Business demography

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Purpose and history
The purpose of the business demography statistics is to monitor the changes in the real number of new and non-existent business enterprises and to describe the development of the new surviving enterprises.

The statistics were compiled for the first time, covering the real number of new and non-existent enterprises in 2001 and actual new enterprises, which have survived from 2001 to 2002.
The statistics replace the statistics on increase in new enterprises, which have been published for the period 1992-2001.

There are the following distinctions between the business demography statistics and the statistics on increase in new enterprises:
- Only real active enterprises are included, i.e. enterprises where the activities performed correspond to at least 0.5 man-year. The way in which this is effected, is by including enterprises, where the wage and salary earners supplementary pension correspond to at least 0.5 man-year and/or where the calculated earnings are a of certain volume estimated on the basis of the turnover. The limit of earnings varies from industry to industry.
- Enterprises which some years after registration get real activity are included as new enterprises.
- All activities are covered, where only enterprises within industries subject to VAT settlement were covered by the previous statistics.
- All sectors are covered, where only enterprises within the private sector were covered by the previous statistics.
- Turnover in the new statistics covers those enterprises, which are included in Statistics Denmarks Accounts statistics and the turnover is compiled on the basis of the accounts of the enterprises. As for the other enterprises, a calculation on the basis of either the data reported by the enterprises with respect to VAT liable turnover, which is included in the Statistics on Purchases and Sales or the data reported by the enterprises with respect to duty on wage and salary costs. In the previous statistics, the VAT liable turnover was applied.
- Finally, the number of new enterprises and non-existent enterprises as well as the number of new surviving enterprises, where only the number of new enterprises was compiled in the previous statistics.

Description of Contents
The Business demography statistics monitor the real number of new enterprises and the real number of non-existing enterprises. Furthermore, all real new enterprises are followed over a period of 5 years after the enterprise was characterized as a new enterprise. (Not until the publication of statistics with 2007 as reference year will figures appear relating to the real number of new enterprises, which have survived for 5 years, as the first year of the publication of real new enterprises relates to 2001).

The statistics contain information on turnover, exports and number of employees of the enterprises. The information is distributed by industry and size group. Finally, the statistics contain information on the geographical location of the enterprises.

The Statistics will later be enlarged with calculation on the number of new and deseased number of workingplaces.

Statistical Concepts
1.2.1 Units and population
Two statistical units are used in the Business demography statistics, partly the enterprise, usually corresponding to the legal unit and partly the workplace (the local kind of activity unit), corresponding to the production unit. At the end of the paragraph a more detailed description of the used concepts are given.

Enterprise
For those enterprises, which are included in the Accounts statistics, the economic and employment information is collected directly from these statistics. The information about employment for other enterprises is collected from the Statistics on employment in businesses. In these statistics, the reporting units can partly be the administrative SE units (i.e. the registration unit used by the Danish Central Customs and Tax Administration, see below), and partly in those cases, where the production of an enterprise is distributed geographically to several workplaces. In the Central Business Register there is an unambiguous connection between workplaces and the enterprise, and therefore the information from workplaces can be gathered to the level of enterprise. The linking of the units at the end of the year for the statistics is used in calculating employment in November.

Information about exports and for those enterprises, which are compulsory to paying VAT, but are not included in the accounts statistics, the turnover is obtained from the VAT statistics. The reporting unit in the VAT statistics is the administrative units used by the Central Customs and Tax Administration. Up to and including the year 2000, the administrative units (SE units) are the statistical units in the VAT statistics. An administrative unit corresponds normally to an enterprise (about 95 pct. of the administrative units are registered in this way). In a few cases, an enterprise has several units (the enterprise is partially registered). In still fewer cases more legal units report information at one joint administrative number (the enterprises are jointly registered). Consequently, in the General enterprise statistics a link of the information has been established for those legal units which have more than one administrative number, and a split-up of information registered at the joint number to the legal units which use this number. This is possible because a link from administrative units to legal units is registered in the Central Business Register. From 2001, the statistical unit in the VAT statistics is the enterprise.

The basis for the Business demography statistics is all real active enterprises during the survey year.

The statistics include those enterprises which have been real active through the survey year, see description given below on the delimitation of real active enterprises. In order to obtain the real number of new and ceased enterprises, the units are sorted out. From the newly registered units, those units which have restarted their activities are sorted out, i.e. units which after a maximum period of 1 year have restarted an activity. Furthermore, units registered as new ones, because the activity has been transferred to a new legal unit, are sorted out, i.e. there is only a change of the number. New units, which are created as the result of a split-up (i.e. the original enterprise sells a part of its activity to one or several new units) or a separation (i.e. the original enterprise ceases its activity, and the activity is taken over by two or more new units), are also sorted out. Finally, all units, which are not really active, are sorted out (the units activity is below the minimum limit). Units, which were once included as real new enterprises but which were later registered as being below the minimum limit, are included as real new enterprises, if they move above the minimum limit afterone yearat the minimum.

Non-existent enterprises are defined as those enterprises, which were aactive in the year before the survey year, but which have not survived until the survey year. In order to obtain the real number of non-existent enterprises, the units, which do not continue as the result of a number change, are sorted out. Moreover, units, which cease to exist as the result of a merger, are also sorted out, i.e. the activity continues, but none of the original enterprises can be said to constitute the same enterprise, or as the result of a takeover, i.e. the activity from the non-existent enterprise(s) continues as part of another enterprises activity. The first time an enterprises activity falls below the minimum limit, the enterprise is considered to be non-existent.

The delimitation of real active enterprises is conducted in the following way, i.e. units engaged in activities below the minimum limit:
The Central Business Register contains all enterprises liable to register in accordance with the Danish legislation regarding taxation and duties or in accordance with the Danish Corporation Tax Act, irrespective of the level of activity. This implies that even the smallest activity, although it is not a business activity, results in a registration of an enterprise. It is the real business activity that is aimed at measuring in partly the General enterprise statistics and partly in the Business demography statistics. On the basis of EU recommendations, the smallest enterprises are not covered, but only those enterprises where were really active during the entire year or part of the year. Eurostat recommends to include only enterprises, where a workload corresponding to 0.5 man-year is carried out. The recommendation has been formalized so that the General enterprise statistics include only enterprises, which have paid in wage and salary earners supplementary pension for employees corresponding to at least 0.5 man-year and/or have hade calculated earnings of a certain volume. The earnings are calculated from the turnover. The turnover, which corresponds to given earnings, varies widely from activity to activity, and it is therefore impossible to specify one definite limit for earnings. In sectors within the wholesale trade, the limit of earnings will typically amount to over DKK 500,000, while for sectors within the manufacturing industry it will typically range between DKK 150,000 and DKK 200,000. In the public sector, where turnover is not a relevant estimate for the activity, only the contributions paid into the earners supplementary pension are used, while enterprises within financing and insurance are reviewed manually, to see if they were really active throughout the year. For those enterprises, which started their activity during the course of the year, the limit for earnings has been set to half the level used for enterprises, which were active during the whole year. This is based on the assumption that newly started enterprises do not usually have a great turnover to begin with, compared to the workload that is carried out.

Workplaces
A workplace is defined as an organizationally delimited part of an enterprise, which is located at an address and is engaged in the production of one or predominantly one kind of goods and services. Unlike the delimitation of the Statistics on employment in businesses, the workplaces are not only delimited with respect to those workplaces to which jobs can be referred at the end of November. (Jobs are defined as those employees in employment at the end of November, which are recorded on the population register year x + 1 and consist of self-employed persons, assisting spouses and employees classified as employees in the primary and/or secondary attachment to the labour market at the end of November). Fictitious workplaces, i.e. workplaces established under an enterprise in order to gather employed persons with varying workplace or staff, which are referred to town halls, etc., despite the fact that they have a workplace att another address.

In the same way as that applied for enterprises, the real new active workplaces are determined by sorting out the workplaces, which are not really new ones. Similarly, non-existent workplaces are determined, so that a workplace linked to an enterprise, which is below the minimum limit, is not considered to be really active. By delimiting the units to only incorporate real active workplaces, the information concerning the enterprise to which the workplace is linked at the end of the survey year is applied in determining whether the workplace is a real active workplace.

1.2.2 Variables
The following variables are included in the Statistics on business demography (the source is stated in parentheses):
CVR-number (ESR (Statistical Business Register), identification number in the Central Business Register CVR)
OK-number (ESR, identification number for the enterprise, which in most cases corresponds to the legal unit, but in single cases the enterprise is a collection of several legal units, see below)
OK-, OT-, ID-number (is created in the Statistics on business demography and identifies the same enterprise over time)
Arb-number (ESR, identification number for the workplace)
Danish Activity Code, standard 9-grouping
Danish Activity Code, standard 27-grouping
Danish Activity Code, standard 53-grouping
Danish Activity Code, standard 111-grouping
Legal form (ESR, Accounts statistics for those units which are included)
Functional code (ESR, code for a split-up into, e.g., the private and public sector)
Municipality code (ESR)
Exports (VAT statistics/Purchases and sales by enterprises)
Purchases (VAT statistics/Purchases and sales by enterprises)
Turnover (VAT statistics/Purchases and sales by enterprises)
Accounts statistics for those units which are included)
Number of full-time employees at the end of November, i.e. man-years (statistics on employment in businesses)
Accounts statistics for those units which are included)
Number of employees at the end of November (statistics on employment in businesses)

1.2.3 In-depth description of concepts
Enterprise
The enterprise is defined on the basis of the legal unit. In Statistics Denmarks Statistical Business Register, the legal units are identified by means of their CVR-number. The legal units in the Statistical Business Register are identical with the units in the Central Business Register, CVR. In a few cases, the enterprise consists of a group of legal units, which can generally be considered to be an economic unit, which can provide detailed account figures, and is market-oriented.

Workplace
The workplace is an organizationally delimited part of an enterprise, which is located at one address and is engaged in the production of one or predominantly one kind of goods and services. In the ESR, the workplace is linked to the enterprise to which it belongs.

Same workplace
The workplaces are followed over time in the ESR. In principle, a workplace maintains its identification number throughout its entire life.

A workplace is generally assumed to be the same workplace provided that it is linked to the same owner. The workplace can thus change both its address and industry. However, there are limits to how far a workplace can usually be moved and, at the same time, can be regarded as being the same workplace. For example, a forest does not move. However, a workplace may change owner, i.e. maintain its identification number, although workplace is taken over by another enterprise. If this is the case, address and industry must usually remain unchanged.

The assessment as to whether an industry is the same industry, is conducted in all cases at 6-digit industry level, see Danish Activity Code 1993/2003. For example, a change from the manufacture of mens and womens outdoor clothes to the manufacture of jackets, trousers and other outdoor clothes for men and boys is not considered to be of be sufficient significance to justify a change of the workplace.

The assessment as to whether the address has remained unchanged is, in principle, made on the basis of the registration of the workplaces address of location by means of the municipality code, road code, house number and letter.

In assessing whether a workplace is the same workplace, information about the employees is, if required, also included.

New and non-existent workplaces
A new workplace can arise, if a new or existing enterprise starts a new activity (frequently at a new address), or if an existing enterprise separates a part of its activity at a new address, in connection with, e.g. a sell-off. The workplace is only considered to be a real new workplace in those cases, where a completely new activity is started.

A workplace is considered to be non-existent, if the activity ceases, or if the activity is integrated into another existing workplace. Only in the first case is the workplace considered to be non-existent.

Continuing workplaces
Through the Statistics on business demography, it is possible to follow the development for real new workplaces over a period of 5 years after the year in which they were registered as real new enterprises.

Same enterprise
Information on the workplaces forms the basis of determining whether an enterprise is the same over time.

The general rule is that in cases where one and the same workplace and only this one is linked to the same enterprise throughout the entire life of the enterprise, the enterprise is considered to be the same enterprise. This is also the case, if there are several workplaces, which are all linked to the same enterprise throughout the life of the enterprise.

In those cases, where workplaces are exchanged between two enterprises, employment data at the workplaces is included in assessing which enterprise is the same enterprise. For example, if all workplaces make a shift from one enterprise to another enterprise, and this enterprise has not previously been engaged in any kind of activity, this enterprise is considered to be a continuation of the first enterprise.

The decision as to which enterprise is the same enterprise is made on the basis of information on employment at the associated workplaces.

If an enterprise sells one or several workplaces to other enterprises, but keep a number of workplaces, so that employment at the kept workplaces makes up more than half of the employment prior to selling the workplaces, the enterprise is considered to be the same enterprise. If an enterprise receives workplaces from other enterprises, but the employment at the workplaces received is not greater than the employment at the already associated workplaces, the enterprise is considered to be the same enterprise. If an enterprise both hands over and receives workplaces to and from other enterprises, the employment at the workplaces received must not exceed the employment at the remaining workplaces if the enterprise is to be considered to be the same enterprise. Real new enterprises are not included in the calculation.

In some situations, the exchange of workplaces is so complicated that it is necessary to make an assessment in order to decide which enterprise can be considered to be the same enterprise. Consequently, there may be some single concrete situations where deviations from the rules described are made.

New and non-existent enterprises
The determination of new and non-existent enterprises is in parallel. As mentioned above, there may be situations, where the change of an enterprise is so comprehensive that it cannot be considered to be the same enterprise. In some cases, this implies that another enterprise is considered to be the same enterprise. In other cases, the change may be so comprehensive that the enterprise cannot be considered to be a continuing enterprise, and must therefore be regarded as both new and non-existent.

New enterprise
If all workplaces linked to an enterprise are new, the enterprise is also new.

An enterprise is also regarded as new, if the enterprise is changed to such an extent that it cannot be considered to be the same enterprise, see above. However, it will not, in all situations, be considered to be a real new enterprise.

If an enterprise sells workplaces with employment exceeding more than half of the original number of employees, this enterprise is considered to be a new one as the result of the sell-off. If the enterprise is completely closed down, it is registered as non-existent as the result of a merger or as the result of a takeover, see the definitions below.

However, if an enterprise receives workplaces from other enterprises, and it cannot thus be considered to be the same as one of the enterprises wherefrom the workplaces are received, see above, but the receipt of workplaces implies that the employment will more than double its size, compared to before the receipt of the workplaces, and the enterprise is then considered to be a new one, as the result of the receipt of workplaces.

Real new enterprises
The number of new enterprises forms the basis of determining the number of real new enterprises, which generally correspond to the new registrations of legal units in the Central Business Register (CVR). Some units are registered subject to a delay. They are included as new enterprises in the year in which they were registered. Furthermore, units, which have previously been registered, are included, but with such a low activity that they are not considered to be real active, but if they are engaged in an activity during the survey year then they are regarded as being real active, see the definition of real active enterprises below.

As it appears from the above, it is not all new units that are really new. Consequently, the following units are sorted out:
- restarted units within a year,
- units, which are considered to be new as the result of handing over workplaces to other enterprises, and
- units, which are considered to be new as the result of the receipt of workplaces from other enterprises

Finally, units, which cannot be considered to be real active enterprises, are sorted out, because the activity of the enterprises is to low.

Non-existent enterprise
If all workplaces linked to an enterprise are closed down, the enterprise becomes non-existent.

The enterprise can also be regarded as non-existent, if the changes made to the enterprise are so comprehensive that it can no longer be considered to be the same enterprise, see above. However, it will not, in all situations, be considered to be a real non-existent enterprise.

If an enterprise sells workplaces with employment exceeding more than half of the original number of employees, the original enterprise is considered to be non-existent as the result of the sell-off, although the enterprise is still registered.

However, if an enterprise receives workplaces from other enterprises, and it cannot thus be considered to be the same as one of the enterprises wherefrom the workplaces are received, see above, but the receipt of workplaces implies that the employment will more than double its size, compared to before the receipt of the workplaces, and the original enterprise is then considered to be non-existent as the result of the receipt of workplaces.
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Real non-existent enterprises
The number of units for which comprehensive changes are made during the survey year, implying that they can no longer be regarded as the same enterprise, including enterprises which have ceased their activities completely, is used as starting point in determining the number of real non-existent enterprises. In some cases, the registration can be made subject to delays. An enterprise is incorporated as non-existent in the year in which it was established that the enterprise can no longer be regarded as being the same enterprise. If another enterprise has taken over the activities and is considered to be the same enterprise as the one wherefrom the activities were taken over, a non-existent enterprise will, however, not be registered.

As it appears from the above, it is not all non-existent units that are regarded as real non-existent units. Consequently, the following enterprises are sorted out:
- enterprises, which were previously regarded as non-existent, because they were no longer really active
- enterprises, which were non-existent as the result of handing over workplaces to other enterprises, and
-units, which are non-existent as the result of receiving workplaces from other enterprises

Finally, to this are added units, which are no longer regarded as being really active after having been considered to be real active enterprises.

Continuing workplaces
In the Statistics on business demography, trends in the number of real new enterprises are followed over a period of 5 years after the year in which they were registered as real new enterprises.

Takeover/split-up
If an enterprise receives one or several workplaces, but the inflow of the new workplaces does not result in a substantial change of the characteristics of the enterprise, a takeover is thus considered to be the case, and the enterprise is regarded as being the same enterprise. The enterprise wherefrom the workplaces are taken over, can be regarded as being non-existent as a result of the takeover or non-existent as a result of the split-up. However, in the latter situation, this enterprise can, at the same time, be considered to be a new enterprise as a result of the split-up.

Merger/separation
Enterprises are regarded as having merged, if the workplaces from two or several enterprises are merged in one enterprise, and none of the original enterprises can be regarded as being the same enterprise after the merger. In this situation, the original enterprises become non-existent as a result of the merger. If the original enterprises maintain a part of the workplaces, they are, however, regarded as new enterprises as a result of the separation.

  Read more about the statistics on 'Business Demography' in our Declarations of contents

Releases

Last updated:	25 November 2009
Scheduled releases:	19 November 2010 for the period 2008

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