Micro Firms Contribute to about Majority of SMEs in U.K

U non-financial business economy, consists of 20 million enterprises, of which about 99.8 % are SMEs (firms having less than 250 employed persons), of these SMEs, 92% are micro enterprises (having less than 10 employees).

The European Association had released statistics regarding the growth of business firms in the year 2002 to 2008. for that year, the number of SMEs increased by 2.4 millionor 13%, while large enterprises saw the growth of only 2000 enterprises or 5%. From the analysis of results, it was seen that, the countries which were having low average enterprise size in 2002 – 2008, were found to have high average enterprise size in 2002 and vice versa.

Between 2002 and 2008, on an average there was an increase of 1.9% annually in the number of jobs in SMEs, creating 9.4 million jobs, whereas it was 0.8% in large enterprises.

Due to differences in structure of sector and intensity of capital, use of lower qualified personnels and the lesser ability of smaller enterprises, the labor productivity in smaller enterprises is less than large enterprises. The average labour productivity in case of micro enterprises is EUR 32,000 while in larger enterprises is EUR 59,000.

It is found that in the whole of EU non financial business economy, the tendency to invest in the business is higher for micro enterprises. In case of micro firms, 24% of value added constitutes to gross investment in tangible goods, while it is 19% for all the firms together. Micro firms are more likely to invest in real estate sector (76%), which comprises to 13% of micro firm sector, in terms of value added.