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Attendees CSO: Keith McSweeney (Chairperson), Kieran Walsh, Gerry Brady, Susana Portillo and Kevin Phelan (Secretary)
Attendees (CSO users): Paul Mooney (Department of Finance), Pamela Malone (Department of Finance), Breda O'Sullivan (IDA), Adrian O’Donoghue (BMW Regional Assembly), Stefanie Haller (UCD), Jonathan Healy (Forfas), Conor O'Toole (ESRI) , Alexa Toomey (Enterprise Ireland), Geraldine Anderson (IBEC), Elish Kelly (ESRI), Alma Murnane (Cork Chamber) and Jennifer Kenneally (ISME)
Keith McSweeney opened the meeting and welcomed all members of the group to the 5th meeting of the ESLG and in particular new members of the group. He outlined some of the challenges that Business Statistics had faced over the past number of years since the financial crisis and stated that after a period of retrenchment CSO was in a better position to undertake work that was deemed critical by members of the group.
Keith proceeded to outline the agenda for the meeting which was based on feedback provided to CSO by members of the group during a consultation process in late 2013. Some of the issues that arose during this consultation process were access to finance for enterprises, data on SMEs and regional data.
As there were a number of members who were new to the group, the chairperson asked all members to introduce themselves and give some detail on what they wanted to get out of the meeting.
The minutes of the previous meeting in November 2012 had been agreed previously over e-mail and subsequently published on CSO’s website.
Kieran Walsh who was appointed Director of Business Statistics and Innovation during 2013 presented to the group some of the key issues and developments in Business Statistics:
Eurostat, a number of years ago, launched a project aimed at establishing a cross-cutting legal framework for the systematic collection, compilation, transmission and dissemination of European statistics related with the structure, economic activity, competitiveness, global transactions and performance of the business sector, this project is known as FRIBS.
The background to FRIBS was that over time different regulations relating to the various statistical domains had been enacted which had led to inconsistencies between these domains and also inconsistencies between countries. Examples of these inconsistencies included inconsistent definition of variables across surveys and different units being surveyed for different purposes i.e. local unit vs. enterprise in Industrial surveys.
Eurostat had decided that the best method to tackle this problem was to introduce a new regulation which would cover all business statistics. The benefit of this approach was that there would be more coherent results, greater efficiencies and greater linkability of sources.
Eurostat plan that the regulation will be in force by 2017, however CSO believes that this timeframe is extremely ambitious with many issues to be overcome. There are many challenges faced in developing this regulation not least in the area of the definition of an enterprise. It is expected that a re-definition would not impact on most Irish enterprises as they are small, single local unit operations but it will have an impact on our largest enterprises which in turn will have an impact on the data that CSO produces.
2. Globalisation
The issue of globalisation is a major challenge for all National Statistical Institutes (NSIs) but more so in case of a small open economy such as Ireland. Traditional statistics were developed around a model that presumed that enterprises had simple structures and operated within national boundaries. In these times, these assumptions are flawed and have led to inconsistencies such as the overstating of trade by counting intra-enterprise flows as exports and the categorisation of some enterprise as being SMEs when in fact they are part of large Multinational Enterprises.
An amount of work has been done in order to come up with a solution to this problem. In April 2013, a report on how to measure global value chains was published by Dr Timothy Sturgeon (Massachusetts Institute of Technology). A copy of the report is available at www.globalvaluechains.eu. However much work is required on this topic, it will require the heavy profiling by NSIs of the largest enterprises and the sharing of data in order to better to understand these groups.
3. National Data Infrastructure (NDI)
There are three pillars to the NDI:
(1) Building - Postcodes
(2) Person (Ideally PSSN but not in all cases)
(3) Enterprise (Unique Business Identifier)
There are a number of common themes across the three areas
- need for greater consistency and coherence
- maximise linkability and reusability of data
- maximise the value of data collected
- need to work on the range of information collected and from whom
Next steps for CSO:
- Continue to influence both nationally and internationally
- Develop plans to create greater integration within business statistics by using a data portal
Kevin Phelan presented to the group the state of play of enterprise statistics and in particular Structural Business Statistics (SBS). He gave an overview of the surveys that CSO conduct within the SBS domain which include the Census of Industrial Production (CIP), Annual Services Inquiry (ASI) and the Building and Construction Inquiry (BCI). Each of these surveys publish their own results on the CSO website.
However in order to provide our data users with a complete picture of the business economy, CSO have produced a “Business in Ireland” report over the past number of years.
Kevin presented some of the key findings from the 2011 report and compared some of the trends with the 2010 results. These include a breakdown of the business economy by size class (99.8% of enterprises are SMEs but account for 50.1% of turnover), business costs facing enterprises and births and deaths of enterprises.
In feedback received by CSO prior to the meeting, the issue of timeliness of SBS data was raised as an issue. CSO stated that provisional SBS data was required to be transmitted to Eurostat 10 months after the end of the reference period while final data would be transmitted 18 months after the end of the reference period. For example, 2012 data was due to be transmitted by June 2014.
However CSO recognised that this was an issue for our data users. In 2013, CSO introduced a new release which provided provisional data for Industry and Services in respect of Turnover and Employment. Analysis of previous years’ data suggested that the difference between the provisional and final data at sectoral level was in order of 2%. CSO plan to include provisional data for Construction in 2014.
A major change for the SBS division over the past number of years had been the growth in the use of administrative data. Such use had led to the cessation of the Business Register Births inquiries, at its peak some 31,000 new enterprises were surveyed.
Additional uses of administrative data meant that approximately 1,700 micro enterprises were no longer surveyed as part of the CIP, the ASI no longer surveyed enterprises that were employed one person or were sole proprietors. The combination of these changes had contributed to a fall in response burden of 33% since 2008 according to CSO’s Response Burden Barometer.
By introducing the Business in Ireland report and the publication of survey results using electronic release format, CSO has improved its data outputs but CSO is also seeking to improve its data inputs by offering methods other than the traditional paper questionnaire. In 2013, CSO conducted the ICT survey solely by e-forms, this was the first annual survey to use the internet exclusively for data collection. It is planned that the 2013/2014 Business Expenditure on Research and Development survey will also be conducted solely by e-forms. By further developing e-forms, CSO expects to minimize contacts with enterprises thus further reducing response burden.
The presentation ended with an overview of Short Term Statistics and in particular the Retail Sales Index and the Monthly index of Production. Comparisons were drawn with the SBS surveys in terms of coverage and timeliness.
There were a number of comments from the members on both CSO presentations
(1) The reduction in response burden was welcomed
(2) There was some clarification regarding the proposed data portal. CSO responded by stating that the intention was to develop a data portal where respondents would be able to see what forms were due for completion, previous forms etc.
(3) It was stated that the changes envisaged by FRIBS could be very important, headings as such might not change but could have a negative impact on the perception of economic performance. CSO responded by saying that it needed to minimize the impact of any change coming from FRIBS but where change occurred CSO would need to communicate with our users on the consequences of these changes
(4) There was a question raised on the possibility of repeating the Access to Finance Survey, there was strong support from the group for a repeat of this survey. The Credit Demand Survey that is conducted by RED C on behalf of the Department of Finance asks questions on balance sheet data and the experience of this survey is that this type of information is readily available
(5) Comprehensive data on the regions was extremely important in terms of regional aid guidelines. CSO stated that it was their preference to publish as much regional data as possible however due to confidentiality constraints, this was not always possible i.e. Mayo and Roscommon are grouped together in CIP due to confidentiality issues. CSO asked that the relevant members provide some detail to CSO on their actual data needs.
As part of the process in organising this meeting, CSO asked members to identify where they saw data gaps. One issue that arose from this feedback process was the data needs around enterprises accessing Finance. To that end, Conor O’Toole from the ESRI and Alexa Toomey of Enterprise Ireland presented on their data needs.
The ESRI presentation was based on feedback given by ESRI and the Central Bank to CSO following the last meeting of the ESLG. As a consequence of the financial crisis, there is significant interest around how enterprises access Finance, the existing CSO surveys while capturing some financial information does not capture information about the sources of funding. Researchers have to rely on the ECB SAFE survey and the Credit demand survey from the Department of Finance.
The fact that there is no balance sheet data collected on CIP/ASI is a major gap for policymakers. However the majority of data that is required is already captured on balance sheet so in principle it should not be difficult for the structural surveys to collect this data without impacting on the response burden of enterprises.
The ideal scenario for researchers is that the Access to Finance survey would be conducted on a regular basis which would complement, not replace the existing Credit Demand survey. ESRI recognise the difficulties this may pose for CSO but are willing to engage with CSO to reach an agreed position.
The Enterprise Ireland (EI) presentation initially set out some context for members describing the types of enterprises that EI works with and their impact in the economy.
EI agreed with ESRI in terms of obtaining financial information for their client companies and in particular expressed a preference for the more regular publication of the Access to Finance originally published in May 2011.
Enterprise Ireland acknowledged the challenge posed by providing more granular data and the need to ensure that potentially identifiable company information is protected. Having said that, EI would like to see increased availability of data broken down by company size, ownership, region and sector where possible.
EI drew particular attention to unemployment statistics and data relating to the level of business investment in Ireland. The ideal scenario would be the availability of business statistics that could be interrogated in a number of ways e.g. sector, size and ownership etc.
Members of the group suggested that Ireland could take a lead role in Europe when defining new sectors such as cleantech where there is a demand for statistics but no clear definition has been created.
CSO stated that they would convene a working group to examine the ATF issue. ESRI suggested that a starting point would be to look at the existing survey. Chambers Ireland supported this proposal and stated they would be willing to assist in any form deemed possible.
As part of the feedback process, a number of issues relating to Trade were highlighted, this included linking the trade classification to NACE. Gerry Brady from Trade division explained that it was not possible to create such a concordance as enterprises could produce many different products with their own individual trade code whereas at NACE level, there was just one code.
Regarding the cleantech issue, Environmental Statistics have been liaising with Enterprise Ireland. A cleantech register that was developed by EI has been transmitted to CSO, this dataset is one of the inputs that CSO will utilise in order to measure the green economy.
Gerry Brady also stated that postcodes would be introduced during 2015 and that plans should be made to collect data using postcodes. It is planned to introduce postcodes at the letterbox level, this will allow for better linking between datasets.
There was some general discussion around a number of topics which included paper vs. electronic forms of dissemination, Unemployment rates by county, Kieran Walsh explained that the QNHS does not produce unemployment data by county.
It was repeated that county level data would be required for regional aid guidelines.
The chair concluded the point by asking members to clarify their high priority issues after the meeting by e-mail.
(1) Regional data – members were asked to examine what CSO produce and feedback where there are gaps to CSO
(2) NACE and cleantech etc. – Business Register are to liaise with Forfas on this issue
(3) Access to Finance/ Balance Sheet data - CSO to set up a working group on this topic
The chair concluded the meeting by stating that the 6th meeting of the group will be held later in the year (Q3 approx.) where the Access to Finance issue can be further discussed. A working group will be convened prior to this meeting. Invitations to join the working group will be sent out during Q2 of 2014.
He thanked members for their contributions and closed the meeting.