Dáil debates

Tuesday, 10 December 2019

OECD Report on SME and Entrepreneurship Policy in Ireland: Statements


8:45 pm

Photo of Michael CollinsMichael Collins (Cork South West, Independent) | Oireachtas source

I do not know how I will follow that. I welcome the opportunity to speak on this matter. As we know, SMEs are a critical part of the Irish economy. The OECD report tells us, "There were approximately 250 000 active enterprises in Ireland in 2016." It states that SMEs make up as much as 56% of manufacturing employment and 74% of services employment in Ireland. Unfortunately, however, Ireland's direct SME export levels are very low by international standards, with only 6% of Irish SMEs directly trading across borders and with a high share of SME exporters trading only with the UK market. However, SMEs may contribute to exports indirectly by providing multinational firms with components and services. This is of particular concern to these companies with Brexit fast approaching. Many companies have invested heavily to support exporting over recent years. These companies need reassurances that the State will stand by them and provide assistance in the event of a hard Brexit.

The report's executive summary outlines in its key findings, "Ireland offers a favourable regulatory environment, low taxation, extensive R&D support and good physical infrastructure." I am not sure about the last one. In rural Ireland we are constantly fighting for investment in our roads, public transport and broadband. I have continuously pleaded with the Government since I was elected a Deputy for investment in our roads in west Cork. It is a fine thing I talked to Shep, the dog at home, because no one here listens. The report seems to contradict itself in chapter 3, calling Ireland's physical transport infrastructure sub-par.

The report also states:

access to finance remains problematic and incentives could be strengthened for investment in SMEs and entrepreneurship. Skills shortages are also rising, implying a need to monitor the success of recent apprenticeship and skills development policies.

I brought up this issue of skills shortages in November of last year and nothing has changed since. There is no doubt but that we have a lack of young people taking up apprenticeships. The 2018 Construction Industry Federation, CIF, report entitled the Trades & Apprenticeships Skills Survey identifies a lack of skilled tradespeople and apprenticeships as small firms struggle to take on apprentices. In the report the CIF states this is a clear warning sign to the Government and that the shortage is so severe that there exists the potential for long-term problems. If the Government wants to see more people taking up trades, it will have to better support young people. The report goes on to state, "Many firms in the past employed apprentices, however currently do not due to firm downsizing, lack of government incentives and onerous legislative obligations." All this has caused a shortage of qualified construction tradespeople across the construction trades and apprenticeships. This is a big concern that needs to be addressed. Contractors feel that the legislative and Government requirements surrounding apprenticeships are burdensome and put them under pressure. The Government needs to tackle this crisis now, not wait for things to escalate further. We have many thousands of talented tradespeople and professionals who emigrated during the recession. The Government should be doing all it can to make moving back to Ireland more appealing. However, with rising rents and shambolic health services, this would seem an uphill battle. Without Government action on this, we cannot expect the trend to change.

The OECD report outlines that the higher education system plays an important role in providing skills that are relevant to the labour market. The report also outlines, however, that the Irish economy would benefit from wider participation in lifelong learning programmes. I would like to see more incentives for people who have left the education system to return to it or take up a trade. I would like to see those who are in full-time employment and who want to continue upskilling given more opportunities to take part in short-term courses. When holding down a full-time job and supporting a family, many people cannot commit to courses that run for years. There should also be more incentives for companies to send their employees on upskilling courses in the form of tax relief for the employer, incentivising companies to invest continually in their employees, in turn benefiting both.


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