Dáil Éireann Debate, Wednesday - 10 July 2013
9. Deputy Aengus Ó Snodaigh asked the Minister for Jobs, Enterprise and Innovation if consideration has been given to focusing additional supports in his Department on indigenous business through additional supports to Enterprise Ireland and the county enterprise boards. [33497/13]
View answerThe Deputy will recall that the capital budget for enterprise supports was broadly protected for 2013 to ensure continued support for Irish business and the implementation of the Action Plan for Jobs programme. This plan is about using available resources in smarter ways and achieving new forms of collaboration across Government to promote enterprise and jobs.
Many of the innovative ideas developed under the Action Plan for Jobs have been aimed at developing new opportunities for indigenous business. These include: improving enterprise competitiveness and access to finance through measures such as the seed and venture capital, development capital, credit guarantee and microfinance schemes; the creation of a micro and small business focused centre of excellence within Enterprise Ireland and the establishment of local enterprise offices within local government, heralding the start of a new radical reform of the system of supports for micro and small businesses and the creation of a culture of excellence for micro-enterprises and start-ups; establishing the potential exporters division in Enterprise Ireland as a new way of engaging with Irish companies that are not yet exporting; a recently launched manufacturing strategy which has the potential to support the creation of 20,000 jobs by 2016 - this will be achieved by focusing on sectors with potential, adapting and responding to changing global supply chains, developing and adapting new technologies and developing indigenous potential for start-up and scaling; a new national step change initiative available to all Enterprise Ireland client companies that will systematically support manufacturing companies; new start-up and capability funds to be run by Enterprise Ireland specifically targeting supports for new manufacturing start-ups and to support capital investment; and roll out of the three new technology centres in the areas of pharmaceutical production, data analytics and connected health. Twelve to 15 companies will be supported by each new centre and this number will increase over time.
These policies are having a positive impact and are supporting enterprises and job creation. There has been a return to stability in the labour market since the middle of 2012 in spite of international and domestic difficulties. The Deputy will be aware that there was an annual increase in private sector employment of 20,000 people in the year to March 2013 and about 18,000 of this was in indigenous business.
My Department continuously monitors the needs of Irish businesses to ensure that policy and programmes reflect their needs. We are currently assessing how policy supporting entrepreneurship can be improved with the help of the group of entrepreneurs under Mr. Sean O'Sullivan. We are also reviewing our capacity to improve-----
The Minister has run over his time.
The Minister, Deputy Bruton, will be working on the Action Plan for Jobs which will review all of the actions.
No doubt there has been a reliance on foreign direct investment by the Government for job creation. We welcome foreign direct investment and all that can be done to ensure foreign direct investment is brought to the State should be done. It is worth noting that the multiplier effect from foreign direct investment creates 0.7 new jobs for each job that is directly created and these are also to be welcome.
In this area, Ireland should focus on its competitive advantages vis-à-vis attracting foreign direct investment. It should focus on the issues of skills, languages, infrastructure, culture, efficiencies and productivity. We should not be putting all our eggs in one basket in terms of Ireland's attractiveness on tax avoidance. I believe strongly that such focus creates a bubble effect whereby when those loopholes are closed internationally, it will have a negative effect on Ireland's foreign direct investment.
Indigenous business is in large part the poor relation in this State. It creates, in comparison, 1.4 new jobs for every direct job created. In general, indigenous businesses contribute properly in taxation to the State.
Over the past five years, and the past two years of Deputy Bruton's stewardship, the county enterprise boards which are directly responsible for indigenous small business development have been directionless. They still do not know what is happening. They are in the nowhere zone. Typically, they provide a better regional distribution of job creation. When will these issues be resolved?
On the same issue, when will we see the legislation? This is the most talked about show in town. We were promised legislation would be published this year. We are coming to the end of a session and we still have not seen it. There are local elections next year.
Second, the Minister might let us know what conversations he has had with the Minister for the Environment, Community and Local Government, Deputy Hogan, on the underspend in Leader. Leader is one of the greatest sources of funding, particularly for indigenous businesses in rural areas. Many Leader companies cannot get access to Leader funding to support business because of more messing around by Deputy Hogan in his Department. Has Deputy Perry, as Minister of State with responsibility for small business, raised the issue of the slowness in Leader funding with Deputy Hogan?
I support my colleagues here. There was a discussion earlier about entrepreneurship on priority questions and the Minister, Deputy Bruton, launched the global entrepreneurship monitor, GEM, report a few days ago. Was he disappointed that there was such negative feedback and that among prospective entrepreneurs, particularly the young and women, fear of failure, lack of ambition and funding are still fundamental issues with which they must contend? Would it be fair to say that the Government's approach to local development - I speak from the other side of the fence as somebody who has been involved for many years - needs to be much more proactive at local level and we need to get away from the austerity mindset, which seems to be predicated, perhaps with the ESRI report yesterday, on something that might continue for the rest of a lost decade? Deputy Bruton will be aware, for example, that the Northside community and business centre of which I am a long-standing director recently launched a programme to encourage and support young women entrepreneurs. Is the Minister certain that the existing rules, in particular, in the Department of Social Protection, do enough to facilitate women who have the idea of starting a business?
First, on the points made by Deputies Broughan and Calleary on the issue of women in business, the aim of Deputy Joan Burton's Department is very much to encourage people back into work. The announcement this week of the fund to provide up to €10,000 to an employer of the long-term unemployed is one example of this. As I stated initially, the purpose of this Government is business. The actions of the Minister, Deputy Bruton, and all of the Departments are focused on jobs and getting people back to work. It is about confidence and credit. Obviously, the latter is a big issue in any business.
From the point of view of the Action Plan for Jobs, the legislation is ready for stamping. It is being signed-off on. It is imminent. Regardless of that, the county and city enterprise boards are effective. The boards I have met are working on the ground with business and their allocation of funding is being spent on the creation of jobs in the domestic economy.
On indigenous economy and foreign direct investment, while there were exports of over €16 billion from Enterprise Ireland supported companies, the highest ever level of exports, the agency expects the corresponding figure this year will be €17 billion. If one looks at the added value of jobs, it is about commercialising good ideas into jobs.
Let us be under no illusion. It is quite difficult to create jobs. There is nothing more difficult than to establish and manage a business.
The Minister of State has run over his time.
I reiterate the commitment of the support agencies, who are doing the best they possibly can. We attended the launch of the pilot local enterprise office in south County Dublin and the county manager was also in attendance. This scheme will be quite revolutionary when it is rolled out from next September and it will mark a new beginning for local enterprise. The point about Leader partnership companies has been raised-----
The Minister of State must conclude.
I thank the Cathaoirleach for his indulgence.
Deputy Phil Hogan is the Minister.
He is dealing with that.
May I ask a supplementary question?
A final question.
We are in favour of supporting indigenous companies that are exporters. However, I caution against talk of high levels of exports in the context of jobs. There has been a decoupling of the connection between job levels and export levels in recent years. The two are not correlated as they were a number of years ago. Indigenous business is better for job creation, for taxation and for long-term sustainability. I suggest there should be a rebalancing in the Government's policies to ensure that indigenous business, the poor relation in business terms, is given the attention it deserves.
The 2013 budget contained an effective plan for the domestic economy and I am confident the action plan for 2014 will reflect the policy of entrepreneurship and the policy to encourage women in business.
We are becoming more competitive. It is not just the 12.5% rate of corporation tax that attracts foreign direct investment. Companies come here because they get highly motivated, highly intelligent people who are capable of doing the job.
I refer to the recent announcements by the Taoiseach and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, with regard to job creation and foreign direct investment. For every large company there are many small companies. The Government is focusing on the 200,000 companies in the domestic economy employing up to 700,000 people. The Minister is focusing on creating confidence and credit and encouraging positivity among employers. It is important to give support to employers. I meet company representatives and I know that many employers are very positive. They are confident about the future of Ireland and the jobs that can be created.
