Competing in the Single Market - SMEs and ... - Erhvervsstyrelsen

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Figure 5 : Index of SME Development100009000800070006000500040003000200010000907321504552102741089293019867Slovenia Hungary Poland Latvia Croatia Estonia Slovakia CzechRepublic417984035087593556GDP per capita (USD) Index of SME Development (USD per capita75547977233064217LithuaniaSource: UNECE (2003)Structure and Presence of SMEs in the B4As presented in Figure 4 (above) and Table 11 (below), SMEs have accounted for a growing share ofthe B4 economies over the last decade and now account for the majority of enterprises, the bulk ofthe labour force, and more than half of total GDP. Although SMEs as a group comprise an importantsegment of enterprises in all of the Candidate Countries, there are large differences between theaverage size of enterprises (and other attributes) among the B4 countries (see Table 11). At the sametime, their structure, sectoral presence and productivity also display noteworthy differences.Table 11: Comparable SME StatisticsSMEs’ Share of Total #of Enterprises(% of total)SMEs’ Share ofLabour Force(% of total)SMEs’ Share of Turnover/GDP(% of total)SMEs’ Share ofValue-Added(% of total)TOTAL Micro Small Med. TOTAL Micro Small Med. TOTAL Micro Small Med. TOTAL Micro Small Med.Denmark 99.3 79.7 16.4 3.2 61.2 13.9 23.8 23.5 53.0 11.8 18.5 22.7 56.5 13.1 20.7 22.7Finland 99.8 90.2 8.1 1.5 58.5 22.5 18.4 17.6 49.0 15.3 15.4 18.3 49.3 17.5 15.6 16.2France 99.9 92.1 6.7 1.1 62.3 24.5 21.2 16.6 58.4 20.4 20.4 17.6 55.5 19.5 19.1 16.9Germany 99.5 81.4 15.5 2.6 61.1 19.1 22.5 19.5 47.5 10.1 16.9 20.5 45.5 8.5 16.4 20.6Italy 99.9 94.9 4.5 0.5 82.2 47.8 21.9 12.5 71.7 30.5 23.7 17.5 72.5 32.5 23.4 16.6Sweden 99.8 93.3 5.6 0.9 63.1 28.0 19.0 16.1 57.6 19.6 19.2 18.8 55.6 20.1 17.7 17.8United Kingdom 99.6 85.5 12.2 1.9 55.1 21.7 18.1 15.3 50.3 16.2 16.7 17.4 59.2 20.9 20.0 18.3Estonia 1 99.6 78.5 17.8 3.3 59.7 30.3 22.7 6.7 54.3 23.3 31.0 - 42.2 16.4 25.8 -Latvia 2 99.5 76.9 18.9 3.7 62.0 60.0Lithuania 3 99.6 81.5 14.9 3.2 64.8 11.1 20.5 33.2 57.4 55.4 12.0 19.1 24.3Poland 4 99.8 96.5 2.4 0.9 66.9 31.9 15.1 19.9 63.0 28.2 13.5 21.3 54.7 25.4 10.7 18.6Sources: For EU member countries: Eurostat (2002b)-data primarily from 1999, for candidate countries: Eurostat (2004a)-data primarily from 20001Data on share of labour force from Statistical Office of Estonia (2004)2Data on share of labour force and share of GDP from European Commission (2003c)3Data on share of labour force, share of GDP, and share of value-added from SMEDA (2003)-data from 20004 Data on share of labour force PAED (2002)-data from 200038
A common measurement of business activity is the number of economically active SMEs per 1000inhabitants. Within the EU, this number fluctuates between 40 and 60. In the B4, the numberis significantly lower (Estonia: 27, Latvia: 18, Lithuania: 17, Poland: 35) (Latvian Ministry ofEconomy 2003 and SMEDA 2003), constituting a cause for concern particularly in Lithuania, Latviaand Estonia. As a result, increasing the number of active SMEs (to be more aligned to Europeanlevels) features as a prominent goal of policymakers in these countries. 17 Seen as an indicator ofentrepreneurial activity, it is understandable that new market economies, such as the B4, would wantthe largest possible base for developing their market skills and entrepreneurial activities.Figure 6: Enterprises by Class Size, Trends for B4 CountriesEstonian Enterprises by Class Size(% of total, by number of employees, 1998-2002)Latvian Enterprises by Class Size(% of total, by number of employees, 1999-2002)0%0%0%0%0%0%1998 1999 2000 2001 20021999 2000 2001 2002Micro Small Medium LargeMicro Small Medium LargeSource: Statistical Office of Estonia (2004)Source: Eurostat (2004a) and Latvian Ministry of Economy (2003)Lithuanian Enterprises by Class Size(% of total, by number of employees, 1999-2002)Polish Enterprises by Class Size(% of total, by number of employees, 1999-2002)1999 2000 2001 2002Micro Small Medium Large1999 2000 2001 2002Micro Small Medium LargeSource: SMEDA (2003)Source: PAED (2002, 2003)As illustrated in Figure 6, micro enterprises dominate SMEs in the B4. Poland, in particular, has anoverwhelming majority of micro enterprises, with an average company size of 5 employees (comparedto 9, 15, and 11 for Estonia, Latvia and Lithuania respectively). Europe, in comparison, has anaverage enterprise size of 6 (see Table 12). According to a report by the European Commission therehas been a trend towards a decrease in company size in the Candidate Countries. The report attributesthis development to three main factors: (i) the restructuring of former state-owned enterprises, (ii)changes in the institutional environment which make it easier to start one’s own business (including the‘legalising’ of the informal economy), and (iii) the rise of the services sector (European Commission,2002e). The figure above confirms this trend for Estonia.17This was mentioned, for example, in the presentation given by the Latvian Minister of Economy, Mr. Juris Lujans, in his presentation at the BalticDevelopment Forum Summit in Riga in October 2003.39
Page 1 and 2: Sylvia Schwaag SergerEmily HanssonC
Page 4 and 5: About the International Organisatio
Page 7: PREFACEAccession to the Single Mark
Page 10 and 11: enterprise development. There are n
Page 12 and 13: BOXESBox 1: The ‘Knowledge-Based
Page 15 and 16: INTRODUCTIONAfter more than 10 year
Page 17 and 18: CHAPTER 1: FROM STABILISATION TO IN
Page 19: increased competitive pressure as B
Page 22 and 23: Box 2: On Innovation and Innovation
Page 24 and 25: Table 5: GDP Growth 1995-2003 in Se
Page 26 and 27: Table 7: Relative Strengths and Wea
Page 28 and 29: Box 3: The Indicator ProblemExistin
Page 31 and 32: CHAPTER 2:BALTIC SMEs - AGENTS OF F
Page 33 and 34: Table 9: Average Annual Growth of S
Page 35 and 36: Box 4: Overview of Selected Multina
Page 37 and 38: The Role of SMEs in Transitional Ec
Page 39: e to the potential advantage of the
Page 43 and 44: Figure 8: Labour Productivity per P
Page 45 and 46: Figure 10: Employment in Med/Hi-tec
Page 47 and 48: Summing up, there are fewer economi
Page 49 and 50: Overall, SMEs tend to lack the fina
Page 51 and 52: Figure 12: Enterprises with Innovat
Page 53 and 54: Figure 14: Proportion of Enterprise
Page 55 and 56: Table 14: Barriers to Innovation fo
Page 57 and 58: Some interesting examples of cluste
Page 59 and 60: CHAPTER 3:POLICIES PROMOTING SMEs A
Page 61 and 62: National governments themselves wil
Page 63 and 64: Institutional StructureIn all of th
Page 65 and 66: EU countries (innovation relay cent
Page 67 and 68: LITHUANIAAgency/OrganisationLithuan
Page 69 and 70: From the private sector, the chambe
Page 71 and 72: On the whole, the B4 have relativel
Page 73 and 74: LITHUANIAProgramme/Policy DocumentI
Page 75 and 76: Table 19: B4 National Rankings of A
Page 77 and 78: Box 11: Structural Funds to the Can
Page 79 and 80: Box 12: On SMEs and FinancingIt doe
Page 81 and 82: examples of evaluations of national
Page 83 and 84: CHAPTER 4:CHALLENGES AND RECOMMENDA
Page 85 and 86: General challengesBased on our own
Page 87 and 88: the above-mentioned channels. 27 On
Page 89 and 90: the EU average and particularly wit
Page 91 and 92:
RecommendationsBased on the challen
Page 93 and 94:
CHAPTER 5:A VISION OF A NORDIC-BALT
Page 95 and 96:
addition, they are the most advance
Page 97 and 98:
countries. One such sign is the rap
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CONCLUSIONSEU accession will not re
Page 101 and 102:
REFERENCESAlfonso, Antonio, Ludger
Page 103 and 104:
European Commission (2003f), Compre
Page 105 and 106:
Eurostat (2004a), SMEs in the Candi
Page 107 and 108:
Statistical Office of Estonia (2004
Page 109 and 110:
APPENDIX I:Agenda for Working Group
Page 111 and 112:
DAY 2:POLICY SOLUTIONS9:30-10:30 In
Page 113 and 114:
APPENDIX II:Participants in the IKE
Page 115 and 116:
APPENDIX III:Conclusions from the I
Page 117 and 118:
APPENDIX IV:Summary of the Panel se
Page 119 and 120:
Regarding the role of policymaking,
Page 121 and 122:
APPENDIX V:Description of Field Stu
Page 123 and 124:
Mr. Miroslaw MarekMr. Talis Millers
Page 126:
IKED - International Organisation f
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