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Share of small-scale industries in total industry value-added.

Industrial enterprises are classified to small compared to large or medium for their distinct nature of economic organization, production capability, scale of investment and other economic characteristics. “Small-scale industries” can be run with a small amount of capital, relatively unskilled labour and using local materials. Small-scale industries” are capable of meeting domestic demand of basic consumer goods such as food, clothes, furniture, etc. Proportion of “small-scale industries” in total industry value added represents an indicator calculating the share of manufacturing value added of small-scale manufacturing enterprises in the total manufacturing value added.

BELTRAIDE

BELTRAIDE

Annual

Percentage (%)

Despite their small contribution to total industrial output, “Small-scale industries” role in job creation, especially in developing countries is recognized to be significant where the scope of absorbing surplus labour force from traditional sectors such as agriculture or fishery is very high.

Small-scale industrial enterprises, in the SDG framework also called “small-scale industries”, defined here for statistical data collection and compilation refer to statistical units, generally enterprises, engaged in production of goods and services for market below a designated size class.

An establishment is defined as an enterprise or part of an enterprise that is situated in a single location and in which only a single productive activity is carried out or in which the principal productive activity accounts for most of the value added. An establishment can be defined ideally as an economic unit that engages, under single ownership or control, that is, under a single legal entity, in one, or predominantly one, kind of economic activity at a single physical location. Mines, factories and workshops are examples. This ideal concept of an establishment is applicable to many of the situations encountered in industrial inquiries, particularly in manufacturing. Although the definition of an establishment allows for the possibility that there may be one or more secondary activities carried out in it, their magnitude should be small compared with that of the principal activity. If a secondary activity within an establishment is as important, or nearly as important, as the principal activity, then the unit is more like a local unit. It should be subdivided so that the secondary activity is treated as taking place within an establishment separate from the establishment in which the principal activity takes place.

The data come mostly from annual industrial surveys, where value added is disaggregated by size classes given in terms of number of employees and from surveys focusing particularly on small enterprises, or small and medium enterprises in general.

The proportion of “small-scale industries” in total value added is an indicator calculated as a share of value added for small-scale manufacturing enterprises in total manufacturing value added:

(𝑀𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑖𝑛𝑔 𝑣𝑎𝑙𝑢𝑒 𝑎𝑑𝑑𝑒𝑑 𝑜𝑓 "𝑠𝑚𝑎𝑙𝑙 − 𝑠𝑐𝑎𝑙𝑒 𝑖𝑛𝑑𝑢𝑠𝑡𝑟𝑖𝑒𝑠") / (𝑇𝑜𝑡𝑎𝑙 𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑖𝑛𝑔 𝑣𝑎𝑙𝑢𝑒 𝑎𝑑𝑑𝑒𝑑) ∗ 100  

This indicator can be used to measure the share of manufacturing value added of small-scale manufacturing enterprises in the total manufacturing value added.

The main limitation of existing national data is varying size classes by country indicating that data are obtained from different target populations. Data of one country are not comparable to another.

The definition of size class in many countries is tied up with the legal and policy framework of the country. It has implications on registration procedure, taxation and different waivers aimed to promote “small-scale industries”. Therefore, countries may agree on a common size class for compilation purposes. In this context, UNIDO proposes that all countries compile the employment and value-added data by a size class of “small-scale industries” as with less than 20 persons employed. From such data, an internationally comparable data on the share of “small-scale industries” in total could be derived.

All the metadata shown in this document was gathered from United Nation Statistics Division. The metadata was extracted from https://unstats.un.org/sdgs/metadata/.