Business Register and administrative data - grounds for effective production of economic statistics

1. Business Register and administrative data -grounds for effective production of economic statistics Joint UNECE/Eurostat/OECD Seminar on Business Registers Geneva, 18-19 June 2007 Hannele Orjala and Tuula Viitaharju Statistics Finland

2. Presentation • Reasons and preconditions for the use of administrative data • The production process of statistics in Statistics Finland • The administrative sources of the Business Register (BR) • The information system architecture of Statistics Finland • Register of enterprise respondents • Strategic goals of the BR • Conclusions Business Trends

3. The main reasons for using admin data are as follows • Reduction of the response burden of enterprises • Reduction of the costs of statistics • Increase the cost-effectiveness and coherence of statistics production • Offer users high quality statistics by using total populations and producing detailed classifications • Give the ability to compile small area statistics • Offers an extensive basis for revision analysis and the follow-up of statistics based on directly collected data Business Trends

4. Legal preconditions • Principles of the Finnish Statistics act (2004): • It is compulsory to use existing data (if suitable) • State government and social security institutionsare obliged to deliver their data to Statistics Finland • Guarantees access to administrative files • Free of charge, compensation of direct cost of larger releases • Data confidentiality: some of the BR is public Business Trends

5. Networking - precondition for use of administrative data • Networking at the state level: Register Board Committee • focus on development and co-operation between registers • prepare strategic level definitions of the register policy • secure integration of the registers, promote data security etc. • Networking at data providers level • co-ordinators inside Statistics Finland to take care of administrative data providers, registers and other statistics producers • focus on the statistical questions: quantity, coverage, quality • also meetings at the Director General level: bilateral Business Trends

6. The Business Register the survey frame and tool for data collection the source of basic information of all relevant statistical units The production process of statistics in Statistics Finland Business Trends

7. Business Register coverage • Small and large business units • Central and local government units • Local kind-of-activity units (local KAUs) • Enterprise groups • The register covers all NACE sections: • 410 000 active enterprises • 480 000 active local units Business Trends

8. Business Register; sources and update frequency • Sources • administrative sources, other mass data (private) • direct data collection, BR surveys • data estimation • feedback information from other surveys • Updating frequency • monthly, annual, • annual data for each statistical year (t) are completed in 10 months => by the end of October (t+1) Business Trends

9. Administrative sources of Business Register Surveys Business Trends

10. The use of Admin data still increasing • The latest admin data in use (2007 onwards) • Annual data on owners and partnership members (Tax administration) • Annual data farm register (Information Centre of the Ministry of Agriculture and Forestry) Business Trends

11. Information system architecture at Statistics Finland • Data copied from one system to another • Basically, “shared” data is copied to each data system • Business register has about 300 users (out of 600 persons employed in statistics divisions) • In population statistics, price statistics, labour force survey, national accounts, business statistics, etc. • Identifiers of statistical units Common identifiers used in all data systems • Classifications Basically taken from base registers • Statistical units Basically taken from base registers Business Trends

12. Acceptance by the people, businesses and administration Statistics based on registers - preconditions • Universal ID-schemes • -Persons • Organisations • Buildings, apartments Well developed IT infrastructure in administration WIDE use Possibility to use in statistics, also to COMBINE Networking with other register/data providers Strict confidentiality in statistics Up-to-date legislation - statistics act - personal information protection Business Trends

13. Linking Administrative and Survey Data example: STS - Short Term Business Statistics • The monthly VAT (Value added tax) and PAYE (pay as you earn) data file of the Tax Administration • total coverage of units (200 000 statistical units, 150 observations, 40 variables) • each release covers 6 months • delay: one-two months • The BR: units, classification variables, samples input • Direct surveys: 2000 largest enterprises from industry, construction, trade and other services • Regional STS -> to use local kind of activity unit data from the BR to disaggregate monthly enterprise level VAT data to a regional, establishment level Business Trends

14. Direct collection vs. the use of administrative Datafrom tax authorities in statistics on enterprises Number of enterprisesDirect collectionAdministrative data Structural Business Statistics 8 000 180 000 Business Register 25 000 over 410 000 Short Term Business Statisticsturnover 2 000 250 000wages and salaries 93 110 000 Even for enterprises in direct collection some data are taken from administrative sources Business Trends

15. More information on surveys: http://stat.fi/keruu/index_en.html Business surveys Income and expenditure of foreign sea transport Information technology and electronic commerce in enterprises Innovation survey Inquiry for industrial establishments (T5) Inquiry on cost indices Inquiry on incentive stock options Inquiry on manufacturing commodities Inquiry on new orders in manufacturing Inquiry on postal and small freight deliveries Inquiry on private sector wages and salaries Inquiry on volume index of industrial output Inventory inquiry Job vacancy survey Monthly inquiry for accommodation statistics Monthly inquiry for iron and steel statistics Mutual fund inquiry Outstanding credit Periodic survey of motor vehicle trade Periodical regional survey of trade Periodical survey of retail trade Periodical survey of wholesale trade Price inquiry on producer price indices for manufactured products Producer price indices for services Quarterly inquiry on international trade in services Quarterly inquiry on labour costs Regional outstanding credit Renovation building of construction enterprises Renovation building of housing corporations Sales inquiry Statistics on agriculture Statistics on goods transport Telecommunications inquiry The inquiry on financial accounts Altogether about 60 direct surveys Annual inquiry on foreign trade in services Authority (Virati) data collections (A and T data collections) Building cost index Business Register inquiry for multi-establishment enterprises Business Register inquiry for new enterprises Business Register inquiry for single-establishment enterprises Business Register inquiry for small single-establishment enterprises Business services CVTS, Continuing Vocational Training Survey Credit cards Data collection on occupations Data collection on personnel of multi-establishment enterprises for employment statistics Energy production inquiry Energy use in manufacturing Enterprises' research and development Environmental protection expenditure in industry Finance of housing corporations Financial leasing inquiry Financial statements inquiry for enterprises (TILKES) Financial statements of mutual funds and investment management companies Forest workers' wages Business Trends

16. Register of enterprise respondents - enlargement of the Business Register • Established in 2006 • Located in the BR unit • Operates as an inner service register of statistics, also respondents get information of the inquiries they are picked up • Part of the program leadership: enterprise respondent programme Business Trends

17. SMEs and response burden • Number of enterprises in our surveys is as follows: • Of enterprises in class 0-9 16 700 are only in Business Register survey • Of enterprises in class 0-9 only 800 are in monthly and 5900 in quarterly surveys • Of enterprises in class 10-49 5100 are only in Business Register survey • Of enterprises in class 10-49 only 650 are in monthly and 350 in quarterly surveys • There seems to be limited possibilities to reduce the numbers further Business Trends

18. Strategic goals of the Business Register - ground for effective production of economic statistics • Globalisation • challenges • international co-operation around multinational corporations is needed • Strategic means in improving coherence • New strategy for economic statistics: the BR as a common frame of business statistics • Enlarging the scope of the BR • new industrial sectors and new variables • More real time BR with interactive nature • infra annual updates Business Trends

19. Conclusions • Finding innovative and competitive ways of reusing collected data gathered by the public or other sectors in society are essential concerns of today to • Challenge of co-operation is very much international • Best practices are in high demand Business Trends

20. Thank you for your attention! hannele.orjala@stat.fi tuula.viitaharju@stat.fi Business Trends