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Joint Committee on Business, Enterprise and Innovation debate -
Tuesday, 27 Feb 2018

Update on Preparations for Brexit: Discussion

I remind members, visitors and those in the Public Gallery to please ensure their mobile phones are switched off or are in flight mode for the duration of this meeting as they interfere with the broadcasting equipment even when on silent mode.

Before we proceed, and in accordance with procedures, I am required to read the following note on privilege. By virtue of section 17(2)(l) of the Defamation Act 2009 witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons, or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses, or an official either by name or in such a way as to make him or her or it identifiable.

I welcome Ms Kerry Curran, strategy and policy manager, and Mr. Mark Sterritt, Brexit manager, InterTrade Ireland; Ms Mary Buckley, executive director, and Mr. Kieran Donoghue, global head of international financial services IDA Ireland; and Mr. Kevin Sherry, executive director global business development, and Ms Anne Lanigan, Brexit manager, Enterprise Ireland. I remind our witnesses that their presentations should be no more than of five minutes duration. Members have received their presentations. I ask Ms Curran to make her presentation to the committee.

Ms Kerry Curran

I thank the committee for inviting InterTrade Ireland here today to share its plans for Brexit. We see Brexit as one of the biggest prevailing challenges for the all-island economy and we primarily want to see more businesses planning for that challenge. As an organisation we established a cross-disciplinary Brexit team in November 2016 to look primarily at the development of our Brexit advisory service and our Brexit research programme. That team has also examined the impact of Brexit on our organisation as a whole and on our service provision. If I may, I will share a little more about the research programme and the advisory service.

In terms of our research programme, it is very important to us as an organisation that we respond in an objective manner, basing the decisions we make, the advice we give and the operational service we deliver on evidence-based research. To that end, we have developed a multifaceted research programme to help us better understand the implications of Brexit on existing trade structures across the island and on the sectors and business types which may be most impacted by Brexit. In addition we have developed our business monitor from the third quarter of 2016 to provide us with additional insights on the impact of Brexit on businesses to date, on the concerns that businesses have and on the planning that is taking place for Brexit.

From our research programme, we already have two reports that have been completed to date. The first one, with which the committee will be familiar, is Potential Impact of WTO Tariffs on Cross-Border Trade, which looked at the impact of a hard Brexit at an aggregate sectoral and product level and it identified a potential drop of 16% under both WTO tariffs and non-tariff barriers on that cross-border trade. That impact disproportionately affected the agriculture sector and, in particular for Ireland, the export of beef products to Northern Ireland.

We have a second report, which has been completed and which we hope to have published next week. It looks specifically at the integrated nature of cross-Border trade on the island of Ireland and at supply chain linkages.

It shows a very high level of integration of supply chains on the island of Ireland and the fact that, across all sectors, it is much higher between Ireland and Northern Ireland than Ireland and Great Britain. The report also shows that businesses have a very high reliance on that cross-border trade. For more than one-quarter of Irish businesses, their export market is Northern Ireland. That cross-Border trade is primarily in intermediate goods, that is, the goods are component parts within the supply chain. Further information on that will be published next week.

There is a full range of research, both under way and forthcoming in the next number of months, on cross-Border trade in services, in the ability of businesses to absorb the cost of Brexit, on the implications of divergence and access to skills and on tariff barriers. All those will help us, as an organisation, better identify which supports businesses will need during the transition period and after Brexit.

The Brexit advisory service is the business-facing arm of InterTradeIreland’s Brexit supports. We have been these out and about across the whole island - from Dundalk, Monaghan, Cavan, Offaly, Sligo, Cork and Mayo - and have planned a raft of events for 2018 which InterTradeIreland is using to engage with businesses in order to help them plan, act and engage for the best possible Brexit outcome. In addition to these events, we have also prepared and made available Brexit fact sheets and a glossary of terms on the website. We have provided access to a tariff database that gives businesses free advice on how tariffs might impact them in the event of a hard Brexit and we also have a Brexit start to plan voucher scheme which gives businesses up to €2,000 of professional advice and guidance to help them in the process of planning for Brexit.

That is a whirlwind tour of our services but I hope it demonstrates to the committee how InterTradeIreland has fully taken on board the challenge of Brexit. We live and breathe it. We have redirected a significant proportion of our resources and organisational effort to ensure that we have the evidence base to understand the challenge of Brexit and we are also working directly with businesses to help them in their preparations regardless of the outcome of the current trade negotiations.

Mr. Kieran Donoghue

I thank the committee for the opportunity to speak on Brexit and how IDA Ireland is responding to the challenge. Our current strategy, which covers the period of Brexit, aims for significant uplift in the amount of foreign direct investment which we hope to win for Ireland between 2015 and 2019. The targets include 900 new investments, 80,000 gross jobs and a 13% increase in the number of firms in the portfolio. Our performance to date has been quite encouraging, especially in 2017. The total number of people employed in the IDA Ireland portfolio of companies is a record 210,000. This is a positive backdrop from which to confront the challenges of Brexit. Ireland's attractiveness to multinationals continues to increase.

We share the view of the Oireachtas that Brexit is a very unwelcome development. It is not in Ireland's national interest. It fragments the EU market. It is very challenging for multinationals but it is not insurmountable. It is worth remembering that they are quite sophisticated, large investors which have the wherewithal to respond to the challenges of Brexit. Brexit is a double-edged sword, presenting opportunities and challenges for Ireland and in the context of foreign direct investment.

In the lead-up to the UK referendum in June 2016, we had been speaking to our clients about Brexit. They share our collective view that it is a very negative development which creates uncertainty and instability. More fundamentally for them, it threatens cross-Border business activity and supply chains and it poses additional costs and disruptions to trade and investment. It is important to remember that multinationals have options to preserve market access within the EU and the UK from their existing networks of subsidiaries and branches. They will not be frozen out of any of the markets. Some of them view Brexit as such a significant event that they will re-examine the overall structure of their business in the EU and reconfigure it with due regard to Brexit. The two principles guiding their response to Brexit are least disruption and lowest cost. They do not want to have to leave the UK and will stay there as long as possible but they are making plans to respond to the challenges that Brexit poses to them.

Generally, Ireland's multinationals view Brexit as a low risk. The impact varies across sectors and companies but none of our clients are telling us that Brexit is an absolutely terrible challenge.

On IDA Ireland's response to Brexit to date, it is a standing item on the executive committee and board's agenda. Each month, we deal with the issue, reviewing what we are doing, what our clients are saying and our response. Our parent Department, the Department of Business, Enterprise and Innovation, has provided extra financial and human resources to help us address the challenges of Brexit which we have deployed to increase our focus on the UK market and on those clients affected by Brexit. We have established an IDA Ireland Brexit group, which I chair, and we participate at all relevant departmental, cross-agency and other Brexit fora.

Since June 2016, we have completed four sensitivity analyses of our portfolio, meaning that we have approached our clients to identify those which are at risk from Brexit and those that view it as presenting them with investment opportunities. We have also restructured our European operations and now treat the United Kingdom as a separate and distinct market from the rest of the European Union. The full range of grants, information and advisory supports available to our clients are available to the clients now dealing with the challenges of Brexit. We have organised many investor briefings in the UK to brief companies there on Ireland's proposition and we have also undertaken a dedicated marketing campaign in the UK. There is ongoing engagement and monitoring of relevant companies through our operations, teams, overseas and through our client development programme.

We have already won approximately 20 investments with employment potential of more than 2,500 jobs over the next three to five years, as a result of Brexit. We have a considerable pipeline of more than 30 investments on which we are still working and which are yet to be announced. Brexit is already generating investment opportunities for Ireland which IDA Ireland has converted.

IDA Ireland continues to have ongoing and active engagement with clients around Brexit. Its impact varies by sector and company. Financial services is one of the sectors most impacted upon by Brexit and it engaged with us quite quickly to respond to the challenges. The majority of the IDA Ireland portfolio is not heavily exposed to Brexit. I would describe the overall response of our firms to the challenges of Brexit as pragmatic and business-focused. Clients have options. They have extensive networks of branches and subsidiaries in the UK and across the EU which gives them the wherewithal to respond to Brexit. The key issue for our clients is the terms of continued access from Ireland into the UK post-Brexit, and we are working with them to address that. What is really important is the deal of the final EU-UK agreement and transition arrangements. All our clients want and need transition arrangements to give them more time to prepare to respond to the challenges of Brexit.

Mr. Kevin Sherry

I thank the committee for inviting us to talk about Enterprise Ireland's work in assisting clients to respond to Brexit. Enterprise Ireland works with companies around the Republic to help them start, innovate and scale their business in international markets. Our 2020 strategy, Build Scale - Expand Reach, is specifically a Brexit strategy to help companies increase their jobs by 60,000, increase exports by €5 billion to €26 billion by 2020, increase the level of spend in Ireland by those companies by €4 billion in 2020 and help more of those companies with their global ambition to internationalise their business.

In May of last year we launched an important eurozone strategy specifically focused on increasing our clients' exports into the eurozone by 50% by 2020. As members are aware, we work with approximately 5,000 companies across our network of ten offices in Ireland and 33 offices outside of Ireland. Our focus is manufacturing and internationally traded service activities. Reflecting the strength of the economy last year, we reported record results by our clients, involving the highest level of employment in the history of the agency with 209,338 people directly employed by our client companies and the creation of over 10,309 new jobs, along with the lowest level of job losses since 1998. It is important to note that there was growth in all regions, counties and sectors in terms of that employment performance. We were delighted with that and are in the process of collecting the end-of-year export data from our client companies, which we will shortly be reporting. Although the outcome of Brexit negotiations-------

I apologise for interrupting Mr. Sherry. A mobile phone is causing interference with the recording system. I ask Mr. Sherry to continue.

Mr. Kevin Sherry

Our focus this year is on helping companies to build on the strength they achieved in 2017 by helping them to innovate, increase their competitiveness and, very important, diversify their global footprint.

I do not know whose mobile phone is causing the interference but it is not mine.

Mr. Sherry's microphone is the only one affected.

Mr. Kevin Sherry

I do not have my phone with me. Although the outcome of the Brexit negotiations is currently uncertain, our role is to help companies prepare for the worst and hope for the best in terms of whatever type of Brexit may occur. Since the referendum in June 2016 we have undertaken a wide range of initiatives which, in the interests of time, I will not address individually. We have worked with companies at an individual and sectoral level to help them respond to and prepare for the outcome of Brexit, whatever that may be, and have particularly focused on helping companies take practical measures in that regard. A number of initiatives involve market diversification and we are actively working with companies to help them diversify their global footprint. Last year, we helped companies win slightly fewer than 1,400 new overseas contracts and establish 350 new overseas presences whereby companies are putting new operations on the ground to help them win business in international markets. Some 56 companies established a presence outside of the UK. Assistance was provided to first-time exporters. We brought almost 1,000 international buyers into Ireland, which is extremely important in terms of helping them to win business. We run a very extensive programme of ministerial-led trade missions and other trade events and will undertake almost 200 major international trade events and 57 ministerial-led trade events this year. We have realigned our financial support and recently launched a new market discovery fund that is providing financial assistance to companies to help them investigate and target new business in international markets.

On innovation, one of the areas in which companies can compete and win against the competition, we last year approved over €100,000 in funding for 99 companies to invest in research and development. We oversaw 436 industry innovation projects through gateways or connections between industry and technology centres and over 1,000 collaborative innovations between industry and research centres around the country. Those measures are very important in terms of helping companies capitalise on the available technology. Aligned with that, we have recently launched a new agile innovation fund which is focused on providing a fast response research and development and financial support to companies.

On competitiveness, we have assisted over 1,000 companies with lean business practices, which is fundamental to help them drive their own competitiveness. We will very shortly be launching a new offer in that regard.

In terms of client numbers, we have more than 1,670 client companies currently exporting to the UK, just over 651 of which export more than 20% of their output to the UK and Northern Ireland, which is a very important market for them. The main sectors impacted are construction, construction services and products, engineering, agricultural machinery, timber, furniture and the very large agrifood sector. We are intensively working with that grouping of companies to help them prepare for and respond to every eventuality.

Brexit probably represents one of the biggest economic challenges of the past 50 years in terms of long-term structural change. The effect on currency in terms of the change in the exchange rate has impacted several companies. Our role is to help companies prepare for the long-term implications of Brexit. We have launched a scorecard to help companies assess in a very practical way what actions they can immediately take in spite of there being some unknowns. More than 2,100 companies have completed the scorecard and started to take action and we have provided financial support to assist those companies with practical plans. We are putting on Brexit roadshows in many counties around the country and have a group of consultants based in Ireland who are focused on helping companies with international reach to assess what the implications of Brexit are for them and help them to respond in a practical way. We also continue to run Brexit advisory clinics around the country, with nine held to date, including one in Portlaoise last week, with one to be held in Claremorris next week and another with InterTradeIreland before the end of the month. The clinics address practical matters in terms of financial and supply chain management, transport and logistics.

We have recently launched an international digital marketing campaign called "The Irish Advantage". It is a digital boots on the ground initiative to assist companies position themselves in international markets. Phase 1 of the campaign, focusing on the construction and medtech areas, has been launched in France, Germany and the Netherlands. Phase 2, focusing on FinTech and financial services, will shortly commence and will target the United Kingdom, the United States, Australia, Italy and the Nordic countries.

As Mr. Donoghue mentioned, we received sanction for additional resources within our organisation, including provision in budget 2017 for some 39 staff positions, 37 of which have been filled, and an allocation of an additional €1.3 million in budget 2018, as a result of which additional staff are being recruited.

In conclusion, we will continue to work with companies to prepare for any type of Brexit. It is a big challenge but our focus and our message to companies is to concentrate on the things we can influence and impact, which are competitiveness, innovation and diversification in terms of companies broadening their export base outside the UK. Too many Irish companies are overly dependent on the UK market.

I thank Mr. Sherry. I have a few comments to make before members pose their questions. The first work undertaken by the committee approximately 18 months ago was to look at the situation around Brexit. Representatives from the organisations before us today also presented at that stage. All present are aware that Brexit is an unwelcome development and not in Ireland's national interest. I was struck by Mr. Donoghue's comments in that regard. Mr. Sherry set out the economic challenges and long-term implications. Do the witnesses think that companies are more aware of the challenges facing them than they were 18 months ago? The word we heard the most at committee meetings on Brexit at that time was "uncertainty" and that nobody really knew what was coming down the line. We still probably do not know exactly what is to come. Are companies now more aware of the challenges they will face? Some 18 months after first appearing before the committee, do the witnesses believe they have the proper resources to help companies face those challenges?

The witnesses said they have extra staff.

If there was no Brexit, could the energy, commitment and emphasis of InterTradeIreland and the IDA be put into something other than Brexit? I am sure the issue of Brexit has taken up much of their time and work in the past 18 months. If the vote in the UK was not carried, do the witnesses feel they could have pursued other avenues, which they have now missed out on?

Ms Kerry Curran

There are some good questions there. I will address the issue of the awareness of the challenges. We have an all-island business monitor, which is the largest monitor of business owners on the island of Ireland, and we have been monitoring the awareness of businesses and some of the issues they have around planning for Brexit. We have seen very little shift in businesses formally planning for Brexit since quarter three of 2016. Of our cross-Border traders, 18 months down the line, only 8% have a formal plan in place for Brexit, which means that 92% have no formal plan in place. They are telling us the uncertainty around Brexit makes it very difficult for them to plan. We are seeing an increase in the informal planning for Brexit as more information filters through. In our most recent survey, 41% of businesses said they are talking to peer groups and other organisations in the same sectors in a collegiate way to garner more information to help them plan for Brexit. A fifth of firms have said they are starting to engage with Government agencies such as the ones attending the committee today to help them to better understand Brexit. There has not been a huge shift and certainly not the shift we would like to see. Uncertainty still prevails and it prohibits those businesses from making firmer plans.

Will I move onto the second issue of resources?

Ms Kerry Curran

We are very grateful for the additional resources we have received to date from the Department of Business, Enterprise and Innovation. We have a plan in place for our Brexit research activities and the Brexit advisory service for 2018. We are comfortable that we have the funding to do what we have said we will do with regard to Brexit. If we had more funding we could do more but we know what we are hoping to achieve in the course of the next 12 months and we have the resources in place for that.

If there was no Brexit we would be in a different world. There is much more we would and could be doing if there was no Brexit. We have plans in our current research programme apart from the issue of Brexit. We want to better understand cross-Border trade in services which over the past number of years has become as important as cross-Border trade in goods. There is very little research on that cross-Border structure for services and we would like to understand it better. We are doing additional research and would like to do more on cross-Border public procurement and also in investment decisions by firms, which have altered in light of Brexit. Even if Brexit had not occurred it is an area that we would like to better understand as an organisation. They are a couple of areas in which we would be doing research if there was no Brexit. There is plenty to do to help businesses across the island of Ireland to fulfil the potential of cross-Border trade and the all-island economy.

That is good to hear. They are very comprehensive answers.

Mr. Kieran Donoghue

I thank the Chairman for her question. Companies and multinationals are certainly more aware of the challenges and opportunities of Brexit. They have taken advantage of the past 20 months to do a lot of additional research, analysis and due diligence to understand the specifics of the challenges and opportunities. Many are now in a position to select exactly how they will respond to Brexit. Different companies and sectors have moved at a different pace and some are more advanced than others but generally they are certainly more aware.

The resources made available from our parent Department to us are absolutely sufficient but it is something to keep under review. Depending on how Brexit plays out, whether it is towards the harder end of the spectrum or the softer, the impact on the economy and our clients will evolve and be different and they will need to review the resource situation accordingly. Is there an opportunity cost associated with Brexit? Are we missing out on other things as a result of Brexit? No. The honest answer is that Brexit is now part of the day job. Everyone is pushing themselves harder to deal with the challenges and pursue the opportunities so we have not lost out.

Ms Mary Buckley

May I add to that?

Ms Mary Buckley

Ireland is perceived as a very stable economy with pro-business policies. For us and Ireland it is really important that we are constantly competing for business. In the past number of months, as Mr. Kieran Donoghue has already highlighted, we have won approximately 20 investments from a number of different sectors going into Dublin and regional locations which are creating about 2,500 jobs. We have won investments on the back of it and we hope to win more.

Mr. Donoghue's statement that Brexit is now part of the day job was excellent. That sums it up.

Mr. Kevin Sherry

On the issue of the awareness of companies, we have seen a shift in recent months in companies that are not only more aware but are moving to take action. For us, the big concern was companies doing evaluations and becoming aware but not taking action. Action is key in responding in advance of March 2019. We had a workshop in Portlaoise last week which 79 companies attended. Change has taken place over the recent months on that.

We are very grateful for the substantial additional resources received from the Department, which we needed to help companies. I will add one caveat which is that there is an issue associated with larger companies looking to make big investments but being restricted by state aid rules. There are larger companies that employ more than 250 people which need to make big capital investments in order to redirect their energies. An example is companies in the dairy industry that are producing a lot of product. State aid rules restrict the support we can provide for them. From Enterprise Ireland's perspective the introduction of the guaranteed loan scheme which will be operational from next month is a very important development.

I will answer the question about whether we are losing other opportunities as a result of the focus on Brexit in two ways. In 2015, the growth rate of exports to the UK by Irish companies was in the order of 12% and in 2016 it was 2%. We have seen a drop in realising potential opportunities in the UK, by currency and also by market demand. That is a lost opportunity as a result of Brexit. We are accelerating efforts with companies to capitalise on opportunities in other markets. That is very important in terms of lessening their dependence. Similar to the IDA, Brexit is a very important part of the day job for Enterprise Ireland. That is a reality and we have to deal with it.

I thank all the witnesses for their very comprehensive answers.

I thank the representatives of the three agencies for attending at the committee. They have a very difficult task. The first time they attended here 18 months ago, we talked about the uncertainty and we are still experiencing that to a certain extent. This morning the Taoiseach confirmed that the legal text would be agreed tomorrow at 12 o'clock so hopefully we will get some certainty from it. This morning I read shocking comments made by the Foreign Secretary in England. He said there was no need for an Irish Border after Brexit because there is no hard border between the London boroughs of Camden and Westminster. He also suggested that British and EU negotiators could seek inspiration from London where congestion charges are automatically applied to commuters driving in the centre of London. He said there was no border between Islington, Camden and Westminster. I lived in the borough of Camden and travelled to work in Grosvenor Gardens, which is in the City of Westminster.

At the same time, there was a border in Ireland so I know exactly what a border does and does not look like. I think his comments were really dangerous and clueless. I do not know what he is talking about and I really fear where the Tory Party is leading the English people but that is not what we are here for today.

I have a few questions for InterTradeIreland. I looked at its figure of 92%. I think it started with 98% and the figure then dropped to 96%. I know it is difficult to get it lower than that because we do not know what we are dealing with but I look forward to the InterTradeIreland report on cross-Border trade and supply linkage. I assume that might lead some companies in the middle of a supply chain that might not even know they are exporting to the UK or vice versa to wake up. InterTradeIreland's Start to Plan programme involves providing an allowance of €2,000 per company. The witnesses said the uptake of that in the Border counties is good but not so good in Munster or Ulster. Are there plans to reach out to other areas?

Can the witnesses from IDA Ireland tell me which companies or sector are particularly exposed to Brexit? Reference was made to the fact that most larger companies are - I will not use the word "okay" - pretty much up to score on it. I have a question for Enterprise Ireland about the scorecard. It has produced 2,100. How many supported companies have been given grants by Enterprise Ireland? Does Enterprise Ireland have a record of that? How many of these companies would say they are Brexit-ready?

Ms Kerry Curran

The Deputy is right. As for the businesses planning for Brexit through the all-island business monitor, the numbers have not come down very quickly. Part of the reason for that is because the businesses on which we are focusing on the island of Ireland are SMEs. Consequently, many of them are very small companies that only have a certain amount of resources for planning. The larger companies with which IDA Ireland and Enterprise Ireland deals will have more resources behind them to support that planning process. The supply chain linkages report shows clearly the nature of the integrated supply chain on the island of Ireland and how closely Ireland and Northern Ireland are tied in terms of delivering those component parts for businesses. As for whether that will be a wake-up call for companies, we do not anticipate a big wake-up call for companies. What we hope to do is to get out and speak to businesses directly. That is where the value is in changing those numbers around and getting more than that 8% of cross-Border traders to plan for Brexit by sharing with them how they plan for Brexit and giving them advice through the Start to Plan vouchers that will really help change that. That is where much of our effort will be focused during 2018. My colleague will share some of that in a moment.

It will be a period of time before we see SMEs really getting past that uncertainty. The good news we are starting to see through the business monitor is that businesses are doing far more informal planning. They are having internal meetings. Just over a third of businesses trading across the Border we surveyed in the most recent business monitor said that they had at least met internally as an organisation and discussed Brexit and that is new. That is moving forward. We are seeing more of them meet their peer organisations and support organisations to get more information for Brexit. They are contacting organisations such as ourselves for advice and are using the Brexit advice vouchers for that. We are seeing a positive sign of that informal planning improving. When we think about the proportion of businesses that actually have a formal business plan, maybe that is good enough for now as we try to work out exactly what is going to happen around Brexit. We are starting to see enough positive signs. I will pass over to Mr. Skerritt who will discuss the plans around developing the Start to Plan voucher and its reach because plenty is under way there.

Mr. Mark Skerritt

I thank Deputy Quinlivan for the question. My job is to manage the Brexit advisory service. We deal directly with those companies and encourage them to act upon their plans. The Deputy is right in identifying that we are seeing more interaction and engagement with companies based in and around the Border region, which might be expected to some extent. We have mapped out where we see some gaps in terms of penetration for those vouchers. In particular, they fall down the west coast, through the midlands, down around Munster and back up into Dublin. We have events in Derry for Sligo, Cork, Mullingar and Wexford and a joint event with Enterprise Ireland in Cootehill, County Cavan in March. Members have been made aware of the fact that there has already been some take up in the Border region. We are also running those events in partnership with local SME stakeholders - either with local chambers of commerce or local enterprise offices. We are looking to increase the number of service providers with a local voice and local expertise on our panel into which SMEs can tap to help them get the greatest benefit from the vouchers.

Ms Mary Buckley

IDA Ireland has a large number of clients in Ireland - more than 1,400 - and from the work we have done, we anticipate that approximately 10% of our client portfolio has a lot of business in the UK because that is a significant market for those clients. That is across the board in all sectors but, obviously, we are conscious that it affects the financial services sector. Interestingly, that is the area where we are seeing a lot of investment wins so it is coming in the other direction for us as well. The bulk of our investments and the new announcements have come on the financial services side. For us, there are also opportunities that come from new areas like broadcasting, legal services and in particular, any of the areas that are regulated areas because the companies that are in the UK must look at alternative locations. That is the first part of the response but I will hand over to Mr. Donoghue, who might like to add to that.

Mr. Kieran Donoghue

I thank Deputy Quinlivan for the question. The IDA portfolio is very varied. We have some very large multinationals, as the Deputy is aware, employing 5,000 or 6,000 people and then we have companies employing 20 or 50 people, so the impact of Brexit will vary across the portfolio. At a high level, we have some engineering firms in the portfolio in regional locations that are very reliant on the UK market so their exposure to Brexit will understandably be higher. While people tend to refer to financial services as an area of opportunity, building on Ms Buckley's observation, an awful lot of investment funds are sold from Ireland into the UK. They need to preserve access to that UK market post Brexit and if they do not, it could have implications for that sector here. Some life sciences and pharmaceutical firms use the UK as a landbridge and provide intermediate inputs to other firms in the supply chain in the UK on their way to continental Europe. Depending on how Brexit pans out, they could have an exposure they need to manage as well. The essential point is that all of the companies are aware of their exposure and are putting in place approaches to mitigate and manage the risk.

Mr. Kevin Sherry

I thank the Deputy for his question. He is right about the Brexit scorecard. As I mentioned, just over 2,100 have been completed. That is not just for Enterprise Ireland clients but local enterprise organisations and many other companies. We purposely made that support available to all companies so we can assist them. As for resulting financial supports, we have supported 89 companies through our Be Prepared grant to prepare a plan associated with Brexit. We expect that the vast majority of companies that completed the Brexit scorecard will not avail of that grant because it is really for companies that cannot prepare a plan themselves. It is focused on companies to provide them with that extra assistance so that it does not become a barrier to them taking action. In terms of providing support for companies, the real figure involves the supports we provided through sales and marketing through our international offices, through competitiveness and through innovation. Those supports we provide to companies also involve providing support to companies to help them add capacity and differentiate themselves from the competition. The vast majority of the organisation's budget is devoted to those areas and we have not only provided supports in those areas but realigned our supports to make them more accessible for companies. Consequently, a large percentage of the organisation's budget goes to those areas, as well as through the supports we provide in terms of the work of our staff in helping those companies to respond. It is an organisation-wide response, including any financial supports we provide.

I thank the delegates for their evidence and observations which have been useful. I have a couple of questions and it is probably better to ask them together to let the delegates answer them in whatever order they wish.

My first question has been touched on. I was interested to hear about vouchers. If I heard correctly, a €5,000 voucher is being prepared under Enterprise Ireland, while there is a €2,000 voucher under InterTradeIreland for a Brexit readiness pack. These are useful and of practical assistance to businesses. As a Kildare Deputy, I come from the midlands-Leinster region. There has been a strong uptake in the Border region, but I have not seen the same degree of engagement or concern among companies local to me. I held a meeting last week on Brexit, at which representatives of the local chamber of commerce and the local enterprise office, LEO, provided support and materials of assistance to local businesses in trying to prepare for Brexit. The meeting was successful and well attended, but I got a sense from some of the attendees to whom I spoke that they did not believe Brexit would affect them because, for example, they did not do business in the United Kingdom. Like the storm we are told that is imminent this week, some people will not take this issue seriously until it hits. Is there a degree of complacency or inertia and is it a concern? Even if the delegates are making their best efforts, some people are not quite there yet, particularly in SMEs, and need a nudge to get them to sit up and take the issue seriously.

My next question is on a different note. IDA Ireland referred to the opportunities which would arise from Brexit. I agree that one such opportunity arises from the potential move by academic researchers, institutions and investigators and their teams out of the United Kingdom lock, stock and barrel to Ireland because they want to access funding under the European Research Council, Horizon 2020 and other schemes. How we are doing on that front? Have we had any notable win to date? Are people on their way here? Which agencies are chasing them, including, for example, those represented in this room? What are their portfolios in that regard?

On a related matter, the delegation from Enterprise Ireland referred to the agile innovation fund, which is great to see. It also referred to technology gateways. I acknowledge Enterprise Ireland's support for the Mid-East Regional Innovation Think Space, MERITS, centre in Naas which is only getting started, but it is a positive development that is great to see. Programmes such as the agile innovation fund are welcome, but I would like to have more information on them. It is not clear where the LEO service stops, the Enterprise Ireland service starts and stops and where the Science Foundation Ireland service starts. It would be great if the delegates drew the picture of the remit of their agencies.

Ms Kerry Curran

I thank the Deputy. His remarks about the vouchers and the level of concern about Brexit among businesses across the island of Ireland do not tally with those that are formally planning. Based on the insights we have received through our business monitor, businesses are seriously considering the potential impact of Brexit, if not formally planning for it. Of the Irish businesses that took part in our recent survey, 16% stated Brexit was already having a negative impact on them. For cross-Border traders, the figure was 25%. Some 40% have told us that the main area of concern is sales. They are starting to see a change in how sales are made which they have attributed to the concerns about Brexit held by them and their customers and suppliers. This is the case across the island of Ireland. As we break the figures down by county, we can see the depth and reach of that concern. Businesses are taking the issue seriously and already feeling the impact of Brexit.

Mr. Mark Skerritt

On vouchers, Deputy James Lawless mentioned the level of engagement. It is possible that there is a degree of Brexit fatigue because it is mentioned everywhere in the media, at events and so on. There is a great deal of noise about it. We deal a lot with micro-SMEs and have been very busy on a day-to-day basis; therefore, distilling the facts and information can be challenging. That is what we are being told anecdotally. Many businesses may be planning, but it is on a tacit basis. The issue may be discussed around the kitchen table or on informal basis, but that does not necessarily equate to having a plan. The conversations are coming through to us and have been picked up on recently through the business monitor, but we want to move companies on. Being passive about Brexit is potentially satisfactory for some companies, but we want them to be consciously passive, that is, to make a decision to leave it for now and continue to engage at events. The vouchers should be made available through various avenues. They are available for the purpose of producing a report bespoke to each business. We are looking to extend their use to meeting training needs, for example, where a company has someone who has never had to complete paperwork for customs before. That would widen the scope and, therefore, the level of engagement.

Ms Mary Buckley

From an IDA Ireland perspective, our clients are taking Brexit seriously. Many of our client companies in Ireland are part of larger organisations. At corporate level, they consider both the opportunities and challenges presented by Brexit. Suffice it to say, that work is ongoing.

Deputy James Lawless asked about immigration and our comment on research opportunities and the like for Ireland. For us, talent is key - the attraction of talent is critical. There is an opportunity for Ireland in people seeking to move to where they will feel welcome and wanted and where they will have opportunities. This, undoubtedly, will be an advantage for Ireland.

On remits, we work closely with Enterprise Ireland. Our role is to engage in the multinational environment and ensure that not only will companies establish in Ireland, but that they will also sustain and expand their activities here. We work very closely with our sister agency, Enterprise Ireland, on companies' client bases and in ensuring their level of expenditure and engagement with indigenous companies is strong.

Mr. Kieran Donoghue

Regarding the observation of Deputy James Lawless on the potential for movement of academics and professional researchers to Ireland, that is an important area. A number of our research intensive clients and colleagues in SFI have drawn our attention to the fact that non-UK researchers, in particular, now believe the United Kingdom is a less welcoming environment in which to conduct research and that a number of them are actively looking for new jurisdictions to which they can transfer their research activities, especially if they are EU funded, or where they can start new research agendas. It is an issue we are monitoring closely. When a country can attract a lead researcher in an area, it is often a basis for attracting flows of investment.

Mr. Kevin Sherry

I will start with the question on agencies' remits for research and development. Like IDA Ireland, Enterprise Ireland has direct responsibility for supporting company level research and development within companies. It also has responsibility for applied research and Horizon 2020. SFI has responsibility for basic research. In the case of Horizon 2020, I am delighted to say Ireland ranks No. 1 in Europe in winning contracts in the SME strand. In 2017 we reported that a total of €475 million had been secured by Ireland under Horizon 2020. The committee will hear later this week about a large win by an Irish company under Horizon 2020. It will be announced in the next few days. That is important for us because it does not just attract investment in research and development but it also promotes strong collaboration between Irish and European companies which has helped them to win against competitors from outside Europe.

I will also mention the recent allocations made from the regional enterprise development fund. Just over €30 million has been allocated in the first round to 21 projects throughout the country. Research is an important element. The second call, for a further €30 million, will be announced within the next six weeks and focus on supporting infrastructure and developments in regions.

Deputy James Lawless asked about complacency among companies, particularly SMEs.

Our experience is that it can be seen either as complacency or as a lack of knowledge in terms of what exactly to do. Brexit is a very big issue facing them. With the Brexit scorecard, our approach has been to help them focus on the things on which they can take action. Earlier, I mentioned innovation, investing in new products and services, competitiveness and market diversification or looking at new markets. Those are practical things they can do that will arm them and help them to strengthen themselves, irrespective of what type of Brexit we have. I will ask my colleague, Ms Lanigan, to comment specifically on some of the experiences at the workshop last week in Portlaoise by way of example.

Ms Anne Lanigan

We recognise that it is difficult for companies to identify where they might be exposed and, particularly, what they can do about it. That is how the Brexit scorecard emerged. We identified nine areas of exposure, some of which are now getting a lot of attention from our companies. At the Portlaoise clinic, for example, as well as the other clinics we are running, we are focusing on three areas: financial and currency management, strategic sourcing, and customs and logistics. Brexit or no Brexit, at this point companies can genuinely take some action in those areas and start to make changes within their business. We are also seeing a lot of attention around the customs piece. That is probably due to the attention it is now getting in the public domain. It seems quite clear that there will be a necessity for customs procedures. Whatever happens with Brexit, they do need to understand the implications of this for their businesses.

As Mr. Sherry mentioned, we have a team of consultants working with our companies at the clinics, where they pre-book meetings. Typically, between 30 and 50 meetings with consultants take place at those clinics. Separately, we are also offering consultancy to companies where they need to spend some time with somebody outside of the business who understands the issues relating to Brexit that will impact on the company, so they can put together an action plan. The output of these clinics and the consultant interventions is an action plan. This allows the companies to have clear actions in terms of what they can do next. It does not need to be a long list. We are seeing companies recognising the issues. Some 2,100 companies have done the scorecard. That means they have been prompted to think about the things they are exposed to and are taking actions around that.

Of course we would like to see more action. However, we must recognise that many of these companies are small businesses. They have to run their business at the same time. That is why the focus is very much on things they can do for their businesses that make sense anyway and that will strengthen their businesses no matter what kind of Brexit we have.

Would it be possible for the Brexit scorecard to be circulated to committee members? It would be a very useful document to have.

Ms Anne Lanigan

It is online and it is easier to view it that way. It would be quite complex to print out because there are so many different response fields. If the Deputy goes to prepareforbrexit.ie, he or anybody can run this scorecard. I recommend that he does so. He will see the prompts we are providing and will get a report at the end of it depending on how he responded, which will indicate what actions he might take.

I welcome our three sets of guests from IDA Ireland, Enterprise Ireland and InterTradeIreland. I acknowledge the great work being done by all three bodies, but particularly by the IDA, in the area of Fingal. We have had two good announcements recently in respect of the Korean company, SK Biotek, and MSD biotech.

So far, everybody has focused on the issues around our existing businesses. While that is right and proper and very important, I am wondering, too, about the opportunities that arise for the three bodies in terms of attracting new business. I am particularly focused on Dublin Airport, which has a huge impact not just on the local and regional economies but also on the national economy. It contributes around €8.7 billion to the Irish economy. There is good news from Cathay Pacific with direct flights coming in from Hong Kong from 2 June. Hainan Airlines will also commence flights from mainland China into Dublin so we will have a direct link with Beijing and the phenomenal market that represents. We are doing a lot of business with those countries at the moment, particularly China. Having those flights will offer huge opportunity.

I have raised the fact that DAA has four blocks of offices that could accommodate 4,000 workers. That represents a great opportunity, given that planning permission is in place and it can be modified to a client's needs. Further to that, there is another 75 acres of a landbank that could accommodate a huge number of additional business. We are all aware that an increasing number of people are looking to Europe as an opportunity. Ireland is very strategically positioned to afford them that opportunity as the landbridge into Europe - an air bridge, as it were. How much marketing has been done by IDA Ireland to advertise and sell that inside Europe?

An example would be Kellogg's, a household name that sells Europe-wide. Its headquarters for the EU are here in north County Dublin, where it employs 350 people. There are other companies that must have similar needs. Ireland represents an opportunity for them. I will be asking the witnesses some questions in this regard in a moment. The Minister of State, Deputy D'Arcy, has been out in Hong Kong doing a lot of work raising our profile for our financial services. The witnesses from IDA Ireland mentioned that as one of the areas that is strongly on their minds.

There is land zoned for 33,000 homes in Fingal, with 4,000 of them to be built in Donabate, which is within 15 minutes' walk of a train station and has access to parks, beaches, schools, sporting clubs etc. I imagine all that would make an attractive package for companies coming in. What are the three or four issues most commonly cited as a challenge for prospective customers coming to this country to set up? They are looking around the world. IDA Ireland is continually bringing people in to have a look. If we take uncertainty about Brexit out of it and consider issues like housing, transport, staffing, schools or power costs, what are the main challenges for prospective companies, big or small, that are considering relocating here to avail of the opportunities we can give them?

Ms Mary Buckley

IDA Ireland is very familiar with the importance of Dublin Airport and the access it provides for our clients and their customers, products, etc. Airports, access and connections are critically important. The Senator mentioned the construction of the office developments at Dublin Airport, known as Dublin Airport Central, with which we are also very familiar. I understand construction has commenced and we will be marketing those offices as part of our proposition to clients.

When it comes to clients and what they are looking for, it varies depending on the sector and the activities in which the company is involved, be it manufacturing, services, or research, development and innovation. If I were to pick the most important item for our clients when they are looking at Ireland alongside other locations against which we are competing, the biggest item is probably talent and talent availability. That piece is certainly critically important. Under that, I would say it is the availability of an experienced and talented workforce and the calibre and quality of students coming from our third level colleges. Those would be the first two items they are looking for. The type of activity the company is involved in, be it services or manufacturing, will also dictate what kind of services it is looking for in the form of water, power, etc.

In tandem with that, there would also be a focus on property, particularly commercial office and manufacturing property solutions. That would be critical too. Across the board, one can select a number of areas in which it is important for our clients to be able to feel that the people they are bringing into the country to work and who are already here will locate in the locations that our clients decide to establish in. There are other areas of critical importance that our clients would look at. The list of areas is quite wide. It all depends totally on the activity that the client is involved in. It sometimes depends on who one is competing against too, because it is sometimes Ireland competing against other large urban centres around the globe.

Mr. Kevin Sherry

There are opportunities relating to Dublin Airport. An Enterprise Ireland client, Dublin Aerospace, recently made an announcement about an additional 150 jobs. Cathay Pacific, as the Senator has rightly pointed out, is opening a new route with the first flight on 2 June. We will have an event on 25 April in the Aviva Stadium with the chief operating officer, COO, and some of the leading team there, focusing on opportunities in China for exporters to that market. Enterprise Ireland works very closely with companies in international markets in helping them to open and justify new direct routes to Ireland because it is a very important factor for exporters.

I thank the witnesses for their presentations. They have been extremely informative about the range of services being offered by their organisations. I have follow-up questions to fill in some of the gaps. Our colleagues in Enterprise Ireland mentioned 651 companies which are highly exposed to the UK market. Do the witnesses have an idea of how many jobs that would relate to? If they do not, maybe they could follow on with that information. It would be important to understand the potential threat to jobs there. I wanted to speak to Mr. Donoghue and Ms Buckley specifically about those 20 relocations and the 2,500 jobs that they have been successful in bringing to Ireland. Perhaps it is similar to what the previous speaker said. What were the major factors in those specific successes? Where was tax in the range of considerations? If they were ordered, would talent go first and tax last? How important is the tax offering? Is it possible to get a broad breakdown of where companies have relocated to? How many of the 20 companies to date have come to Dublin as opposed to the regions? I thank our colleagues in InterTradeIreland for an excellent presentation. It is worrying to see that 92% of companies still have no formal planning in place. InterTradeIreland's Start to Plan initiative sounds really good. I have a simple question. Is €2,000 enough? What can one get for €2,000?

Mr. Kevin Sherry

The 651 companies between them employ approximately 39,000 people. We would have a very good fix on each of those companies and their exposure.

Is that 39,000?

Mr. Kevin Sherry

Approximately 39,000.

Ms Mary Buckley

From the IDA Ireland and foreign direct investment, FDI, perspective, we had approximately 20 companies which have come to Ireland. They will, over time, create 2,500 jobs. Those jobs have not necessarily been created at the moment. We will see that happen over the next few years. The biggest focus for our clients is the fact that they cannot be in the UK post Brexit. It is a regulatory issue for many, especially on the financial services side, which a significant number of those investments were from. Many of those have located in Dublin. Some already had a presence there and are also expanding there. It will be a very strong focus of these companies to ensure not only that they can operate from a regulatory perspective in Ireland but also that the talent is available. The talent is key, to ensure that the people who are here will be able to work and that they can get the kind of talent they need. That is a key priority.

We have a number of investments from financial services which are relocating their activities here. Some had no activities in the UK but will have to find a location in Europe because of Brexit as they expand and internationalise themselves. Due to regulation, we have seen life sciences companies look at Ireland and decide to establish here. In particular, we have two pharmaceutical companies that have established in Dundalk. Wasdell Group is from the UK and will invest €30 million with 300 jobs to be created in a pharmaceutical packaging and distribution facility in Dundalk. Those jobs will be created over the next five years. The second company is Almac Group, which is expanding its activities into Dundalk with an additional 100 jobs. Those would be the two life sciences companies that we have seen. A company called Alter Domus will establish itself in Cork and expand its financial services activities in Ireland.

Mr. Kieran Donoghue

I will zero on the Deputy's focus on tax. Tax was a factor but it certainly was not the principal driver. Another interesting feature of those 20 investments is that the majority are what we call new name investments. By that, we mean that they had no pre-existing presence in Ireland. A reason multinationals have traditionally selected the UK as a base is exactly the same reason for which they select Ireland: it is a platform from which to service the wider EU market. The Brexit decision has now drawn a line through that so clients are now looking at places other than the UK, and Ireland, with English-speaking common law, is an obvious attraction. Linking in with what Senator Reilly referred to, in recent times, we have detected an increasing emphasis on quality of life, the availability of residential property, and the quality of our city regions and infrastructure. If one considers the environments from which these multinationals come, whether Shanghai, Beijing, Australia, continental Europe or the US, they are used to operating in a particular environment. They are now looking to us for guidance as to what Ireland's plans are to improve the attractiveness of all of our regions, including Dublin, over the next few years. That is what makes the Government's recent initiative with the national planning framework and Project Ireland 2040 really important for these multinationals. They know that, over the next few years, we have a vision and plans in place to expand the carrying capacity of the economy to support more foreign direct investment.

I thank the witnesses. For clarification, how many of the 20 companies are in Dublin and how many are regional?

Ms Mary Buckley

Three have gone to regional locations and 18 have gone into Dublin. That is on the back of the financial services companies, in the main.

If I could interrupt before Ms Curran comes in, while I know Mr. Donoghue mentioned it, the English language must be a huge contributory factor. Is it? Talent and commercial property were mentioned. Following on from Senator Reilly's question, I imagine the English language would be a huge factor too.

Mr. Kieran Donoghue

Absolutely.

Ms Mary Buckley

Being English-speaking is very important, particularly because we will be the only country within the EU that speaks English as a first language once the UK leaves the EU. On the point about the breakdown of investments and Mr. Donoghue's point about investments coming to Ireland for the first time, one thing we have found with many of our clients is that they come and establish operations in Dublin, then after a period of being in Dublin, they seek to expand their activities. They often go to what we, internally, call second-site solutions where, after a period operating in Dublin, companies go and establish operations in other parts of the country. For example, we would have Northern Trust, which many would be familiar with, and which has very strong funds management activity in Dublin. It has had that there over many years. It has expanded its activities in Limerick and has several hundred people now employed in fund administration activities. We see the same with State Street bank which has locations in Dublin, Kilkenny and elsewhere.

It is not unusual for companies, particularly those in the financial services sector, to start their operations in Dublin and then expand their activities around the country as they become more comfortable and get to know the environment, the footprint and the talent pool of people they need and have.

It is a success and we need to acknowledge that. The only concern is the obvious one, namely that 85% of the Brexit bonus in terms of the relocations to date has been Dublin-based. Given that development is already very much skewed towards the east coast, is there not a particular challenge for IDA Ireland?

Ms Mary Buckley

Since the financial services sector is regulated, it is the one that has been under the most pressure to move its activities. The investment made in Dundalk by the two life sciences pharmaceutical companies is quite significant. It is safe to say financial services companies are among the first movers. There are other sectors and activities that will move, particularly on the regulated side. The pharmaceuticals sector is regulated. We will also see movement among tech companies that are considering expanding their activities to Ireland. In time, we will be absolutely focused on marketing not only Dublin but also the regions as locations in which to invest. Over time, as we win further investments, we will see other investments being made in regional locations.

It is important to highlight that when we talk about Brexit-related investments, our clients increasingly tend not to want us to talk about whether their investment is related to Brexit because they will still be using the United Kingdom. It will still be a market for them. It may not be within the European Union but the client will have a customer base there. Every conversation we have with our clients has a Brexit tint but ultimately our announcements may not mention Brexit because clients may not want that. Over time, we will see investments coming through that may not mention Brexit but that will be Brexit related.

With regard to the sentiment in the two countries since Brexit was mooted and passed by the people of Britain, I echo what has been said here, that is, that people from the United Kingdom are, for the first time in their lives, feeling slightly less welcome and thinking of moving. I am referring to professional research people whom I know.

The culture here has very much changed. Ireland is now seen as very much less insular following the marriage equality referendum. We have not mentioned, but all know, that being in the eurozone makes life very easy for somebody coming here who wants to do business with the 440 million people in mainland Europe.

I welcome the delegates. I am quite aware of a lot of the work that IDA Ireland, Enterprise Ireland and InterTradeIreland do. There has been a lot of interaction in Mullingar. The Science Park has been a great success. I refer in particular to the use of the former tobacco factory, which would have been a real eyesore only for the good work ethic and great business acumen of Mr. Garret Moore and those who came in behind him. In this regard, I must mention Mr. Tommy Kelly and Mr. John Hunt of TEG and Mr. Pat Beirne and the guys in Mergon. The development has been a huge success story. It is a breath of fresh air to go to the factory and see what is happening there.

I am trying to be very objective. Patterson Pump Ireland is in the IDA park in Mullingar. I was involved in some representations for the company. It has been a good success story. It moved to its current location from Lynn industrial estate.

Talent, third level education and getting second stations to locate further down the country were mentioned. Maybe a different focus is needed on some of the regional parks. Perhaps they are more suited to indigenous companies. These have proven to be the only companies that have taken up the spaces. Perhaps we need to consider these places slightly differently. Everybody wants to be in Dublin or around the M50, unfortunately, but Mullingar is only 50 minutes from the M50 and it is close to the M4 and M6. Perhaps we should change our expectations regarding the types of companies that will locate in some of the places. I am sure the delegates are hearing all about Sligo and every other town, including Limerick and Dundalk. Athlone has been quite successful. We have talked about some of the other regional towns and what has occurred there but I am curious to hear the delegates' thoughts on what might be the way forward.

Ms Mary Buckley

We have a large number of companies in Westmeath. We have approximately 17 client companies there. They employ close to 3,000 people across a good range of sectors. The pharmaceuticals sector there is very strong. There are a cluster of pharmaceutical companies. We also have a very good tech company, a very strong player, Ericsson. We have won a number of investments in recent times. We recently constructed a building. Aerie Pharmaceuticals, a brand-new company, has located in Athlone.

My organisation would love to be able to deliver clients to every location in the country but we are challenged. It goes back to the question of requirements. I mentioned earlier the critical nature of third level education. It is a question of having some scale behind the activities. The talent piece is critical.

Senator Davitt referred to the park in Mullingar. We would be very happy to welcome indigenous companies there. We work very closely with Mr. Kevin Sherry and the Enterprise Ireland team in that regard. It is part of our property remit to have land available for indigenous clients. Enterprise Ireland clients have access to our parks. The relationship between both agencies works very well.

Mr. Kevin Sherry

Let me add to that. Westmeath is a very important region for Enterprise Ireland clients. More than 3,700 people are employed in Westmeath by Enterprise Ireland clients. Employment by the companies in the region grew by 7% last year. We cannot have enough entrepreneurs like Mr. Garrett Moore, whom I know well. He started SteriPack and made it a very successful company. It has since invested heavily in the Imperial Tobacco facility. It was not by accident that the announcement of the regional economic development fund, amounting to €30 million, was made by the Minister, Deputy Humphreys, at the IMR facility. It is a fantastic facility and it offers great opportunities to companies. It is about supporting and encouraging entrepreneurs in continuing to develop and grow existing businesses and in starting new businesses.

Last year, we supported 181 companies in starting up. That is a very important focus for us. In that area, there is very strong capability. The medical technology companies and the other companies mentioned in this regard have a strong cluster. We see this as a real feature and opportunity.

I want to let Ms Curran back in. I did not get an answer for Senator Gavan.

May I ask something because the question relates directly to InterTradeIreland? It emerged when the SME delegates were before us that many SMEs are not aware of what Brexit means for them. Those who are not exporters might not realise that a large part of their business involves supplying or servicing an exporter. Will the delegates comment on progress in this regard? What can we do to address it?

I thank all the representatives, especially those from IDA Ireland and Enterprise Ireland. They have done a huge amount of work in building and supporting businesses. In Galway, there is a significant medical devices industry that was not there 20 years ago. In Cork, there is a huge pharmaceutical industry. Therefore, there is a spread.

I wonder now, given that the International Financial Services Centre in Dublin is chock-a-block, whether there is a huge opportunity to invite more financial service operators, particularly from Asia and Australasia, into Dublin Airport where there is room to build another such centre. I had to get that little plug in before I let the witnesses go.

Before we conclude, if we are getting parochial, Waterford is only down the road.

Ms Kerry Curran

I will address Senator Reilly's points first and then my colleague will cover Senator Gavan's point. Senator Reilly is absolutely right: many SMEs are not aware of their supply chains and where they sit within them. This is a key part of our messaging. When we have gone out all around the country, in the North and South of Ireland, we have told businesses they really need to look at where they sit within their supply chains, look up them, look down them and see how Brexit in all its permutations may impact upon their business. We are trying our very best to get this message out. It relates a little to Senator Davitt's point on SMEs. Through our very latest supply chain reports, research which will come out, I hope, next week, we are seeing just how important SMEs are to all-island trade. We all know they are the backbone of our economy and that they contribute approximately 50% to gross value added, GVA, in Ireland, but when we looked at businesses that are trading across the Border, we saw that the majority are SMEs and are trading within supply chains in component parts. It is important they have both the space and the opportunity to grow on both sides of the Border if we want to see cross-Border trade continue to develop at the pace it has done so. Over the past 18 years we have seen cross-Border trade increase on average by 4% per annum. We want to see that continue to grow and really take up its full potential.

What about Senator Gavan's point?

Ms Kerry Curran

I will pass to my colleague.

Mr. Mark Skerritt

I will respond to the point Senator Gavan raised about the value of the voucher. The voucher is one element of the Brexit advisory service and how we engage with companies. One can also access the website for information, a glossary of terms, a targeted database, etc. The value is an issue. It was €1,000, but during the course of 2017 it was increased to €2,000 following feedback from companies and engagement with service providers on that. When they receive a value from that in terms of a report, it is not the end of the journey. It is used to signpost other services through InterTradeIreland such as our innovation team and our products through that which help them then to act. This is the information being scoped out as part of the start to plan voucher and other agency supports around that. We also have plans through the course of this year to add a follow-on, a start to act voucher that will be of an increased financial amount. This will play in as talks move on, there is more information and companies then take that action.

Ms Anne Lanigan

I will comment a little further on Senator Reilly's question about the point that companies, if they are not exporting to the UK, may be exposed to Brexit in other ways. For example, they may be servicing or providing supplies to a company that is exposed to the UK market. We also need to remember that companies will be exposed if they are buying from the UK market. The vast majority of product coming into this country comes from or through the UK, so that is an impact for our companies. This is why, going back to the scorecard, and this is one piece of the scorecard, companies really need to look at how they might be exposed on that side of their business as well, hence our focus on strategic sourcing, helping companies to see whether they are buying their product in the right place, the implications, and what changes they might need to match their business on that sourcing side to ensure they are not heavily hit on that side as well.

I thank everyone from Enterprise Ireland, the IDA and InterTradeIreland for attending and giving up their time. It was a very informative session. We will continue to monitor Brexit developments. We are looking at it purely from a business, enterprise and innovation point of view. We will probably invite the witnesses back in about six months. I hope they will be available to come back again. The situation is very fluid, as we all know, but we will be keeping them on their toes.

The joint committee adjourned at 6.05 p.m. until 4.00 p.m. on Tuesday, 27 March 2018.
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