October 20, 2014

The Importance of Micro Enterprises

Micro enterprises are a more important source of jobs in some countries than in others. Data from Entrepreneurship at a Glance, a publication of the Organization for Economic Development and Cooperation (OECD), shows wide variation across nations in the share of employment in micro-businesses. While nearly 60 percent of Greeks work in businesses with one-to-nine employees, only 4.6 percent of Slovaks do.

Americans are less likely than people in many other countries to work in micro enterprises. As the figure below shows, only 11.1 percent of Americans worked for companies with fewer than ten employees in 2007 (the latest year for which the data are available).

With such different shares of their work forces in micro businesses, policy makers in different countries must take varying approaches to stimulating employment. In Greece and Italy, for instance, government officials need to concentrate on ways to help micro business owners, while in the Slovak Republic and Luxembourg, those in a similar positions need to employ other policies entirely.

Source: Created from data from the OECD Entrepreneurship at a Glance

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Scott Shane


Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.

One Reaction

  1. Should the term ‘micro’ be redefined (or, defined authoritatively)? If small businesses in the US can have as many as 1000 employees (http://www.sba.gov/sites/default/files/Size_Standards_Table.pdf), maybe micro businesses should at least be up to 20 employees. With that definition, and including non-employer businesses – also part of the complete employment picture, the percentage of employment by micros is closer to 35% in the US. (Employment Size of Firms http://www.census.gov/econ/smallbus.html)

    The definition and exclusions matter as we move toward a better understanding of how jobs created might be better sustained. What size classes, if given more support to keep them in business beyond through year 5 and beyond, would be most likely to create and sustain more jobs?

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