Thursday, 7 October 2021
Nithe i dtosach suíonna - Commencement Matters
Enterprise Support Services
The Minister of State is welcome to the House. He had a successful visit to the local enterprise office, LEO, in Limerick recently. When I was a member of the local authority, I served as a member of the local enterprise board, the precursor to the LEO, and saw the benefits of same to business. In recent times, however, I have become aware of the fact that the LEO mainly deals with companies with ten employees or fewer while Enterprise Ireland mainly deals with companies with 30 or more employees. I have spoken to companies and businesses that received wonderful support in the start-up phase from their LEO. Many businesses have started small and grown into multi-million euro turnover enterprises, which is wonderful. However, I am concerned about those that are the meat in the sandwich, namely those companies with more than ten but fewer than 30 employees because they have nowhere to go. They feel that they are squeezed in the middle and I would like to see more supports and services made available to them.
The Minister of State is committed to the small business sector as was clear when he visited Limerick and met staff at the LEO, various companies and the Limerick Enterprise Development Partnership, LEDP. There is so much scope there and he saw for himself what is going on in the area. It is important that we support companies of an in-between size. I look forward to his response.
I thank the Senator Marie for raising this important issue. It has come up a lot at meetings of the SME task force set up by the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, last year and it also comes up during our visits to various local authorities, LEOs and development agencies, both voluntary and community, around the country. As the Senator mentioned, we spent a day in Limerick recently, which was beneficial in getting feedback from businesses and from all of those involved in supporting businesses. Great work is being done on job creation and economic activity in Limerick and I compliment all involved. The combined efforts of the local authority and the LEO, as well as the engagement of LEDP and others, is impressive. I compliment everyone on what was a good visit. I met some enterprising individuals who have a lot of drive and potential to create jobs, but as the Senator pointed out correctly, the system has to be adjusted to suit them and to help them to follow through. Companies are concerned that when they reach ten or more employees, they could lose their connection with the LEO. They might be moved on to Enterprise Ireland or get caught in the middle and miss out. We are trying to deal with that and it is an issue I am determined to address. All of those involved in this area want us to address it too and Senator Maria Byrne is correct to raise it.
The House will recall that the programme for Government commits to examining the role of the LEOs and their interface with Enterprise Ireland and other local stakeholders in supporting local and regional job creation so that ambitious and high-performing companies, regardless of size, are supported in scaling up and achieving their full potential, whether in the export or domestic market. The Senator referred to companies in that situation who have to make a judgment call on whether to scale up. Some say that they are reluctant to do so because they are afraid they might lose the support of their LEO. It is our job in the Department, in conjunction with the LEOs, local authorities and Enterprise Ireland, to address this issue. In that regard, it is vital that our SMEs have a clear roadmap of progression and that the appropriate structures are in place to assist companies on that journey. Approximately 92% of the 250,000 SMEs are microenterprises with fewer than ten employees and are, therefore, eligible to engage with their LEOs. Companies with between ten and 29 employees represent approximately 7% of the total cohort.Approximately 92%, over 250,000 SMEs, are micro enterprises - in other words, those which have employees of numbers of up to ten. They are therefore eligible for engagement by the local enterprise offices, LEOs. Companies of ten to 29 employees represent about 7% of the total cohort and these are companies which may be assisted by Enterprise Ireland. These are the companies on which the Senator is homing in on. The figure is 7% or 8%, maybe a little bit more, which are in that gap and in the grey area. However, it is acknowledged that there may be enterprises particularly in the non-manufacturing and non-internationally traded services companies which can fall outside either the LEO or Enterprise Ireland net. The Government has, in addressing the Brexit and Covid-19 challenges, made it possible for the LEOs, in particular, to extend the reach of their services to a broader base of businesses, both in terms of sector and size, by offering financial support to companies of up to 50 employees, which would customarily not have qualified for LEO funding.
Examples of this include their business continuity, competitive and productivity voucher schemes, for example. Furthermore, Enterprise Ireland now grant aids the retail sector under the successful online retail scheme, a sector which is not usually supported by Enterprise Ireland.
I have to compliment the LEOs in their work around the business continuity voucher. If I remember the figures, more than 12,000 were granted. There were nearly 15,000 applications for that voucher and 12,000 these were successful in drawing that down. It costs €20 million and is a worthwhile voucher. The business continuity voucher, along with the training online voucher, which was also supplied by the by the LEOs, has been an immense success. The LEOs reached out to many businesses well beyond their normal reach. We want to build on that success. I compliment all involved, but we want to make sure that we do not let that slip and that we continue with that engagement.
Enterprise Ireland has also to date expended more than €141 million on the sustaining enterprise fund, SEF. Companies applying for the SEF are across a range of SME sectors and sizes including those employing ten to 29 employees in areas such as precision engineering, life sciences and construction, food delivery services, ICT, telecoms, international services, and consumer-retail. Indeed, small companies, those employing 50 or fewer, account for 76% of all companies approved funding, and 65% of the value of total funding approved.
We are, therefore, trying hard as a Government. I know this subject is dear to Senator Maria Byrne’s heart that we reach in to support those companies, those micro and smaller companies of fewer than ten people, but also up to 50 people, and beyond that.
The success of the above-mentioned programmes and schemes has strengthened our resolve to provide for a comprehensive range of training, advisory and financial schemes, including grant and equity interventions, for regional enterprise development and scaling.
I thank the Minister of State. It is welcome news that there is keen interest from the Government in that grey area. The LEOs and Enterprise Ireland are doing fantastic work. The supports, the level of support and the mentoring they give are important. However, there is a fear factor, as Minister of State said, among people who are in the middle category. They realistically do not fit into either category, as such. In some instances, they do, although it depends on what services they provide. Certainly, I look forward to working with the Minister of State on this. I come from a small business background, so I have a keen interest in this area. I have been helping a number of companies which fall within that category. I thank the Minister of State again for his response.
I again thank the Senator for raising this, as I know it is dear to her heart. She has a background in business, and she works with businesses. I could see their work in Limerick as well.
I would like to mention that the SME task force, which will be in line with the Senator’s thinking. It was set by the Tánaiste last September. For two months, we met and engaged with more than 40 entrepreneurs and beyond that to focus in on all the issues they want addressed. Similarly, the growth plan that we published last January on the foot of its work provides Government with a set of recommendations directly from the business community of long-term strategic importance for SMEs and entrepreneurs which we are currently pursuing through an implementation group that was jointly chaired by myself and the Minister of State, Deputy Robert Troy, on behalf of the Tánaiste, which is currently taking forward the growth plan recommendations. In that space, there is exactly what Senator Maria Byrne is saying, that is, to make sure that there is seamless transition between our agencies for supports.
I indicated earlier that a number of priority recommendations from that task force are being examined which have the most potential to make a positive impact on the SME sector over the coming year. One of these is to ensure that there is a comprehensive and joined-up range of enterprise responses for all SMEs by the State, public bodies and our enterprise agencies. As part of the development of the new Enterprise Ireland strategy, which is currently under way and due soon, we are also examining how best to sustain that broadening of assistance to ambitious entrepreneurs and businesses, like those in Limerick, with the potential to scale and grow both on domestic market and internationally.
The issue is in identifying any market failures in respect of potential gaps in Government assistance to help the business sectors of our economy which have the potential to grow and create employment, whether exporting or not while avoiding any economic displacement and deadweight issues and keeping to the rules on state aid.
Ensuring an appropriate level of resources and capacity will, of course, be a significant determinant in this endeavour. I know it is something the Senator wants us to raise and to achieve and that, in general, the Seanad is supportive of this too. I was in Louth last week with Senator McGahon and we met companies in a similar space and had similar conversations.