SMEs Internationally

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SMEs in New Zealand: Structure and Dynamics - 2005

[ Last Updated 3 November 2005 ]

SMEs generally account for more than 95 percent of enterprises and 60-70 percent of employment in OECD economies.

There is no universal definition of a SME, although there has been a push for countries to adopt similar definitions to enhance comparability.¹⁶ International comparisons of the SME economic contribution are often difficult to make because of the different methods central statistical agencies use to collect and communicate firm-level data. However, even taking into account the variation in definition, the OECD recognises that SMEs make up over 95 percent of firms and 60-70 percent of employment, and that they generate a large share of new jobs in OECD economies.¹⁷

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 Commission¹⁸	< 10	< 50	< 250	-
United Kingdom¹⁹	< 10	< 50	< 250	250+
Australia²⁰	< 5	5-19	20-200	200+

A large number of firms in all countries, including New Zealand, fall into a "micro" category. At February 2004, a micro firm category would capture most enterprises in New Zealand (92% using the EC/UK definition, 86.8% using the Australian definition). Allowing for differences in data collection and methodology, New Zealand has a similar proportion of small firms in the economy to other OECD countries.²¹

Tables 10 and 11 provide information on a limited number of countries where comparable and recent data were readily available.

Table 10: Percentage of Firms by Size Class
	Year	Employment Size Class
		0-19	20-49	50-99	100-499	500+
		Percentages
New Zealand	2004	96	2	0.7	0.5	0.1
UK²²	2003	97	1	0.4	0.3	0.1
US²³	2002	89	6.8	2	1.4	0.3
		Employment Size Class
		0-19	20-99	100-199	200+
Australia²⁴	2001	96	3	0.3	0.2

Table 11: Percentage of Employees by Size Class
	Year	Employment Size Class
		0-19	20-49	50-99	100-499	500+
		Percentages
New Zealand	2004	29.1	14	9	18	29
UK	2003	30.6	6.5	4.4	10.8	47.7
US	2002	18	10	0.7	14	50
		Employment Size Class
		0-19	20-99	100-199	200+
Australia	2001	38	23	8	30

¹⁶See findings of the Special Workshop on SME Statistics [81 KB PDF] [link to 2nd OECD Ministerial on SMEs website], 2nd OECD Ministerial on SMEs, 3-5 June 2004.

¹⁷OECD (2000) Small and Medium-Sized Enterprises: Local Strength, Global Reach [link to OECD website].

¹⁸SME definition: Commission Recommendation of 6 May 2003 (Recommendation 2003/361/EC).

¹⁹Definition sourced from UK Small Business Service.

²⁰Definition sourced from Australian Bureau of Statistics, Small Business in Australia.

²¹Mills, D. & Timmins, J. (2004) Firm Dynamics in New Zealand: Comparative Analysis with OECD Countries. New Zealand Treasury Working Paper 04/11.

²²Small Business Service (2004), Small and Medium Enterprise (SME) Statistics for the UK 2003, see SME Statistics [link to Small Business Service website].

²³US Small Business Administration [link to SBA website], Office of Advocacy, based on data provided by the US Census Bureau, Statistics of US Businesses. www.sba.gov

²⁴Australian Bureau of Statistics [link to ABS website], Small Business in Australia 2001.

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Printed: 26/11/2009