Rome – Italy 26 – 31 October 2003
Session No 7
[Ana María Landeros Díaz, INEGI, México]
Municipal Business Register as auxiliary data source for the National Business Register
Introduction
Mexico’s National Business Register is conformed by a directory obtained from an economical census for the different sectors of its economy. The integral update of this directory is carried out every 5 years. During the inter-census period it suffers partial modifications which basically came from the registered changes in the surveys directories and the specific pursuit of the 140,000 most important enterprises by its incomes and occupied personnel on each sector.
The National Institute of Statistics, Geography and Informatics (INEGI) has been doing a great effort to use the administrative registries of some institutions such as the Ministry of Finances and the Social Security Office, which have the most complete economic units´ directories in the country because of enterprises obligation of fees payment.
As a result of these managements a collaboration agreement was signed between INEGI and the Social Security Office (SSO), in which the SSO is committed to give us its monthly updated database. Also, the negotiation with the Ministry of Finances is in a good way. Nevertheless, these database have approximately 800,000 and 600,000 registries respectively. These are low numbers if we consider the 2.8 millions of economic units in the census directory.
In conclusion on these administrative registries are the formal enterprises which accomplish their obligations and pay their fees, it means, the major enterprises. Besides, the smallest enterprises which are more numerous haven’t been captured.
In searching for alternative information sources for the updating of the National Business Register, a project was developed: Municipality Business Register, as a result from licenses´ registry expedition for business operation.
1.- Justification and Objectives
A municipality is the smallest unit of the country’s political division, with faculties to the generation and management of public resources. Among these faculties, we find the authorization for licenses to the businesses established within its geographical limits.
The administrative registries generated by this procedure may be the most complete in the country, regarding its scope and the special attention from the municipality’s authorities to prohibit the operation of any business without license, because this is a direct source of incomes for the Municipality. Nevertheless, due to the independency of the municipalities regarding of their internal administration, there is not a central control unit which regulates and standardizes these registries´ generation process and concentrates this information in an unique database.
For this reason, INEGI wants to reach this purpose taking advantage of its faculty as a coordinator of the generation of statistical information in Mexico. To achieve it, the project named “Municipality Business Register” includes the following objectives:
1. The knowledge of the features of the municipality registries of economic units.
2. The evaluation of the feasibility to use the municipality’s information as an updating source of the National Business Register.
3. To design and establish the system to capture information in the municipalities.
4. To maintain the updating process of the Municipality Register and the data integration into a unique database, verifying its quality.
2.- Research about the features of municipalities registries
A survey directed to major municipalities was made with the purpose to obtain the information about the existence and the features of the municipality registries. The most relevant aspects are as follows:
2.1. Study object
The sampling frame for the survey was the economical census directory, which contains a total of 2,866,073 economical units, which contribution in terms of occupied personnel and incomes by activity sector are shown in the following table:
Table 1
TOTAL OF ECONOMIC UNITS, OCCUPIED PERSONNEL AND INCOMES BY ACTIVITY SECTOR
Activity Sector / EconomicUnits / Occupied Personnel / Incomes
(Thousands of pesos)
Total / % / Total / % / Total / %
National / 2,866,073 / 100.0 / 16,500,891 / 100.0 / 5,682,569,070 / 100.0
Fishing / 20,012 / 0.7 / 154,379 / 0.9 / 10,049,867 / 0.2
Mining and Petroleum Extraction / 2,541 / 0.1 / 72,501 / 0.4 / 32,782,436 / 0.6
Manufacturing Industry / 337,462 / 11.8 / 4,355,585 / 26.4 / 1,896,027,652 / 33.4
Electricity and Water / 2,393 / 0.1 / 189,924 / 1.2 / 133,770,764 / 2.4
Construction / 10,300 / 0.4 / 669,779 / 4.1 / 127,807,301 / 2.2
Commerce / 1,427,842 / 49.8 / 3,908,787 / 23.7 / 1,909,870,249 / 33.6
Communications and Transports / 48,728 / 1.7 / 869,115 / 5.3 / 286,515,576 / 5.0
Financial and Real State Services / 41,445 / 1.4 / 410,586 / 2.5 / 578,324,729 / 10.2
Technical, Professional and Social Services / 975,350 / 34.0 / 5,870,235 / 35.6 / 707,420,496 / 12.4
In order to detect those municipalities with greater economic concentration, these were ordered in an ascendant way based on the number of economic units that it contains, making cuts in 1000,750, 500, 200 and 150 municipalities. So, the cover was obtained for the variables: number of economic units, occupied personnel and incomes, the results are shown in table 2:
Table 2
TOTAL OF ECONOMIC UNITS, OCCUPIED PERSONNEL AND INCOMES AND THEIR COVERAGE WITH RESPECT TO THE NATIONAL TOTAL FOR THE DIFFERENT GROUPS OF MUNICIPALITIES
Number of Municipalities / Economic Units / Occupied Personnel / Incomes (Thousands of pesos)Total / Cover % / Total / Cover % / Total / Cover %
Total 2434 / 2,866,073 / 100.0 / 16,500,891 / 100.0 / 5,682,569,070 / 100.0
1000 / 2,725,581 / 94.9 / 16,092,473 / 97.8 / 5,630,332,860 / 98.5
750 / 2,632,635 / 92.0 / 15,811,470 / 96.0 / 5,566,507,629 / 97.7
500 / 2,473,302 / 86.3 / 15,265,747 / 92.6 / 5,459,557,155 / 96.1
250 / 2,148,435 / 75.0 / 14,063,517 / 85.3 / 5,140,953,159 / 90.5
200 / 2,041,716 / 71.2 / 13,554,405 / 82.2 / 4,984,703,136 / 87.7
150 / 1,892,112 / 66.0 / 12,894,579 / 78.2 / 4,802,921,366 / 84.5
From the previous table it can be noticed that the 1000 most important municipalities in terms of the number of their economic units, represent the 41% of the total of the municipalities total number; cover the 97.8% of the occupied personnel and the 98.5% of the incomes, these percentages are decreasing meanwhile we cut the number of municipalities. Nevertheless, with 250 municipalities (10% of the total) the difference in the cover with respect to the 1000, is only a 13% in occupied personnel and 8% in incomes.
With the object to optimize the time and resources, it was decided to limit the universe of study to the 250 municipalities with the greatest number of economic units.
The following tables show the sector coverage of the economic units of the 250 selected municipalities respecting to the number of establishments, occupied personnel and the total incomes:
Table 3
TOTAL OF ECONOMIC UNITS FOR THE 250 SELECTED MUNICIPALITIES AND ITS COVERAGE BY ACTIVITY SECTOR
Economic UnitsActivity Sector
National / 250 Selected Municipalities / Coverage
%
Totals / 2,866,073 / 2,148,435 / 75.0
Fishing / 20,012 / 9,658 / 48.3
Mining and Petroleum Extraction / 2,541 / 1,080 / 42.5
Manufacturing Industry / 337,462 / 225,325 / 66.8
Electricity and Water / 2,393 / 275 / 11.5
Construction / 10,300 / 9,915 / 96.3
Commerce / 1,427,842 / 1,072,056 / 75.1
Communication and Transports / 48,728 / 33,424 / 68.6
Financial and Real State Services / 41,445 / 33,584 / 81.0
Technical, Professional and Social Services / 975,350 / 763,118 / 78.2
Table 4
TOTAL OF OCCUPIED PERSONNEL FOR THE 250 SELECTED MUNICIPALITIES AND ITS COVERAGE BY OCCUPIED PERSONNEL
Occupied PersonnelActivity Sector
National /
250 Selected Municipalities
/ Coverage%
Totals / 16,500,891 / 14,063,517 / 85.2
Fishing / 154,379 / 80,138 / 51.9
Mining and Petroleum Extraction / 72,501 / 25,134 / 34.7
Manufacturing Industry / 4,355,585 / 3,636,048 / 83.5
Electricity and Water / 189,924 / 172,313 / 90.7
Construction / 669,779 / 653,881 / 97.6
Commerce / 3,908,787 / 3,268,191 / 83.6
Communication and Transports / 869,115 / 778,882 / 89.6
Financial and Real State Services / 410,586 / 392,215 / 95.5
Technical, Professional and Social Services / 5,870,235 / 5,056,715 / 86.1
Table 5
TOTAL OF INCOME FOR THE 250 SELECTED MUNICIPALITIES AND ITS COVERAGE BY INCOME
Incomes (Thousands of pesos)Activity Sector
National /
250
Selected Municipalities
/ %Totals / 5,682,569,070 / 5,140,953,159 / 90.5
Fishing / 10,049,867 / 7,512,218 / 74.7
Mining and Petroleum Extraction / 32,782,436 / 10,460,471 / 31.9
Manufacturing Industry / 1,896,027,652 / 1,580,858,651 / 83.4
Electricity and Water / 133,770,764 / 132,196,769 / 98.8
Construction / 127,807,301 / 125,710,395 / 98.4
Commerce / 1,909,870,249 / 1,761,403,254 / 92.2
Communications and Transports / 286,515,576 / 274,883,545 / 95.9
Financial and Real State Services / 578,324,729 / 574,738,002 / 99.4
Technical, Professional and Social Services / 707,420,496 / 673,189,854 / 95.2
Considering the sectors with major number of economic units such as Manufacturing Industry, Commerce, Technical, Professional and Social Services these 250 municipalities, cover 67%, 75% and 78% respectively of the sector’s activity. We can confirm that there is a good cover at sector level.
With respect to occupied personnel, for every sector, there is a cover up to 80%. Regarding the incomes sector, the cover broadly exceeds the 80%, without considering fishing and mining sectors.
2.2 Conceptual Design
The thematic in the questionnaire was as follows:
1. The obligation to realize the procedure to obtain licenses
2. The information required for the procedure
3. Storage information resources
4. Captured variables in the database
5. Movements´ registry and opportunity in the database updating.
6. Type of classifier
7. Information’s availability
2.3 Operational Strategy
The survey was made from June 4th to July 28th 2003, through an e-mail questionnaire directed to the Municipality’s President.
2.4 Survey Results
Registry Characteristics
Type of Response / Obligation to realize the procedure to obtain a license / Annual renovation of licenses / Base register / Type of classifier / Interest to obtain statistics reports / Disposition to provide information to INEGIYes
/ 92.2 / 76.5 / 81.3 / 80.1 / 89.8 / 85.0No / 7.8 / 23.5 / 18.7 / 19.9 / 10.2 / 15.0
Total / 100.0 / 100.0 / 100.0 / 100.0 / 100.0 / 100.0
Capture of data
Type of capture / Owner’s name / Business name /Trade mark
/ IDR / Telephone / Activity / Occupied personnel / Capital stockIn data basis / 83.7 / 69.9 / 77.1 / 60.8 / 38.0 / 81.3 / 16.3 / 20.5
In other resources / 12.1 / 13.2 / 10.9 / 20.5 / 25.3 / 12.7 / 7.2 / 9.0
Total / 95.8 / 83.1 / 88.0 / 81.3 / 63.3 / 94.0 / 23.5 / 29.5
Movements registered
Registry periodicity / Opening of new establishments / Owner’s change / Changeof activity / Temporary close / Closure / Definitive close / Change of address
Permanent / 53.0 / 38.6 / 39.8 / 31.3 / 25.3 / 33.7 / 35.5
Periodically / 35.6 / 50.0 / 48.8 / 39.2 / 46.4 / 49.4 / 51.2
Total / 88.6 / 88.6 / 88.6 / 70.5 / 71.7 / 83.1 / 86.7
From the given results we can conclude that due to the procedure of the licenses registry, it is obligatory in the 92.2%, in the 76.5% of the municipalities it should be renewal once a year and the 85.0% shows availability to provide its information to INEGI. The administrative registry resultant from this activity has enough coverage to be used as an input of the National Business Register.
Related to its main characteristics, there are different forms in which the data and the movements are captured, as well as the media used for those effects. So, this information needs a standardization process before being used. This allows us to count the same thematic coverage and the same subject matter corresponding to all municipalities.
3. Concertation with the municipalities’ authorities.
Due to different ways to capture the information from the municipalities, it has been concluded that the simplest form to achieve the standardization process to collect the municipalities´ register, is to offer to the municipalities a system that will be developed by INEGI, based on a conceptual design on which should be well define the following aspects:
· The observation unit
· The integration of an economic unit code
· The data captured by the economic unit
· The classifier
· The movements object of registry
The negotiation will try to encourage the municipal authorities to use the registry system for any kind of movement related to licenses, without growing their activities, they will provide INEGI the necessary information to integrate the National Business Register. This will establish a wining-wining agreement, in which INEGI will gather the information from each municipality and they will obtain the following benefits:
· To improve the quality of its registry through the use of a system that will provide a precisely and clear conceptual design.
· To facilitate the registry and the consult of the movements realized inside of the municipality, as well as their correct follow up and the set up of criteria to improve the collecting.
· The access to national statistics about economic units´ demography which allows each municipality to be compared with the rest and to have evaluation instruments in economic development politics matter.
The concertation for the system’s implantation will be done as a cascade, profiting both, INEGI structure as well as government structure on three stages:
Stage 1.- The INEGI´s directory area designs the system incorporating the advantages of the most developed municipalities existing systems, later they will present it to the state coordinators, train and put them in charge to negotiate its implantation with the government.
Stage 2.- The state coordinators from INEGI present the system to the state government authorities represented by the local ministry of finance showing the benefits of the system, asking them to do the same with the municipalities on their region.