< Previous | Contents | Next >

Scottish Economic Statistics 2002

chapter two: Industrial Sector

Structure of the Scottish Corporate Sector

Between 1999 and 2000, the number of enterprises operating in Scotland decreased by 2 per cent, to an estimated 294,000 (excluding the public sector). However, the number of enterprises that employ staff increased. In the same period, the associated employment rose by 1 per cent, providing in total employment for 1.8 million people. About 63 per cent of enterprises were sole traders or partnerships without employees.

Details of the data sources and an explanation of the calculations involved can be found in the Definitions and Methodology section at the end of this publication. Tables giving details of the corporate sector can be found on the Scottish Executive internet site.

Analysis of components of change

With the availability of data for 2000, it is now possible to provide longitudinal data on the changes within individual enterprises in the Scottish corporate sector since 1997. This allows more in-depth analyses of the data and a better understanding of the causes of employment changes. Due to the level of sampling errors in the estimation of enterprises not registered for VAT or PAYE, the longitudinal analysis only includes enterprises that are on the Inter-Departmental Business Register (IDBR).

Overall change

The number of registered enterprises (excluding the public sector) with Scottish employment grew between November 1997 and November 2000 by 9 per cent. The total Scottish employment of these enterprises grew by 6 per cent in the same period.

Employment growth and decline in individual enterprises

Analysis of enterprises registered in both 1997 and 2000 shows that around 19,000 enterprises increased their Scottish employment over the three years while about 14,000 enterprises decreased theirs. There were about 66,000 enterprises registered in both 1997 and 2000 whose Scottish employment stayed the same. Almost all of the enterprises that stayed the same were small (91 per cent had less than 10 employees in the whole of the UK).

Between 1997 and 2000:

• Over 500 small enterprises increased to medium or large and about 200 medium enterprises became large, resulting in an increase in employment of almost 50,000.
• About 100 large enterprises decreased in size-band and about 250 medium enterprises became small, resulting in an employment drop of almost 21,000.
• There was an increase of almost 92,000 in employment in enterprises that did not move size-band.

Openings and closures

By 2000, 27 per cent of the enterprises operating in 1997 had left the register. Most of these would be closures but some might have left the register as a result of take-overs, mergers or relocation, especially among the medium and large enterprises.

However, in November 2000, there were an estimated 50,000 enterprises that had joined the register since 1997 (equal to 37 per cent of the number of enterprises operating in 1997). The Business Activities sector had the most openings between 1997 and 2000. Wholesale, Retail and Repair had more openings and closures overall than other sectors.

Chart 2.1: Number of enterprises that opened or closed between 1997 and 2000, by sector

Components of employment growth and decline

67 per cent of gross employment created between 1997 and 2000 was in new enterprises, about 40 per cent of these jobs were in new large enterprises. Of these large enterprises most were based in the rest of the UK and could possibly have been established elsewhere before 1997 but opened a unit in Scotland between 1997 and 2000. However, 55 new large enterprises were based in Scotland.

Consistent growth or decline during 1997-2000

Only about 1000 enterprises grew every year during the three years between 1997 and 2000. These increased their employment by 65 per cent. Just 100 enterprises were found to account for half of this increase, all of which had more than 500 employees in 1997. There were only 375 enterprises that decreased their employment level every year between 1997 and 2000. However, this number would exclude those enterprises that decreased employment every year but closed before November 2000.

The majority of enterprises growing consistently over the three years were in Wholesale, Retail and Repair and Business Activities. On the other hand, Manufacturing and Agriculture, Forestry and Fishing had the most enterprises that decreased employment every year but were still in operation in 2000.

Chart 2.2: Number of enterprises that increased or decreased their Scottish employment every year from 1997 to 2000

< Previous | Contents | Next >