Ms Siobhán Finn:

Today, I will address the challenges facing Ireland's community enterprise centres and hubs, which support over 3,500 micro and SME businesses nationwide. For the purpose of clarity, we define the community enterprise sector as the broader enterprise development support ecosystem that arises from the collective efforts and activities of enterprise centres and innovation hubs across Ireland. These efforts span multiple sectors, providing vital shared infrastructure and enterprise supports, reducing costs for start-ups and SMEs, fostering collaboration and innovation, and driving balanced regional economic growth and social development within communities.

Competitiveness and the escalating cost of doing business in Ireland are central to the performance delivery of centres and hubs. By offering shared infrastructure, affordable space and wraparound enterprise supports, these centres help reduce overheads for businesses while strengthening local competitiveness, attracting and retaining talent and driving balanced regional economic growth and development.

The Department's data indicates that Enterprise Ireland, on behalf of the Department, has provided funding of well over €150 million for the establishment of some 140 centres and hubs, comprising 250 enterprise-driven investments, through a range of enterprise-funding schemes into this sector since the early nineties. The result is a sector that supports thousands of businesses and sustains approximately 18,000 full-time jobs in local communities. Independent research in 2023 confirmed the sector contributes approximately €1.8 billion in gross value add annually, thus achieving a ninefold return on public investment.

We are here to discuss the major challenges and barriers to the sector's continued growth. Ireland’s national development plan calls out enterprise centres and hubs as important tools for regional employment, yet despite the sector’s significant contribution and the potential it offers, the sector faces ongoing critical challenges that constrain its potential. Since 2023, we have been attempting to engage constructively with the Department concerning these challenges. Financial instability is pervasive, notably among hubs funded under the regional enterprise development fund, REDF, and border enterprise development fund, BEDF, schemes, where over 60% continually operate within six months of financial insolvency and struggle to meet basic operational costs including salaries. Innovation management expertise and leadership capacities remain limited in many centres, compounded by under-resourced operational models. The long-awaited solution presented to the sector by the Government in 2023, as the smart regions enterprise innovation scheme, is now its greatest challenge. This fund, to the tune of €145 million, was launched in November 2023, with the first call for applications expected to be completed by 31 March 2024. The sector is, in fact, still attempting to navigate the challenges of that first call, 18 months after it was expected to close. Detail shared during a Dáil Éireann debate on 19 June this year indicated that only €10 million worth of grants had been awarded; in other words, less than 7% of the available funding has been awarded to date. While no comprehensive list of successful applicants is publicly available, we understand that only one capital project has been funded under stream 1 and that in the region of 17 cluster-based or programmatic-focused projects have been awarded funding under streams 2 and 3, with the balance, an unconfirmed number, having been awarded under stream 4 for feasibility or priming. The limited progress of the smart regions scheme is greatly undermining Ireland’s broader goal of enhancing regional competitiveness and innovation.

The recent Action Plan on Competitiveness and Productivity emphasises boosting regional development as one of its main themes, with enhanced regional balance driven by investment in infrastructure, innovation and skill support targeted across regions. The smart regions scheme will not contribute in any significant way to this ambition in its current guise. The 2025 European innovation scoreboard highlights Ireland’s persistent challenges in scaling innovation due to comparatively low public sector support and investment vis-à-vis EU scoreboard leaders. The centres and hubs are crucial regional innovation enablers; however, they require practical and expert-led engagement rather than a top-down approach to ensure long-term sustainability and impact.

The sector’s vital role remains under-recognised, with significant challenges unaddressed and detrimentally impacting its growth and sustainability. Immediate, evidence-based, outcome-driven and partnership-focused interventions are essential to safeguard these important regional assets. Go raibh míle maith agaibh go léir.