Conor Lenihan (Dublin South West, Fianna Fail)

The Opposition motion acknowledges the importance of SMEs to our economy. On the Government side, we have always recognised the importance of the SME sector to our overall long-term economic well-being. As we have improved the business environment, raised our competitiveness and provided direct supports to enterprises through our enterprise development agencies, SMEs have always been at the centre of our policies. That is why we have focused our efforts over the past 18 months on the key issue of credit for viable SMEs to help them get through these difficult times and bring us through the recession.

Our first priority has been to sustain the banks and ensure that credit flows to the economy as a whole. We also want to maintain a pro-business environment where entrepreneurship can flourish so that new and existing businesses can survive and grow. The Minister, Deputy O'Keeffe, has already outlined in detail a number of specific initiatives included in the two recapitalisation packages of 2009 and 2010, including the commitment from AIB and Bank of Ireland in the 2010 recapitalisation package that they would provide not less than €3 billion each for new or increased lending to SMEs in 2010 and 2011.

In August, as part of a series of regional meetings, I attended a meeting in Tallaght, in my constituency, on access to credit for SMEs. Thirty-three representatives from business and farming organisations, including the Small Firms Association, ISME, Chambers Ireland, the Irish Farmers' Association and the Irish Hotels Federation, attended from Dublin, Kildare, Meath and Wicklow. It was important to hear at first hand the experience of borrowers so that I could feed back their constructive views to the Government, the Credit Review Office and the banks. Since then, Mr. John Trethowan has indicated that the environment for bank customers is much better than it was six to nine months ago. I also note that one of the business representative groups has recently indicated that there has been an improvement in the provision of bank credit to small businesses. This development will no doubt be welcomed by all sides of the House.

If we are to build a much greater number of competitive and innovative companies in Ireland, we will need to see the creation of many new businesses, mostly small and medium-sized, now and in the years ahead. From my perspective as Minister of State with responsibility for science, technology and innovation, STI, our investment in this area is aimed at helping us compete in a highly competitive global market. We appreciate that nations with long-term competitiveness make significant investments in research and development. Recent analysis by the OECD which makes a strong case for public investment in research development and innovation is highly persuasive, particularly in offering a way forward from the economic crisis.

In December 2008, the Government reinforced the importance of investment in STI through the paper entitled Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal, which prioritised continued investment in science and engineering infrastructure and research. The decision in budget 2010 to allocate €600 million to the STI priorities of Departments, despite the challenging economic times, reinforces the Government's commitment to STI as a productive investment for the future and an engine of economic growth. In budget 2010, we reoriented the focus of spending on STI. Our goal for this year and the immediate future is to leverage the investment made to date in research and development to obtain a return in terms of jobs and exports while consolidating what has been built to secure long-term growth. The tripling of public investment in STI over the past ten years concentrated on built infrastructure and productive human capital development. After the reorientation, we are now focused on deriving maximum commercial benefit from the investment to date.

For us, building a smart economy depends on the development and application of human capital - the knowledge, skills and creativity of people - and our ability and effectiveness in translating ideas into valuable processes, products and services.

The report of the innovation task force, which was launched in March of this year, provides a roadmap for delivering sustainable new jobs by making Ireland an innovation hub.

There is one way out of this recession, and that is through export-led growth. That export-led growth will be driven by companies that engage in research and development. It is no accident that the 800 companies that work with Enterprise Ireland in research and development are adding to their export share in these difficult two years of recession. It is also a hallmark of the success of the Government strategy that 51% of the inward investment we achieved through foreign direct investment has been in the area of research and development.

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