Small businesses in Ireland account for more than 60 per cent of the entire workforce, according to a new study by the Central Statistics Office (CSO).

However, the average salary for employees in small business is much lower than in larger companies. The average wage for employees in a small business was €30,280 in 2004. The corresponding average in medium/large businesses was 23 per cent higher at €37,181 per employee.

The CSO defines a small business as one employing less than 50 people. Total labour costs of these firms amounted to €8.5 billion compared to €21.8 billion for medium/large businesses.

Average annual labour costs per employee were €35,340 for small businesses and €44,157 for medium and large businesses. In all sectors except business services, annual labour costs were lower for small business.

However, full-time employees in small enterprises worked, on average, one hour more per week than their counterparts in larger enterprises.

The services sector has the highest concentration of small enterprises, the vast majority of which employ less than 20 people. More than half the people working in the services sector are employed in small firms, which now employ 400,000 people.

At just under €74 billion in 2004, small firms accounted for more than half of the total turnover in the services sector. Almost half the 83,000 small firms in the services sector are family-owned, with the vast majority employing less than 10 people.

In the construction sector, small firms accounted for nearly 75 per cent of employees. More than half of all those employed in the construction sector are either self-employed or work for very small concerns employing less than 10 people.

Four out of every five industrial enterprises were small firms employing less than 50 people. Small firms in industry employed 53,000 people, just under a quarter of total industrial employment.

Small enterprises generally make less use of more advanced information and communication technologies than larger enterprises, according to the CSO. Just under half of small enterprises had undertaken innovation activity in 2004 compared with two-thirds of larger enterprises.

Almost 61 per cent of females employed in small workplaces are in low-skilled or elementary occupations, compared with just 24 per cent of males.