Thursday, 12 October 2017
Department of Jobs, Enterprise and Innovation
Small and Medium Enterprises Supports
53. To ask the Minister for Jobs, Enterprise and Innovation the degree to which SMEs can qualify for support in the context of innovation and technology; the extent to which an advantage is afforded to foreign direct investment as opposed to the indigenous sector; and if she will make a statement on the matter. [43332/17]
Enterprise Ireland and IDA Ireland are both agencies of my Department and each has a specific and very different role to play in the context of innovation and technology. Enterprise Ireland is primarily focussed on SMEs and indigenous enterprises, while IDA Ireland’s main objective is to encourage investment into Ireland by foreign owned companies, in the form of foreign direct investment (FDI).
RDI (Research, Development & Innovation) enables Irish companies to make innovative products and services that are competitive and more novel than those in global markets. However, for an SME investment in R&D can be costly in terms of time, personnel and budget. It also requires a focus beyond the day to day challenges of running a business with limited resources.
Enterprise Ireland has role in this regard to de-risk such RDI so that companies will develop new and improved products and services and achieve the required exports to allow economic growth. This is done either by supporting companies to do RDI within the company, or by collaborating with Higher Education Institutions (HEIs) or by sourcing/licensing new technologies from HEIs which can provide a step change in their innovative capabilities. These supports all help companies to develop new and improved products and services which serve as the basis for sustainable economic growth.
SMEs qualify for all of Enterprise Ireland’s funding programmes and a limited number of these programmes are also open to FDI companies.
Enterprise Ireland operates a range of supports to help companies at all stages of growth and sophistication to engage in RDI, from initial research projects to higher level innovation and R&D activities, such as:
In Company RD&I - supporting the development of new or substantially improved products, services or processes which will have a competitive advantage in their target market. This enables companies to increase employment through sustainable and substantially increased sales;
Innovation Vouchers - providing vouchers worth €5,000to small businesses to introduce them to innovation, linking them with a network of knowledge providers, North and South of the border;
Innovation Partnerships - helping industry to engage in collaborative research projects with Irish universities and Institutes of Technology to develop new products and services;
Technology Gateways - providing Business Development resources to the Institutes of Technology to help them interact with industry on a local, regional and national basis;
Technology Centres - a partnership between EI and IDA Ireland; these centres are organised to respond rapidly to industry-defined needs and conduct market-relevant R&D in partnership with collaborating groups of companies. Participating companies propose areas and themes of greatest relevance to them over a 3-5 year period. In response, the researchers develop solutions that respond to these needs, often exploring avenues that can lead to new licensable intellectual property;
Campus Incubators – such facilities are internationally recognised as an important element of public assistance for technology-intensive start-ups. Incubators now exist on every university and Institute of technology Campus in the country.
Going forward, Enterprise Ireland will continue funding it’s critical existing programmes along with new supports for innovation specifically targeting SMEs, such as:
The Business Innovation Initiative (BII) – available only to SMEs, this initiative is aimed at driving innovation beyond selling products based on technical innovations; in turn providing more customer focussed process and service solutions.
The Small Business Innovation Research (SBIR) Initiative is also available only to SMEs. The SBIR a cross-government process that allows public bodies to use public procurement to source R&D and innovative solutions to solve ‘identified challenges’ with solutions that are not currently commercially available. This provides significant business opportunities for innovation focused companies;
EU funding in the form of the SME Instrument is available and is specifically for single or groups of highly innovative SMEs with international ambitions, determined to turn strong, innovative business ideas into winners on the market. The instrument provides full-cycle business innovation support from the stage of business idea conception and planning over business plan execution and demonstration to commercialisation. Ireland has the highest success rate in Europe for the Horizon 2020 SME Instrument with a 16% success rate, compared to a European average of 6%.
In light of Brexit, Irish companies will continue to employ more R&D in a bid to protect their current exports to the UK . Innovation will continue to play a central role in growing exports as well as contributing to employment and Enterprise Ireland will assist SMEs in this regard.
IDA Ireland also has an important role to play in the Irish economy, as foreign direct investment (FDI) has been, and will continue to be, a key plank upon which Ireland’s economy is built. Its contribution is far reaching and it is estimated that 20% of all private sector employment in the State is directly or indirectly attributable to FDI. It also contributes significant taxation revenue to the Exchequer, generates other commercial activity across the economy and helps to drive investment in research and innovation.
IDA is tasked with growing and sustaining FDI in Ireland. It achieves this by partnering with potential and existing investors to help them establish or expand operations here. It also provides a range of supports, including R&D grant assistance, to its client companies.
At present, Ireland is home to over 1,200 overseas company operations that directly employ 200,000 people. Many of the companies undertake strategic activities here such as advanced manufacturing and R&D.
R&D capital investment remains very strong in Ireland. In 2016, IDA Ireland client companies achieved R&D investments worth €1.12bn. This was undoubtedly a strong performance given the general market caution for large capital projects, which includes significant R&D activities. The total spend on in-house R&D in 2016 was €1.5bn.
One of IDA’s ambitious targets in its strategy‘Winning: Foreign Direct Investment 2015 - 2019 is to win €3 billion in new RD&I investment projects, including in-house and collaborative RD&I projects with companies and universities by 2019, and to encourage 120 additional companies to engage in R&D across the FDI portfolio
The Government works hard to maintain the country’s attractiveness to FDI in the face of ever-increasing global competition. Ireland has been ranked first in the world for the flexibility and adaptability of its workers and also scores highly in international rankings for the availability of skilled labour and productivity.
IDA Ireland’s strategy for the period 2015 – 2019 sets out the key targets that the agency is working towards in order to sustain and grow investment by overseas companies in the next few years.
Enterprise Ireland and IDA Ireland are resourced to meet the innovation needs of their respective client companies through the range of supports outlined above. SMEs do not compete with FDI projects in order to access supports and no advantage is afforded to foreign-owned companies in terms of the supports available for innovation.