Dáil Éireann Debate, Thursday - 24 January 2013
33. Deputy Pádraig Mac Lochlainn asked the Minister for Jobs, Enterprise and Innovation the steps taken by him to ensure that locally owned operated business can compete with large multinational chains. [3228/13]
View answerMy Department works across Government to ensure that we create the right business environment for all enterprises to trade and create jobs. In general, the business operating environment in Ireland is the same for indigenous enterprises as it is for multinationals.
Through the Action Plan for Jobs 2012, we are focusing on policies that will support start-ups and help indigenous businesses to grow and compete, not just in the domestic market, but in global markets. These policies are about driving down the cost of doing business, ensuring the right skills are available and helping businesses to access the finance that is most appropriate to their needs, be it micro-finance, venture capital or development capital.
Multinationals are also an important part of Ireland’s base. Apart from the jobs they create and the innovation they bring to the enterprise ecosystem, they are a significant purchaser of goods and services from indigenous enterprises. Indeed, one of the selling points used to attract Multinationals here is the quality, responsiveness and innovation of indigenous Irish enterprises, as pivotal suppliers of goods and services into the multinationals.
Ireland has some of the most innovative enterprises in the world today, with cutting-edge, well-priced goods and services, competing successfully with other companies across the globe. We have particular strengths in sectors such as software; medical technologies and food. However, due to the small size of the domestic market, Irish companies need to export if they are to achieve scale.
A key part of the Government’s plan for jobs and growth is ensuring that we derive more benefit as an economy, from the world-leading multinational companies that have located operations in Ireland. These companies currently source approximately €80 billion in goods and services globally, of which over €11billion currently comes from Irish businesses. The Government is targeting the global supply chain of multinational companies in an effort to help Irish companies win new business, grow exports and ultimately create new jobs. As I recently highlighted, a 5% increase in global sourcing by multinationals from Irish companies would lead to annual benefits of over €500million for Irish companies.
In this regard, a new joint Enterprise Ireland/IDA Senior Management team has been established under the Action Plan for Jobs 2012, to drive this initiative. IDA Ireland has confirmed that its focus is on ensuring that each engagement with a client company, whether existing or new, includes, where appropriate, a discussion on the opportunity and potential for global sourcing from supplier companies based in Ireland.
The 65 companies selected for the first phase of the initiative account for €20bn in sales/exports and employ 27,000 people. They have a total material spend in 2012 of €5.25bn, of which €0.5bn (9.5%) is currently sourced in Ireland. The value of their total services spend is €6.2bn with €0.63bn (10%) currently sourced in Ireland.
There is a need in the Irish economy for both well performing indigenous companies and multinationals. Each brings a unique contribution to economic growth, and both indigenous and foreign-owned companies provide valuable jobs, whether they are trading on the domestic market or exporting into global markets.
