JOINT COMMITTEE ON JOBS, ENTERPRISE AND INNOVATION debate -
Tuesday, 24 Jul 2012

Crafts Sector: Discussion with Crafts Council of Ireland

Chairman

I welcome Ms Karen Hennessy, chief executive, Ms Louise Allen and Mr. Brian McGee from the Crafts Council of Ireland, who are here to discuss the contribution to enterprise and jobs made by the crafts sector. They previously came before the committee a couple of years ago. Some members attended a very successful event they held in the RDS recently. Hopefully, they will give us a report on the latter.

Before we begin I must remind members 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 identifiable. 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. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they will be entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

I invite Ms Hennessy on behalf of the Crafts Council Of Ireland to make her presentation to the committee on the contribution to enterprise and jobs made by the crafts sector.

Ms Karen Hennessy

I thank the Chairman and the members for the invitation to address the committee. We have prepared a PowerPoint presentation but shall I simply proceed to make the presentation?

Chairman

Yes. Please continue.

Ms Karen Hennessy

It is great to have the opportunity to talk about the craft sector in Ireland. I will outline where the craft sector is at and some of the programmes in which the crafts council is involved to give members a flavour of the level of activity and vibrancy of the crafts sector. The sector is a significant one. It contributes €498 million to the Irish economy and employs more than 5,700 people throughout the country. Employment in the sector is spread across the country including in rural areas and it contributes to the local economies The majority of the businesses in the sector are microenterprises but there are some economies of scale. The types of businesses in the sector include disciplines in ceramics, textiles, blacksmithing, jewellery, wood turning and furniture.

The craft council is a membership organisation. It has 72 member organisations including professional organisations such as the Made in Kilkenny group, the Cream of Irish Design, Irish Artists Blacksmiths Association and so on. We serve 2,700 craft enterprise clients who are spread throughout the country but have a rural base.

A number of the main programmes in which we are involved include Showcase, Ireland's Creative Expo, to which the Chairman referred. It is probably the biggest international trade event in the craft and gift sector in Ireland and it has been running for more than 36 years. Some €20 million in sales is placed at this event over a four-day period and some 5,000 buyers, 1,000 of whom are international, attend. It presents an export opportunity for many of our makers. There are 400 exhibitors at this trade event, 177 of whom are craft clients. The members will have received the Creative Island book, which showcases the level of clients who exhibit at that showcase. This year we placed an emphasis on fashion and we will continue to develop that area along with interiors. We also support retail and direct selling in Ireland. We are delighted to announce that Arnotts opened an Irish Craft Collective outlet in June in which the products of more than 20 makers are being sold. We support some 120 shops throughout the country which sell Irish products.

In terms of direct selling, we have been involved with the Irish craft village at the Bloom festival and the National Craft and Design Fair. The formula of the combination of retail units, demonstrations of craft and children's workshops works very well in terms of engaging and promoting craft to the general public.

In terms of international events, we brought a group of Irish jewellery makers to the Inhorgenta international jewellery trade show in Germany this year which was attended by more than 44,000 buyers. We will bring a group of makers to the London Design Festival in September and that will lead to the fit out of the Justus Lipsius building in Brussels for Ireland's holding of the EU Presidency, at which the very best of Irish craft and design will be showcased.

The collector market is an important one for our sector. There is the National Craft Gallery in Kilkenny and the Irish Craft Portfolio book, a copy of which, hopefully, members will have received, which show the finest work of the different craftspeople at the high level. We are involved in bringing people to international events at the high end of contemporary craft.

We have an educational remit across primary, secondary and third level. At the primary level we have our CRAFTed programme, marrying teachers with craftspeople to transfer the skills on to children. That programme was rolled out nationwide in 2011 when the educational centres came on board as partners. We have a similar programme for second level. We have outreach workshops run through the National Craft Gallery and at different events throughout the country. We have two courses in Kilkenny, a goldsmithing skills and design course and a ceramics skills and design course, both of which are accredited at level 7. They are probably the finest of their type in Europe, from which there is an employment rate of more than 90% in terms of people setting up their own business or going into direct employment. We also run a future makers award.

Part of our role very much involves promoting craft as much as we can, promoting it to the general public - last year was the Year of Craft - and when we do this, we get tangible results. In a Lansdowne Market Research in 2010, a survey which we conduct every year, 39% of those interviewed said they were interested in buying Irish crafts. After the Year of Craft, that level of interest increased to 51%. There is a growing awareness and appreciation of Irish crafts and because of the recession people want to support local craft businesses and we saw that in the run up to Christmas last year and throughout the year. Profiling is an important element of what we do.

Innovation is important for the crafts sector in term of cluster development. There has been a rise in self-organised clusters throughout the country and we are partnering the Irish Leader development companies to examine clustering in regions throughout the country and the benefits that would accrue from that.

Under enterprise development, we are working with the clients, the county enterprise boards and the Leader companies to deliver skills around product design, innovation, examining innovative ways of making and in the process ensuring that we are not duplicating a service but providing a specific service.

In terms of international links, we have an exciting programme, Innocrafts programme, which is focused on new ways of working and developing policies for SMEs, linking in with Enterprise Ireland, the county enterprise boards and the different universities including WIT and UCD.

Looking forward to the future, we are involved in various programmes, including Ireland's EU Presidency in 2013 and The Gathering in 2013. The year 2013 will be the 50th anniversary of the Kilkenny Design Workshops, having regard to the legacy it has in terms of design for Ireland. In 2014 Ireland will host the International Academy of Ceramics. I have circulated the key points for discussion but essentially a key point is the potential for craft in terms of exporting, its internationalisation and having an online presence. I spoke briefly about the potential of clustering developments around the country, the potential of skills development and growing that in partnership with the universities, FÁS and the different organisations that are in place, and developing policies for the SMEs at local level. There are challenges facing the sector, similar to those that face most small businesses. One is the cost of doing business. Because most of our clients have small businesses that employ only one or two people they cannot avail of the national internship scheme or practically any such schemes. In terms of the current VAT rate, because the work in which craftspeople are involved is labour intensive, instead of it being value added, the VAT is a tax on the labour. As Ireland will hold the EU Presidency, it will present opportunities to support and show the great quality of craft and design in Ireland.

Chairman

I thank Ms Karen Hennessy for her presentation. I apologise for our computers being down and her not being able to make a PowerPoint presentation. I hope that did not throw her. Do members have any questions? They are all very shy.

Senator Deirdre Clune

I congratulate the representatives on these impressive publications. I am very aware of the quality and availability of Irish craft. I would like Ms Hennessy to expand more on the international development of the sector. I appreciate that promoting and selling craft products on the Internet would be valuable for the sector. How has that segment grown? One can note from travelling through the country that Irish craft and design are doing very well nationally. The quality of the product has improved dramatically, albeit Kilkenny is the flagship. There are many interesting craft outlets throughout the country for ceramics, knitwear and jewellery in particular, which is something at which we excel. Could Ms Hennessy expand on where our strong markets are and the potential she envisages for the area?

Ms Karen Hennessy

Ireland has a comparative advantage when it comes to crafts because of the underlying skills and talents of the craftspeople and the positive market, as Senator Clune has outlined, in terms of the reputation we have for craft and design. When we have the opportunity to participate in an international event, we get a good reception. We have started a programme which began with a visit to Inhorgenta earlier this year with a group of ten makers. They received a very good reaction. However, that is the tip of the iceberg in terms of potential. Many makers have great potential to export. In the context of the Creative Island we have an "Imagined Designed and Made in Ireland" range. The beige book that has been made available to members lists 85 craftspeople who are already exporting to a greater or lesser extent. That is the client base that requires support in terms of bringing them forward. Mr. Brian McGee is head of market development. I invite him to add to what I have said.

Mr Brian McGee

In response to Senator Clune, the domestic market is a strong one for Irish craft. We have worked hard to reposition it as something that is cool and relevant. We have given it a headline brand identity, built under the message of "Imagined Designed and Made in Ireland". That seems to have generated quite a bit of interest and traction with consumers.

In regard to going abroad, we have relied on Showcase, Ireland's creative expo, as the main vehicle for exporting. About a fifth of the total revenue for the sector is export but that is the tip of the iceberg in terms of potential. Traditionally, we have not been funded to attend international fairs but we did two things during the year of craft. First, we went to Inhorgenta for the first time, which is a jewellery fair, because we feel that out of everything we do, jewellery is small, easy to ship and the cost of material is high relative to the finished cost of goods, which means labour is not a huge factor in the final cost of goods and that makes it a competitive product. We had a very good innings in Inhorgenta. More importantly, we saw where we could go with it in terms of developing the potential.

The other area we have identified internationally that has potential is design. That is why we are attending the London Design Festival. We have to go to the market with the very best of what we have to offer and stake our claim. That is a multi-year journey but it is one in which we can be successful. We are confident the sector has vibrancy and creativity and that it can compete. We do not compete with China; we compete with Italy and Sweden. They are the people we need to watch. We do not need to watch the Chinese. We are never going to win against them. There is not a chance of that.

Senator Mary M. White

I congratulate the Crafts Council of Ireland on the tremendous work that has been done over the years. I remember the country shop and getting involved in craft exhibitions in County Leitrim approximately 30 years ago. The crafts council has come a long way. I would like to hear more about the potential for online marketing and sales. How can we enhance and innovate the design of products?

I was talking to a colleague who participates in the Showcase. She felt that because of the opportunities for people who are unemployed to start up a business, perhaps the space the crafts council takes at the Showcase should be greater and focus more on Irish products. That is another matter. The lady in question has done superbly well out of it but she thought it would give more people an opportunity to show what they do if the space was greater. The Gathering will be a great opportunity for the crafts sector next year. It is fantastic.

Ms Karen Hennessy

I thank Senator White.

Senator Mary Ann O’Brien

Senator Clune inquired about online marketing. Ms Hennessy indicated that there are 3,700 members in the Crafts Council of Ireland. The trade fairs are fantastic but only approximately ten members can attend each one. In the same way as Senator White I am interested in hearing about the long-term vision because we all know how many people in this country and England are now shopping online, and therein lies an opportunity, but it also requires a considerable amount of world-class expertise.

Ms Karen Hennessy

I wish to respond to the question about the online aspect of the business. There is great potential for the sale of crafts online. At the moment we are working on having a dedicated e-commerce platform. We are working with Enterprise Ireland on funding and getting the right platform in place. It could be in association with the Crafts Council of Ireland in a private capacity but that is where we are going to make real traction. Many of the businesses are small and it is difficult for them to be able to do that on their own. It would be difficult to be able to adhere to the quality required to drive it. We are fully committed to the approach and it is part of our programme for the future. Mr. McGee is looking after that area so he could perhaps add something to what I have said.

Mr Brian McGee

I fully agree with Ms Hennessy. We have been working in a fairly methodical way through a strategic roll-out of a new face for craft, a re-launch of it, so to speak. Online sales are possible at the moment on the website, giveirishcraft.com. We consciously did not make it a commercial sales point because we did not have the funding or bandwidth within the organisation to do it. We have made a comprehensive proposal in that regard. I completed the Marketing Institute’s digital marketing programme. When one reads the paper, it is evident the proposal has potential. As Senator White is aware, opening a shop online does not mean that customers will go to it so it is really about driving traffic to the site. We are lucky in that respect because we do have the mother of all websites already in terms of search engine optimisation through our parent site. We get approximately 20,000 visits a month to it. There is already potential to work with it on the commercial side.

The other issue of note is partnership. We have found that partnership is the way to do things effectively commercially. We are not a commercial organisation; we are a development agency. What we have done with Arnotts, for example, is facilitated a shop within a shop to be opened. We have facilitated a large space of 60 sq. m in a busy department store near the Apple shop. It is a collective that is run and financed by the business itself. We facilitate it but we do not run it. Our vision for the commercial side of the web is that we would facilitate the setting up of the site but, like we do with Showcase, we would manage it from afar, have a third party run it, and, I hope, make money from it. The channelling of money to the craftspeople is the main priority. The Internet has exciting potential for expanding markets. Sad to say, many Irish people are abroad, including young people, and they are keen to buy Irish goods. We are hopeful about the potential. Does that address the questions?

Senator Mary M. White

What about more space at the Showcase for new products and entrepreneurs?

Ms Karen Hennessy

Senator White might be familiar with the way Showcase is set up. At the moment approximately 400 exhibitors exhibit each year. A total of 177 of those are Crafts Council of Ireland clients. Eighty five of them are part of the Creative Island brand, as displayed in the book. They are part of the "Imagined Designed and Made in Ireland" range. They are very high quality. We have a very good partnership with the county enterprise boards, CEBs. At the moment we have an enterprise zone and new people generally come in through the county enterprise boards. They get a space, which could be a shared space, and as they improve, develop their product and become more commercial they drop down into the Creative Island. That is a selected group to ensure that everyone who visits gets top quality products and high standards. It is a selection process but there is a training route, and I agree with the Senator that many people are coming through that process. Since 2009 there has been a 40% increase in the number of clients on our register. That is partly for two reasons. First, many people are unemployed and, second, they appreciate hand-made crafts and the quality of life that brings, and are turning to making crafts. We see that coming through in terms of people coming on the books, looking for mentoring and starting up their own business. That is the channel we are using at the moment.

Senator Mary Ann O’Brien

Ms Hennessy may have mentioned it previously but because buyers are being brought in from abroad, is there a necessity to have the "Made in China" section in the showcase, which I know would not please the witnesses very much?

Ms Karen Hennessy

This show has been going on for 36 years and it has evolved over that time. Non-100% Irish crafts are made there but we package our products in such a way that it is obvious they are imagined, designed and made in Ireland. When one comes to it, one can see that area. In other areas there are Irish people who are importing products but to make the show viable, both are needed. Ideally, in the long term it may be different but both are necessary to make the show viable.

Mr. Brian McGee

To add to that, Ms Hennessy is correct. If we were starting from a green field we probably would not have all the "Made in China" products at Showcase, and we are certainly not fans of it. That is the reason we created the Irish area - to ensure people could make an informed choice as to what was Irish. Interestingly, we are now being asked the question "Is this Irish? I am looking for something made in Ireland." I was with people from Lands' End, a famous American catalogue retailer, which is a very large business, who said the only reason they were there was to find products made in Ireland. One of our linen people, the Irish Linen House, recently got listed in Barneys in New York. We are seeing that interest from luxury retailers, especially on the high-end products. They see the provenance, the authenticity, and the design and creativity in Irish work. The show rides two horses, unfortunately, but at the same time the industry benefits because some importers are still providing jobs in Ireland. We can work together in that regard.

Deputy Anthony Lawlor

The issue for most people starting off would be funding. Ms Hennessy mentioned Leader funding, which is probably the biggest source of funding in rural areas. Do the witnesses find it easy to work with the Leader companies regarding new entrepreneurs coming onto the scene? The enterprise boards are quite good but they provide limited funding in comparison to Leader funding.

There are probably reviews taking place with regard to the internship programme. Have the witnesses made submissions to the social welfare officer with regard to making internships available? This would be ideal for interns who might want to start off working at the coalface.

Do the witnesses see the funding available under the microfinance legislation passed recently as a source of additional funding? Do they intend to put together a leaflet or brochure to ensure that young people or others who come to them with ideas can access that funding? Do they believe there is a need for a change in the legislation in that regard? I realise it was passed only recently but this committee has advocated that the funding should be targeted more towards younger people. The internship aspect would be useful to get them involved in this because it is the small businesses that will pull this economy out of the crisis.

Ms Karen Hennessy

On the funding, in the past six months we have developed a strong relationship with the Irish Local Development Network, ILDN, and the Leader companies. We have signed a memorandum of understanding, MOU, with them, the idea being to show the potential of craft talent across the country, but it needs investment, and Leader is very much a partner in that. We have started examining different ways we can work closely together. Economic analysis and cultural mapping are the areas we are working closely on with the Leader companies, towards development but also to deal with training gaps. We can provide so much. The county enterprise boards can provide so much, and Leader can do it also, but if we had joined-up thinking among the different organisations we would make a real difference. There is little point in the Crafts Council of Ireland providing any training that can be provided elsewhere. We have a pool of money that we need to maximise, and that is where we are doing it.

In terms of where Leader groups are going, we are making sure that craft plays an important part in terms of their strategy in the long term. We are on that journey. We are at a relatively early stage but we continue to work very closely with a committee of Leader groups. I hope that answers the Deputy's question.

We have also signed an MOU with the Western Development Commission because it is taking many actions that are relevant to other regions. We can give it our expertise or advice and vice versa. The same applies to the county enterprise boards.

On the internships, I understand the reason the rules are in place. Currently, unless someone employs at least one person they are disqualified from taking on an intern. It so happens that over 70% of our clients are one-man shows and there is great potential for people who are unemployed to learn skills. If someone becomes an intern with a craftsperson they will not be sweeping the floor. Craftspeople have to do their own making, marketing, packaging, production and bookkeeping. They do it all themselves if they are a one-man show, and therefore the skills transfer is very high. One of the areas in which large numbers of people are out of work is craft and related activities, coming from the building trade, and therefore there are many ideal candidates who could benefit from this.

We wrote to the Department and it responded saying the rules are in place because it does not want abuse of the scheme. However, the potential within this sector is great in terms of an immediate impact, and I believe many people would be well disposed to learning skills within it.

Deputy Anthony Lawlor

Could Ms Hennessy forward to the committee a copy of the submission she made to the Department? It is something this committee might push forward. She might copy us with anything coming through her organisation in that it would be the liaison office.

Chairman

We could ask the Department to examine that. There is an excellent fund for new labour activation schemes and there might be an opportunity to develop a scheme with the Department that would work with the witnesses' industry. People might have seen notification of it recently. We might try to liaise with the Department on that.

Our committee remit has changed since we first tried to have the witnesses come before it. We no longer cover the Department of Social Protection as well as the Department of Education and Skills but we can link in with the new committee which covers that area. We will certainly deal directly with the Department as well because there is an opportunity to develop some scheme around the witnesses that might suit them.

Ms Karen Hennessy

That would be fantastic.

Chairman

I think there would be a willingness on the part of the Department to do that. We will take up Deputy Lawlor's suggestion.

Mr. Brian McGee

On the issue of skills and the transfer of skills, there are many stories in this book about different craftspeople, but on page 41 there is one about the Handmade Soap Company. Donagh Quigley of County Meath was formerly a thatcher. I told Ms Hennessy that as I travelled here along the Long Mile Road I saw a Mercedes van, registered 11 MH, emblazoned with the logo, "The Irish Handmade Soap Company". He is two years in business. He just secured a huge order for Japan. He was thatching roofs some years ago and had no job. Mr. Eric Byrne was installing kitchen counters made of granite but is now in Arnotts with beautiful boards and cutlery of Irish stone. As Ms Hennessy stated, it is not a huge leap from having some of these skills to availing of a commercial opportunity.

Chairman

The point is well made.

Deputy Michael Conaghan

I welcome the delegation. I wish to ask about the typical entry points into craft-making. I refer, in particular, to schools where some students reach very high levels of proficiency in materials-based subjects, such as woodwork and metalwork, and may be familiar with design and working with motifs. Is there an apprenticeship structure whereby small numbers of people could enter craft-making and link up with schools where there is outstanding proficiency working with materials? Is there any such scheme in place?

Ms Karen Hennessy

We are running a number of courses ourselves. There are links with a number of colleges throughout the country. Ms Louise Allen shall elaborate further.

Ms Louise Allen

We work very closely with the newly formed SOLAS, which was previously FÁS, on apprenticeship schemes. We recently met representatives of the DIT, which runs almost 30% of apprenticeship schemes throughout the country. As Ms Hennessy stated, a number of our own schools deliver courses in both jewellery and ceramics to a very high level. We provide craft skills within second level schools. We are working on a number of schemes at present, particularly with transition year students, and we examine progression routes. We have produced various publications that take into account opportunities for career progression and entry routes in that regard. The VECs comprise a great provider of various hand-based skills training courses across the country.

We have support schemes for people who progress from second level to third level or apprenticeship training. In this regard, we provide a suite of enterprise supports through mentoring and continued professional development, but we also provide grants and awards. We are very conscious that those who avail of the schemes and perhaps graduate in particular courses or colleges need to acquire enterprise and business skills if they are to have a very real career opportunity. We make provision in this area on an ongoing basis.

Ms Karen Hennessy

May I add to that? The educational landscape will change dramatically over the next five years, and this shows our position as a country. Three or four years ago, we had to knock on doors but now the position has changed, which is encouraging. There may eventually be a university in the south east based on what is happening in Dublin. We are linking into the National College of Art and Design. We have a partnership with the National University of Ireland, Maynooth, and we are considering accrediting some of our business courses through Waterford Institute of Technology. We are also considering how we can work with Dublin Institute of Technology.

Based on our adult craft strategy, it is important to determine what is occurring around the country, who has incubation space and how we can obtain access for our clients as they come through the education system. It is a matter of ensuring clients not only have the skills required but also that they are fit for work and can set up a business when they come through the platform. We are very conscious of this. We are deliberately working with partners as we will not be able to do all the work ourselves. We are determining what is available, and this work will link with that on creative clusters in so far as it will lead to a pooling of resources and links to an educational centre.

Senator Michael Mullins

I welcome our visitors and compliment them on their wonderful work. Their publication is fantastic. Many of us might not have realised that approximately 6,000 people are employed in the crafts sector and that it contributes €0.5 billion to the economy per annum. This is very significant.

I was interested to hear that the council has got 20 companies into Arnotts. Is that correct?

Ms Karen Hennessy

Yes.

Senator Michael Mullins

Are there plans to extend to other department stores, perhaps in provincial towns? While I agree that the Internet is the way forward, and the means by which many young people make purchases, I believe many of the people who have money nowadays are the more mature members of society, who do not necessarily use the Internet to shop. They go into the department stores. Therefore, our high-street presence is important. Are there plans for expansion in this regard?

How can we maximise our opportunities during the EU Presidency and The Gathering? Over the coming years, there will be many significant centenary celebrations in this country. This should present a great opportunity for Irish business.

Where would the council like to see itself in five years with regard to having people employed in the craft business and contributing to the economy? If the council had a wish list, what would it like the Government to do to assist it?

Ms Karen Hennessy

With regard to the question on Arnotts, during the Year of Craft 2011 we ran a number of initiatives, one of which was our counties initiative whereby we wrote to the county enterprise boards, Leader companies and chambers of commerce asking them what they would do in their counties for crafts? At the time, we had hoped that perhaps ten counties would respond. Twenty-two responded and did something. A number of the initiatives involved pop-up shops. At the same time, we ran a curated craft programme. We had a small fund and the programme was based on pop-up shops. Approximately 19 pop-up shops opened last year for the Year of Craft.

It stood out for us that when one brings craft to the public, it engages and purchases. There is great engagement especially if one sees demonstrations and production.

In Kilkenny, there is a department store called Good's. The MADE in Kilkenny group does in that store exactly what is done in Arnotts. Mr. McGee has been having many discussions on this matter and may want to elaborate.

Mr. Brian McGee

I totally agree with the Senator. I worked in America for many years and had a great boss who said one must fish where the fish are. Department stores are where the people are going. The Senator quite rightly identified the older consumer as the one with money. We now have relationships with 120 shops in Ireland, having started with pretty much no relationship with any retailer at all. We have regular contact with 120 retailers and I envisage this rising to approximately 200 as we move into smaller, specialist niches, for example, jewellery and fashion. We could take slices of craft because craft is actually associated with many product categories. It does not necessarily fit into a standard retail model. Little slices can be in so many departments in a shop.

The deal with Arnotts took a long time to negotiate. As the Senator would know, one of the current challenges in retail is the margin expectations of retailers are very high. When the cost of goods is as high as is ours and one begins to include middlemen, suddenly no one is making any money. Consequently, as far as I am aware, the model being used in Arnotts is a first. It is a collective operating as a concession and, ordinarily, a retailer would expect to get 30% or more straight off the top of the sales from a concession. However, the crafts council has negotiated a substantially lower rate than that for these craftspeople. The costs of staffing are then underwritten by the sales in the space and what then remains is divided between the craftspeople. We are keen to ascertain whether this concession model can work because if it does, it offers huge potential to be rolled out. There is no purchase risk or stock risk for the retailer because effectively, the stock is owned by the craftsperson until it is sold. As for the craftsperson, he or she knows what is selling, which is an incredibly valuable thing for craftspeople to know. They are not simply making 100 pieces of an item and then selling them on to someone without learning whether anyone actually bought the item. Consequently, we envisage good potential in this regard.

In parallel, retailers such as Shaws have been great. We are in Shaws on a regular own-bought basis and Blarney Woollen Mills in Cork has returned to Irish craft in a major way. Moreover, we did something with Brown Thomas last year and that company will do more with us this year. The "big mama" in this regard is Dublin Airport and the crafts council has reached a good stage with it in that we did something with the airport last Christmas and it went very well. We did a jewellery presentation and it really surprised all of us. Consequently, we are hopeful that we can do something for Christmas and for 2013.

Deputy Seán Kyne

I welcome the delegation and thank the Crafts Council of Ireland for the publication, which contains some excellent material on some great stuff across the country. Traditionally, the craft sector in Ireland was associated with Waterford Glass and the Claddagh ring, which were the items that would spring to mind internationally. It is good to see this sector is growing internationally. Anyone who has attended small city or country fairs or markets will have seen many people selling their wares, be they pottery, jewellery or whatever. Is there generally a progression from that initial stage to selling in Arnotts and the other establishments? Is the Crafts Council of Ireland conscious of such a progression? Do some people prefer to stay at the first level or does a general appetite exist to grow and expand?

Ms Karen Hennessy

At present, there are 2,700 craft enterprises on our books, which does not include all those who are involved in making craft for a hobby or enjoyment. In addition, many of those who will exhibit in different regions may retail from their own studios and may sell through a craft fair. The Crafts Council of Ireland at all times is trying to raise the standards for craft across Ireland. Therefore, anyone who is our client may access the different programmes we run. However, it is by selection and by a panel who will select as one raises the bar by so doing. The Irish craft portfolio book, which members have to hand, represents the very top end, that is, the collector or gallery market. We like to refer to it internally as the halo, wherein one really aspires to be in a gallery. Not everyone can be in that space but it is good to raise the bar within that context. As for programmes to ensure someone is moving, something we do a lot is to provide people who do not get onto a particular programme with feedback as to the reason. In addition, we provide mentoring or direct them to the county enterprise boards. The point is to state, even within the selection for Creative Island, that while a number of people may have been told they would participate in that event, it would be on the condition they took mentoring in X, Y or Z, which the council would supply. Consequently, there are routes to cut through if one has the quality or the ambition to follow them. Hopefully, this answers the Deputy's question.

Deputy Seán Kyne

To follow up, are there always concerns in respect of replication, that is, of people copying others? Once people are members of or are under the remit of the Crafts Council of Ireland, is a concern that others who may be copying some of their products would not be prevented from so doing or excluded?

Ms Louise Allen

On the issue of copying or patents and so on, these are quite difficult waters to navigate or to police. We would work with anyone who had any such concerns but in respect of the progression routes, Ms Hennessy mentioned, we have in place various programmes. We target them at different levels and we work with the enterprise boards. The first level concerns continuous professional development and such programmes are offered to large groups of people on various specific areas about which they have identified a need to upskill. Potentially, participants would progress from there onto a mentoring programme. At present, the council is giving consideration to restructuring how we mentor and with whom we engage in respect of that mentoring provision. We have been working with Enterprise Ireland and with the enterprise boards on the provision and have been refocusing the kind of mentoring the council itself delivers. We are looking at product design, as well as the provision of skills and capabilities in our own area of expertise in respect of developing the product design skills of our client base. The level up from that again is called our building craft enterprise programme, which is where we work with Waterford Institute of Technology on accreditation. It will work intensively with a select group of people who seek to really develop their craft from what may have been on display at a market stall or country market into a viable business.

Ms Karen Hennessy

The number of people we reach with the programmes is not huge, in the sense that we can only cater for so many. However, we are moving towards greater online provision in order that many more people can gain access to the programmes and such access will be more widespread. While one will always need one-to-one mentoring, as we move online to a greater extent, that will make sure we deliver to many more craftspeople.

Mr Brian McGee

As for how we operate from a market development perspective, the Deputy identified the smaller country markets. This constitutes direct selling, which probably is the easiest kind of selling for anyone to do. They really need only show up, having made a product, and there is no one in the middle or whatever. Such people do not need to be vetted, so to speak, and are not involved in any sort of quality assurance process.

We then have a level of premier direct selling events for which we select and for which we insist on the maintenance of high quality. The National Crafts and Design Fair is one such event and the Irish Craft Showcase at Bloom in the Park is another - I do not know whether any members attended the latter. Such events involve people who sell direct but who are at a very high standard. In addition, they have the ability to satisfy demand because at shows such as the Bloom in the Park event, there were sales of €185,000. Consequently, such participants must have the stock to supply the demand. Once people have reached that level, they may decide they wish to wholesale, which is very difficult. One is now into business skills and the question arises as to whether people have such skills and the wish to do this. For example, the question is whether they can invoice someone properly and can they do all these complex business things. This involves a smaller group again. However, one finds they will deliver very high sales. It is a progression and as Ms Allen noted, it happens to an extent through the programmes, as well as through people's own ambition. Such personal ambition is an extremely important constituent of success in this or any other business.

Senator Mary M. White

Mr. McGee mentioned Brown Thomas but I cannot imagine anyone making any profit out of it, given my experience of what that company charges. While that is one part of the question, I note I am sceptical in this regard. I am very impressed because I remember and personally knew Ms Muriel Gahan many years ago. While she was wonderful, I must say Ms Hennessy is even better. The sector has 5,700 people working in it. Is 70% of that figure accounted for by one-man or one-woman shows?

Ms Karen Hennessy

One or two people, yes.

Senator Mary M. White

That is about 4,390. A friend of mine has a beautiful product and sells at the showcase. I asked for her comments because I knew that Ms Hennessy was coming in. She is at it for a good five or six years now. She has said she will not be able to keep going, or will not want to work so hard, if she cannot make a business out of it. How realistic is it for people to make a living unless they have a high-value-added product and brilliant marketing?

Chairman

Are there any other final questions to wrap up? If not, I will hand back to Ms Hennessy. We will probably close in two or three minutes if that is okay.

Ms Karen Hennessy

To clarify, we know that about 70% of the 2,700 clients are one- or two-person operations. The figure of 5,700 is the total of people employed in the country, so it extrapolates out.

There are a number of points in terms of making a living from craft. Of those involved in craft throughout the country, some people are making a very good living while some are making an okay living. It is interesting that in the current climate some people are creating jobs but, more importantly, many jobs are being sustained. Some firms have gone out of business but people are not going out of business wholesale right across the country. That is a real endorsement of the sector.

A lot of these people have many strings to their bow. They may teach craft as well as making it. We have been ensuring that all the people teaching within colleges, including VECs, have the relevant qualifications so they can continue to do this work.

The Indecon report suggests an average of €70,000 sales per employee across the board. Productivity in this area would be about €43,000 but that is an average. One may talk to people who have done extremely well and will then have pared back. Some people who are on tourist routes are doing extremely well at the moment. Others are struggling but are reinventing themselves. This group of people never overspent in the Celtic tiger days; they have been careful and cautious and have reinvested. That is not to say that some people are not struggling, but there are opportunities out there, including exports and online sales.

We are blessed with a country full of talent and entrepreneurship. We know there is a close relationship between a country's living standards and the number of entrepreneurs. We should be trying to create more entrepreneurs. Craft people are the very essence of entrepreneurial skill. They take the risks and go after it. I firmly believe that we should invest in these people. In 20 years' time this landscape is going to change. The knowledge and experience economy will be important. As regards the opportunities available, we are looking at more manufacturing. We have the creativity and the potential. Ireland's EU Presidency and The Gathering should support these efforts.

Mr Brian McGee

Senator White mentioned Brown Thomas. We did a pop-up with it last autumn. As with a lot of things concerning Brown Thomas, including Posh Spice, it is about publicity. We have to create this idea that craft is desirable and part of that is being in the right place. Keeping the halo polished is important from a premium point of view. In Arnotts, for example, that space is going to deliver about €300,000 in revenue for the year. That will deliver about €130,000 in margin for the 20 craftspeople involved. In Dublin Airport, last December, we did a space in jewellery which delivered €30,000 in sales off a ten-metre-squared space. Therefore, there is revenue if the right category is profitable.

Irish craftspeople are responding to price points, which are going lower because the public want lower prices. Therefore craftspeople are delivering lower prices but profitable ones. They are selling objects they can make money on because they have to stay in business.

With regard to how much income they make out of it, it is obviously a personal choice, but a lot of these people are passionate about what they do. They are doing it because they love it. I mentioned Mr. Eric Byrne, who is a stonemason. He just wants to work with stone and is delighted he has a business now. He is not driving a BMW, nor does he want to. There is a relativity there in terms of what people are after and he is certainly happy to be part of the programme.

Chairman

I thank the witnesses for their presentations. It was very worthwhile and interesting, and provided a good look at the whole area. We have a bit of work to do on it ourselves. We will initially contact the Department of Social Protection to see if we can work around the internship scheme. There are other issues which feed into the budget, including the VAT rate, which we will also examine.

On behalf of all the members, I thank the witnesses for attending the joint committee. We will respond to them in the autumn. They should keep in touch if there are any particular issues they want to raise subsequently.

We will now suspend briefly to prepare for the next presentation.

Sitting suspended at 2.45 p.m. and resumed at 2.50 p.m.