Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
es whose
personnel
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
, the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
, the
United Nations
The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
, and the
World Trade Organization
The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation
in the United Nations System, governments use the organization to establish, revise, and e ...
(WTO).
In any given national economy, SMEs sometimes outnumber large companies by a wide margin and also employ many more people.
For example,
Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
n SMEs makeup 98% of all Australian businesses, produce one-third of the total
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
(gross domestic product) and employ 4.7 million people. In
Chile
Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the east a ...
, in the commercial year 2014, 98.5% of the firms were classified as SMEs. In
Tunisia
)
, image_map = Tunisia location (orthographic projection).svg
, map_caption = Location of Tunisia in northern Africa
, image_map2 =
, capital = Tunis
, largest_city = capital
, ...
, the self-employed workers alone account for about 28% of the total non-farm employment, and firms with fewer than 100 employees account for about 62% of total employment. The United States' SMEs generate half of all U.S. jobs, but only 40% of GDP.
Developing countries tend to have a larger share of small and medium-sized enterprises. SMEs are also
responsible for driving
innovation
Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a new or changed entity ...
and
competition
Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...
in many
economic sector
One classical breakdown of economic activity distinguishes three sectors:
* Primary: involves the retrieval and production of raw-material commodities, such as corn, coal, wood or iron. Miners, farmers and fishermen are all workers in the ...
s.
Although they create more new jobs than large firms, SMEs also suffer the majority of job destruction/contraction.
Overview
SMEs are important for economic and social reasons, given the sector's role in employment. Due to their sizes, SMEs are heavily influenced by their
Chief Executive Officer
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
, a.k.a. CEOs. The CEOs of SMEs are often the founders, owners, and managers of the SMEs. The duties of the CEO in a SME mirror those of the CEO of a large company: the CEO needs to strategically allocate their time, energy, and assets to direct the SMEs. Typically, the CEO is the strategist, champion and leader for developing the SME or the prime reason for the business failing.
This definition is provided in Section 7 of
Micro, Small & Medium Enterprises Development Act, 2006 (MSMED Act) and was notified in September 2006. The Act provides for the classification of enterprises based on their investment size and the nature of the activity undertaken by that enterprise. As per MSMED Act, enterprises are classified into two categories - manufacturing enterprises and service enterprises. For each of these categories, a definition is given to explain what constitutes a micro-enterprise or a small enterprise or a medium enterprise. In India, if an enterprise does not fall under the above categories, it would be considered a large-scale enterprise.
At the employee level, Petrakis and Kostis (2012) explore the role of interpersonal trust and knowledge in the number of small and medium enterprises. They conclude that knowledge positively affects the number of SMEs, which in turn positively affects interpersonal trust. Note that the empirical results indicate that interpersonal trust does not affect the number of SMEs. Therefore, although knowledge development can reinforce SMEs, trust becomes widespread in a society when the number of SMEs is greater.
Legal boundary on SMEs around the world
Multilateral organizations have been criticized for using one measure for all. The legal boundary of SMEs around the world vary, and below is a list of the upper limits of SMEs in some countries.
Africa
African
African or Africans may refer to:
* Anything from or pertaining to the continent of Africa:
** People who are native to Africa, descendants of natives of Africa, or individuals who trace their ancestry to indigenous inhabitants of Africa
*** Ethn ...
small businesses frequently struggle to get the cash they require to thrive. According to the SME Finance Forum, the formal financing gap for African SMEs averaged 17% of GDP across the
43 countries assessed in 2017.
According to the World Bank, women own 58% of all MSMEs in Africa.
The
European Investment Bank
The European Investment Bank (EIB) is the European Union's investment bank and is owned by the EU Member States. It is one of the largest supranational lenders in the world. The EIB finances and invests both through equity and debt solutions ...
's
Banking in Africa
The economy of Africa consists of the trade, industry, agriculture, and human resources of the continent. , approximately 1.3 billion people were living in 54 countries in Africa. Africa is a resource-rich continent. Recent growth has been d ...
survey, 2021 suggests that most of the responding banks had a
non-performing loan A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as it reduces the profitability of banks, and ...
(NPL) ratio of at least 5%. NPLs account for at least 10% of the SME portfolio in approximately one-third of African banks. Furthermore, 50% of the banks had at least 5% of their SME portfolio under the moratorium, and 40% had at least 5% of SME loans under some type of restructuring.
Egypt
Most of
Egypt
Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia via a land bridge formed by the Sinai Peninsula. It is bordered by the Mediter ...
's businesses are small-sized, with 97 percent employing fewer than 10 workers, according to census data released by state-run statistics body
CAPMAS
Central Agency for Public Mobilization and Statistics (CAPMAS) () is the official statistical agency of Egypt that collects, processes, analyzes, and disseminates statistical data and conducts the census.
CAPMAS was established by a Presidential ...
(Central Agency for Public Mobilization and Statistics).
Medium-sized enterprises with 10 to 50 employees account for around 2.7 percent of total businesses. However, big businesses with over 50 employees account for 0.4 percent of all enterprises nationwide.
The data is part of Egypt's 2012/13 economic census on establishments ranging from small stalls to big enterprises. Economic activity outside the establishments – like street vendors and farmers, for example – were excluded from the census.
![Expected_change_in_credit_demand_from_small_and_medium-sized_enterprises_over_next_year_(%25)_respondents_in_East_Africa](https://upload.wikimedia.org/wikipedia/commons/7/73/Expected_change_in_credit_demand_from_small_and_medium-sized_enterprises_over_next_year_%28%25%29_respondents_in_East_Africa.png)
The results show that Egypt is greatly lacking in medium-sized businesses.
Seventy percent of the country's 24 million businesses have only one or two employees. But less than 0.1 percent – only 784 businesses – employ between 45 and 49 people.
Kenya
In
Kenya
)
, national_anthem = "Ee Mungu Nguvu Yetu"()
, image_map =
, map_caption =
, image_map2 =
, capital = Nairobi
, coordinates =
, largest_city = Nairobi
, ...
, the term changed to MSME, which stands for "micro, small, and medium-sized enterprises".
For micro-enterprises, the minimum number of employees is up to 10 employees. For small enterprises, it is from 10 to 50. For medium enterprises, it is from 50 to 100.
Nigeria
The
Central Bank of Nigeria
The Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959.
The major regulatory objectives of the bank as stated in the CBN Act are ...
defines small and medium enterprises in
Nigeria
Nigeria ( ), , ig, Naìjíríyà, yo, Nàìjíríà, pcm, Naijá , ff, Naajeeriya, kcg, Naijeriya officially the Federal Republic of Nigeria, is a country in West Africa. It is situated between the Sahel to the north and the Gulf o ...
according to asset base and a number of staff employed. The criteria are an asset base that is between
₦5 million ($15,400) to
₦500 million ($1,538,000), and a staff strength that is between 11 and 100 employees.
Somalia
In
Somalia
Somalia, , Osmanya script: 𐒈𐒝𐒑𐒛𐒐𐒘𐒕𐒖; ar, الصومال, aṣ-Ṣūmāl officially the Federal Republic of SomaliaThe ''Federal Republic of Somalia'' is the country's name per Article 1 of thProvisional Constituti ...
, the term is SME (for "small, medium, and micro enterprises"); elsewhere in Africa, MSME stands for "micro, small, and medium enterprises". An SME is defined as a small business that has more than 30 employees but less than 250 employees.
South Africa
In the National Small Business Amendment Act 2004, micro-businesses in the different sectors, varying from the manufacturing to the retail sectors, are defined as businesses with five or fewer employees and a turnover of up to R100,000
ZAR ($6,900). Very small businesses employ between 6 and 20 employees, while small businesses employ between 21 and 50 employees. The upper limit for turnover in a small business varies from R1 million ($69,200) in the
agricultural sector to R13 million ($899,800) in the catering, accommodations and other
trade sectors as well as in the
manufacturing
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...
sector, with a maximum of R32 million ($2,214,800) in the
wholesale trade sector.
Medium-sized businesses usually employ up to 200 people (100 in the agricultural sector), and the maximum turnover varies from R5 million ($346,100) in the agricultural sector to R51 ($3,529,800) million in the manufacturing sector and R64 ($4,429,600) million in the wholesale trade,
commercial agents and allied services sector.
A comprehensive definition of an SME in South Africa is, therefore, an enterprise with one or more of the following characteristics:
* Fewer than 200 employees,
* Annual turnover of less than R64 million,
* Capital assets of less than R10 million,
* Direct managerial involvement by owners
Asia
Hong Kong
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
defines Small and Medium Enterprises (SMEs) as any manufacturing business that employs less than 100 people or any non-manufacturing business that employs less than 50 people.
98% of business establishments in Hong Kong are defined as SMEs and employed 45% of the work force.
India
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
defines Micro, Small and Medium Enterprises based on dual criteria of investment and turnover. In June 2020, India updated the definition as follows:
Businesses that are declared as MSMEs and within specific sectors and criteria can then apply for "priority sector" lending to help with business expenses; banks have annual targets set by the Prime Minister's Task Force on MSMEs for year-on-year increases of lending to various categories of MSMEs.
MSME is considered a key contributor to India's growth and contributes 48% to
India's total export.
Indonesia
In
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
, the government defines micro, small, and medium enterprises (
Indonesian
Indonesian is anything of, from, or related to Indonesia, an archipelagic country in Southeast Asia. It may refer to:
* Indonesians, citizens of Indonesia
** Native Indonesians, diverse groups of local inhabitants of the archipelago
** Indonesian ...
: ''usaha mikro kecil menengah'', UMKM) based on their assets and revenues according to Law No. 20/2008:
An annual revenue of Rp 50 billion is approximately equal to US$3.7 million as of November 2017.
Bangladesh
In
Bangladesh
Bangladesh (}, ), officially the People's Republic of Bangladesh, is a country in South Asia. It is the eighth-most populous country in the world, with a population exceeding 165 million people in an area of . Bangladesh is among the mos ...
,
Bangladesh Bank
Bangladesh Bank ( bn, বাংলাদেশ ব্যাংক) is the central bank of Bangladesh and is a member of the Asian Clearing Union. It is fully owned by the Government of Bangladesh.
The bank is active in developing green bankin ...
defines Small and medium enterprises based on
fixed asset
A fixed asset, also known as long-lived assets or property, plant and equipment (PP&E), is a term used in accounting for assets and property that may not easily be converted into cash. Fixed assets are different from current assets, such as cash ...
, employed manpower and yearly turn over, and they are definitely not Public Limited Co. and requires these characteristics -
Philippines
According to the
Department of Trade and Industry's 2020 List of Establishments report, there are 957,620 registered business enterprises operating in the country, composed of 99.51% MSMEs and 0.49% large firms. The MSMEs consist of 88.77% microenterprises, 10.25% small enterprises, and 0.49% medium enterprises. Among the top industry sectors include (1) wholesale and retail trade; repair of motor vehicles and motorcycles (445,386); (2) accommodation and food service activities (134,046); (3) manufacturing (110,916); (4) other service activities (62,376); and (5) financial and insurance activities (45,558) which accounted for about 83.77% of the total number of MSME establishments. Prior to the pandemic, MSMEs generated more than 5.38 million jobs or 62.66% of the country's total employment with a 29.38% share from micro-enterprises followed by 25.78% and 7.50% for small and medium enterprises.
Singapore
With effect from 1 April 2011, the definition of SMEs is businesses with annual sales turnover of not more than $100 million or employing no more than 200 staff.
Europe
European Union
Small companies are important to the
European economy as they account for 99.8% of non-financial enterprises in the European Union (EU) and employ two-thirds of the workforce in the EU.
The majority of European firms are small and medium-sized enterprises (SMEs), employing over 100 million people. Due to the
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...
, a large majority of SMEs saw a decline in revenue during 2020-2021.
The pandemic has had a greater impact on SMEs than on large businesses, with an average sales loss of 26% versus 23% for large businesses.
Government assistance appears to have benefited SMEs more than large corporations among the companies that do have overdraft facilities, indicating a successful application of policies to ease financial limitations for SMEs even when they receive help from the banking sector.
SMEs were more quick in altering output during the pandemic, despite the intensity of the shock. In reaction to the crisis, one-third of major enterprises altered their output or services, compared to 37% of SMEs.
Large businesses, on the other hand, embraced
digitization to a greater extent than small businesses, with 26% boosting their online distribution of products and services, compared to 22% for SMEs. The most significant difference in adaption measures was shown in the chance of expanding remote work, which increased by 25% among SMEs but 50% among large businesses.
The criteria for defining the size of a business differ from country to country, with many countries having programs of
business rate reduction and
financial subsidy for SMEs. According to the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
, SMEs are enterprises which meet the following definition of staff headcount and either the turnover or balance sheet total definitions:
In July 2011, the European Commission said it would open a consultation on the definition of SMEs in 2012. A consultation document was issued on 6 February 2018 and the consultation period closed on 6 May 2018. , no conclusions or responses have yet emerged.
In
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
, there are three broad parameters that define SMEs:
*
Micro-enterprise
A micro-enterprise (or microenterprise) is generally defined as a small business employing nine people or fewer, and having a balance sheet or turnover less than a certain amount (e.g. €2 million or PhP 3 million). The terms microenterprise and ...
s have up to 10 employees
* Small enterprises have up to 50 employees
* Medium-sized enterprises have up to 250 employees.
The European definition of SME follows: "The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro." In order to prepare for an evaluation and revision of some features of the small and medium-sized enterprises definition European Union established public consultation period from 6 February 2018 to 6 May 2018. Public consultation is available for all EU member country citizens and organizations. Especially, national and regional authorities, enterprises, business associations or organizations, venture capital providers, research and academic institutions, and individual citizens are expected as the main contributors.
EU member states have had individual definitions of what constitutes an SME. For example, the definition in
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
had a limit of 255
employees, while in
Belgium
Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
it could have been 100. The result is that while a Belgian business of 249 employees would be taxed at full rate in Belgium, it would nevertheless be eligible for SME subsidy under a European-labelled programme.
SMEs are a crucial element in the supplier network of large enterprises which are already on their way towards
Industry 4.0
The Fourth Industrial Revolution, 4IR, or Industry 4.0, conceptualizes rapid change to technology, industries, and societal patterns and processes in the 21st century due to increasing interconnectivity and smart automation. The term has bee ...
.
According to German economist
Hans-Heinrich Bass
Hans Heinrich Bass (born 1 April 1954) is a German Economist and Economic Historian and professor at the City University of Applied Sciences, Bremen, Germany.
Bass obtained his M. A. in Economics and his PhD in Economics and Social Sciences un ...
, "empirical research on SME as well as policies to promote SME have a long tradition in
Germany">estGermany, dating back into the 19th century. Until the mid-20th century, most researchers considered SME as an impediment to further economic development and SME policies were thus designed in the framework of social policies. Only the
Ordoliberalism
Ordoliberalism is the German variant of economic liberalism that emphasizes the need for government to ensure that the free market produces results close to its theoretical potential but does not advocate for a welfare state.
Ordoliberal ideals ...
school, the founding fathers of Germany's
social market economy
The social market economy (SOME; german: soziale Marktwirtschaft), also called Rhine capitalism, Rhine-Alpine capitalism, the Rhenish model, and social capitalism, is a socioeconomic model combining a free-market capitalist economic system alon ...
, discovered their strengths, considered SME as a solution to mid-20th century economic problems (mass unemployment, abuse of economic power), and laid the foundations for non-selective (functional) industrial policies to promote SMEs." Only around 20% of European SMEs are substantially
digitalized, compared to almost 50% of major businesses.
Small and medium-sized companies make up 56.2% of the non-financial sector.
![Major_obstacles_small_and_medium_enterprises_face_when_investing_in_digital_technologies](https://upload.wikimedia.org/wikipedia/commons/c/ca/Major_obstacles_small_and_medium_enterprises_face_when_investing_in_digital_technologies.png)
Smaller companies account for more than 60% of the value contributed to the non-financial sector in
Belgium
Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
,
Italy
Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...
, and
Spain
, image_flag = Bandera de España.svg
, image_coat = Escudo de España (mazonado).svg
, national_motto = ''Plus ultra'' (Latin)(English: "Further Beyond")
, national_anthem = (English: "Royal March")
, i ...
, three of the nations worst hit by the
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...
.
An estimated 50% of Europe's small firms may fail because they lack the substantial financial reserves required to weather the crisis.
The results of an EU survey conducted in 2021 suggest that during the
pandemic
A pandemic () is an epidemic of an infectious disease that has spread across a large region, for instance multiple continents or worldwide, affecting a substantial number of individuals. A widespread endemic (epidemiology), endemic disease wi ...
, in countries with larger fiscal packages, SMEs were on average more likely to experience
bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
even after controlling for the size of the shock, the use of
bank financing, and country and sector fixed effects. When policy assistance rises by 1% of
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
, the probabilities of bankruptcy for a SME are 2.7 times higher than for a non-SME.
Credit limitations are especially difficult for SMEs and new businesses to overcome. Credit constraints affect 24% of SMEs and 27% of young businesses.
Poland
The SME sector in
Poland
Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populous ...
generates almost 50% of the
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
, and out of that, for instance, in 2011, micro companies generated 29.6%, small companies 7.7%, and medium companies 10.4% (big companies 24.0%; other entities 16.5%, and revenues from customs duties and taxes generated 11.9%). In 2011, out of the total of 1,784,603 entities operating in Poland, merely 3,189 were classified as "large", so 1,781,414 were micro, small, or medium. SMEs employed 6.3 million people out of the total of 9.0 million of labour employed in the private sector. In Poland in 2011 there were 36.2 SMEs per 1,000 inhabitants.
Nearly seven million people are employed by small businesses in Poland, which accounts for around half of the country's GDP, yet smaller businesses are less likely than larger ones to invest in strategies to combat climate change or boost energy efficiency. In October 2021, the Bank Ochrony rodowiska, a Polish bank that specializes in funding environmental protection initiatives received €75 million from the European Investment Bank (EIB) for these small enterprises.
The Polish bank wants to use at least 50% of the loan for initiatives with a clear emphasis on tackling climate change, such improving building energy efficiency or turning to renewable energy sources like solar power. The money is set to be distributed across Poland, with around 80% of it projected to go to
cohesive regions.
United Kingdom
In the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
(UK), a company is defined as being an SME if it meets two out of three criteria: it has a turnover of less than £25m, it has fewer than 250 employees, it has gross assets of less than £12.5m.
Very small companies are called in the UK micro-entities, which have simpler financial reporting requirements. Such micro-enterprises must meet any two of the following criteria: balance sheet £316,000 or less; turnover £632,000 or less; employees 10 or less.
Many small and medium-sized businesses form part of the UK's currently growing , or ''Brittelstand'' as it is also sometimes named. These are businesses in Britain that are not only small or medium but also have a much broader set of values and more elastic definition.
The
Department for Business Innovation and Skills
, type = Department
, logo = Department for Business, Innovation and Skills logo.svg
, logo_width = 200px
, logo_caption =
, picture = File:Лондан. 2014. Жнівень 26.JPG
, seal =
, se ...
estimated that at the start of 2014, 99.3% of UK
private sector
The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government.
Employment
The ...
businesses were SMEs, with their £1.6 trillion annual
turnover accounting for 47% of private sector turnover.
In order to support SMEs, the UK government set a target in 2010 "that 25% of government’s spend, either directly or in supply chains, goes to SMEs by 2015"; it achieved this by 2013.
Norway
In Norway it is normal to design small and medium-sized businesses as businesses with less than 100 employees. Businesses with 1-20 employees are defined as small, while businesses with 21-100 employees are considered medium-sized. Businesses with more than 100 employees would be considered a big business. Micro-sized businesses is a little used expression in Norwa
NHO
Small and medium-sized businesses make up more than 99% of all businsesses in Norway, and together they employ 47% of all employees in the private sector. Together, SMEs account for 44% of the economic value added each year - almost 700 billion Norwegian Kroners (NOK
Switzerland
In
Switzerland
). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
, the
Federal Statistical Office defines small and medium-sized enterprises as companies with less than 250 employees.
[Taille, forme juridique, secteurs, répartition régionale]
Swiss Federal Statistical Office
The Federal Statistical Office (FSO) is a Federal agency of the Swiss Confederation. It is the statistics office of Switzerland, situated in Neuchâtel and attached to the Federal Department of Home Affairs.
The Federal Statistical Office ...
(page visited on 24 October 2017). The categories are the following:
[
* Microentreprises: 1 to 9 employees
* Small enterprises: 10 to 49 employees
* Medium-sized enterprises: 50 to 249 employees
* Large enterprises: 250 employees or more
]
North America
Canada
Industry Canada
Innovation, Science and Economic Development Canada (ISED; french: Innovation, Sciences et Développement économique Canada; french: ISDE, label=none)''Innovation, Science and Economic Development Canada'' is the applied title under the Federal I ...
defines a small business as one with fewer than 100 paid employees, and a medium-sized business as one with at least 100 and fewer than 500 employees. As of December 2012, there were 1,107,540 employer businesses in Canada of the rally . Canadian controlled private corporations receive a 17% reduction in the tax rate on taxable income from active businesses up to $500,000. This small business deduction is reduced for corporations whose taxable capital exceeds $10M and is eliminated for corporations whose taxable capital exceeds $15M. It has been estimated that almost $2 trillion of Canadian SMEs will be coming up for sale over the next decade, which is twice as large as the assets of the top 1,000 Canadian pension plans and approximately the same size as Canadian annual GDP.
Mexico
The small and medium-sized companies in Mexico
Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...
are called PYMEs, which is a direct translation of SMEs. But there's another categorization in the country called MiPyMEs. The MiPyMEs are micro, small and medium-sized businesses, with an emphasis on micro which are one man companies or a type of freelance.
United States
In the United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, the Small Business Administration
The United States Small Business Administration (SBA) is an independent agency of the United States government that provides support to entrepreneurs and small businesses. The mission of the Small Business Administration is "to maintain and stren ...
sets small business
Small businesses are types of corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to ap ...
criteria based on industry, ownership structure, revenue and number of employees (which in some circumstances may be as high as 1500, although the cap is typically 500).
Both the US and the EU generally use the same threshold of fewer than 10 employees for small office
Small office/home office (or single office/home office; sometimes short SOHO) refers to the category of business or cottage industry that involves from 1 to 10 workers.
In New Zealand, the Ministry of Business, Innovation and Employment (MBIE) ...
s (SOHO).
Oceania
Australia
In Australia, a SME has 200 or fewer employees. Micro Businesses have 1–4 employees, small businesses 5–19, medium businesses 20–199, and large businesses 200+. Australian SMEs make up 98% of all Australian businesses, produce one-third of total GDP, and employ 4.7 million people. SMEs represent 90 per cent of all goods exporters and over 60% of services exporters.
New Zealand
In New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
, 99% of businesses employ 50 or less staff, and the official definition of a small business is one with 19 or fewer employees.["SMEs in New Zealand: Structure and Dynamics 2011"](_blank)
Page 10-11, Ministry of Economic Development It is estimated that approximately 28% of New Zealand's gross domestic product is produced by companies with fewer than 20 employees.
See also
* Confédération Européenne des Associations de Petites et Moyennes Entreprises (CEA-PME), an international federation of SME associations
* Environmental regulation of small and medium enterprises
Small and Medium Enterprises (SMEs) are defined by the European Commission as having less than 250 employees, independent (with no shareholder having over a 25% stake in the business) and with an annual turnover of no more than €50 million or an ...
* Hidden champions Hidden champions are relatively small but highly successful companies that are concealed behind a curtain of inconspicuousness, invisibility, and sometimes secrecy. The term was coined by Hermann Simon. He first used the term as a title of a public ...
* Mittelstand
commonly refers to a group of stable business enterprises in Germany, Austria and Switzerland that have proved successful in enduring economic change and turbulence. The term is difficult to translate and may cause confusion for non-Germans. It ...
* Small and medium enterprises in Mexico Small and medium enterprises in Mexico, generally called PyMEs ( es, pequeña y mediana empresa), are an important segment of the Mexican economy. They are classified in two types of small and medium enterprises: family businesses and non-family b ...
* Small business
Small businesses are types of corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to ap ...
References
External links
SMEs and Entrepreneurship at the OECD
Small Business Expo Events Schedule USA
MSME Loan 5 Important thing to know
{{DEFAULTSORT:Small And Medium Enterprises
Companies by type