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11th Joint UNECE/Eurostat/OECD Seminar on
Business Registers

Uses of Business Register in the context of
Business Demography the Spanish experience
Valentín Llorente García (INE - Spain) Session
3 Business Register as a source for further
development of business demography statistics.
Luxembourg, 7 October 2009
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11th Joint UNECE/Eurostat/OECD Seminar on
Business Registers
Uses of Business Register in the context of
Business Demography the Spanish
experience Several issues arisen from Business
Demography perspective. - Part one Uses of
Business Register general overview - Part two
Business Demography - Part three Employers
Demography - Part four High-Growth Enterprises
and Gazelles - Part five Firm Growth Project

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Part one Uses of Business Register general
overview

• 1. CONTEXT
• Nowadays, the role of Business Register (BR) as
  source of statistical information is becoming
  more relevant. But users needs are not only
  focussed on figures related to a point in time
  they search also for indicators showing the
  evolution of entrepreneurship frame.
• Business Register department at Spanish National
  Statistical Institute (INE) has developed works
  in order to be available several kinds of
  statistical information
• Standard statistical data (Website of INE)
• Tailored data
• - Institutional users (Civil Services, Local
  Governments, Chamber of Commerce, Central Bank,
  Directorate for Small and Medium Enterprises)
• - Private firms, Foundations, Individual users,
• Specialized economic analyses
• - Business Demography
• - Employers Demography and High-Growth
  Enterprises
• - Firm Growth Project

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Part one Uses of Business Register general
overview

• 2. OVERALL VIEW ON THE PROCEDURE TO EXTRACT
  INFORMATION
• Business Register is subjected to a process of
  statistical analysis by applying international
  methodology, and particularly
• Computer procedures combined with manual checks
  mainly focussed on big companies.
• Delimitation of target sub-populations paying
  attention to harmonized methodological
  definitions.
• Making-up of data tables according to
  requirements specified in each project.

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Part two Business Demography 1. Methodology

• STATISTICAL UNIT
• The statistical unit to be used for Business
  Demography data collections is the enterprise
  defined as follows The enterprise is the
  smallest combination of legal units that is an
  organisational unit producing goods or services,
  which benefits from a certain degree of autonomy
  in decision-making, especially for the allocation
  of its current resources. An enterprise carries
  out one or more activities at one or more
  locations. An enterprise may be a sole legal
  unit.
• POPULATION OF ACTIVE ENTERPRISES (N)
• The population of active enterprises including
  all employers and non-employers (N) consists of
  all enterprises that had either turnover or
  employment at any time during the reference
  period.

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Part two Business Demography 1. Methodology

• ENTERPRISE BIRTHS (R)
• The enterprise births (population R) are covering
  all enterprises, regardless of whether they are
  employers or not. Enterprise births are defined
  as follows A count of the number of births of
  enterprises registered to the population
  concerned in the business register corrected for
  errors. A birth amounts to the creation of a
  combination of production factors with the
  restriction that no other enterprises are
  involved in the event. Births do not include
  entries into the population due to mergers,
  break-ups, split-off or restructuring of a set of
  enterprises. It does not include entries into a
  sub-population resulting only from a change of
  activity.

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Part two Business Demography 1. Methodology

• SURVIVAL OF NEWLY BORN ENTERPRISES
• The survival of an enterprise is defined in the
  following way
• An enterprise born in year xx or having survived
  to year xx from a previous year is considered to
  have survived in year xx1 if it is active in
  terms of turnover and/or employment in any part
  of year xx1 (survival without changes).
• An enterprise is also considered to have survived
  if the linked legal unit(s) have ceased to be
  active, but their activity has been taken over by
  a new legal unit set up specifically to take over
  the factors of production of that enterprise
  (survival by take-over).

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Part two Business Demography 1. Methodology

• ENTERPRISE DEATHS (D)
• The enterprise deaths (population D) are covering
  all enterprises, regardless of whether they are
  employers or not. Enterprise deaths are defined
  as follows A count of the number of deaths of
  enterprises registered to the population
  concerned in the business register corrected for
  errors. A death amounts to the dissolution of a
  combination of production factors with the
  restriction that no other enterprises are
  involved in the event. Deaths do not include
  exits from the population due to mergers,
  take-overs, break-ups and restructuring of a set
  of enterprises. It does not include exits from a
  sub-population resulting only from a change of
  activity.
• NOTE All these definitions can be consulted in
  Eurostat-OECD Manual on Business Demography
  Statistics.

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Part two Business Demography 2. Spanish results
Population of active enterprises
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Part two Business Demography 2. Spanish results
Population of active enterprises
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Part two Business Demography 3. Spanish results
Enterprise births
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Part two Business Demography 3. Spanish results
Enterprise births
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Part two Business Demography 3. Spanish results
Enterprise births
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Part two Business Demography 4. Spanish results
Survivals of newly born enterprises
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Part two Business Demography 4. Spanish results
Survivals of newly born enterprises
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Part two Business Demography 5. Spanish results
Enterprise deaths
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Part two Business Demography 6. Spanish results
Enterprise births vs. enterprise deaths
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Part three Employers Demography 1. Methodology

• STATISTICAL UNIT
• Again the statistical unit to be used for
  Employers Demography is the enterprise, but in
  this case a threshold of 1 employee should be
  reached.
• POPULATION OF ACTIVE EMPLOYERS ENTERPRISES (N1)
• The population of active employers enterprises
  (N1) consists of all enterprises with 1 or more
  employees on the annual average in head counts
  over their operating period.
• EMPLOYER ENTERPRISE BIRTHS (R1)
• There are two conditions which qualify an
  enterprise as an employer birth
• 1. It was an enterprise birth in year xx, and
  had at least one employee in the year of birth,
  or
• 2. It existed before year xx, was not an
  employer for the two previous years and had at
  least one employee in year xx (entry by growth).
  The growth should not be due to the take-over of
  another enterprise with employees.

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Part three Employers Demography 1. Methodology

• SURVIVAL OF NEWLY BORN EMPLOYER ENTERPRISES, two
  possibilities
• An employer enterprise born in year xx or having
  survived as employer to year xx from a previous
  year is considered to have survived in year xx1
  if it has one or more employees in year xx1
  (survival without changes).
• An employer enterprise is also considered to have
  survived if the linked legal unit(s) have ceased
  to be active, but their activity has been taken
  over by a new legal unit set up specifically to
  take over the factors of production of that
  enterprise, employees included (survival by
  take-over).
• EMPLOYER ENTERPRISE DEATHS (D1)
• There are two conditions which qualify an
  enterprise as an employer death
• 1. It was an enterprise death in year xx, and
  had at least one employee in the year of death,
  or
• 2. It had at least one employee in year xx,
  continued activity but was not an employer for
  the two following years (exit by decline). The
  decline in employment should not be due to a
  split-off.

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Part three Employers Demography 2. Spanish
results Population of Active Employer Enterprises
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Part three Employers Demography 2. Spanish
results Population of Active Employer Enterprises
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Part three Employers Demography 3. Spanish
results Employer Enterprise births
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Part three Employers Demography 3. Spanish
results Employer Enterprise births
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Part three Employers Demography 4. Spanish
results Survivals of newly born Employer
Enterprises
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Part three Employers Demography 4. Spanish
results Survivals of newly born enterprises
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Part three Employers Demography 5. Spanish
results Employer Enterprise deaths
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Part three Employers Demography 5. Spanish
results Employer Enterprise deaths
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Part three Employers Demography 6. Spanish
results Employer Enterprise births vs. deaths
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Part four High-Growth Enterprises and
Gazelles 1. Sensitivity Analysis. Growth period
2002-2005.
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Part four High-Growth Enterprises and
Gazelles 1. Sensitivity Analysis. Growth period
2002-2005.
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Part four High-Growth Enterprises and
Gazelles 1. Sensitivity Analysis. Growth period
2002-2005.
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Part four High-Growth Enterprises and
Gazelles 2. Methodology

• HIGH-GROWTH ENTERPRISES
• High-growth enterprises as measured by employment
  (or by turnover) are all enterprises with average
  annualised growth in employees (or in turnover)
  greater than 20 per annum, over a three-year
  period, and with ten or more employees at the
  beginning of the observation period.
• GAZELLES
• Gazelle enterprises are a subset of high-growth
  enterprises they are the high-growth enterprises
  born five years or less before the end of the
  three-year observation period.
• In other words, measured in terms of employment
  (or of turnover) gazelles are enterprises which
  have been employers for a period of up to five
  years, with average annualised growth in
  employees (or in turnover) greater than 20 per
  annum over a three-year period and with ten or
  more employees at the beginning of the
  observation period.

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Part four High-Growth Enterprises and
Gazelles 3. Spanish results (Employment
definition)
2002-2005 period 8149 high-growth enterprises
and 1476 gazelles 2003-2006 period 8857
high-growth enterprises and 1532 gazelles
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Part four High-Growth Enterprises and
Gazelles 3. Spanish results (employment
definition)
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Part five Firm Growth Project 1. Methodology
BACKGROUND The overall aim of this project is to
develop relevant, internationally comparable
indicators for measuring firms growth using
business register data. Danish institution FORA
has engaged in a partnership with the UK-based
National Endowment for Science, Technology and
the Arts (NESTA) in order to develop this
project. IDEA AND PROJECT OUTLINE The main
idea of the Firm Growth Project is to create
indicators that place firms in 11 different
growth intervals, such that it will be possible
to produce distribution curves that are easily
comparable across countries. The indicators would
be broken down by age, size class and by sector,
although in the Spanish case the variable firms
age was not possible to apply. Additional
statistics on firms contribution to job creation
would also be coupled to the firms within the
different intervals. THE INDICATORS The
indicators developed in the firm growth project
would be an extension of the indicators created
in the EUROSTAT-OECD Manual on Business
Demography Statistics, where high-growth
enterprises are defined.
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Part five Firm Growth Project 1. Methodology
The firm growth project takes as a starting point
the definition of high-growth enterprises but
goes further in identifying all firms growth,
using 11 different growth intervals (numbered 1
to 11) as shown in the Table below.
This gives rise to the following definition of
growth measure as it is applied in the Spanish
case The indicators of the firms growth project
measure the distribution of firm growth for all
employer enterprises over a 3 years period.
Growth is measured by the number of employees and
data is broken down by size class and
sector. The indicator measure the number of
firms that fulfil the given requirements. POPULAT
ION The population consists of active employer
enterprises (with at least one employee) that
have survived during the measurement period from
2002 to 2005. It is required that the employer
firms have had at least one employee both in
period t (2005) and t-i (2002).
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Part five Firm Growth Project 2. Spanish results
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Part five Firm Growth Project 2. Spanish results
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Part five Firm Growth Project 2. Spanish results
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11th Joint UNECE/Eurostat/OECD Seminar on
Business Registers

Uses of Business Register in the context of
Business Demography the Spanish experience
Session 3 Business Register as a source for
further development of business demography
statistics. Luxembourg, 7 October 2009