Mr. John O'Dea:

The medical technology industry is built on small and medium-sized enterprises. Ireland’s medical technology industry is now a recognised global medtech cluster comprising approximately 250 medtech companies. Of these, some 80% are SMEs. In fact, the majority of these companies are small and micro-sized, employing fewer than 50 people.

Global offerings across competing jurisdictions are threatening Ireland’s hard-gained leadership position and strong reputation, not only in Europe but also globally. It is important for the Government to support the pivotal role SMEs and entrepreneurs play in the medtech ecosystem and Irish economy.

One reason SMEs are so important to medical technology is the particular nature of research and development within the industry. Innovation often emerges from intimate collaborations between health professionals, academia and manufacturers - an approach to which small businesses are particularly suited. Developments often arise in direct response to particular needs, and result in the rapid innovation that characterises the industry.

Securing early-stage investment in these medium to high risk SMEs is critical to their very survival and to bring the technology to exit or to market. The introduction of a State-backed enterprise or investment bank could usefully fill the gap in the market that exists in financing growth-oriented smaller enterprises and start-up companies, the lifeblood of the medical technology ecosystem.

The medical technology sector is characterised by serial entrepreneurs. We need to take advantage of the potential a reformed capital gains tax regime for reinvestment will bring to the Irish economy and ensure we do not lose out to international competition as a location for investment. Capital gains taxation in Ireland is no longer supportive of productive investments by domestic indigenous entrepreneurs. For example, the levels of capital gains tax for entrepreneurs engaged in high-technology start-ups in Ireland are over three times higher than those in Northern Ireland.

Further measures to support investment need to be addressed, for example, simplification of the rules related to the EII and SCR schemes, and founder pension-funded investments.