A study conducted by the Brazilian Service of Support for Micro and Small Enterprises (Sebrae) reveals that micro and small enterprises were responsible for creating seven out of every ten formal jobs this year. From January to May, Brazil generated a total of 865,360 formal jobs, with micro and small enterprises accounting for 594,213 of them, representing 69% of the total.
The data comes from the General Register of Employed and Unemployed (Caged), maintained by the Ministry of Labor and Employment.
According to Sebrae’s president, Décio Lima, most micro and small enterprises have up to five employees. “In a context of about 22 million small businesses, they play a fundamental role in the economy, representing about 99% of all companies in the country. They contribute 55% of the total jobs in the formal sector and nearly 30% of GDP [the sum of all products and services produced in the country in a year],” Lima explained to Agência Brasil.
The study classifies microenterprises as those with up to nine employees (in agriculture, commerce, and services) or up to 19 employees (in industry and mining). Small enterprises are defined as those with up to 49 workers (in agriculture, commerce, and services) or up to 99 employees (in industry and mining).
In May alone, small enterprises accounted for 70% (108,406 out of 155,270) of new jobs, marking a 2 percentage point increase from the 68% recorded in the same month of the previous year.
This growth in the contribution of micro and small enterprises to the total volume of jobs contrasts with the performance of medium and large companies, whose share of total formal jobs fell from 22% in May 2022 to 15% in May 2023.
Sebrae’s president explains that small enterprises play a significant role in job creation and retention in the economy. “It is natural for medium and large companies to invest heavily in modernizing their production processes to increase their competitiveness. As a result, they tend to be more labor-saving in the long term. On the other hand, small enterprises are labor-intensive, which is why they tend to be the last to lay off during times of crisis and the first to hire during economic recovery,” he stated.
Analysis by Sectors
When analyzing the sectors that contributed most to job generation in small enterprises from January to May, the services sector led with a net increase of 339,127 positions, followed by construction (123,937), industry (64,754), and commerce (34,127).
The research also indicates that the positive balance of formal job creation by micro and small enterprises was observed in all 26 Brazilian states and the Federal District.
Sebrae predicts that small enterprises will continue to play a crucial role in job creation. “In 2023, the outlook points to a participation rate close to 70% of micro and small enterprises in job creation, with higher levels expected in October and November. Therefore, the employment landscape should continue to be influenced by micro and small enterprises,” concluded Décio Lima.
Source: Agência Brasil