2000 Edition

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

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The OECD SME Outlook 2000 provides an overview of trends in SME performance and policies in the OECD area and evaluations of selected programmes. It contains policy profiles for 27 Member countries. Most governments apply a range of programmes aimed at alleviating the difficulties that SMEs experience in diverse areas (e.g. financing, technology and innovation, management, exports) and are seeking to identify best practice policies. The Outlook aims to broaden and deepen the analyses of SME policies and highlights common lessons that can be drawn from Member country experiences to ensure that they remain relevant and effective. The report also synthesises thematic work undertaken by the OECD Industry Committee's Working Party on SMEs – High-growth SMEs, Financing Women Entrepreneurs, Regulatory Reform and SMEs, and Electronic Commerce and SMEs. The Statistical Annex contains the most recent SME data and key indicators – output and employment – as well as statistics on the role of SMEs in employment gains and losses, and enterprise demography data.

This 2000 edition of the SME Policy Outlook, the first of a biennial series, was co-ordinated and prepared by Marian Murphy, and benefited from contributions by Thomas Andersson, Marie-Florence Estime, Sara Johansson, Shigeaki Koga, Mariarosa Lunati, Maria Maher, Akira Masunaga, Paul Schreyer and Helgard Wienert. This book is published on the responsibility of the Secretary-General of the OECD.

Chapter 2. Evaluation of SME Policies and Programmes

Chapter 3. Thematic Reviews

Chapter 4. Country Profiles

Statistical Annex

Outlook for SME Performance

SMEs in the new economy

Productivity growth
and overall economic growth
in OECD countries
will continue to be strongly
influenced by the dynamism
of the SME sector.

This Overview presents the outlook for small and medium-sized enterprise (SME) performance and policies in the near- to medium-term, based on an analysis of current trends. SMEs are at the core of future economic growth in OECD countries. Productivity growth is fueled by competitive processes in industry which, to a large extent, build on the birth and death, entry and exit of smaller firms. Over 95% of enterprises in the OECD area are SMEs, which account for 60%-70% of jobs in most countries. They are the source of most new jobs and make significant contributions to innovation and high-technology employment.

In addition, they are of considerable importance for regional development and for social cohesion. However, less than one-half of small start-ups survive for more than five years and only a fraction develop into high-performance firms. Governments need new and improved approaches for maximising the small-firm contribution to economic and social well-being.

What are SMEs? SMEs are non-subsidiary, independent firms which employ fewer than a given number of employees. This number varies across countries. The most frequent upper limit designating an SME is 250 employees, as in the European Union. However, some countries set the limit at 200 employees, while the United States considers SMEs to include firms with fewer than 500 employees. Small firms are generally those with fewer than 50 employees, while micro-enterprises have at most ten, or in some cases five, workers. Financial assets are also used to define SMEs. In the European Union, SMEs must have an annual turnover not exceeding EUR 40 million and/or a balance-sheet valuation not exceeding EUR 27 million.