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Pierre Teillet
European Profiling of GEGs: progress, issues and proposals
Joint UNECE/OECD/Eurostat Meeting on BR 03/09/2013
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201322
Overview
Objectives of the Profiling programme (reminder) slide 3
Context of the programme slide 4
Main results slides 5 to 8
Will we realise this dream ? slides 9 to 18
Annex: definition of the enterprise slide 20
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201333
Reminder of the objectives of European Profiling
Allow the description of the globalised business economy
- as well at international level as at national level;- as well for structural analysis (size, industries, etc) as for
macroeconomics;- and a frame for supporting more detailed or specific investigations
Carry on previous research for the benefit of UN and OECD and cooperate with any interested country.
In technical terms: describe consistently the same MNEs in all EU+EFTA countries
=> “enterprises” linked between countries through the EGR
support efficient data collection in SBS, FATS, FDI & if possible in STS => a system of statistical units for all business statistics
for direct dissemination and indirect use (National accounts etc) => most statistical productions concerned
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201344
Context of the programme
Concerning the team: benefits from the varied backgrounds of the experts … and their open-mindedness: no-one remained stuck to his certainties; uses the opportunities of working for/in international bodies; and has (now) won the support of Eurostat … + yours ?
Concerning the topic: is closing the second cycle of post-war business statistics ?
=> first cycle: technical analysis of physical production (flows in volumes from intermediate consumptions);
=> second cycle: economic analysis of the production and its factors(incl. estimates of stocks);
opens the third cycle:=> analysis of globalised production (ownership, values & margins);
with the opened issue of linking the business internal analysis and the global value chains.
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20135
Main results (reminder 1/4):
Economic/statistical world (global)
Global Enterprise group
Legal Unit
Legal/administrative world (global)
Local (legal) unit
Global Enterprise
Local unit
Economic/statistical world (sub-global)
Truncated Enterprise group
Truncated Enterprise
Local unit
Legal/administrative world (sub-global)
Legal or operational unit (sub global)
Local unit legal or operational
SPE SPE
Step 1
a new system of Statistical Units
Step 2
Step 1 bis
Step 3
with sequentially ordered steps
Step 4
This model is “general”; it applies to all kind – domestic, GEGs – and all size of businesses.It changes very few units; but might change a lot in observing the productive variables.
Global level National level
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201366
Main results: process (reminder 2/4)
3 objectives / 3 lines to start business analysis :
- legal structure (for perimeter of the GEG) => top-down approach - management structure =>“operating segments” as starting points for
enterprises- their own source of data (for EU/countries data consistency) => IFRS basis.
a cooperative process involving 3 types of actors, assessing the suitability to produce statistics (national and European) :
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201377
Main results: methodology and tests blue = reminder 3/4; green = new
extensive testing in progress: at the end of 2013
- 60 intensive profiles produced (3 years programme), on agreed methods- 40 light(er) profiles, for proposals to come,
- from 7 countries in 2009, to 15 in 2013.
methodology progressively integrated in the European System :- with “Consistency” programme for the definition of units,
- with the European Group Register towards the future ESBRs, - with Structural Business Statistics for the future collection process,
- hopeful and probable with OFATS (source for profiling medium-size GEGS, result of profiling for the largest);
- same kind of concerns and same kind of approach (use business own data, “agree” with them, monitor “large units”)
with the National Account(ant)s.
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201388
Main results: guidelines and integration blue = reminder 4/4; green = new
Guidelines to be issued at the end of 2013:
- for use in the future “Vision Implementation Programme” of the EU: “Vision” first decisions yet in progress
a future common EGR/Profiling programme: ESBRs
- include a segmentation for profiling “enterprise groups”: Large and complex GEGs Intensive profiling
Medium Size GEGs, and large but simpler Light Profiling Small groups Automatic profiling (research in complement to Profiling)
Profiling is as well an integrating device for SBS, NA, and all business statistics as a SBR programme:
Results include: BR variables + economic “core variables”(even if the set of “core variables” is still under discussion).
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201399
Will we realise this dream ?
Our main issues are five:
Can our approach succeed ?
Will we get support from the businesses ?
Will we find an acceptable management of statistics ?
Can we remain outside political concerns?
How to finance it all ?
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131010
Will our approach succeed ? – 1/3-
We are confident in the “top-down” approach for statistics:
facilitates the understanding of the “business model” of the groups:gives clues to understand “what is on” => improves the global economic
description; improves also the national one; as examples show:
comprehensive coverage; limitation of double counting; improved economic significance of structural data
This approach is well understood by individual business officials, because close to theirs.
We foresee impacts on economic policies: National for sure (for an overview, see 2 following slides
=> how to apply the Lisbon programme on knowledge policies to SMEs ?) European probably
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201311
Will our approach succeed ? – 2/3- an overview of potential impactEnterprises distribution far more concentrated than by legal units
Shares of legal units / enterprises in total France by size(non farm, non financial market sectors, 2009)
94 95
21 2028
22
4029
5 5
40
29
31
22
23
16
26
23
27
23
24
22
14
28
14
33
13
32
0%
20%
40%
60%
80%
100%
UL
En
t
em
plo
ye
es
UL
em
plo
ye
es
en
t
Va
lue
ad
de
d U
L
va
lue
ad
de
d e
nt
GO
S U
L
GO
S e
nt
Lus with 5,000+ employeesor large enterprises
LUs with 250-4,999employees or ISEs
LUs with 10-250 employeesor SMEs
LUs with fewer than 10employees ormicroenterprises
Source : Insee, Esane, Lifi 2009
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/201312
Shares of legal units / enterprises categories, 2009(non farm and non financial market sectors)
93 94
296 13 5 2 1
6 6
25
9
27
13 1811
25
22
39
3443
26
21
62
21
4937
62
0%
20%
40%
60%
80%
100%
UL ent
Fixe
d as
sets
UL
Fixe
d as
sets
ent
Expo
rt sa
les
UL
Expo
rt sa
les
ent
Lus
R&D
expe
nditu
res
Ent R
&Dex
pend
iture
s
Lus with 5000 +employees or largeentreprisesLus with 10-249employees or ISEs
LUs with 10 249employees or SMES
LUs with fewer than 10employees ormicroentreprises
Source : Insee, Esane, Lifi 2009
Will our approach succeed ? – 3/3- an overview of potential impact Enterprises distribution far more concentrated than by legal units
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131313
Will we get support from the businesses ?
Top-down approach is mostly welcome by individual business officials
But faces 4 types of technical critics: Usually implies initial investment: no priority => make it compulsory
(more for boosting business internal priorities than for acceptance) Usually no country segments available.
Profit and Loss statement rarely by “nature” (mostly by function) : could change to face sustainability and environmental concerns.
Because data by country needed for the whole EU, frequent request for consistent questionnaires and for centralised collection.
=> No specific computations without counterparts
Probable, but yet unofficial, political concerns: difference appearing between individual / business position
some data very sensitive: e.g operating surplus by enterprise x country
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131414
We are aware of the organisational issues it reveals:
between NSIs: Networking between NSIs becomes critical
with a lot of consequences on/from the Code of Practice: “punctuality”, updating, …
Is it mainly a loss of autonomy/independence for each NSI + a longer process ? Necessary changes in confidentiality rules: access to be given to the
European community of statisticians?Is it a revolution for confidence links with businesses and between NSIs ?
Necessary creation and use of specific tools: as for example the IPTLeading to the implication of Eurostat in the production process ?
An acceptable management of business statistics ? (1/3)
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131515
An acceptable management of business statistics ? (2/3)
We are aware of the organisational issues it reveals …(next) inside each NSI:
outstanding changes in the collection structure to be looked at: - creation of a large entities service (with an account management
model for the largest);
- skills to be updated (negociators, accounting specialists, etc); - collection model more diversified: differing collection of data for each type of
enterprises; use of new accounting standards; usual administrative data no more relevant for large multinationals; etc
breaks in series to happen: - need assessment: but if large and significant => are worth it
communication(s) between services (incl National Accounts): - the ideal but impossible “big bang”;
- re-scheduling and synchronisations (concerns always NA … at the end); questions on costs (investments and recurrent).
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131616
We are aware of the organisational issues it reveals …(next)
the role of Eurostat: becoming one of the direct producers:
- for the business register (non-EU GEGS; international financial links), - eventual direct collector of European data;
- for the tools a role to be fully taylored in the coordination and in the financing:
- defining the populations to be profiled and balancing them between countries; - organising a favourable cost-benefit result for each country
to prepare, organiser and financer of research, tests and methodsin or out of ESSnets
An acceptable management of business statistics ? (3/3)
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131717
Can we remain outside the political concerns?
Statistical independence does not prevent us from being hit by political issues.
We statisticians are requested: to produce economically significant data;
to “re-build” national data from global stuff. when at the same time businesses (are allowed to) organize globally;
and optimize at world level their regulatory and fiscal duties and burdens.
We share the same type of issues with: governments and international bodies such as OECD: in this context:
- how to levy taxes at country level ?
- how to organise economic policy without proper data ? NGOs (etc) e.g involved in economic development.
Their solutions are mostly for us steps in a good direction
We are committed; but operate no magic We prove(d) we can. We could do it better.
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131818
How to finance it all ?
Should be easy according to the 3rd principle of
“European Statistics Code of Practice”: The resources available to statistical authorities are sufficient to meet
European Statistics requirements.
Results of a financing model awaited at the end of this year based on the overall time spent for profiling
Priorities to come from the Vision Implementation Programme…
then …
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20131919
Remarks, comments, proposals etc are welcome [email protected]
Joint UNECE/OECD/Eurostat Meeting on BR: Profiling 03/09/20132020
The Enterprise is an organisational market oriented unit which benefits from sufficient degree of autonomy in decision-making. An enterprise carries out one or more activities at one or more locations [1].The Enterprise can correspond either to
- a single legal unit not controlled by any other legal entity=independent legal unit, - an enterprise group as a set of legal units under common control, or- an autonomous part of an enterprise group.
Organisational means: for the economic activities in which the enterprise is engaged, a planned and formal structure is identified. This structure is able to govern the whole production processes managing the whole productive means.Market-oriented means: the enterprise sells in its own will goods and services to an independent buyer and the exchanges are made on the basis of commercial consideration only, called at “arm’s length” (at economically significant prices.). If not all of the exchanges are made at arm’s length, the 50% criterion has to be used: the unit is market oriented if more than 50% of its total cost is covered by exchanges made at arm’s length.Sufficient autonomy in decision-making means: the enterprise has the control of the use (may not be the owner from a legal point of view) of nearly the whole productive means, processes and outputs of the economic activities in which it is engaged.
[1] The enterprise corresponds to the institutional unit contributing to the Gross Domestic Product identified in ESA 2013 as market producers (sectors S11, S12, S141 and S142) with the exclusion of the institutional units that in S14 are “producing for final use only”
Definition of the enterprise [proposed by Eurostat; provisional]: