Micro-businesses, a fragile category

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of Euractiv Media network.

This article looks behind the latest Eurostat data on SME in the candidate countries.

Eurostat has just published its latest data on SME in the candidate countries, excluding agriculture*. In the CEEC, the proportion of companies with less than 250 employees (99.7%) is almost identical to that of the EU15 (99.8%), representing 2,402 M and 13,178 M units respectively. The micro and small firms (less than 50 employees) account for slightly less than 55% of the jobs, both in the CEEC and in the current Union. The major difference is to be found in the proportion of micro-businesses (< 10 employees): 93.4% as compared with 90.6% in the EU. This category seems particularly fragile in the CEEC.

  • The apparent productivity of work, measured in € per person employed, clearly pushes the average downwards. In the Czech Republic for example, this indicator varies considerably according to the size of the company: in 2001 an employee in industry generated on average 7,300 € as opposed to 6,300€ in micro-businesses, 13,700 € in small companies, 10,300 € in medium-sized enterprises (< 250) and 14,400 &euro; in large companies. By comparison, the EU15 figures were 51,200&euro;, 29,600&euro;, 37,900&euro;, 47,300&euro; and 66,900&euro;, which is a ratio of 1 to approximately 2.
  • In very small companies wages are definitely lower, except in Slovakia. Still in manufacturing – but the same is also true of services – they vary from 1 to nearly 3 in Hungary and Romania and from 1 to 4 in Bulgaria. Whether this be cause, coincidence or consequence, the proportion of the workforce whose level of education is high lies below the average and that of those whose level is low is above average** In addition, these companies offer their employees relatively fewer opportunities for continued vocational training.
  • Finally, as for physical capital, this category of company invests little and various studies underline the difficulties experienced by the region’s SME in accessing finance. In Hungary, for example, micro-businesses account for 1.9% of the gross investment in industry as against 12% of the jobs. In Poland, a country where, together with Estonia, the gap is among the smallest in the CEEC, the figures are 4.8% and 9.5% respectively. Micro-businesses, which account for approximately 25% of the jobs (19% in the EU 15) could be the ones which will suffer most after the 1st May 2004.

 

For more analyses on the EU’s enlargement process, see the

enlargement website of DREE.  

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