Mr. Kevin Sherry:

I thank the Chairman for the invitation to attend this morning. I am joined by my colleagues Mr. Garrett Murray, the department manager for policy and government relations and by Ms Anne Lanigan, the department manager in our Brexit co-ordination unit.

Enterprise Ireland supports indigenous companies in every region of Ireland to start and scale their business, to innovate and to win business in international markets. We focus on the manufacturing and internationally traded services companies, which are a critical source of existing employment and job creation in every county in Ireland and are spread across a wide range of sectors.

On 9 January 2017 Enterprise Ireland announced that the driving enterprise, delivering jobs strategy over the period of 2014-16 - our three year strategy period - 45,592 new jobs were created by our client companies. This brings the total number of people employed by companies supported by Enterprise Ireland to 201,108. This is an all-time high for the agency. It is the first time we exceeded 200,000 jobs. In 2016, which was the last year of that strategy a total of 19,244 new jobs- full and part-time - in Enterprise Ireland supported businesses were created. Almost two-thirds of these new jobs, 61%, were outside Dublin, and all regions recorded increases in employment. This translates into a net increase of 9,117 jobs for 2016, taking account of job losses.

The contribution of Enterprise Ireland client companies to the domestic economy is very important, particularly from a regional perspective, as it sustains over 300,000 direct and

Exports to the UK as a proportion of our total client exports declined from 45% in 2005 - a decade ago - to 37% in 2015, as more of our client companies have diversified their export strategies into Northern Europe, the USA, China and the Gulf region. We expect this trend to continue. Supporting clients to diversify their exports while also growing exports in existing markets including the UK - our nearest market - has been a central pillar of Enterprise Ireland strategy for over a decade. In 2015 there were 1,476 Enterprise Ireland client companies that recorded exports to the UK and between them these companies employ some 100,000 people. This represents half of the total employment of Enterprise Ireland clients. The sectoral breakdown of these 1,476 companies is as follows: food at 15%; ICT and international services at 40%; and industrial, life sciences and consumer at 45%.

The sectoral breakdown of these 1,476 companies is as follows: food accounts for 15%; ICT and international services, 40%; and industrial, life sciences and consumer, 45%. Irish exporters are significantly impacted by Brexit and over 600 of the 1,476 companies generate over 20% of their turnover from the UK market.

It is expected that the UK will remain the largest market for Irish exporters in the short term. Enterprise Ireland’s focus on supporting our clients to sustain and grow exports in the UK and in other established and high-growth markets will continue.

In January this year, we published our strategy for the period 2017-20. This strategy was specifically developed in the context of Brexit and focuses on supporting clients to both build scale and expand reach, in other words, to diversify. The strategy sets ambitious targets out to 2020 including to sustain and grow jobs in Enterprise Ireland client companies to in excess of 220,000 and €26 billion in exports. The objective is that at least a 50% growth in exports would be outside the UK. We have set a target of increasing the annual total spend in the economy by Enterprise Ireland client companies of €27 billion, as well as increasing their direct annual research and development spend by 50% to €1.275 billion.

The UK vote in June 2016 triggered a period of uncertainty for Irish business and this has continued. The primary cause of uncertainty since then has been currency volatility. However, in the medium term, the outcome of the negotiation process and the new trading structures that will exist thereafter may provide further challenges.

The devaluation of sterling impacts differently on companies in different sectors in different ways; it is not uniform. Some companies are hedged through their banks and others are naturally hedged, so Brexit impacts on all sectors in different ways. What is clear is that the devaluation of sterling and any other impacts of Brexit will not be temporary and will require a strategic response from Irish exporters and from Enterprise Ireland.

The challenge is significant in terms of exchange rate volatility. We have been here before in 2009 when the euro and sterling were near parity. Irish companies, while severely challenged during that period, took actions that assisted them to respond to the movement and overcame that challenge.

Enterprise Ireland's focus in the immediate aftermath of the vote in June 2016 was to set up a helpline and directly reach out to our clients. Since then we have taken many actions including working with clients company by company and sector by sector. We have developed a new guide to exporting to the UK, and a webinar on currency volatility and hedging. In addition, we have promoted global market opportunities in the media through our global ambition campaign. We have prepared a guide to exporting to the UK, which will continue to be a very important market.

We have published a revised schedule of trade and investment missions for the second half of 2016, which we implemented, and published a trade and investment mission schedule for this year involving over 145 trade missions and international trade events.

We have worked closely with local enterprise offices through our Brexit and competitiveness units to support LEO clients. We have worked through our parent Department and other Departments to ensure that any issues raised by our clients are highlighted in the policy system and are addressed. In addition to many other actions undertaken, we have refined and promoted our own client offering to support client growth strategies.

Enterprise Ireland has advised, and will continue to advise, our clients to prepare for a hard Brexit. That is our advice, but if it is better than that, it will be great. Companies are alert to the challenges posed by Brexit, but not all of them are taking action as yet. Our focus continues to be on supporting companies on a one-to-one and on a sector-by-sector basis to enhance their competitiveness and capability and build on their success in existing and new markets.

Enterprise Ireland is focusing on four strategic areas of action: innovation and research and development; competitiveness; financial management; and expanding reach, in other words, diversification. We are working systematically with clients through our client engagement model to support their priorities and actions. Our overseas offices will continue to work with clients in a range of market areas focused on winning business. A focused eurozone strategy will be launched in the coming weeks. On 31 March, Enterprise Ireland launched our Brexit SME scorecard, a new interactive online platform which can be used by all Irish companies to self-assess their exposure to Brexit under six business pillars, where they have not already done so. Based on the answers those companies have supplied, the scorecard generates an immediate report which contains suggested actions.

By completing the online questionnaire, the Brexit SME scorecard will provide companies with an assessment of their preparedness. The tool is a starting point for SME management teams looking to develop an action plan to help mitigate risks and leverage opportunities which may arise from Brexit. While the SME scorecard Is available to all companies, Enterprise Ireland client exporting companies that utilise the Brexit scorecard will then be able to engage with the agency’s experts both domestically and through the overseas offices in global markets. Enterprise Ireland will provide funding up to the value of €5,000 to exporting clients to support the development of a business action plan. Enterprise Ireland will work with those companies on a one-to-one basis to support the implementation of the plan. The roll-out and marketing of this initiative is being complemented by a schedule of regional events. Over 420 companies have already completed the Brexit scorecard.

Enterprise Ireland will continue to directly implement our strategy build scale and expand reach 2017-2020. We will work closely with others, including other governmental and non-governmental bodies to support our clients to overcome the challenges of Brexit and build on their ambitious strategies to sustain and create jobs throughout Ireland.