Summary

This Document is Archived

SMEs in New Zealand: Structure and Dynamics - 2004

[ Last Updated 4 November 2005 ]

Small and medium sized enterprises¹ constitute the majority of all enterprises in New Zealand…

86% of enterprises employ 5 or fewer full-time equivalents (FTEs).²
96.8% of enterprises employ 19 or fewer FTEs.
20.3% of enterprises employ 0 FTEs.³

…and the number of SMEs is increasing.

The number of SMEs (0-19 FTEs) increased 4.9% in 2003, following an increase of 2.7% in 2002.

The average enterprise size has remained stable.

Between 2002 and 2003 the average number of FTEs per enterprise remained relatively stable at around 5.2.

SMEs also account for a significant proportion of total employment…

SMEs accounted for 42.3% of all FTEs in 2003.
Small firms accounted for 22.7% of all FTEs in 2003.

…and output.

Using value added as a measure of output, SMEs accounted for 38.1% of the economy's output in 2002.
Small firms contributed 21.1% of total output in 2002.

Small firms play a key part in the increase in enterprise dynamic in New Zealand.

In 2003, entries and exits of small firms on the Business Frame accounted for 93.2% and 92.4% respectively of total enterprise dynamic on the Business Frame.

SMEs form a significant component of modern economies both in terms of number of firms and their contribution to employment.

97% of New Zealand firms are SMEs; this proportion is similar to a number of other countries.

¹Small 0-5 FTEs; Medium 6-19 FTEs.

²The number of full-time equivalents (FTEs) is calculated as the number of full-time employees and working proprietors plus half the number of part-time employees and working proprietors.

³0 FTEs is defined in this report as no employees and no working proprietors. In the Treasury Working Paper Firm Dynamics in New Zealand: Comparative Analysis with OECD Countries, working proprietors are included in the 0 FTE grouping, which accounts for the discrepancies between the two reports (see Appendix 1 for further information).