Resume:
As of 2016, the total number of those employed in enterprises was 667,000. Of this amount, 46% (307,000) were employed in small-size enterprises. In 2017, the number of those holding employment in small enterprises decreased by 30,000 whilst the number of those employed in large and medium-size enterprises increased by 17,942 and 5,177, respectively. As a result, the share of those employed in small enterprises from the total number of individuals employed in enterprises has fallen by 4.1 percentage points to 41.9%.
Analysis At the plenary session of the Parliament of Georgia, European Georgia – Movement for Freedom member, Zurab Tchiaberashvili, stated:
“In accordance with the National Statistics Office of Georgia’s data, the amount of those employed in small businesses decreased from 46% to 42% in 2017 as compared to 2016. This is a direct indication that in today’s unbearable situation, small business is on its deathbed.”
The National Statistics Office of Georgia publishes employment figures using two different methodologies. In accordance with the “old” methodology, large enterprises are those where the average annual amount of employed personnel exceeds 100 persons or the average annual turnover exceeds GEL 1.5 million. Medium-size enterprises include all enterprises of any organisational and legal types where the average annual amount of employed personnel fluctuates in the margins of 20 and 100 whilst the average annual turnover is between GEL 0.5 million and GEL 1.5 million. Small-sizeenterprises encompass all enterprises of any organisational and legal types where the average annual amount of employed personnel does not exceed 20 and the average annual turnover does not exceed GEL 0.5 million.
In accordance with the “new” methodology, large enterprises are those where the average annual amount of employed personnel exceeds 249 or the average annual trade turnover is more than GEL 60 million. Medium-size enterprises include all enterprises of any organisational or legal form where the average annual amount of employed personnel fluctuates in the margins of 50 and 250 whilst the average annual turnover is between GEL 12 million and GEL 60 million. Small-sizeenterprises incorporate all enterprises of any organisational or legal form where the average annual amount of employed personnel does not exceed 50 and the average annual turnover is less than GEL 12 million.
The MP refers to the data calculated on the basis of the “new” methodology. The respective figures are given in Graph 1. Of note is that the trends in data changes are similar in any case – whether the data is calculated on the basis of the “new” or “old” methodologies.
Graph 1:
Employment in Small-size Enterprises (new methodology)
Source: National Statistics Office of Georgia
As illustrated in the graph, the total amount of those employed in enterprises was 667,000 in 2016. Of this number, 46% (307,000) were employed in small-size enterprises. As of 2017, the total number of those employed in enterprises decreased, including the number of people employed in small-size enterprises. The number of those employed in large and medium-size enterprises has increased by 17,942 and 5,177, respectively. The reason behind the decrease in the total employment figure is because of cutting employment in small-size enterprises by 30,000 which was respectively reflected upon the share of those employed in small-size enterprises. That figure dropped by 4.1 percentage points to 41.9%.
In light of increased employment in both medium and large-size enterprises, it is impossible to plainly identify the reasons behind the decreased employment in small-size enterprises. Therefore, FactCheck will not enter further into the analysis of this issue.
