| SMEs play a vital part in Europe’s economcy |
| Do you know how one defines the term SME when looking at the number of employees, turnover as well as balance sheet? |
| We give you the definition and links to other documents regarding defining the term SME. |
Small and medium enterprises sometimes also called small- and medium sized enterprises (SMEs) are considered important drivers of innovation and change in Europe. Nonetheless, it is not always clear what is an SME and what is not.However, the European Commission (formally the Commission of the European Communities) has provided a a definition of what a micro, small and medium sized enterprise is regarding number of employees, annual turnover or annual balance sheet.
| Table – How does the European Union classify Small- and Medium-Sized Enterprises (SMEs)? |
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Head Count Annual Work Unit (AWU) 1 |
Annual turnover |
or |
Annual balance sheet |
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Medium-sized enterprises |
< 250 |
≤ €50 million
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|
≤ €43 million
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|
Small enterprises |
< 50
|
≤ €10 million
|
|
≤ €10 million
|
|
Micro enterprises |
< 10
|
≤ €2 million
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|
≤ €2 million
|
Note. This definition is taken from the COMMISSION RECOMMENDATION of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises [notified under document number C(2003) 1422] (Text with EEA relevance) (2003/361/EC) (May 20, 2003).
On 6 May 2003 the Commission adopted a new Recommendation 2003/361/EC regarding the SME definition which replaced Recommendation 96/280/EC from 1 January 2005.
1 Anyone who worked full-time in the enterprise or on its behalf during the entire reference year counts as one AWU. Accordingly, part-time staff, seasonal workers and those who did not work the full year are treated as fractions of one unit.
WHAT IMPACT DO SMEs HAVE UPON TOTAL EMPLOYMENT IN EUROPE?
Micro, small and medium-sized enterprises are socially and economically important, they represent 99 % of an estimated 23 million enterprises in the EU and provide around 75 million jobs representing two-thirds of all employment. SMEs contribute up to 80% of employment in some industrial sectors, such as textiles, construction or furniture.
International Finance Corporation: Micro, Small, and Medium Enterprises: A Collection of Published Data (MS Excel file, 17 May 2005)
HOW DOES THIS RELATE TO SOCIAL MARKETING AND BECHMARKING?
A rethorical question for sure but considering the importance of these enterprises it is surprising how little if anything is done serving their needs in the social marketing space. For instance, most benchmarks or social marketing metrics discussed are extremely cumbersome for SMEs to follow and/or implement.
Nonetheless, this group of firms requires tools and social marketing metrics as well as advisories or best practice suggestions that are easy to implement and result in substantial improvement regarding the firm’s security posture.
We will continue to address these SME related matters in upcoming weeks and months here.
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