Small and medium enterprises
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Small and medium enterprise or small and medium-sized enterprise (SMEs, small and medium-sized businesses, SMBs and variations thereof) are companies whose personnel numbers fall below certain limits. The abbreviation "SME" is used in the European Union and by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO). The term "small and medium businesses" (or "SMBs") is predominantly used in the USA. In most economies, smaller enterprises outnumber large companies by a wide margin. SMEs are said to be responsible for driving innovation and competition in many economic sectors.
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Europe
EU member states have had individual definitions of what constitutes an SME. For example, the definition in Germany had a limit of 255 employees, while in Belgium it could have been 100.
In July 2011, the European Commission said it would open a consultation on the definition of SMEs in 2012. In Europe, there are three broad parameters which define SMEs: micro-entities are companies with up to 10 employees; small companies employ up to 50 workers, whilst medium-sized enterprises have up to 250 employees.1 SMEs are also defined as firms with either revenues of €10–50 million or a balance-sheet total of €10–43 
United States
In the United States, the Small Business Administration sets small business criteria based on industry, ownership structure, revenue and number of employees (which in some circumstances may be as high as 1,500, although the cap is typically 500).2 Both the US and the EU generally use the same threshold of fewer than 10 employees for small offices (SOHO).
India
- Micro-enterprise
A micro-enterprise is one where the investment in plant and machinery (their original cost excluding land, building and items specified by the Ministry of Small Scale Industries in its notification No. S.O. 1722(E) dated October 5, 2006) does not exceed Rs.25 lakh.
- Small enterprise
A small enterprise is one where the investment in plant and machinery (see above) is more than Rs.25 lakh but does not exceed Rs.5 crore.
- Medium enterprise
A medium enterprise is one where the investment in plant and machinery (see above) is more than Rs.5 crore but does not exceed Rs.10 crore.
The definition of MSMEs in the service sector is:
- Micro-enterprise: Investment in equipment does not exceed Rs.10 lakh
- Small enterprise: Investment in equipment is more than Rs.10 lakh but does not exceed Rs.2 crore
- Medium enterprise: Investment in equipment is more than Rs.2 crore
The Indian micro- and small-enterprises (MSEs) sector plays a pivotal role in the country's industrial economy. It is estimated that in value, the sector accounts for about 39 percent of manufacturing output and about 33 percent of total exports. In recent years, the MSE sector has consistently registered a higher growth rate than the overall industrial sector. The major advantage of the MSE sector is its employment potential at a low capital cost. According to available statistics, the sector employs an estimated 31 million people in 12.8 million enterprises; labor intensity in the MSE sector is estimated to be nearly four times that of large enterprises.3
Kenya
In Kenya, the term is SME (for "small, medium and micro enterprises"); elsewhere in Africa, MSME stands for "micro, small and medium enterprises". Maximum number of employees = ? maximum revenue or turnover
South Africa
In South Africa, the term is SMME (for "small, medium and micro enterprises"); elsewhere in Africa, MSME stands for "micro, small and medium enterprises".
Canada
Industry Canada defines a small business as one with fewer than 100 employees (if the business is a goods-producing one) or fewer than 50 employees (if the business is service-based), and a medium-sized business as one with fewer than 500 employees.
New Zealand
In New Zealand, a SME has 19 or fewer employees.
Nigeria
The Central Bank of Nigeria defines small and medium enterprises in Nigeria according to asset base and number of staff employed. The criteria are an asset base between N5 million and N500 million, and a staff strength between 11 and 300 employees.
See also
References
- ^ European Commission (2003-05-06). "Recommendation 2003/361/EC: SME Definition". http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/index_en.htm. Retrieved 2009-04-05.
- ^ United States Small Business Administration. "Size Standards". http://www.sba.gov/category/navigation-structure/contracting/contracting-officials/size-standards. Retrieved 2011-08-21.
- ^ "Home Page for Ministry of Agro & Rural Industries". Msme.gov.in. 2007-05-09. http://msme.gov.in/msme_aboutus.htm. Retrieved 2010-12-09.