Written answers

Thursday, 15 October 2020

Department of Trade, Enterprise and Employment

Enterprise Support Services

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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58. To ask the Minister for Trade, Enterprise and Employment his plans to establish a national agency for small businesses; and if he will make a statement on the matter. [30101/20]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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This Government places SMEs and micro-enterprises centre stage in many areas of our Programme for Government, given the critical role which SMEs and micro-enterprises have always played in the economy and will play in the recovery as the “backbone” of our economy and as key drivers of employment.

Our enterprise policy gives significant attention to ensuring that our enterprises enjoy a supportive business environment through constructive framework conditions as well as through direct financial and soft supports.

Balancing our enterprise support direction as between FDI, export only businesses and non-exporting indigenous firms, is however an important policy consideration and one which has been touched upon by the OECD in its 2019 report on entrepreneurship and SME policy in Ireland which was commissioned by my colleague, Minister Humphreys, when Minister for Business, Enterprise and Innovation.

Enterprise Ireland’s remit is to assist and support the indigenous sector albeit with a specific focus on helping companies to innovate, compete and diversify and ultimately trade globally. Companies supported by Enterprise Ireland now, directly and indirectly, account for more than 375,000 jobs in the Irish economy. EI client companies total spend in the Irish economy in 2019 was €28.12 billion delivering huge economic impact across every region and County in Ireland.

The network of Local Enterprise Offices (LEOs) was established in 2014 and has become an important and effective channel to provide information and advisory support to indigenous local businesses. The LEO network is a unique business support delivery mechanism, unrivalled in its success amongst comparable small and micro business support mechanisms in the EU. In 2019, the LEOs, within allocated resources at that time, dealt with 7,400 client companies, supporting over 36,000 jobs. The LEO budget has been increased from €27.5 million to €70.5 million since the onset of the pandemic to help microenterprises in business continuity planning and in establishing an on line presence.

Significant additional resources have also been provided to our Agencies in Budget 2021.

The OECD report refers to 250,000 active enterprises in Ireland of which 92% are microenterprises. Such a high number presents challenges in terms of the State’s engagement with and support of enterprises in addition to ensuring compliance with the EU's state aid rules.

In terms of expanding the eligible entities, the LEOs have already started on this route with last year’s Productivity Fund which targeted an expanded cohort of enterprises (for employees up to 50) which would customarily not have qualified for funding as well as in the provision of Business Continuity Vouchers through the LEOs for small businesses with employment up to 50. Enterprise Ireland is also working with a broader base of non-exporting SMEs, such as through the Retail On-line Scheme and through its Covid 19 Sustaining Enterprise Fund.

In that regard, legislative powers are available under Section 7 (1) (i) of the Industrial Development (Enterprise Ireland) Act 1998 to require Enterprise Ireland and the LEOs to administer any schemes, grants and other financial facilities requiring the disbursement of European Union and such other funds as may from time to time be authorised by the Minister with the concurrence of the Minister for Finance. These powers have been used extensively in tackling the dual challenges of Brexit and Covid-19.

It is key that, whatever overarching institutional framework we have for developing micro businesses and SMEs, that a benign environment is in place for SMEs to start up, scale up, to access international markets and to enable SMEs to become more productive and ready for the transition to a digital and green economy.

In that context, I have established the SME Growth Taskforce in follow up to a commitment in the Programme for Government in order to design a National SME Growth Plan that will map out an ambitious long-term strategic blueprint for SMEs and entrepreneurs beyond COVID-19.

The Task Force will also examine the recommendations in the 2019 OECD Report including the strategic framework and current delivery system for SME supports and entrepreneurship policy in Ireland. This new Taskforce is composed of a broad range of business people with expertise in a range of sectors, as well as SME representative groups and other individuals uniquely positioned to contribute to a long-term vision for the SME sector and how best it can be supported. I hope to receive recommendations from the task force in November.

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