Mr. Fergal O'Brien:

When we talk about competitiveness from a business perspective, we always focus on both the cost side and the productivity side. Very often the focus is excessively on the cost agenda. Costs obviously matter. We need to keep our labour costs in line with what our competitors are doing. We need wage increases in the economy, but they need to be moderate, sustainable and in line with those of our competitors. By and large, that is what we have seen to date as the economy is recovering. However, we are concerned that the labour market is getting so tight that we need to be cautious in imposing any other cost, either regulation or other costs, that will impact on payroll.

The cost of insurance is a source of significant concern for business. Listening to the previous session, the cost of transport and getting goods off the island, particularly in the context of Brexit, is a concern.

From a productivity perspective, we would like to see more being done to support the indigenous sector in the context of its talent and management capacity. We mentioned trying to help companies to take advantage of the new technology in automation and robotics. Very often it is much more complex than just buying the latest high-tech kit. It can be a management capacity challenge which can require extensive upgrading and investment across the technology systems of a business. It might be about generating awareness, particularly in the indigenous SME sector, of the available new technologies.

On making much better use of the research and development tax credit, one of our specific recommendations to help more SMEs to use it is to have a more streamlined pro formaapproach to it. We also recommend reducing the administration involved for companies below a certain size to make it more accessible and reduce professional services costs in availing of the credit.

On the broader issue of the value of the credit to the economy and the tax forgone, we point to the additionality in research and development activity.

Extensive research with our members has shown a substantial return to the Exchequer from the cost benefit of the research and development tax credit. We have estimates for that economic return. The Government also continues to see this surge in corporate tax revenue. That is indicative of continuing higher quality business activity in the Irish economy and much of that goes back to us growing our innovation capacity and our research and development activity. There is a tax forgone element of the research and development tax credit but it is creating a significant amount of additionality for the economy. That is evident in respect of-----