WRITTEN QUESTION E-2151/03

by Giovanni Pittella (PSE) to the Commission

(27 June 2003)

Subject: Parameters for small and medium-sized enterprises (SMEs)

In its recommendation C(2003) 1422(1) of 6 May 2003 the Commission totally redraws the parameters (in particular those relating to size and turnover) by means of which SMEs are defined:

- medium-sized enterprise: fewer than 250 employees, with an annual turnover not exceeding EUR 50 million;

- small enterprise: fewer than 50 employees, with an annual turnover not exceeding EUR 10 million;

- micro enterprise: fewer than 10 employees, with an annual turnover not exceeding EUR 2 million.

These new criteria will directly influence all future Community legislation and will have an impact on state aid, Structural Fund programming and the accounting and auditing rules to which European companies are subject.

The recommendation also extends the concept of enterprise to any entity engaged in economic activity, irrespective of its legal form (something which Parliament has repeatedly called for), and enables a more accurate picture to be formed of the situation of companies in Europe.

In view of the above, does the Commission intend to bring all statistics into line with the new classification?

(1) OJ L 124, 20.5.2003, p. 36.

Answer given by Mr Solbes Mira on behalf of the Commission

(1 August 2003)

In Article 7 of the Annex to the Recommendation on the definition of micro, small and medium-sized enterprises (SMES) (Recommendation 2003/361/EC) it is foreseen that the Commission will take the necessary measures to present statistics on enterprises in accordance with a number of staff size classes(1). The other criteria defining SMEs included in Article 2 annual turnover and balance sheet total are not mentioned in Article 7.

The Eurostat statistics cover in principle all entities engaged in economic activities, irrespective of their legal form. They generally include data on incorporated enterprises as well as self-employed persons and family businesses engaged in craft or other activities.

Eurostat disseminates statistics by staff size classes in the area of Structural Business Statistics, the Labour Costs Survey, the Structure of Earnings Statistics and the Innovation Survey. Staff size classes of enterprises can also be identified in the Business Registers.

The availability of data for the smaller staff size classes in the framework of the Structural Business Statistics has improved considerably the last few years thanks to the efforts of the National Statistical Institutes.

The category of enterprises with a small staff size was optional for the 2000 Labour Cost Survey and 2002 Structure of Earnings Survey, but it is proposed to extend this coverage in future surveys. In view of their purposes, the Labour Costs Survey and the Structure of Earnings Statistics are restricted to enterprises with employees and do not therefore cover the self-employed or family workers.

In the Innovation Statistics enterprises with small and medium-sized staff numbers can be identified. Micro-enterprises are not covered in the Innovation Statistics for all countries yet. It is expected that more countries will include the micro-enterprises in the future and Eurostat will do efforts to align its threshold.

The concept of employment used for some Eurostat statistics is not fully consistent with the concept defined in the SME Recommendation. The concept of persons in Article 7 refers essentially to the concept of staff headcount and annual work units in Article 5(2), but as the count of part-timers, seasonal workers, apprentices, etc. is not fully reflected in the currently available statistical data, the more neutral expression of persons was used. The Eurostat statistics can, however, be used as a good proxy and constitute a solid basis for an analysis of the SMEs in the Union. In fact, Eurostat does already release regular publications on SMEs based on the available statistical information. The latest publications released are SMEs in Europe: Competitiveness, innovation and the knowledge driven society in the Detailed Tables series and a Statistics in Focus Enterprises in Europe does size matter?.

The taking into account of all criteria (turnover, balance sheet total and the calculations for partner and linked enterprises) in Eurostat statistics is not foreseen in the near future. The main purpose for the financial criteria and the consideration of connections between enterprises is in fact to determine the access to state aid schemes and funding programmes on an individual basis per enterprise. This is not relevant for general statistical purposes. This of course does not exclude specific statistics in the context of state aid or participation in funding programmes, for instance the 6th Research and Technological Development (RTD) Framework Programme, as for these purposes the full criteria of the SME definition will be used to determine the size-class of beneficiary enterprises.

Changes to the existing regulatory framework for statistics collected by Eurostat may result in considerable additional burden for data providers and businesses and they therefore have to be carefully planned and discussed well in advance. However, further important issues regarding SMEs will be explored by Eurostat in the near future. These include a major developing project to record in business registers ownership and control links between enterprises. In this way SMEs, which should be autonomous according to Article 3 of the Recommendation and not part of an enterprise group, can be better distinguished.

(1) Article 7 StatisticsThe Commission will take the necessary measures to present the statistics that it produces in accordance with the following size-classes of enterprises: (a) 0 to 1 person; (b) 2 to 9 persons; (c) 10 to 49 persons; (d) 50 to 249 persons.

(2) Article 5 Staff headcountThe headcount corresponds to the number of annual work units (AWU), i.e. the number of persons who worked full-time within the enterprise in question or on its behalf during the entire reference year under consideration. The work of persons who have not worked the full year, the work of those who have worked part-time, regardless of duration, and the work of seasonal workers are counted as fractions of AWU.The staff consists of: (a) employees; (b) persons working for the enterprise being subordinated to it and deemed to be employees under national law; (c) owner-managers; (d) partners engaging in a regular activity in the enterprise and benefiting from financial advantages from the enterprise. Apprentices or students engaged in vocational training with an apprenticeship or vocational training contract are not included as staff. The duration of maternity or parental leaves is not counted.