Small matters. How much
employment is there in self- employment and in micro and small enterprises?

Monday, September 21, 2020 by Dragan Raddic, Head of SME Unit Enterprises Department at International Labour Organization (ILO)

Small matters. How much
employment is there in self- employment and in micro and small enterprises?

Monday, September 21, 2020 by Dragan Raddic, Head of SME Unit Enterprises Department at International Labour Organization (ILO)

How relevant are micro-, small and medium-sized enterprises for the future of work? What about the self-employed?

Until recently, relatively limited worldwide empirical evidence was available to answer the above questions. Many earlier studies relied on data from formally registered firms, leaving the informal economy, which in many countries is the largest contributor to employment, out of the picture. There has been growing recognition of the role, in particular, of self-employment and micro-enterprises in driving employment, yet the evidence base is still not well developed.

Drawing on a new ILO database, ILO’s 2019 « Small Matters » report provides an up-to-date and realistic assessment of the contribution of self-employment and micro- and small enterprises (hereafter referred to as “small economic units”) to employment – both in the formal and the informal economy – across the globe.

A key finding is that, globally, the self-employed and micro- and small enterprises (hereafter referred to as “small economic units”) account for 70 per cent of total employment.

The estimates presented in the report are based on a new ILO database that draws on national household and labour force surveys (as opposed to firm-based surveys) from 99 countries in all the world regions except for North America. Because these surveys target people rather than firms, they are able to cover self-employment and employment in all types of enterprises:

  • Enterprises from all size classes: micro-enterprises (with 2 to 9 employees), small enterprises (with 10 to 49 employees) and medium-sized/large enterprises (with 50 or more employees)[1];
  • Enterprises from the informal as well as the formal sector;
  • Enterprises from agriculture, industry and services (including public services).(Read more…).