Small business is big business for Luxembourg
Small businesses account for the majority of jobs in the Luxembourg services sector and provide a significant number of jobs in all sectors. However, they face a higher risk of folding than their larger counterparts.
A total 87 percent of firms in Luxembourg employed fewer than 10 staff, according to the latest OECD study of small companies and entrepreneurs based in member states for 2012.
The proportion is similar to that reported in other member states but what makes Luxembourg stand out is that small businesses are particular pronounced in the services sector.
Small businesses provide quarter of all jobs
While Luxembourg had the lowest proportion of self-employed entrepreneurs who do not employ any other staff (36 percent), compared to the OECD average of 60 percent, small businesses employing fewer than 10 people provided nearly a quarter of jobs in Luxembourg (22 percent).
Meanwhile, firms with 250 employees or more provided a third of jobs (30 percent).
Employers of firms with 50 to 249 staff accounted for a fifth of jobs (19 percent).
In Luxembourg's services sector, small companies are the biggest employers, providing 29 percent of jobs, compared with 27 percent provided by companies employing 250 or more staff.
Small companies in Luxembourg also account for the largest chunk of turnover in the Grand Duchy, (33 percent) compared with companies employing more than 250 people (25 percent). The OECD average was 20 percent and 39 percent respectively.
Despite the crisis of 2008, the number of small businesses in Luxembourg's services sector rose 10 percent from 2008 to 2012.
Manufacture, however, saw the number of large businesses fall 10 percent over the same period.
Start-ups in decline
Between 2006 and 2012, the number of business start-ups declined from 12 percent to 10 percent. The largest number of start-ups was in the services sector. And regardless of sectors, companies with at least five staff recorded the strongest growth.
During the same period, the proportion of businesses folding remained at 8 percent. Again, across all sectors, it was the companies with fewer than five staff which disappeared.
For every two start-ups launched in Luxembourg in 2007, one was still going by 2012 (53 percent), echoing a similar pattern in France, the report said.
This proportion increased gradually for businesses founded in the years that followed (63 percent for businesses set up in 2008; 68 percent in 2009; 77 percent in 2010 and 89 percent in 2011).
The Luxembourg business survival figures were higher than the OECD average by at least 10 points.
The top 10 export companies in Luxembourg account for nearly half of all exports (46 percent).
Small to medium-sized enterprises exported the most, as was also the case with other OECD member states.
Multinational firms with bases in Luxembourg reported a similar turnover to export ratio as national companies.
Finally, the study compared the salaries of men and women in the workplace. Luxembourg counted as many self-employed men as women (and not employing any other staff).
However, across the OECD countries, men were generally more likely to work for themselves.
Within the services sector, it was more common to find women working for themselves than men, both in Luxembourg and within the OECD average.
Reporting by Kevin Wammer and Dominique Nauroy
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