This week in the Seanad we discussed the Public Consultation Committee Report on SMEs in Ireland of which I was rapporteur.
Tá fáilte roimh an Aire Stáit anseo inniu. Gabhaim buíochas leis agus léiríonn sé an tsuim atá aige i ngnóthaí beaga ar fud na tíre agus é inár láthair. I would also like to thank the Leas-Chathaoirleach for his support in the promotion of this as a topic for investigation and in the preparation of this report for the committee. I very much appreciate that as well as the help from all the other committee members. Gabhaim buíochas le Ms Bridget Doody, Ms Carol Judge agus Ms Ilinca Popa. I also, in particular, thank Dr. Majella Giblin, who is in the Gallery with her mother, Rhona. It is good of her to come here. Dr. Giblin works in National University of Ireland Galway, NUIG. Gabhaim buíochas leis an Dr. Giblin and to Eoghan McCarthy in the National University of Ireland Maynooth, NUIM, who helped with the graphics and county analysis, for their work on academic, evidence-based research along with their colleagues to help develop an evidence-based strategic document to help us as legislators and policymakers to go and create something of substance.
The purpose of this report arose when I became a Taoiseach’s nominee. I asked the then Taoiseach, Deputy Enda Kenny, what he thought my focus should be in the Seanad. I also asked Deputy Micheál Martin what he thought my focus should be separately. Both of them mentioned entrepreneurship and SMEs and told me that is what I know about and that is what is in my DNA. That was my focus. From day one, I started working in this space and in developing this space. The Oireachtas Library and Research Service was also very helpful. This is down to 18 months to two years of a journey that has been in gestation and has been continually developing from there. The purpose of the report is to create the landscape of what SMEs are like in Ireland and to examine where we are. There are two parts to it. There is a cross-sectional part and there is a lateral perspective to it. That is looking at it on an industry by industry basis. We asked questions about what the tourism sector is like in Ireland, what financial services in Ireland are like for SMEs and so on. Then when we looked at in a vertical manner on a county by county basis and we discovered significant differences between SMEs in Dublin, for example, and those in Cork, Kerry and Donegal. For example, in Kerry and Donegal, almost 20% of all the SMEs in those counties are focused on tourism and hospitality. It is approximately 8% in Dublin. The strategy from a policy perspective for SMEs in Dublin is different from what is needed in the regions and that is what the report highlighted.
As the Leas-Chathaoirleach rightly said, this came from SMEs and the industry. Together with Dr. Giblin and others, we developed the formulation of the model around that. The process was based on direct and indirect evidence. As the Leas-Chathaoirleach and the Minister of State said, 98% of businesses are SMEs. They employ approximately 1 million people around the country and there are 250,000 of them, which is a significant number. The document makes 129 recommendations. I will not go through them now but there are a number of key areas. I recognise what the Minister of State, Deputy Breen, the Minister of State at the Departments of Finance and Public Expenditure and Reform, Deputy D’Arcy, and their colleagues have done with SMEs. In fairness, the Government has helped bring this issue up the ladder and up the scale in prominence. I go back to 2012 when the then Government got the pillar banks to say they would allocate €3.5 billion towards loans to SMEs, and that happened. I acknowledge that and we need to push this on to the next stage.
Many of the issues the Minister of State highlighted are highlighted in the report. I will mention a couple. I will come back to the LEOs but I will give the Minister of State a sense of where we are with the start-ups up to the end of quarter 3 2019. There were approximately 5,500 start-ups in quarter 3. In total, since the start of the year, 17,120 companies have started up. Some 42% of those were in Dublin, 8% in Cork, 3% in Galway and another 3% in Limerick. I am hugely supportive of Dublin and I am proud of it as a capital but we need to create different types of support mechanisms for the different regions. That does not mean we do not support Dublin. We support Dublin big time. I would be as much of a Dublin supporter as anybody in every way, except in Croke Park.
The Department of Business, Enterprise and Innovation produced a report in June 2019 on supporting indigenous businesses. The focus was on State support for businesses. That complemented the document we created because that came from the SME perspective. The OECD report the Minister of State referred to was launched last week. It totals 286 pages and relates to 55 members of the OECD. It is a very significant report. I again appreciate and commend the Minister of State on initiating that report. I read the report at the weekend and it was done in a macro sense, looking at where Ireland is compared with other countries. We are looking at talking to the SMEs to find out where they are and what they want and need. That is in our report.
The Department of Business, Enterprise and Innovation has stated there are 170 different Government supports from 27 different Departments and agencies. We need to focus on that. The OECD report mentions that as well. In the Department’s report in June 2019, synergy was also mentioned, as was connectivity. We do not have connectivity between all the different supports. We are not looking for more money, believe it or not; we are looking for focus and we do not have that. That must be the next layer and the next strategy. That is what the OECD said in its report that compared us with other countries. That would be a positive direction for us to go in.
Regarding action, we definitely need a Cabinet Minister to synchronise it. The Department highlighted that in a recent report. The Leas-Chathaoirleach mentioned procurement as well. Over the next five years, the State will offer €100 billion in procurement contracts. Irish companies will get less than 3% of that. An SME in any other European country would be getting up to three times that. In fact, SMEs are seriously hindered from tendering for Government contracts. The Minister of State should acknowledge at the end of this debate that this is something he will focus on. I would appreciate that.
I hope others will speak about female entrepreneurship. That is important and Enterprise Ireland is doing powerful work in a number of areas.
With regard to one such area, I do not know if the Minister of State has seen the document called “Powering the Regions”. This is Enterprise Ireland’s regional plan. Enterprise Ireland is executing a very good strategy in this area. A person in the organisation called Mark Christal is leading on it.
Another area which is important to me is that of the local enterprise offices, LEOs, which the Minister of State mentioned. There are 31 LEOs in Ireland. Údarás na Gaeltachta has been given responsibility for one of them, but it has not been given any funding in that regard. All of the other LEOs are receiving funding to develop small businesses, but the Údarás na Gaeltachta LEO is not. Something is askew there. I would appreciate it if the Minister of State would actively look at this issue. We are not talking about a lot of money but rather just the provision of a few resources.
I may be coming near the end of my time. All of my colleague Senators here, including the Leas-Chathaoirleach, have direct experience in the SME sector. Senator Devine and I were speaking a while back and I was taken aback when she said that her husband has a business of his own.
That is what we have in Ireland – resilience. We need to develop that resilience and empower more of our SMEs and people to take the risk. I have judged a variety of entrepreneurial programmes in Ireland and I have seen hundreds and hundreds of business plans. Companies do not grow; people grow. The environment must be provided to allow people to grow. The work our committee has done, the work I have been doing for years, and the research on which Dr. Giblin and her colleagues have been working is all about ascertaining how we can empower people to grow and develop businesses.
We need to decide on key performance indicators, KPIs, in order to know whether we are doing well or poorly with regard to supports. I mentioned research and development. This is primarily the focus of large companies. Small companies do not do it. That is a fact. Why do they not do it and why do they not access those vouchers? We need to support them in breaking through those barriers.
The Leas-Chathaoirleach mentioned personal guarantees. These are absolutely critical. I echo what he said in that regard.
There is another thing which is very important in respect of productivity. The vouchers are part of it, but another big part is education and our connections with people like Dr. Giblin and others. These connections allow us to build a Venn diagram in which there is an overlap between business, SMEs, the intelligence and ability of academics, and evidence-based research. We are very weak on that. We are much weaker than many other countries, hence our research. I ask the Minister of State to drive Cabinet and to lead in developing that area. I am sure he can do it because I know his passion for it. We have spoken about this area on a number of occasions, albeit briefly.
One of things I am pushing hard is the Perjury and Related Offences Bill 2018. It has gone through all Stages in the Seanad and is now before the Dáil. I have spoken with the Minister, Deputy Flanagan, and he and the Government will support it in the Dáil, as will Fianna Fáil and Sinn Féin. Will the Minister of State proceed with this as soon as possible so that it can go through the Dáil and become law by Christmas, because insurance is a huge issue? Insurance and Brexit are the two big issues we hear about in respect of SMEs. We do not have legislation like the perjury Bill in Ireland, although every other developed country has. There is perjury legislation in Northern Ireland and the UK, but not in Ireland.
Those are my few asks of the Minister of State. Gabhaim buíochas leis. I know he is passionate about this issue. I very much welcome his support and feedback on it. All of my colleagues know entrepreneurship and SMEs, so the Minister of State and I are talking to people who know what this is all about.
See my full report: https://bit.ly/2W6SJDJ