Mr. Neil McDonnell:

ISME is grateful for the opportunity to make a submission to the committee. While we are in favour of continued Government support for higher education, we do not believe that free tertiary education for all would represent an effective allocation of State resources. We also do not believe it should be at the expense of employers, who already fund the national training fund via PRSI.

Regarding the future expansion of the technological universities, we do not see the logic behind creating more universities in the country while our technical and vocational education continues to falter. Ireland’s tertiary educational attainment performance level is already above the EU target level for 2030. Ireland demonstrates the highest level of overeducation of countries in the EU and UK, with over 30% of full-time employees defined as overeducated for their occupational mode.

Our education system is now underperforming, and declining, relative to peer countries. The OECD economic survey for Ireland in 2020 notes that the skills of Irish adults are below the OECD average, literacy skills are close to the OECD average, and numeracy and problem-solving skills were significantly lower than the average for all ages.

On the expansion of apprenticeships, our membership remains concerned at the slow pace of development in craft and new generation apprenticeships. We believe that Ireland has overpromoted academic learning at the expense of technological and skills learning. The disparity between pre- and post-2016 apprenticeships is unacceptable. Analysis by the Department of Public Expenditure and Reform confirms low levels of take-up in post-2016 apprenticeships. The €2,000 grant per apprentice per year is inadequate to cover employer costs.

Regarding access, diversity, inclusion and digital learning, the entry levels to be eligible for support are very low, so middle-income families struggle to pay college costs. Child benefit ending at 18 for those still in full-time education does not give many parents the opportunity to save for college fees. Regarding lifelong learning, progression pathways and continuous professional development, ISME has long acknowledged the skills shortfalls among the owners and managers in indigenous businesses.

The National Competitiveness and Productivity Council notes that productivity of foreign multinationals is increasing in Ireland, while that of domestic firms is declining. ISME has lobbied for the establishment of a QQI level 6 program called the "blue cert" to close the main knowledge gaps among small and medium enterprises. We believe PAYE and capital gains tax incentives should be used to encourage uptake in this blue cert. Training in lean six sigma, which would form part of our blue cert programme, should be deemed essential for most manufacturing, production and service businesses.

Regarding research, innovation and engagement, use of the research and development tax credit and the knowledge development box among SMEs is effectively non-existent. These schemes are written with rules appropriate to quoted multinationals, not domestic SMEs. Research and development expenditure in Ireland is grossly overconcentrated, to the tune of 66%, in large companies which make up only 0.3% of businesses.

Clusters are a great way of building engagement and harnessing innovation. ISME and similar organisations are willing to help, but need assistance in meeting the administrative burden. We would like the technological universities to be prioritised for expenditure on biogenics, renewables, recycling systems, rainwater recovery, and so on, and for providing technical training for businesses in mechanical and electrical areas, and about the Internet of things. Fraunhofer-Gesellschaft provides a useable model for this and already has a footprint in Dublin.

Regarding mental health and well-being supports, we are concerned about the decline in mental health among SME owners. We encourage those businesses which cannot provide well-being supports internally to use external professional providers.