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Small and medium-sized enterprises

Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank, the European Union, the United Nations and the World Trade Organization (WTO).

In any given national economy, SMEs sometimes outnumber large companies by a wide margin and also employ many more people. For example, Australian SMEs make up 98% of all Australian businesses, produce one-third of the total GDP and employ 4.7 million people. In Chile, in the commercial year 2014, 98.5% of the firms were classified as SMEs. In Tunisia, 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.

In developing countries, smaller (micro) and informal firms, have a larger share[of what?] than in developed countries.[citation needed] SMEs are also said[by whom?] to be responsible for driving innovation and competition in many[which?] economic sectors. Although they create more new jobs than large firms, SMEs also suffer the majority of job destruction/contraction.

Contents

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SMEs are important for economic and social reasons, given the sectors role in employment. Due to their sizes, SME are heavily influenced by their Chief Executive Officer, a.k.a. CEOs. The CEOs of SMEs often are the founders, owners, and manager of the SMEs. The duties of the CEO in SME are difficult, and mirror those of the CEO of a large company: the CEO needs to strategically allocate her/his 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[citation needed].

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 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. What is not coming under the above three categories would be considered as a large scale enterprise in India.

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.

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

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Egypt

Most of Egypt's businesses are small-sized, with 97 percent employing fewer than 10 workers, according to census data released by state-run statistics body CAPMAS.

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.

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, 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. no

Nigeria

The Central Bank of Nigeria defines small and medium enterprises in Nigeria according to asset base and number of staff employed. The criteria are an asset base that is between N5 million to N500 million, and a staff strength that is between 11 and 100 employees.[citation needed]

Somalia

In Somalia, 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. 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 in the Agricultural sector to R13 million in the Catering, Accommodations and other Trade sectors as well as in the Manufacturing sector, with a maximum of R32 million 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 in the Agricultural sector to R51 million in the Manufacturing sector and R64 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

India

India defines Micro, Small and Medium Enterprises based on dual criteria of Investment and Turnover. In June 2020, India has updated the definition as follows:[citation needed]

Sr No Classification Criteria (in ₹)
1 Micro Enterprises Investment <= 1 cr and Turnover <= 5 cr
2 Small Enterprises Investment <= 10 cr and Turnover <= 50 cr
3 Medium Enterprises Investment <= 50 cr and Turnover <= 250 cr

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 key contributor in India's growth and contribute 48% in India's total export.[citation needed]

Indonesia

In Indonesia, the government defines micro, small, and medium enterprises (Indonesian: usaha mikro kecil menengah, UMKM) based on their assets and revenues according to Law No. 20/2008:

Type Maximum assets, Rp Maximum revenue, Rp
Micro 50,000,000 300,000,000
Small 500,000,000 2,500,000,000
Medium 10,000,000,000 50,000,000,000

An annual revenue of Rp 50 billion is approximately equal to US$3.7 million as of November 2017.

Bangladesh

In Bangladesh, Bangladesh Bank defines Small and medium enterprises based on Fixed Asset, Employed Manpower and Yearly turn over and they are definitely not Public Limited Co. and requires these characteristics -

Serial No Sector Fixed Asset other than Land and Building (Tk)

SE (Small Enterprises) & ME (Medium Enterprises)

Employed Manpower Yearly Turn Over (Tk)

(N/A-Not Applicable)

01 Services For SE 1000,000 - 200,00,000 &

For ME 200,00,000 - 30,00,00,000

SE - 16-50 & ME - 51-120 N/A
02 Business For SE 1000,000 - 200,00,000 SE - 16-50 SE 10,000,000-120,000,000
03 Industrial For SE 7,500,000 - 150,000,000

For Me 150,000,000 - 500,000,000

SE - 31-120 & ME - 121-300 N/A

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, and employ two-thirds of the workforce in the EU. 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, SMEs are enterprises which meet the following definition of staff headcount and either the turnover or balance sheet total definitions:

Company category Staff headcount Turnover Balance sheet total
Medium-sized < 250 ≤ €50 million ≤ €43 million
Small < 50 ≤ €10 million ≤ €10 million
Micro < 10 ≤ €2 million ≤ €2 million

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. As of November 2019[update] no conclusions or responses have yet emerged.

In Europe, there are three broad parameters which define SMEs:

  • Micro-enterprises 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 had a limit of 255 employees, while in Belgium 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. According to German economist Hans-Heinrich Bass, "empirical research on SME as well as policies to promote SME have a long tradition in [West] Germany, 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 school, the founding fathers of Germany's social market economy, 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.

Smaller companies account for more than 60% of the value contributed to the non-financial sector in Belgium, Italy, and Spain, three of the nations worst hit by the COVID-19 pandemic. An estimated 50% of Europe's small firms may fail because they lack the substantial financial reserves required to weather the crisis.

Poland

The SME sector in Poland generates almost 50% of the GDP, 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 was 36.2 SMEs per 1,000 of inhabitants.

United Kingdom

In the 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 Mittelstand, 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 estimated that at the start of 2014, 99.3% of UK private sector 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.

Switzerland

In Switzerland, the Federal Statistical Office defines small and medium-sized enterprises as companies with less than 250 employees. 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 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 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 exceeding $10M, and is completely 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 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 Small Business Administration sets small business 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 offices (SOHO).[citation needed]

Oceania

Australia

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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, produced 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, 99% of businesses employ 50 or less staff, and the official definition of a small business is one with 19 or fewer employees. It is estimated that approximately 28% of New Zealand's gross domestic product is produced by companies with fewer than 20 employees.

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Small and medium-sized enterprises
Small and medium sized enterprises Language Watch Edit Small and medium sized enterprises SMEs or small and medium sized businesses SMBs are businesses whose personnel numbers fall below certain limits The abbreviation SME is used by international organizations such as the World Bank the European Union the United Nations and the World Trade Organization WTO In any given national economy SMEs sometimes outnumber large companies by a wide margin and also employ many more people 1 For example Australian SMEs make up 98 of all Australian businesses produce one third of the total GDP and employ 4 7 million people In Chile in the commercial year 2014 98 5 of the firms were classified as SMEs 2 In Tunisia 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 3 The United States SMEs generate half of all U S jobs but only 40 of GDP 4 In developing countries smaller micro and informal firms have a larger share of what than in developed countries citation needed 5 SMEs are also said by whom to be responsible for driving innovation and competition in many which economic sectors Although they create more new jobs than large firms SMEs also suffer the majority of job destruction contraction 6 Contents 1 Overview 2 Legal boundary on SMEs around the world 2 1 Africa 2 1 1 Egypt 2 1 2 Kenya 2 1 3 Nigeria 2 1 4 Somalia 2 1 5 South Africa 2 2 Asia 2 2 1 India 2 2 2 Indonesia 2 2 3 Bangladesh 2 2 4 Singapore 2 3 Europe 2 3 1 European Union 2 3 2 Poland 2 3 3 United Kingdom 2 3 4 Switzerland 2 4 North America 2 4 1 Canada 2 4 2 Mexico 2 4 3 United States 2 5 Oceania 2 5 1 Australia 2 5 2 New Zealand 3 See also 4 References 5 External linksOverview EditThis section needs expansion You can help by adding to it January 2017 SMEs are important for economic and social reasons given the sectors role in employment Due to their sizes SME are heavily influenced by their Chief Executive Officer a k a CEOs The CEOs of SMEs often are the founders owners and manager of the SMEs The duties of the CEO in SME are difficult and mirror those of the CEO of a large company the CEO needs to strategically allocate her his 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 citation needed This definition is provided in Section 7 of Micro Small amp Medium Enterprises Development Act 2006 MSMED Act and was notified in September 2006 The Act provides for 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 What is not coming under the above three categories would be considered as a large scale enterprise in India 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 7 Legal boundary on SMEs around the world EditMultilateral organizations have been criticized for using one measure for all 8 9 The legal boundary of SMEs around the world vary and below is a list of the upper limits of SMEs in some countries Africa Edit This section needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed May 2015 Learn how and when to remove this template message Egypt Edit Most of Egypt s businesses are small sized with 97 percent employing fewer than 10 workers according to census data released by state run statistics body CAPMAS 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 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 Edit In Kenya 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 no Nigeria Edit The Central Bank of Nigeria defines small and medium enterprises in Nigeria according to asset base and number of staff employed The criteria are an asset base that is between N5 million to N500 million and a staff strength that is between 11 and 100 employees citation needed 10 Somalia Edit In Somalia 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 Edit In the National Small Business Amendment Act 2004 11 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 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 in the Agricultural sector to R13 million in the Catering Accommodations and other Trade sectors as well as in the Manufacturing sector with a maximum of R32 million 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 in the Agricultural sector to R51 million in the Manufacturing sector and R64 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 12 Asia Edit India Edit India defines Micro Small and Medium Enterprises based on dual criteria of Investment and Turnover In June 2020 India has updated the definition as follows citation needed Sr No Classification Criteria in 1 Micro Enterprises Investment lt 1 cr and Turnover lt 5 cr2 Small Enterprises Investment lt 10 cr and Turnover lt 50 cr3 Medium Enterprises Investment lt 50 cr and Turnover lt 250 cr 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 13 MSME is considered key contributor in India s growth and contribute 48 in India s total export citation needed Indonesia Edit In Indonesia the government defines micro small and medium enterprises Indonesian usaha mikro kecil menengah UMKM based on their assets and revenues according to Law No 20 2008 14 Type Maximum assets Rp Maximum revenue RpMicro 50 000 000 300 000 000Small 500 000 000 2 500 000 000Medium 10 000 000 000 50 000 000 000 An annual revenue of Rp 50 billion is approximately equal to US 3 7 million as of November 2017 Bangladesh Edit In Bangladesh Bangladesh Bank defines Small and medium enterprises based on Fixed Asset Employed Manpower and Yearly turn over and they are definitely not Public Limited Co and requires these characteristics Serial No Sector Fixed Asset other than Land and Building Tk SE Small Enterprises amp ME Medium Enterprises Employed Manpower Yearly Turn Over Tk N A Not Applicable 01 Services For SE 1000 000 200 00 000 amp For ME 200 00 000 30 00 00 000 SE 16 50 amp ME 51 120 N A02 Business For SE 1000 000 200 00 000 SE 16 50 SE 10 000 000 120 000 00003 Industrial For SE 7 500 000 150 000 000 For Me 150 000 000 500 000 000 SE 31 120 amp ME 121 300 N ASingapore Edit 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 15 Europe Edit European Union Edit Small companies are important to the European economy as they account for 99 8 of non financial enterprises in the European Union and employ two thirds of the workforce in the EU 16 17 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 18 SMEs are enterprises which meet the following definition of staff headcount and either the turnover or balance sheet total definitions Company category Staff headcount Turnover Balance sheet totalMedium sized lt 250 50 million 43 millionSmall lt 50 10 million 10 millionMicro lt 10 2 million 2 million 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 As of November 2019 update no conclusions or responses have yet emerged 19 In Europe there are three broad parameters which define SMEs Micro enterprises have up to 10 employees Small enterprises have up to 50 employees Medium sized enterprises have up to 250 employees 20 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 21 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 22 EU member states have had individual definitions of what constitutes an SME For example the definition in Germany had a limit of 255 employees while in Belgium 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 23 According to German economist Hans Heinrich Bass empirical research on SME as well as policies to promote SME have a long tradition in West Germany 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 school the founding fathers of Germany s social market economy 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 24 Only around 20 of European SMEs are substantially digitalized compared to almost 50 of major businesses 16 25 Small and medium sized companies make up 56 2 of the non financial sector Smaller companies account for more than 60 of the value contributed to the non financial sector in Belgium Italy and Spain three of the nations worst hit by the COVID 19 pandemic 16 26 An estimated 50 of Europe s small firms may fail because they lack the substantial financial reserves required to weather the crisis 16 27 Poland Edit The SME sector in Poland generates almost 50 of the GDP 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 was 36 2 SMEs per 1 000 of inhabitants 28 United Kingdom Edit In the 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 29 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 30 Many small and medium sized businesses form part of the UK s currently growing Mittelstand or Brittelstand as it is also sometimes named 31 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 estimated that at the start of 2014 99 3 of UK private sector businesses were SMEs with their 1 6 trillion annual turnover accounting for 47 of private sector turnover 32 33 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 34 Switzerland Edit In Switzerland the Federal Statistical Office defines small and medium sized enterprises as companies with less than 250 employees 35 The categories are the following 35 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 Edit Canada Edit Industry Canada 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 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 exceeding 10M and is completely eliminated for corporations whose taxable capital exceeds 15M 36 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 37 Mexico Edit The small and medium sized companies in Mexico 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 Edit In the United States the Small Business Administration sets small business 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 38 Both the US and the EU generally use the same threshold of fewer than 10 employees for small offices SOHO citation needed Oceania Edit Australia Edit This section needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed May 2015 Learn how and when to remove this template message 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 39 Australian SMEs make up 98 of all Australian businesses produced 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 40 New Zealand Edit In New Zealand 99 of businesses employ 50 or less staff and the official definition of a small business is one with 19 or fewer employees 41 42 It is estimated that approximately 28 of New Zealand s gross domestic product is produced by companies with fewer than 20 employees 43 See also EditConfederation Europeenne des Associations de Petites et Moyennes Entreprises CEA PME an international federation of SME associations Environmental regulation of small and medium enterprises Hidden champions Mittelstand Small and medium enterprises in Mexico Small businessReferences Edit Compare Fischer Eileen Reuber Rebecca 2000 Industrial Clusters and SME Promotion in Developing Countries Issue 3 of Commonwealth trade and enterprise paper ISSN 2310 1369 London Commonwealth Secretariat p 1 ISBN 9780850926484 Retrieved 18 November 2020 In most countries small and medium sized enterprises SMEs make up the majority of businesses and account for the highest proportion of employment Chile Financing SMEs and Entrepreneurs 2016 Financing SMEs and Entrepreneurs OECD Publishing 2016 04 14 pp 155 173 doi 10 1787 fin sme ent 2016 11 en ISBN 9789264249462 retrieved 2018 10 01 Rijkers et al 2014 Which firms create the most jobs in developing countries Labour Economics Volume 31 December 2014 pp 84 102 United States Commission for Assistance to a Free Cuba 2004 Report to the President Department of State publication volume 11164 Colin L Powell U S Department of State p 233 Retrieved 18 November 2020 In the United States small business accounts for 50 percent of jobs 40 percent of GDP 30 percent of exports and one half of technological innovations Compare Antoldi Fabio Cerrato Daniele Depperu Donatella 5 January 2012 Export Consortia in Developing Countries Successful Management of Cooperation Among SMEs Berlin Springer Science amp Business Media published 2012 p v ISBN 9783642248788 Retrieved 18 November 2020 Small and medium sized enterprises SMEs are highly significant in both developed and developing countries as a proportion of the totl number of firms for the contribution they make to employment and for their ability to develop innovation Aga et al 2015 SMEs Age and Jobs A Review of the Literature Metrics and Evidence World Bank Group November 2015 P E Petrakis P C Kostis 2012 The Role of Knowledge and Trust in SMEs Journal of the Knowledge Economy DOI 10 1007 s13132 012 0115 6 Kushnir 2010 A Universal Definition of Small Enterprise A Procrustean bed for SMEs World Bank Gibson T van der Vaart H J 2008 Defining SMEs A Less Imperfect Way of Defining Small and Medium Enterprises in Developing Countries Brookings Institution website September 2008 Central Bank Of Nigeria March 30 2010 N200 BILLION SMALL AND MEDIUM ENTERPRISES CREDIT GUARANTEE SCHEME SMECGS PDF Central Bank of Nigeria Retrieved December 9 2017 Republic of South Africa National Small Business Amendment Act PDF www thedti gov za Retrieved 10 October 2015 Du Toit Erasmus amp Strydom Definition of small business Introduction to business management 7th Edition Oxford University Press 2009 p 49 Micro Small and Medium Enterprises Reserve Bank of India Retrieved 9 May 2015 Indonesian Government Law No 20 of 2008 PDF Commission for the Supervision of Business Competition Retrieved 2 November 2017 Fact Sheet on New SME Definition PDF a b c d Digital innovation hubs to the rescue European Investment Bank Retrieved 2021 07 15 Anonymous 2016 07 05 Entrepreneurship and Small and medium sized enterprises SMEs Internal Market Industry Entrepreneurship and SMEs European Commission Retrieved 2021 07 15 What is an SME Small and medium sized enterprises SME Enterprise and Industry ec europa eu Archived from the original on February 8 2015 Retrieved 2015 06 12 CS1 maint unfit URL link European Commission Public consultation on the review of the SME definition accessed 22 November 2019 European Commission 2003 05 06 Recommendation 2003 361 EC SME Definition Archived from the original on 2015 02 08 Retrieved 2012 09 28 Enterprise and Industry Publications The new SME definition user guide and model declaration Extract of Article 2 of the Annex of Recommendation 2003 361 EC Consultations European Commission European Commission Retrieved 2018 02 19 Sommer Lutz 28 November 2015 Industrial revolution industry 4 0 Are German manufacturing SMEs the first victims of this revolution Journal of Industrial Engineering and Management 8 5 doi 10 3926 jiem 1470 Hans Heinrich Bass KMU in der deutschen Volkswirtschaft Vergangenheit Gegenwart Zukunft Berichte aus dem Weltwirtschaftlichen Colloquium der Universitat Bremen Nr 101 Bremen 2006 Archived 2017 12 15 at the Wayback Machine PDF 96 kB Small and medium sized enterprises an overview ec europa eu Retrieved 2021 07 15 Small and medium sized enterprises an overview ec europa eu Retrieved 2021 07 15 Coronavirus COVID 19 SME policy responses OECD Retrieved 2021 07 15 D Walczak G Voss New Possibilities of Supporting Polish SMEs within the Jeremie Initiative Managed by BGK Mediterranean Journal of Social Sciences Vol 4 No 9 p 760 761 Mid sized businesses gov uk Department of Business Innovation and Skills Retrieved 11 June 2015 Micro entities small and dormant companies GOV UK Brian Groom 1 October 2015 Brittelstand stymied by lack of growth and skills Financial Times Retrieved 11 September 2020 Bridging loans UK can be used for many purposes www konnectfinancial co uk Konnect Financial Archived from the original on 11 October 2015 Retrieved 10 October 2015 Statistical Release Business Population Estimates for the UK and Regions 2014 PDF Department for Business Innovation and Skills 26 November 2014 Retrieved 9 May 2015 2010 to 2015 government policy government buying 20 February 2013 Retrieved 9 May 2015 a b in French Taille forme juridique secteurs repartition regionale Swiss Federal Statistical Office page visited on 24 October 2017 T2 Corporation Income Tax Guide Chapter 4 Page 4 of the T2 return Canada Revenue Agency Retrieved 27 April 2014 Equicapita May 2014 Who Will Buy Baby Boomer Businesses PDF United States Small Business Administration Size Standards Retrieved 2011 08 21 1321 0 Small Business in Australia 2001 23 October 2002 Retrieved 30 September 2015 AN INTRODUCTION TO FTAs FREE TRADE AGREEMENTS PDF Small Business Association of Australia 2015 Retrieved 29 March 2016 permanent dead link Ministry of Business Innovation and Employment 2014 The Small Business Sector Report 2014 PDF Ministry of Business Innovation and Employment MBIE Archived from the original PDF on 2017 03 12 SMEs in New Zealand Structure and Dynamics 2011 Page 10 11 Ministry of Economic Development Archived copy PDF www mbie govt nz Archived from the original PDF on 2018 12 10 Retrieved 2018 12 09 CS1 maint archived copy as title link External links EditSMEs and Entrepreneurship at the OECD SME definition by European Commission Small Business Expo Events Schedule USA MSME Loan 5 Important thing to know Retrieved from https en wikipedia org w index php title Small and medium sized enterprises amp oldid 1053632847, wikipedia, wiki, book,

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