EU industrial structure - EU Bookshop - Europa

EU industrial structure 2011 — Trends and Performance
50
ht mht mlt lt
1997 2007 1997 2007 1997 2007 1997 2007
Estonia 0.6 0.4 0.5 0.5 0.8 1.2 1.9 1.7
Finland 1.5 2.2 0.8 0.7 0.8 0.9 1.4 1.1
France 1.3 1.1 0.9 0.8 1.0 1.1 1.0 1.1
germany 1.2 0.9 1.3 1.4 0.9 0.9 0.8 0.7
greece 0.4 0.5 0.4 0.3 1.0 1.4 1.9 1.7
hungary 1.1 1.4 0.9 1.1 1.0 0.9 1.1 0.8
ireland 2.1 2.0 1.1 1.0 0.4 0.3 1.2 1.4
italy 0.8 0.6 0.9 0.8 1.1 1.2 1.1 1.1
latvia 0.5 0.3 0.3 0.3 0.5 1.1 2.4 2.1
lithuania 0.7 0.2 0.4 0.5 0.7 1.2 2.0 1.7
luxembourg 0.1 0.1 0.6 0.5 1.8 2.0 0.9 0.9
malta 1.3 1.5 0.8 0.9 0.9 0.9 1.2 1.1
netherlands 0.9 0.5 0.9 0.9 0.9 1.0 1.2 1.3
poland 0.5 0.4 0.8 0.8 1.1 1.2 1.3 1.3
portugal 0.7 0.2 0.6 0.5 0.9 1.1 1.6 1.9
slovakia 0.6 0.6 0.8 0.8 1.3 1.4 1.1 1.0
slovenia 1.1 0.8 0.8 1.0 1.0 1.2 1.2 0.9
spain 0.7 0.5 0.9 0.8 1.1 1.3 1.1 1.1
sweden 1.8 1.5 1.0 1.0 0.8 0.9 1.0 1.0
united Kingdom 1.4 1.4 0.9 0.8 0.9 0.9 1.1 1.3
Note: Bulgaria and Romania not available for lack of data.
Source: own calculations using EU KLEMS and Eurostat data.
II.3 Size distribution of enterprises
The distribution of economic activity according to the size of the
enterprises provides a measure of the degree of concentration
and of the share of large and small enterprises in the economy.
This is of interest in understanding sectoral performance, in
analysing competitiveness, and for policy. The distribution
reflects certain characteristics of sectors and, simultaneously,
influences performance and competitiveness. Sectoral
technology (e.g. economies of scale) and market size are some
of the factors explaining the enterprise‑size structure of the
sector, which, in turn, determines market power and sectoral
performance and competitiveness. It is clear that the resilience or
vulnerability of sectors and enterprises to certain market shocks
is affected by the size of enterprises, which also plays a crucial
role in innovation and the development of new activities and
products. For these reasons, it is important to bear in mind the
size of enterprises in the sectoral analysis, and to incorporate it
into formulation of industrial policy.
It is often argued that small and medium‑sized enterprises
(SMEs) constitute the backbone of the EU economy. However,
the share of SMEs varies significantly among industries. The
figure below presents, in a decreasing order, the sectors
where large enterprises dominate: large enterprises are those
with 250 or more employees. The units underlying these
distributions are enterprises. The concentration of value added
in large enterprises that characterises some of the sectors does
not necessarily imply economies of scale since enterprises, and
more particularly the largest ones, may own several small plants.
Large enterprises represent more than 80 % of value added
in the industries producing tobacco, the communications
sector, mineral oil refining and nuclear fuel, motor vehicles,
air transport and other transport equipment. The first
impression is that manufacturing sectors are generally formed
by larger enterprises than services sectors. Indeed, 55 %
on average of enterprises of the manufacturing sector are
above 250 employees against 36 % on average in the services
sectors. The sectors with more than 80 % of SMEs are real estate
activities, recycling and construction. But, contrary to common
belief that manufacturing enterprises are supposed to be large,
decomposition of firm size distribution by sector reveals a more
nuanced picture. Many manufacturing sectors are dominated
by small firms, especially the industries producing leather and
footwear, fabricated metal products, wood products, textiles,
clothing, and furniture where between 72 % and 79 % of the
firms have fewer than 250 employees, cf. Figure II.7. 35
35 According to the official EU definition of an SME, the number of
employees is not the only criterion that matters. The definition also
takes into consideration thresholds related to turnovers of balance
sheet totals. Size distribution according to employment bands
rather than turnover or balance sheet total was favoured because
for data availability reasons.