SME Lead

Thank you Ceann Comhairle,

My Department and its Agencies will play a vital role in working through the current economic circumstances, and in making sure that we are well positioned to reap the benefits that will undoubtedly arise when the situation improves.

And of course as my colleague Minister Kelleher has stated we will continue to provide the necessary support services and re-training opportunities to assist those who have been made unemployed in this difficult time. By providing these services it is our intention that people who have been recently made unemployed are given every opportunity to reskill themselves and to secure alternative employment as soon as possible.

In addition I wish to reassure the House that this Government will continue to take whatever steps are required to safeguard the Irish economy. Based on our decisive actions we have stabilised the financial services sector so that Irish enterprises, small, medium and large, have improved access to funds, thereby protecting jobs and Irish economic growth.

Importance of the SME Sector to the Irish Economy
The current economic turmoil that is affecting the entire world economy is obviously having a serious impact on our economic performance. And yet despite witnessing some of the most dramatic changes in the world’s financial markets Ireland’s SME sector continues to make an important contribution to our economic prosperity. Over 250,000 small businesses operate in our economy and employ about 800,000 people.

I want to state that the Government recognises the importance of SMEs and given the ongoing economic difficulties throughout the world the role of SMEs is becoming increasingly important. This Government is therefore committed to ensuring that we put in place policies and programmes that encourage the emergence of new business creations and facilitate long-term business survival.

Our tax system is one of the most supportive of business in the world and we dedicate significant exchequer resources to the promotion of research and development. The introduction of the Better Regulation Programme, to tackle regulatory burdens, particularly those faced by the business community is intended to provide a supportive environment for small business in Ireland. The Government has adopted new strategies to support the entire enterprise sector, including small business, based on the Reports of the Enterprise Strategy Group and the Small Business Forum.

I firmly believe that there is no doubt that future prosperity will be founded on the development and growth of Irish-owned companies. This vision can be realised if the challenges faced by Irish enterprise are met head-on. In this context the development of the strength and depth of our indigenous sector will be critical if we are to return to the levels of prosperity achieved in recent years.

In that regard the Government has already taken concerted action to assist Irish business succeed in the ever-increasing competitive environment they compete in. We have:

• Established the Management Development Council,
• Increased Support for the County and City Enterprise Boards,
• In Budget 2009 we introduced new tax relief measures specifically aimed at assisting new start up companies,
• We are continuing to tackle red tape and reducing it wherever feasible and
• We are promoting increased entrepreneurial activity

I would like to discuss very briefly each of these issues here this evening.

Management Development Council
Arising out of the final report of the Small Business Forum and in particular its recommendation that management capability in small Irish business be raised to best international standards the Management Development Council was established last year. The Council’s membership is drawn from the key stakeholders in the provision and usage of management development training and is chaired by Professor Frank Roche of UCD.

The work of the Management Development Council has two main strands. Firstly, the Council will benchmark Ireland’s current management development provision, determining whether or not this meets the requirements of SMEs, identifying any gaps and developing action plans to address these gaps.

And secondly, the Council is charged with developing a coordinated approach to building appreciation in the SME sector for the value and need of leadership and management skills. I look forward to receiving the Management Development Council’s report next year.

It is clear to me that this report will be key in assisting us tailor our management development training to the precise needs of businesses. This is vital, as I strongly believe that management development training is an issue of crucial importance for enterprise development policy in Ireland. Research shows the benefits of management training are not restricted to the individual manager or enterprise.

In Ireland high-growth SMEs are large net job creators and significant drivers of economic growth. By enhancing and further developing the managerial skills of small firms, all of us stand to gain.

It is in the interests of the State, employers and employees to ensure Irish SMEs have access to world-class management development training. Given the present global market Irish companies have to compete in, access to high quality management development training is no longer an option, it is a necessity.

County Enterprise Boards
I am confident that the Management Development Council’s findings will find many positives in our existing provision of services to the SME sector. The County and City Enterprise Boards already have a clearly defined role as the principal deliverers of State support to the micro-enterprise sector in Ireland. As a result of their strong regional presence they are now well placed to help micro-enterprises to deal with changing economic circumstances.

Through the provision of both financial and non-financial support the Boards have assisted many micro-enterprises in developing their growth and export potential as well as bringing them to a stage where they have sufficient mass to access the services of Enterprise Ireland.

Funding for Small Business up 9% to €34.8 million in 2009
Last month the Government further illustrated its commitment to supporting small business by announcing in the Budget that supports for small business, through the County and City Enterprise Boards, will increase next year by almost €3 million, or 9%, to €34.8 million. This is recognition and support of the County and City Enterprise Boards who have developed a structure capable of generating and tapping into enterprise at local level. The 2009 allocation for the CEBs recognises the importance of continuing to promote entrepreneurship at this time.

Small Business Forum Report
The Government has already made very considerable progress on the implementation of the Small Business Forum Report’s recommendations. I have already referred to the establishment of the Management Development Council, however significant other progress is reflected through a substantial package of financial measures and Schemes introduced to assist the sector over the last two years, including fiscal measures in the 2007 and 2008 Finance Acts.

My colleague the Minister for Finance during his Budget speech last month, announced tax relief measures for start up businesses by way of remission in Corporation Tax and Capital Gains Tax in the first 3 years for new and start-up businesses. These measures will also help to grow small business and promote an entrepreneurial culture.

Reducing Administrative Burdens/Red Tape
One area of particular interest to me that impacts on small business is the level of regulatory or administrative burdens placed on them. In 2007, the then Minister for Enterprise, Trade and Employment Micheál Martin T.D. established the High Level Group on Business Regulation to look at concrete measures to reduce the administrative burdens in five areas namely taxation, statistics, environment, health and safety and employment and company law. These areas were selected in direct consultation with business.

The First Report of the Group was published in August of this year. The Report identifies administrative simplifications that are already saving Irish business some €20 million in administrative costs this year through reducing paperwork, revising the rules for small businesses and making much better use of secure on-line services.

Entrepreneurship
As a businessman I recognize that entrepreneurship can play a central role in assisting the country to continue to meet the challenges we now face in a way that contributes to growth and prosperity.

If we are to build a much greater number of competitive and innovative companies in Ireland, then we will need to see many new businesses being created now and in the years ahead. The challenge is not only to generate a high level of new businesses being started, but also to maximise the number of innovative businesses among them that subsequently develop to achieve high growth. The education and training sector will play a critical role both in developing entrepreneurial mindsets and in equipping current and future entrepreneurs with the skills necessary to successfully strategically position new enterprises and then manage their subsequent development and growth.

However, we must also acknowledge that the level of entrepreneurship in Ireland is strong. The latest Global Entrepreneurship Monitor (GEM) Report for Ireland shows that the number of entrepreneurs increased in Ireland during the past year to the extent that 2,700 individuals were setting up new businesses each month throughout the country. This high level of activity will create employment and growth and will allow Ireland to overcome the difficult issues we are currently facing.

IDA Ireland
I would like to take this opportunity to state that the IDA will continue to be a key factor in our continued economic success. The IDA is helping the Government to continuously develop the Irish economy – nevermore so than in challenging times such as these. The Foreign Direct Investment sector in Ireland is made up of approximately 1,000 companies who directly employ 136,000 people.

The quality of investments from global companies into Ireland is of a very high standard reflecting our move towards a high-tech knowledge economy. Investments in the past year, such as those by Google, Cisco, GlaxoSmithKline, PepsiCo and Georgia Tech, are clear evidence of this movement.

Ireland continues to be an attractive location for services, high tech manufacturing and research development and innovation activities. The current slowdown is cyclical, related to a number of temporary factors - the adjustment in the construction sector and the deterioration in the international environment. However, it is important to recognise that we have weathered cyclical slowdowns before, most notably at the beginning of this decade with the fall-out from the ICT shock.

The focus of policy in Ireland is to ensure that we are in a position to benefit from the global economic recovery when it emerges. Securing Foreign Direct investment is a long-term strategy to improve the economic conditions of this country.

The IDA has a policy of paying particular attention to clients in vulnerable sectors in regional locations and of working with them to secure their investment in Ireland. Ireland is a very different economy now than in the 1980s. The Government is committed to maintaining sound public finances through the coming year. The Government is determined to control spending, and to ensure value for money in order to ensure that the public finances remain in a healthy position.

Ireland continues to be one of the most attractive places in the world as a location for global business. With our highly educated, skilled and adaptable workforce, our strong focus on R&D and knowledge, and our responsive and open attitude, we remain a location of choice. As a small open economy, Ireland welcomes the continued strong interest demonstrated by many of the world’s leading companies in investing and expanding here.

Conclusion
In conclusion the Government is taking the necessary measure to protect the Irish economy, the businesses operating here and is assisting individuals in overcoming the particularly difficult and challenging circumstances we currently face.

I am confident that we have in place the right balance of policies, which are adaptive and responsive to maintain our current high level of employment and business activity. The Government is willing to make the difficult decisions that will place the interests of the State first and safeguard Ireland’s social and economic progression which we have created and overseen for the past decade.

The Government’s policies will in my view position Ireland to succeed in the long term and will directly result in the creation of new employment opportunities and enhanced standards of living for all our citizens.

Thank you.