Business dynamics have a significant impact on an economy’s overall productivity growth, and this in turn affects a country’s ability to compete globally. There is mixed empirical evidence on the relation between firm size and business dynamics, but small and medium enterprises (SMEs) play a key role in all countries and are significant generators of employment and income. In the OECD area, SMEs employ more than half of the private sector’s labour force. In the European Union, they account for over 99% of all enterprises. SMEs employing between 1 and 9 persons, also called micro firms, represent more than 80% of all firms in most OECD countries.