Pat Breen (Clare, Fine Gael) | Oireachtas source

I am delighted to be here in the Seanad as Minister of State with responsibility for trade, employment, business, EU digital single market and data protection to discuss the matter of small and medium enterprises, SMEs. In particular, I wish to cover three items of strategic importance to SMEs. First, I will address the strategic SME policy direction. Second, I will discuss entrepreneurship, specifically female entrepreneurship. Finally, something we cannot leave out in a discussion on business is Brexit.

Senator Pádraig Ó Céidigh has raised the issue of developing a strategy to support indigenous SMEs. This is extremely timely. At present, my Department is considering such a strategy that would bring together the many Government supports for SMEs, as well as ensuring the business environment supports our SMEs and is fit-for-purpose, which is important. I have mentioned the name of the Senator in vain; I hope he will not mind. Such a strategy will ensure all relevant Departments, agencies, local and regional bodies support SMEs and this collaboration is extremely important.

Everyone here knows that this Government has consistently been focused on the creation of jobs through the creation, retention and growth of businesses, given that business is very important. With unemployment levels now reaching a new low of 5.8% in May this year, we can adjust our focus to quality employment and providing the necessary further support for businesses. To do this, it is important that we understand the breadth of supports available to SMEs. In addition, we need to establish which of these policies and programmes work and whether the wider SME ecosystem is performing well.

One of the best measurements of the wider framework conditions for SMEs is the European Commission’s small business act, SBA, fact sheet. This is a yearly report which ranks Ireland against other EU member states. In the 2017 report, Ireland’s SBA profile continued to be competitive and has even improved on last year’s performance. In eight SBA areas, namely, entrepreneurship, second chance, responsive administration, state aid and public procurement, access to finance, Single Market, skills and innovation and internationalisation, Ireland performed well above the EU average. Therefore, we can see Ireland gets a good report card as it stands.

However, as I mentioned earlier, we cannot and must not be complacent. We need a co-ordinated strategy to continue Ireland's upward trajectory. That is why I travelled to Mexico in February to the OECD ministerial conference on SMEs as head of the delegation for Ireland and spoke on topics such as what policy makers should do to help SMEs harness the most recent trends in digitalisation and the best way to support SME adoption of productivity-enhancing digital technologies. Digital technology is important and we have to embrace it in every sector, right down to micro-enterprises and up to multinationals. It is not about the future; this is the future. It was an excellent conference where great ideas were shared and a declaration to strengthen SMEs and entrepreneurship for productivity and inclusive growth was signed by member countries.

At the same time, my officials and I were engaging with the OECD on the possibility of conducting a review of SME and entrepreneurship issues and policies in Ireland. I launched this review with the Minister for Business, Enterprise and Innovation and the secretary general of the OECD in March of this year. This is a major piece of work which will take 18 months. We can expect publication at the end of 2019. Not only will it assess the state of play of the policies, programmes and issues as they currently are, but will also result in a SME strategy roadmap which can form the basis of a wider SME strategy for Ireland.

I note Senator Byrne is in the Chamber. Female entrepreneurship is the second matter I would like to discuss. It is an important element of the SME ecosystem in the new business environment. It is imperative that we have a culture and business environment that is conducive to entrepreneurship. This environment must support people from all backgrounds to get out there and start their own businesses. The latest global entrepreneurship monitor report on Ireland released just last week shows that Ireland ranks as No. 1 for a positive attitude towards entrepreneurs. Our new businesses rank fourth in Europe for high potential and internationalisation.

The story is not uniformly positive when it comes to the breakdown of who is creating the business. Female entrepreneurs lag far behind in numbers. Generally, female labour participation rate is lower than for men. In 2016 it was 14% lower than the rate for men. One method the Government has to encourage women to enter or re-enter the labour market is to encourage women to be their own bosses. In order to do this we must provide a whole suite of supports so that we can get the best out of Irish female-led companies and they can get the best out of themselves.

There are supports for female entrepreneurs, specifically in Enterprise Ireland and local enterprise offices strategies for Irish companies. Enterprise Ireland has run female-only feasibility and competitive funds since 2012. This spotlight has yielded results. In 2012 just 8% of the 97 high potential start-ups were female-led, whereas in 2017, 28% of 90 new high potential start-ups were female-led, which is a significant improvement over a number of years. Enterprise Ireland also awarded 42% of the competitive start funds to female-led companies. I look forward to these figures continuing to improve over the next few years.

Enterprise Ireland also partners with knowledge providers in a series of accelerators designed especially for females, including: the DCU Ryan Academy female propeller programme; the NDRS female founders programme; the CIT female exxcel programme; and Going for Growth.The Local Enterprise Offices, LEOs, which play an important part in job creation in the regions, are also actively engaged in encouraging and inspiring an increase in female-led businesses through initiatives such as the annual national women’s enterprise day and the women in business networks.

An important aspect of the networking programme is the promotion of successful female entrepreneurs as role models, and the use of mentoring and networking opportunities, which aim to build the confidence of newly emerging female entrepreneurs. Enterprise Ireland, EI, and Network Ireland, in conjunction with the LEOs and the Entrepreneurs Academy, have announced their second nationwide Fuelling Ambition, Steps to Success roadshow, targeting existing and potential female entrepreneurs. The aim of the roadshow is to encourage, support and drive the ambition of female entrepreneurs nationally by showcasing the steps to success of thriving Irish businesswomen and entrepreneurs, who are client companies of either EI or LEOs.

These are major supports for an under-utilised group from whom Ireland needs greater participation in the entrepreneurship and SME ecosystem. The increase in numbers is positive but is far from parity with male entrepreneurs or even the levels in northern EU member states. One of the areas under scrutiny in the OECD review is female entrepreneurship. I fully expect that we will receive recommendations on how to continue to improve this vital pipeline of new business in the report.

I refer to Brexit, which is part of our work every day in the Oireachtas and which every Department is working on at the moment. There is great uncertainty for Irish businesses and for the landscape in general, there is no doubt about this. The Government has been trying to inform businesses about Brexit to get them thinking about its impact and, most important, to get them ready. While many have put strategies in place to counteract the impact of Brexit or to consider alternative markets or suppliers, others have done little. This is a huge task, but there may also be opportunities.

Over the medium term, Brexit will disproportionately affect SMEs, particularly those in the Border area Senator Mac Lochlainn comes from and those in sectors such as food and agriculture. My Department has been particularly busy in engagement with businesses and in accessing supports and grants that can assist those who are at risk of scaling back or closure. Uncertainty affects all those businesses. The onus is on all of us in government and local government and in agencies to get the message out that we understand the threat to business and the importance of doing something about it. There is no shortage of advice and supports, and LEOs have played an important part through seminars, training, grants and so on for those who seek them. There are 31 LEOs throughout the country which supply that support. My Department has launched a €300 million Brexit loan fund which is available to all companies, regardless of size or sector, to address the challenge. LEOs will play an important role in promoting the new fund and encouraging local businesses to access it.

Enterprise Ireland Strategy 2017-2020 represents a strategic response to Brexit, aiming to grow more resilient Irish companies by building scale and expanding reach. To support its strategy, the Department provided for additional capital moneys in 2017 to enable El implement a variety of initiatives and ramp up its supports to drive improvements. Those improvements are needed in productivity and innovation, which is an important word that I use in my Department or when I go on trade missions every day of the week. We have to be innovative. Management capacity is important and, above all, leadership skills. It is so important for companies to have leadership skills to build on the ambition of managers to consider other markets around the world. That is what we have been doing in my Department. It is what Enterprise Ireland has been doing. I was in Prague last week and I was in Warsaw with 26 innovative Irish companies located all over the country doing business. We signed nearly €8 million worth of contracts for those companies. Our reputation among those companies is second to none. They support our Brexit strategy 100%.

We are seeking to accelerate the number of EI clients diversifying into new markets, and if we are to diversify, Europe is an important market for us, because it is our nearest neighbour after the UK. We have increased the number of trade missions and events planned for this year by 22% on last year. In 2018, EI will run 215 trade events in Ireland and overseas, 70 of which will be Minister-led. This extensive programme of international trade events is central to achieving this increase in exports, first, to the eurozone and to wider global markets such as Asia and the US. However, the UK will continue to be a major trading partner for Ireland, because it is our nearest trading partner and there are many similarities in our culture. Trade between both countries totalling €1.3 billion takes place every week. The UK needs Ireland as much as we need the UK. The 70 trade missions and visits that will be led by Ministers this year are essential to supporting clients that seek to extend their global footprint.

Another agency under the aegis of my Department, InterTrade Ireland, ITI, is uniquely well positioned when it comes to understanding the needs of businesses on both sides of the Border and helping businesses to prepare for the challenges that lie ahead. We have given the other 26 member states a greater understanding of the importance of the North and South. A key part of InterTrade Ireland's Brexit work is the provision for SMEs of a Brexit readiness voucher scheme entitled, Start to Plan, which enables companies to purchase specialist advice in areas such as customs, tax, tariff and non-tariff barriers, and legal and labour mobility issues. These are worth €2,000 to each of the companies. To show how interoperable these grants are, intelligent businesses have used this voucher to put together their proposal for funds through the Brexit loan scheme. This is tangible assistance to SMEs in Ireland and is evidence of Government supports working well.

I thank Members for the opportunity to discuss SMEs. We could spend a lot more than an hour and a half talking about SMEs. They comprise 98% of the enterprises in the country, and employ 70% of the private sector workforce. Whether the enterprises are based in Donegal, Galway, Limerick or Dublin, the SME sector is extremely important. We must continue to ensure that we grow the SME sector and the indigenous sector. Foreign direct investment typically goes into clusters in large urban areas. Out of those big multinational companies are formed the seeds for many indigenous companies that can grow. I have witnesses this in the medical technology sector. Some 20 years ago, sector was small but, today, we are on a par with Minneapolis, and we are second to Germany in Europe. When one considers all that is happening in this sector in Ireland, and the output from the sector in a global context, it is astonishing.

My Department and the Government are looking to create a better business ecosystem for ISMEs, whether they are starting up or established, in many areas. They are a vital part of our economy. It is essential that we all collaborate to support Irish businesses. It is also important that the people support Irish business. Irish businesses will support them by creating quality employment.Brand Ireland is great, as can be seen when one travels all over the world. It is a great brand in the UK. The brand, and the reliability of it, will help us overcome the challenges and obstacles in our way. If we work together, we will grow together and remain resilient in the face of any obstacle that comes before us.