The OECDEurostat Framework on Business Demography Indicators Nadim

The OECD/Eurostat Framework on Business Demography Indicators Nadim Ahmad, Statistics Directorate, OECD 1

Background n n Eurostat database on BD indicators OECD study investigating comparability of start-up rates OECD framework to improve comparability in OECD countries (including new indictors) OECD/Eurostat framework 2

Indicators n Births and Deaths – Thresholds - All enterprises - Employer enterprises (with turnover) - (Economic) Enterprises with 2+ employees (with turnover) n Consistent treatment of ‘real’ births vis-avis reactivations, mergers, take-overs etc 3

Indicators n n n Survival Rates – 3 year survival and 5 year survival An enterprise born in year xx or having survived to year xx from a previous year is considered to have survived in year xx+1 if it is active in terms of turnover and/or employment in any part of year xx+1 (= survival without changes). Births and deaths follow the measures outlined earlier. 4

Indicators n Employment in newly born enterprises – Head counts on FTE basis during the period of activity. But, where not possible head counts are acceptable. n Impact of Deaths – Based on average employment during periods of activity in year of death. 5

Indicators n High Growth – All enterprises with average annualised growth greater than 20% per annum, over a three year period, and with 10 or more employees in the beginning of the observation period, should be considered as high-growth enterprises: measured by the number of employees and by turnover. n Gazelles – All enterprises up to 5 years old with average annualised growth greater than 20% per annum, over a three year period, and 10 or more employees in the beginning of the observation period, should be considered as gazelles. 6

High-Growth Developments Composite Indicators – Paper develops hybrid Employment-Turnover based measure 7

High Growth Developments Previous indicators require some convention: growth threshold, size-class cut-off to avoid small firm bias. What about Birch–type Indices to overcome size-class bias? combined with convention that we take the top X% of enterprises in any country as high-growth. 8