1. June 19, 2007Montréal ICES-III June 19, 20071 Third International Conference on Establishment Surveys Introductory Overview Lecture Statistical Business Register Content, Place and Role in Economic Statistics Jean Ritzen, Statistics Netherlands

2. June 19, 2007Montréal ICES-III June 19, 20072 Content of the lecture 1.Introduction 2.Modeling society: several and different views 3.Why and what a business register 4.Difference between an administrative BR and a statistical BR (administrative: instruments for control and governance) 5.Basic content and requirements of SBR 6.Goals and uses in statistics 7.Challenges 8.Some figures 9.Discussion

3. June 19, 2007Montréal ICES-III June 19, 20073 Modeling society Social order Social structure Social processes

4. June 19, 2007Montréal ICES-III June 19, 20074 Modeling society Social order Social structure Social processes Several and different views

5. June 19, 2007Montréal ICES-III June 19, 20075 Modeling society Social order Social structure Social processes Several and different views Economic order Economic structure Economic processes

6. June 19, 2007Montréal ICES-III June 19, 20076 Modeling society Social order Social structure Social processes Several and different views Economic order Economic structure Economic processes Economic Statistics e.g. economic view

7. June 19, 2007Montréal ICES-III June 19, 20077 Economic Statistics Statistics describing the structure of the economy: number and kind of elements/entities Consumers Producers of goods and/or services (incl. government) Financing units Statistics describing the economic processes: Interaction between elements (real and/or monetary) Consuming processes Producing processes Financing processes Relationships with abroad

8. June 19, 2007Montréal ICES-III June 19, 20078 Economic Statistics Statistics describing the structure of the economy: number and kind of elements/entities Consumers Producers of goods and/or services (incl. government) Financing units Statistics describing the economic processes: Interaction between elements (real and/or monetary) Consuming processes Producing processes Financing processes Relationships with abroad EconomiccycleEconomiccycle

9. June 19, 2007Montréal ICES-III June 19, 20079 Economic Statistics Conceptual frames: System of National Accounts (SNA) European System of Accounts (ESA) Describing: Types and definitions of entities (economic/statistical units) Types and definitions of transactions/flows between entities Classifications to be distinguished and applied

10. June 19, 2007Montréal ICES-III June 19, 200710 Economic Statistics Operational infrastructural frames and metadata systems Population (survey) frames Business (survey) frames Institutional sector classification Industrial classification (kind of activities) Classification of changes Definitions of entities/units Definitions of terms Size-classifications (turnover/employment) Other, e.g. editing and processing rules

11. June 19, 2007Montréal ICES-III June 19, 200711 Business (Survey) Frames Most known and important one: Statistical Business Register: A full and comprehensive list of all entities, institutionally and formally involved in production and financing processes of the economy to facilitate and support the collection of statistical data and the compilation and dissemination of statistical information. The entities are standardized according the operational frame of definitions of appropriate units.

12. June 19, 2007Montréal ICES-III June 19, 200712 Statistical Business Register (1) The SBR is the infrastructural backbone in system of economic statistics: Population frame for business statistics List of units and characteristics Rules and procedures for co-ordination of statistics Basic reference information Part of surveying methodology Sampling procedures and grossing up procedures Frame/tool for survey management and survey control Frame/tool for control of administrative burden

13. June 19, 2007Montréal ICES-III June 19, 200713 Statistical Business Register (2) More complex than a register of natural persons and/or households because of the many ways of manifestation of units in the real world, e.g. many kinds of legal forms and ways of being organized. Need for standardization into (objective) statistical units: Enterprise group Enterprise Local unit Statistical units appropriate for registration

14. June 19, 2007Montréal ICES-III June 19, 200714 Statistical Units The EU-list of statistical units of the production system (according EU-regulation): A.the enterprise; B.the institutional unit; C.the enterprise group; D.the kind-of-activity unit (KAU); E.the unit of homogeneous production (UHP); F.the local unit; G.the local kind-of-activity unit (local KAU); H.the local unit of homogeneous production (local UHP).

15. June 19, 2007Montréal ICES-III June 19, 200715 EU Statistical units: relationships EG UHP IU EnterpriseLegal Unit KAU Local KAULocal UHP Local Unit Statistical World Administrative World

16. June 19, 2007Montréal ICES-III June 19, 200716 Statistical units: definitions* A.the enterprise: The enterprise is the smallest combination of legal units that is an organizational unit producing** goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit. C.the enterprise group: An enterprise group is an association of enterprises bound together by legal and/or financial links. A group of enterprises can have more than one decision-making centre, especially for policy on production, sales and profits. It may centralize certain aspects of financial management and taxation. It constitutes an economic entity which is empowered to make choices, particularly concerning the units which it comprises. F.the local unit: The local unit is an enterprise or part thereof (e.g. a workshop, factory, warehouse, office, mine or depot) situated in a geographically identified place. At or from this place economic activity is carried out for which - save for certain exceptions - one or more persons work (even if only part-time) for one and the same enterprise. *) Source: EU regulation on Statistical Units **) An important criterium is the generating of value added

17. June 19, 2007Montréal ICES-III June 19, 200717 Legal/Administrative vs. Economic/statistical Legal/administrative organization of society: The way of creation of entities and rules in order to perform optimally according goals. Regulatory and executive institutes (e.g. tax-offices) keep lists for own purposes. Focus is on governance and control with orientation on individual persons and/or institutions. Organization is according national legislation. Economic/statistical approach via standardization into standard concepts of units, independent of national legislation and/or administration in principle. Individual information in context of groups. No direct repercussion on individuals.

18. June 19, 2007Montréal ICES-III June 19, 200718 The SBR: simple model Domestic Legal or natural person Economic/statistical worldLegal/administrative world Enterprise group = enterprise = local unit All domestic legal and natural persons are mapped from the legal/administrative world into the economic/statistical one if they contribute to the production process, and if they do this “autonomously”. Inactive units do not reach the economic statistical part.

19. June 19, 2007Montréal ICES-III June 19, 200719 The SBR: extended model Domestic Legal or natural person Economic/statistical worldLegal/administrative world (Domestic) Enterprise group Local (legal) person Enterprise Local unit

20. June 19, 2007Montréal ICES-III June 19, 200720 SBR: Related EU Regulations For standardization in European Union: Regulation on statistical units Regulation on business registers

21. June 19, 2007Montréal ICES-III June 19, 200721 The SBR: model EU BR Regulation Domestic Legal or natural person Economic/statistical worldLegal/administrative world (Domestic) Enterprise group Local (legal) person Enterprise Local unit

22. June 19, 2007Montréal ICES-III June 19, 200722 The SBR: model EU BR Regulation Domestic Legal or natural person Economic/statistical worldLegal/administrative world (Domestic) Enterprise group Local (legal) person Enterprise Local unit

23. June 19, 2007Montréal ICES-III June 19, 200723 SBR: units and main characteristics Legal unit Local legal unit Enterprise group EnterpriseLocal Unit Time stamp Source keyxx SBR ID Numberxxxxx Control/ownershipx Legal formx SNA-sector-codex SIC-code(s)xxxxxx Size-class-code(s)xxxxxx Change codexx(x)x GEO-codexx Survey-codesxxxx Date of entryxx Date of birthxx(x) Date of deathxx(x) Date of deregisterxx

24. June 19, 2007Montréal ICES-III June 19, 200724 Some characteristics explained SNA-sector- code Institutional sector SIC-codeISIC, NACE, NAICS, ANZIC, National codes Regards main activities and secundary activities Size-classPersons employed, employees, turnover Change-codeKind of change in relation to continuity; control of events GEO-codeAdress-code, postal code, municipality, grid Survey codeIndicates the survey in which the unit is involved Time stamp : date of registation;, date of start applying; date of checking; date of end of applying

25. June 19, 2007Montréal ICES-III June 19, 200725 Classification of changes (events)* * According Ad Willeboordse and Peter Struijs: papeer presented at ICES-I, 1993 ** Number of units before and after the change: x>1, y>1.

26. June 19, 2007Montréal ICES-III June 19, 200726 SBR: Sources and maintenance Administrative sources (as much as useful available): tax, chambers of commerce, courts, social security (NB: avoid capriciousness) Highly automated procedures and processing Feed-back information from statistical surveys Register-surveys Profiling: tailor-made analysis of large businesses (internet, annual reports, visits, …) Dun & Bradstreet

27. June 19, 2007Montréal ICES-III June 19, 200727 SBR: Update-procedure administrative sources Tax Social security Chambers of commerce Other Administrative Environment (units) Statistical Environment (units) Enterprise group Enterprise Local unit Standardized/ normalized (Local) Legal Unit Auxiliary environment

28. June 19, 2007Montréal ICES-III June 19, 200728 SBR: Update-procedure administrative sources Tax Social security Chambers of commerce Other Administrative Environment (units) Statistical Environment (units) Enterprise group Enterprise Local unit Standardized/ normalized (Local) Legal Unit Auxiliary environment 2,0 mln 0,98 mln 1,02 mln 1,12 mln 1,9 mln Figurs in the Dutch SBR-system at th end of 2006, excluding agriculture

29. June 19, 2007Montréal ICES-III June 19, 200729 Example of analysis of newly registered legal units

30. June 19, 2007Montréal ICES-III June 19, 200730 SBR: main (possible) uses 1.Business survey frame Stratified sampling (selection of units) Survey dispatch (names/addresses) and tool for survey management/control Instrument facilitating use of data in administrative registers for statistics (frame for standardization and normalization) Burden control + monitoring 2.Frame for co-ordination statistics Comparability in and over time Comparability between (sub)populations Control of continuity 3.S tatistical analysis Economic demography Small area analysis 4.Internationally Comparability of statistics of different countries, contemporary and in time series Analysis of globalization 5.Selling lists

31. June 19, 2007Montréal ICES-III June 19, 200731 Business register and economic statistics Place and Role of the statistical business register is very important to serve and support statistical processes. Business register is part of economic-statistics- system and has evaluated to a business register system with subsystems.

32. June 19, 2007Montréal ICES-III June 19, 200732 SBR: main challenges Meeting traditional goals and purposes more efficient and more effective (e.g. development of automatic coding systems) Efficient use of administrative sources Normalization tool in the use of administrative data for statistics: translation from administrative, legal based, concepts into statistical concepts Dealing with imperfections and frame errors International comparability of statistical data starting with harmonized SBR-concepts Improvement of quality

33. June 19, 2007Montréal ICES-III June 19, 200733 SBR: Quality indicators Coverage (overcoverage (% duplications ) and undercoverage) Completeness/exhaustiveness Actuality Percentage errors (all variables) Effectiveness of use available administrative information Rate of disclosure administrative data Fitness for use System-integrity (consistency)

34. June 19, 2007Montréal ICES-III June 19, 200734 Important SBR issues Awareness on: Restricted available budgets Necessity of use administrative sources Budget Timeliness Response burden Importance of support in revisions of classifications (e.g. introduction of NACE rev.2) Common responsibility for quality of statistics Continuity in sources Reconstructible frames (using time-staping) Need for good relationships with administrative sources, resulting in influence in content

35. June 19, 2007Montréal ICES-III June 19, 200735 Important SBR development issues 1.Expanding goals and uses internationally: Multinational enterprises Globalization Supranational statistics 2.Further imbedding SBR-system in system of economic statistics 3.Expanding statistical use of the SBR 4.Further imbedding of the SBR in the total information system of the society 5.Further development of quality control

36. June 19, 2007Montréal ICES-III June 19, 200736 Example relationships units (1) ENT GR 1 SRU B ENT 1ENT 2ENT 3 LU 2 LU 3LU 4LU 5LU 6 LU 7 SRU 2SRU 3SRU 4 SRU 5SRU 7SRU 8SRU 9SRU A LU 1 SRU 1 SOURCE 1SOURCE 2SOURCE 3SOURCE 4 SRU 6

37. June 19, 2007Montréal ICES-III June 19, 200737 ENT GR 1 SRU B ENT 1ENT 2ENT 3 LU 2 LU 3LU 4LU 5LU 6 LU 7 SRU 2SRU 3SRU 4 SRU 5SRU 7SRU 8SRU 9SRU A LU 1 SRU 1 Combine Split Combine/split SOURCE 1SOURCE 2SOURCE 3SOURCE 4 SRU 6 Example relationships units (2)

38. June 19, 2007Montréal ICES-III June 19, 200738 “Profiling” Results in Dutch SBR 2005 legal units enterprise groups enterprises 20 – 29  195  717 30 – 39  88  974 40 – 59  64  903 60 – 99  44  833 100 and more  37  970

39. June 19, 2007Montréal ICES-III June 19, 200739 Some figures (1)

40. June 19, 2007Montréal ICES-III June 19, 200740 Some figures (2)

41. June 19, 2007Montréal ICES-III June 19, 200741 Some figures (3)

42. June 19, 2007Montréal ICES-III June 19, 200742 Card box (mut.slips, adm) 1970 - 1978 -P1400 SBR (stat) 1974 - 1978 -Inforex (adm) 1979 - 1988 -Siemens SBR (adm+stat) 1989 – 1993 + Adabas DMBS -Cyber SBR (stat) 1978 - 1993 -Oracle SBR (adm+stat)1993 - 2006 -Dotnet system (adm+stat) 2006 - … Some technical SBR history at Statistics Netherlands

43. June 19, 2007Montréal ICES-III June 19, 200743 References: Council Regulation (EEC) No 3037/90 of 9 October 1990 on the statistical classification of economic activities in the European Community, amended by Commission Regulation (EEC) No 761/93 of 24 March 1993 and Commission Regulation (EC) No 29/2002 of 19 December 2001 Commission Regulation (EC) No 1893/2006 of 20 December 2006 (NACE rev 2.0) Council Regulation (EEC) No 696/93 of 15 March 1993 on the statistical units for the observation and analysis of the production system in the Community Council Regulation (EEC) No 2186/93 of 22 July 1993 on Community co-ordination in drawing up business registers for statistical purposes + Recommendations Manual (Amendation is in the stage of decision) Many papers prepared anmd presented at the yearly International Roundtable on Business Survey Frames: http://circa.europa.eu/Public/irc/dsis/businessurvey/library Jean Ritzen, 1995, Characteristics, maintenance and uses of the business register. In: Netherlands Official Statistics, Spring 1995.

44. June 19, 2007Montréal ICES-III June 19, 200744 Thank you for your attention! Questions? => jrtn@cbs.nl