SMEs Internationally
SMEs account for the majority of firms in OECD economies.
There is no universal definition of an SME. Internationally, firm size is measured in a variety of ways including by numbers of employees, sales figures and industrial classification. However, the diverse structures of different economies makes adherence to a single statistical definition unworkable. International comparisons of SME demographics and performance are also difficult to make because of the different methods central statistical agencies use to collect and communicate firm-level data.
Most countries use an employment measure to define SMEs. The following are examples of international SME definitions in numbers of employees:
| |
Micro |
Small |
Medium |
Large |
| European Commission10 |
< 10 |
< 50 |
< 250 |
- |
| United Kingdom11 |
< 10 |
< 50 |
< 250 |
250+ |
| Australia12 |
< 5 |
5-19 |
20-200 |
200+ |
International Case Study: SMEs in Canada13
What Is the Definition of a Canadian SME?
Industry Canada uses a definition based on the number of employees. Goods-producing firms are considered "small" if they have fewer than 100 employees, while for service-producing firms the cut-off point is seen as 50 employees. Above that size, and up to 499 employees, a firm is considered medium-sized. The term "SME" is used to refer to all businesses with fewer than 500 employees, while firms with 500 or more employees are classified as "large" businesses.
How Many SMEs Are There in Canada?
As of June 2005, there were approximately 2.2 million businesses in Canada. Of these, 1,048,286 were classed as "employer businesses", because they maintain a payroll of at least one person. Ninety-eight percent of employer businesses have fewer than 100 employees. Nearly 74 percent have fewer than 10 employees and 57 percent have only 1-4 employees.
How Many People Work for SMEs in Canada?
In 2004, SMEs employed approximately 6.7 million, or 65 percent of all employees in the private sector, covered by the Survey of Employment, Payrolls and Hours (SEPH). Of these, 49 percent worked for small enterprises (fewer than 100 employees) and 19 percent worked for medium-sized enterprises (those with between 100 and 499 employees).
How Many People Are Self Employed in Canada?
In 2004, self-employed workers represented approximately 2.45 million or 15 percent of all employed workers in the Canadian economy.
What Is the Contribution of SMEs to Employment Creation by Growth Firms?
The Canadian economy is dynamic, with high rates of firm entries and exits. Industry Canada's Small Business Policy Branch has completed several studies on firm growth and job creation in Canadian employer firms. Businesses were categorized, based on their employment growth as hyper growth (those that grew more than 150% over these four years) strong growth (50-150% growth), slow growth (positive growth less than 50%) or declining firms (negative growth).
Between 1985 and 1999, of the 728,000 firms operating in 1985, only 199,000 firms continued to operate in 1999, and they created 497,000 net jobs. Small firms and medium-sized firms created 661,000 and 184,000 net jobs respectively during this period. Large businesses shed 348,000 jobs. Hyper and strong growth firms numbered 48,000, creating 974,000 jobs over the 14 years between 1985 and 1999. Over 47,000 of these firms were small businesses and they created 612,000 jobs.
What Is the Contribution of Small Businesses to Canada's GDP?
Small businesses accounted for approximately 22 percent of Canada's GDP in 2004.
How Many Small Business Owners Are Women?
Based on the 2001 Survey on Financing of Small and Medium Enterprises it is estimated that 47 percent of SMEs have some degree of female ownership. Of those, 39 percent were equal partnerships between male and female owners, 38 percent were majority-owned by females and the remainder were minority owners in businesses majority-owned by males.
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