Where are the micro- and small businesses around the world? Visualizing the data
Micro- and small enterprises (MSEs) are essential agents of inclusive growth around the world. There are millions of them; collectively, they provide employment to more people than enterprises of any other size, according to the International Labour Organization.
In early 2021, before Strive Community launched its initiative to support the digital transformation of MSEs globally, we sought to better understand the nature of this business segment. Specifically:
- What defines an MSE?
- What sectors do most MSEs operate in?
- Which countries have the most MSEs?
- Where can Strive Community best support MSEs?
Visualizing MSEs across the globe
To answer these questions, we combined data from two sources — the SME Finance Forum MSME Economic Indicators Database (2019) and the World Bank MSME Country Indicators (2014) — to develop a visual tool that illustrates the distribution of MSEs around the world, their breakdown by sector, and their contributions to employment and the economy. Because Strive Community focuses on micro- and small businesses, we filtered out medium-sized business data during the analysis. This visual tool was crucial in enabling Strive Community to prioritize countries that might benefit from MSE digital support programs and to assess the impact opportunity in different geographies.
What else does the data show?
In addition to helping us better understand how Strive Community could empower MSEs for a digital future around the globe, this visual tool also offered other insights:
Countries categorize micro- and small businesses differently.
While all countries categorize MSEs by the number of employees they have, these numbers can vary. For example, countries like Australia, Canada, and Indonesia categorize micro-businesses as those with 0–4 employees. On the other hand, Angola, Spain, and Uganda categorize micro-businesses as those with up to nine employees. With this variance in mind, Strive Community works with organizations that support businesses with fewer than ten employees.
India and Indonesia have the greatest number of MSEs.
The data shows that India, Indonesia, Nigeria, the United States, Bangladesh, Brazil, Japan, Mexico, Italy, and Egypt have the greatest number of MSEs in the world. India leads with 63 million, though Indonesia is a close second with 62 million. However, when looking at the number of MSEs per 1,000 people, Indonesia and Nigeria are the top two, respectively.
There are more micro-businesses than small ones.
Globally, the data shows that there are 196 million micro-enterprises, compared to 11 million small businesses (both defined by country-specific classifications of micro and small). Further, micro-sized firms employ a greater proportion of employees when compared to small firms. Analysis by the World Bank indicates that lower-middle-income economies have a relatively greater micro-enterprise density than upper-middle-income economies.
Most MSEs are concentrated in the service and trade sectors.
Micro- and small enterprises are concentrated in the services and trade sectors, according to the data. These sectors provide employment to more than 300 million people globally. These two sectors are followed by manufacturing and agriculture, which employ an additional 84 million people.
MSEs contribute substantially to their nations’ economies.
While not all countries have data on how much MSEs contribute to GDP, where the numbers are available, the visual tool shows that they contribute a substantial amount. In Kenya, for example, they add more than $500 million to the country’s GDP. In Indonesia, they add about $470 million to the country’s GDP.
This tool is accessible and free to use for any organization that supports small businesses and may wish to use data to better understand the global landscape or inform programmatic decisions. The tool will be updated when the World Bank releases new figures for the MSME economic indicators database this year.
Disclaimer: While Strive Community aims to make this data comparable, this is not always possible due to different definitions and measurement methods at the country level. The figures used are the latest available, combined with exchange rates on March 24, 2021. For questions about the visual tool, please contact hello@strivecommunity.org.
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