Mr. Tom Hayes:

I thank the Chairman and members for the opportunity to attend this afternoon and contribute to the important work of this joint committee. The Chairman already introduced my colleagues so there is no need to repeat that.

We have been asked to outline Enterprise Ireland's proposals for the new micro enterprise and small business unit and to draw reference to the proposed liaison with the local authorities on how this unit will assist micro enterprises in Ireland. Before I take the committee through our presentation, it is important to say that the Government decision to establish local enterprise offices throughout the country, replacing the county and city enterprise boards, CEBs, is being brought forward by an implementation working group, which is chaired by the Department of Jobs, Enterprise and Innovation and includes members of all the key stakeholders. These include county and city enterprise boards, Enterprise Ireland, the local authorities and the Department of the Environment, Community and Local Government. This group has been charged with reporting back to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, by December and has been tasked with overseeing the practical implementation of the Government decision on the restructuring of the existing micro and small enterprise support structures with a view to creating an enhanced national enterprise support model.

The overriding objective of our work is to build on the already excellent work undertaken by the county and city enterprise boards and to bring to bear the input of the local authorities in developing an enhanced micro enterprise support system. The committee will also appreciate that the implementation working group is engaged in reviewing a range of issues and decisions on key aspects of the implementation process have yet to be made. A number of sub-groups are working through elements of the implementation process and these include functions and structures; service level agreements, which will underpin the relationship between Enterprise Ireland and the local enterprise offices; evaluation and approval procedures; and human resources.

I will now take the committee through some of the key points of the statement. I will preface my comments on the micro enterprise and small business unit by setting its activities in the context of Enterprise Ireland's overall objective on behalf of the State. Above all else, Enterprise Ireland's objective is to develop capability to generate sales and exports and to grow jobs in Irish companies, which is critical for sustaining the economy. In short, our job is to help companies create jobs. Enterprise Ireland client companies employ, on a full-time basis, over 141,000 people throughout the economy, supporting direct and indirect employment which is estimated to total more than 300,000 jobs.

I draw the attention of the committee to the fact that Enterprise Ireland client companies have a similar economic impact in the country to foreign-owned companies here both in terms of the number of jobs supported and also the estimated €19 billion in annual expenditure in the economy. The sales, particularly the €15.2 billion in exports achieved in 2011, that sustain this level of local impact have to be won day in, day out by our client companies throughout the world. Our job in Enterprise Ireland is to focus on all the elements of what a business or an entrepreneur needs in order to export successfully and create jobs. More than 8,000 jobs were created by our client companies last year. A similar number of jobs were, unfortunately, lost, mainly as a result of the continuing contraction of sectors such as construction and related business activity. However, it is critical that the severe losses of previous years have now been stemmed.

This year has focused on encouraging investment and supporting our client companies in a move to a growth path. In the first nine months of 2012, a total of 5,408 job commitments over the next three years, linked to Enterprise Ireland approvals to client companies, were secured. Additionally, in the last two weeks, the Kerry Group announced the establishment of an industry-leading global technology and innovation centre in Ireland. This €100 million investment will create 800 jobs over the next four years, as well as 400 jobs in the construction phase, which will be part-funded by the Department of Jobs, Enterprise and Innovation through Enterprise Ireland. This adds to a number of significant announcements by indigenous companies over the past months, such as Dawn Meats and EirGen in Waterford, Shay Murtagh Precast in Westmeath, GenCell in Limerick, Technopath in Tipperary, Danone in Wexford and Cork, Copperfasten in Galway, Sysnet in Dublin and Eishtec in Waterford.

A major aspect of our work is supporting indigenous start-ups each year and this is closely linked to the development of new sectors and clusters of job creation in the economy. In the first six months of the year, 53 new innovative high potential start-up, HPSU, companies were supported by Enterprise Ireland. Together, they plan to create over 900 new jobs by the end of 2014. Both the number of investments and the number of jobs to be created are significantly up on the same period last year. Over the past ten years, Enterprise Ireland has supported and invested approximately 800 high potential start-ups, which now generate approximately €1.5 billion in sales per annum, of which 75% is exported. These companies have directly created 12,000 jobs and account for a similar number of indirect jobs in the economy. I would suggest that a quiet revolution has been taking place within indigenous industry over the past number of years. Our efforts over the course of this year are likely to see us support the greatest number of high potential start-up companies ever supported by Enterprise Ireland in one year. We have supported a total of 80 HPSUs against a target of 95 for the year and, in addition, we will have supported a further 60 emerging start-up companies under the competitive start fund, which is building a pipeline of companies in the economy which will help create sustainable jobs into the future.

Underlying this end product of start-up companies support is a system of action which supports entrepreneurs in their efforts to set up internationally focused, innovative companies. This includes the development of an effective and sustainable seed and venture capital system in Ireland, which provides the necessary finance for these companies, in addition to other supports aimed at increasing the availability of finance such as business angels and working with investors here and abroad. The provision of support through the community enterprise centres, CECs, in every county as well as incubation space across Ireland is often forgotten about. Enterprise Ireland has invested substantially in CECs.

This year, we approved further support for the business development managers within 37 of those centres. These people are or should be the beacons of entrepreneurship in their communities. The incubation centres in the institutes of technology and universities are providing a support environment for approximately 300 companies employing over 1,300 people. We undertake a range of workshops, seminars and training programmes for entrepreneurs. These are designed to aid the development of their business programmes and plans and assist them in the process of getting their companies off the ground. The significant efforts of our high-potential start-up division seek to identify entrepreneurs and offer advice and assistance in the very difficult early-stage start-up phase. Ongoing support and engagement with the CEBs throughout the country is also a feature.

Enterprise Ireland has worked very closely with the CEBs. They are an important part of the State apparatus to support entrepreneurs and help to drive the creation of jobs throughout the economy. In recent years, this has involved having a responsibility for the central co-ordination of the CEBs through our CEB co-ordination unit in Enterprise Ireland. The unit is based in Shannon, and my colleague, Mr. Richard Murphy, is responsible for it.

It is clear that the CEBs have an excellent track record in developing and promoting entrepreneurship and enterprise in their respective areas. The challenge, of course, is to maximise that impact and activity and to ensure consistency in the delivery of services.

As the committee is aware, the Government made a decision earlier this year to enhance the micro-enterprise and small business support system. The Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, recently set out his vision for the reform of small business supports which will deliver a better and improved service to enterprise. Micro-businesses and small businesses are crucial to our economy. Ensuring that they can start, expand and export comprises a key pillar of our plan for jobs and growth. This is why a part of the action plan for jobs commits to improving the support service for small businesses. It is crucial that we see these reforms through in a way that delivers improved services for the businesses that need them.

The local enterprise offices, LEOs, will deliver access to micro-business supports, such as: finance, marketing, mentoring and management development; a progression pathway for ambitious companies from LEOs to Enterprise Ireland; local business advisory services, including regulatory, licensing and planning services; advice on accessing local procurement processes; access to commercial and enterprise space; access to promotional space; and local networking programmes and initiatives to support early-stage companies.
Microfinance Ireland, MFI, is a real example of the latter. Applications to MFI are to be made with the support of the CEBs. The CEB network and MFI are working on a service level agreement to underpin the CEB role, which role will continue into the LEOs.

The Minister has outlined the key elements of the Government's plan to bring forward the establishment of the new LEOs. These include dissolving the 35 CEBs and transferring their functions, assets and liabilities to Enterprise Ireland. This will be underpinned in primary legislation. Another element includes delivering an enhanced service to the sector through the LEOs, which process will be underpinned by a robust service level agreement between Enterprise Ireland and the local authorities. The plan is to ring-fence the CEB staff to retain their expertise, enterprise culture, skills set and capability. This is vital. The Minister is to retain responsibility for enterprise policy and budgets.

The Minister said that, by working together, the new LEOs will deliver improved and expanded services to small industry but will also provide more direct insight for local authorities and county managers into the needs of small business. It is Enterprise Ireland's objective to have the Minister's vision of an enhanced, more consistent and coherent set of enterprise supports for small business delivered through the LEOs.

The work of the CEBs and the co-ordination unit in Enterprise Ireland must continue as normal during the planning phase of the implementation of the Government's decision. It is crucial that entrepreneurs and client companies remain the primary focus of all the agencies.

The design and rolling out of the small business unit is currently under development as part of the work of the implementation working group. However, it is fair to state the objective of the unit will be to lead, develop and manage the enhancement of a support system that generates innovative export-focused enterprises that will result in sustainable employment.

With regard to the local enterprise offices, the unit will have responsibility for the potential exporters unit and Enterprise Ireland's regional office network, which also provides supports to client companies throughout the country.

With regard to the areas of corporate governance, compliance and stakeholder management, let me refer to the key pillars associated with the centre of excellence that is to be established. The system will be underpinned by a service level agreement. The agreement will be very clearly dictated by metrics which will include: the number of start-ups supported - financial and non-financial; the number of jobs created and sustained; the economic impact locally, which will be defined in terms of increased sales, exports, employment and economic expenditure; progression pathways, with reference to the number of clients that progress and are transferred to Enterprise Ireland; the number of entrepreneurial promotional activities undertaken at local level, in respect of which we have an ideal opportunity to promote entrepreneurship at all levels locally; the number of micro-financed loan applications assisted; and a range of local authority service-associated metrics. There will be promotion of client development through the development of the pathways between the LEOs and Enterprise Ireland, and the progression of LEO clients to and from our high-potential start-up division, the potential exporter division or our established departments within Enterprise Ireland. This is a core measure and will be part of the performance indicators.

With regard to knowledge, competence, collaboration and the transfer, there is a wealth of knowledge, competency and resources within Enterprise Ireland and across the LEO network. An objective will be to increase the development, promotion and evaluation of a best-practice enterprise system. The unit will also assist with national event management, including the national enterprise awards scheme, and facilitate and support the LEOs in organising the delivery of the national enterprise education programme, including the national student enterprise awards. The unit will also facilitate the development of sectoral and regional networks and clusters, which will involve client companies from the IDA, Enterprise Ireland and the CEB, to develop businesses opportunities such as sub-supply to the multinationals by micro-enterprise.

With regard to online support, we would draw on material and best practice from around the world in establishing the centre of excellence for micro-businesses and small businesses. Based on the experience of our potential exporters unit to date, we have developed a customer-friendly interactive benchmarking tool, which has already been used by over 700 client companies. This will enable all inquirers and start-ups to gain access to basic information, such as signposting, how-to guides and where-to guides for the development of their businesses.

The priority is now to work through the implementation process and ensure the best-practice support system for micro-enterprise can be put in place. This will undoubtedly require the best efforts of all the stakeholders in this new approach, including the existing CEB network, the local authorities and Enterprise Ireland. It is clear that a real opportunity exists to expand and improve the range of services available to micro-enterprise in a single, accessible local support office.

On behalf of my colleagues, I thank the committee for inviting us. We will be happy to respond to any questions members might have.