Joint Committee on Enterprise, Trade and Employment díospóireacht -
Wednesday, 25 Oct 2023

Engagement with Chairperson of Enterprise Ireland

An Cathaoirleach

We will now engage with the new chairperson of Enterprise Ireland. Enterprise Ireland is the Government organisation responsible for the development and growth of Irish enterprises in world markets and comes under the remit of the Department of Enterprise, Trade and Employment. It plays a key role in providing supports and assistance to many Irish enterprises. I welcome its new chairperson, Mr. Michael Carey. He is joined by the following officials: Mr. Conor O'Donovan, manager of global communications, marketing and events, Dr. Paula Maguire, manager of corporate governance and secretary to the Enterprise Ireland board, Ms Karen Hynes, principal officer in the Enterprise Ireland liaison unit, and Gary Ward, assistant principal officer and Enterprise Ireland liaison officer.

Before we start, I will explain some limitations to parliamentary privilege and the practice of the Houses as regards references witnesses may make to another person in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. Witnesses are reminded of the long-standing parliamentary practice that 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 or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if witnesses' statements are potentially defamatory concerning an identifiable person or entity, they will be directed by me to discontinue those statements. It is imperative that they comply with any such direction.

The opening statement has been circulated among members. I now invite Mr. Carey to make his opening remarks.

Mr. Michael Carey

I thank the members for the opportunity to attend, introduce myself and share my initial priorities as the incoming chairman of Enterprise Ireland.

Enterprise Ireland helps Irish manufacturing and internationally traded services companies to start, scale and grow their businesses. We work across all regions and sectors of the economy with export-focused companies, predominantly with SMEs, supporting them to improve their competitiveness and productivity and to increase innovation, helping them to develop to achieve their full growth potential.

Enterprise Ireland's statement of strategy is entitled Leading in a Changing World. Our mission, as set out at the start of 2022, the beginning of the strategy period, is to accelerate the development of world-class Irish companies to achieve leading positions in global markets. We work with the network of 31 local enterprise offices, LEOs, through our centre of excellence, working closely with the local authorities to support the growth of local enterprises across the country.

My background and experience over the past 40 years entail a combination of leadership positions in the private sector, primarily in the food industry, and the public sector, as chairman of several State boards. In the private sector, I have held several senior management positions in Irish and multinational food manufacturing businesses, working here in Ireland and in the UK. I have held the positions of managing director at Evian Volvic UK, managing director at Fox's Biscuits and managing director at Kellogg's for the UK and Ireland. In the past 20 years, I have set up, invested in and managed several start-up food businesses, including Jacob Fruitfield Food Group. Currently, I manage a specialist food sector investment firm with equity interest in several businesses, including through the establishment in 2016 of East Coast Bakehouse, Ireland's only commercial-scale biscuit manufacturer. The latter is based in Drogheda and currently employs 130 people. In 2019, East Coast Bakehouse won the overall Irish Exporter of the Year award. It is one of Europe's fastest-growing food businesses.

My experience as a director on State boards involves two terms as chairman of An Bord Bia. I currently hold the position of chairman of the board of the Housing Agency, and I am in my second five-year term. I have chaired the board of the Grow Dublin Tourism Alliance, which is part of Fáilte Ireland.

I have experience of Ireland's entrepreneurial ecosystem as a judge of the EY Entrepreneur of the Year awards for the past ten years, giving me exposure to a wide range of entrepreneurial activity in all business sectors. I have been involved in the past in job creation and livelihood development as a cofounder and board chairman of several business-led not-for-profit organisations operating in Uganda and Haiti.

I hope my experience in both the private and public sectors will allow me to carry out this role as chairman of Enterprise Ireland successfully, and I am happy to commit whatever time is required to ensure I can have a meaningful impact on the success of the organisation.

Coming into this role, my intention is to spend some considerable time listening - listening to all the stakeholders, including the leadership team and board; most crucially, the clients; the Department and Members of the Oireachtas; and the sister agencies involved in enterprise development.

The role of Enterprise Ireland is a broad and complex one, with a substantial budget and significant important responsibilities. I will invest considerable time ensuring that I fully understand how Enterprise Ireland has been successful and how it has allocated its resources.

Having said that, I come into this role with a number of personal priorities, which will continue to evolve and change as I get closer to the organisation. Those initial priorities include the following. We need to ensure the client is placed at the core of everything ensuring that we have a clear and deep understanding of and insight into the needs of the client companies and entrepreneurs as we respond to those needs in a way that makes a real and meaningful impact.

We need to ensure that we support, in an optimum manner, the full range of Irish businesses, in every stage of the entrepreneurial journey, from micro startups through high-growth Irish firms and Irish global leaders. The needs of companies at those various stages change and evolve and Enterprise Ireland's response needs to be appropriate.

We need to ensure that the indigenous business sector in Ireland is making as great a contribution as possible to our economy and society, counterbalancing the great success of foreign direct investment. Many Irish-owned and controlled businesses have the potential and ambition to become global leaders, and I believe Enterprise Ireland can play a role in supporting such ambition to establish Irish businesses of real scale.

We need to ensure that Enterprise Ireland’s strategic ambitions are in line with the priorities of the White Paper on enterprise especially as regards decarbonisation, digitalisation, innovation and employment.

We need to ensure that we help build a supply of future leaders, who can work in State organisations such as Enterprise Ireland and can be future business leaders and entrepreneurs. Investing in developing current and future leaders will have an enduring impact.

Enterprise Ireland’s current strategic plan runs from 2022 to 2024. We will commence a process in the coming months to develop the next strategic plan, taking into account the ever-changing business environment, current challenges and opportunities facing our clients. I will personally chair the strategy sub-committee of the board and will work closely with the members of the board and the leadership team to ensure key cross-sectoral issues such as sustainability, digitalisation, diversity, leadership and innovation are integrated into the new strategy.

Successful businesses, managed well, can make a significant positive improvement to Ireland’s society, contributing a substantial proportion of corporation and employment taxes, and generating wealth and high-quality employment opportunities. The State, through the efforts of Enterprise Ireland and others, has a key role to play in facilitating such success by encouraging entrepreneurship, supporting companies' ambitions to grow and expand, to improve competitiveness and to innovate. I look forward to contributing to that effort as chairman of the board of Enterprise Ireland.

I take this opportunity to thank my predecessor, Terence O’Rourke, who held the role of chairman of Enterprise Ireland for the past ten years. He has played a full role in ensuring Enterprise Ireland has made a successful impact on the Irish indigenous business sector, going through such major crises as Brexit and Covid-19, while ensuring robust and professional adherence to corporate governance at Enterprise Ireland. I hope to continue to maintain those high standards.

I also thank our chief executive, Leo Clancy, and his leadership team, as well as the members of the board of Enterprise Ireland, for their support and assistance over the past few weeks. I look forward to working closely with them in the coming years, to optimise the impact that a State agency such as Enterprise Ireland can make on our economy and society.

An Cathaoirleach

I wish Mr. Carey all the best in the future.

Deputy Louise O'Reilly

I join the Chairperson in wishing Mr. Carey well in his new role. We look forward to hearing from him and working with him. As the first of his priorities, he said that Enterprise Ireland would ensure that the client is placed at the core of everything. That is incredibly important and I was glad to see it.

Female founders in tech and founders of disruptive and novel technologies are saying they find it hard to access supports or in some instances get what they would say is a fair hearing from Enterprise Ireland because of what they are telling us is an alleged lack of diversity at senior decision-making levels and a lack of understanding of novel technologies, such as property tech and home market tech. These are new and emerging areas. I ask Mr. Carey to elaborate on how he will improve on that. Responses to parliamentary questions have shown that the figures for female founded companies are behind at 27% with the balance obviously going to the other gender. How does Mr. Carey plan to improve on this?

Mr. Michael Carey

Female participation in business is vital to the success of the economy and society. I feel very strongly about the need to step up our efforts to make progress in that area and I would like to do so. The current figure shows that 37% of high-potential startups are founded-----

Deputy Louise O'Reilly

It has gone up.

Mr. Michael Carey

That is a huge improvement. I think it came from 7% about ten years ago but there is a long way to go. I suggest it is probably more than the simple numbers and the proportion split. The quality and scale of the opportunities to support female founders and female-led businesses that have real ambition to establish as the very best of Irish new businesses are important. It is more than just the number; it is the quality as well.

Deputy Louise O'Reilly

It is. The talent is there and the enthusiasm is there.

Mr. Michael Carey

And the blocks are there.

Deputy Louise O'Reilly

The blocks really are there. I have spoken to some of these women and organisations like TechFoundHer are doing really good work. It is very refreshing that Mr. Carey has acknowledged that there is some work to be done there. It is good that there would be a focus on this area because without leadership it will not happen. While I am not speaking on behalf of all women, we tried sitting around waiting for men to get tired of the patriarchy - they did not and so we need to be a bit more proactive about it. Being proactive and having an open mind and an open door is really important. We need to give the supports that will be needed particularly for women founders.

Mr. Michael Carey

Absolutely. It applies to enterprise development as it does to politics. The gender balance here is a huge challenge. The gender balance on the Enterprise Ireland board is good. The importance of getting that right is more than just about business. Businesses with the right diversity can be much more impactful in every sector and not just in the sectors the Deputy has highlighted. There are opportunities in all sectors.

Deputy Louise O'Reilly

I highlight those only because they were brought to my attention recently and it is an issue I had raised with the Minister in the last fortnight.

Mr. Michael Carey

Enterprise Ireland already has the Going for Growth programme, which specifically targets female entrepreneurships. There is a very heavy involvement and some outstanding female entrepreneurs have come through that programme. We need to redouble our efforts in that area. I have two daughters aged 19 and 21 and I want their world to be equal. I want them to be able to be in business, politics or whatever environment they want to operate in and be in an equal setting. I feel very strongly about that.

Deputy Louise O'Reilly

Would Mr. Carey consider engaging with some of them? I want to stress that they are not critical of Enterprise Ireland; in fact, they are very supportive of Enterprise Ireland. They say that Enterprise Ireland is very good at what it does but they just want to be able to work with it. Would Mr. Carey consider engaging with some of the founders who did not necessarily have a brilliant experience but they want to access the support that is there? They are not critical of Enterprise Ireland necessarily but they are critical of their experience of Enterprise Ireland.

Mr. Michael Carey

I would greatly welcome an opportunity to do that. As I said in my opening comments, my first priority is to get closer to clients to get a deep insight into what their needs are in every aspect. A specific focus on female entrepreneurship would be a really good area to spend time on.

Deputy Louise O'Reilly

I want to ask about expanding our base of exporting SMEs. We have an open economy and a significant trade surplus relative to our size. However, that is not replicated at the SME level. SME export levels are low by international standards. Approximately 6% of our SMEs trade directly across borders. The share of SMEs in total domestic value is also relatively low. Most do not export. A significant percentage only trade with our nearest neighbour, on the British market.

Will Mr. Carey speak a little about what EI will do under his leadership to increase the number of SMEs that export so we can bolster the economy and reduce the risk everyone talks about that is associated with an overreliance on a small group of multinational corporations?

Mr. Michael Carey

The point I was trying to make in my introductory comment about supporting businesses at every stage of their entrepreneurial journeys is relevant. For smaller businesses, moving into exporting is an important step on that journey. EI has offices in 40 countries, where it introduces client businesses to potential customers. Working through the local enterprise offices, LEOs, at the smaller micro scale, to help the feeder school of entrepreneurs who are coming through with businesses of export potential is crucial. Indigenous businesses at every stage have room to improve. Indigenous businesses have a real impact on the economy in many ways. There is no question about that. However, to counterbalance the presence of foreign direct investment, FDI, it is important that more Irish businesses export and build scale. We need to take them through those stages. That is the core of what EI should be doing.

Mr. Michael Carey: The point I was trying to make in my introductory comment Smaller businesses that are moving into exporting is an i

Deputy Louise O'Reilly

Absolutely. It is welcome to hear that and it leads me to my next question.

Historically, we have not been brilliant at helping businesses to develop and grow into large corporations. There seems to be a feeling that is hit early. The State has a responsibility and a direct role to play in ensuring we help micro businesses to become small businesses, small businesses to become medium businesses, medium businesses to become large businesses and large businesses to become global companies. Will Mr. Carey speak a little about the fact that we often see Irish SMEs sell up to foreign buyers rather than scale up to the level of a global corporation, which they could perhaps do if they got help? I have heard anecdotally from SMEs that they almost feel as though they are encouraged by EI to sell up rather than supported to expand further. I agree that an overreliance on FDI is not good. Indigenous business need to be expanded. This is an area I have a particular interest in and I would love to hear what the State and EI can do to encourage companies to scale up rather than sell up.

Mr. Michael Carey

Scaling is probably the biggest challenge indigenous industry has. I have personal experience of investing in businesses and seeking to grow businesses to become businesses of real scale. The needs of businesses at that stage are unique and need to be responded to and supported. Some businesses are at the tipping point. They are already capable of becoming businesses of real scale and they need specific support. They employ 200 or 300 people and have revenues of hundreds of millions of euro and could become businesses that have a turnover of €1 billion and become major or significant international businesses that are Irish-owned and Irish-controlled.

The challenges include funding for that type of growth. EI can play a role, not necessarily in providing the funding, but in facilitating and supporting the fundraising process. Key customer engagement with major international customers is the sort of step change that many Irish companies need. EI is incredibly well positioned through its network to bring that sort of business to Irish businesses. Many businesses scale through acquisitions. EI can provide guidance, advice and support around how businesses can continue to grow through acquisition rather than being acquired, that is being the acquirer rather than the acquiree, and around finding solutions for funding in ways that retain control for the Irish business. There are lots of ways that can be done. There are lots of funding solutions and opportunities for businesses. They can do small scale initial public offerings, IPOs. There are funding solutions through existing sources of funding focused on Irish enterprise that can provide a basis to allow Irish businesses to continue to be controlled and owned here, while becoming businesses of real scale. It is probably the single biggest challenge we have in the indigenous sector. We need to have many more businesses with a turnover of €1 billion.

Deputy Louise O'Reilly

We have the capacity. The ideas, companies and talent exist and there is an opportunity, but it requires an intervention.

Mr. Michael Carey

The businesses and owners have the ambition. I come across businesses of real scale, that have a turnover of hundreds of millions of euro and are well run Irish businesses that have the ambition to grow. There are barriers we need to identify and the State has a crucial role to play in helping to remove those barriers to allow more of those businesses to grow. Some will not make it. It is not a perfect world. Businesses with that level of ambition may stumble or may limit their growth but the ones that grow can be successful and there are dozens of them. We need a specific programme around scaling.

Deputy Louise O'Reilly

I welcome that. The difficulty is that when businesses sell up rather than scale up, the business and the workers employed by it are left at the mercy of new owners. That is not to say that just because it is an Irish business, it will necessarily stay here but there is a greater chance it will-----

Mr. Michael Carey

It has a greater commitment.

Deputy Louise O'Reilly

-----stay here and expand. Is it Mr. Carey's intention - I am not trying to bounce him into saying something - to establish a specific unit in EI or to simply shift around the focus a little of what is already being done?

Mr. Michael Carey

To be entirely honest, I do not have a specific view on what the solution is as regards structure and resources in EI but focus on scaling certainly needs to be redoubled. A lot of discussion is already going on around identifying the barriers and opportunities. There is engagement with companies of that scale to identify how EI can play a role to help them.

Deputy Louise O'Reilly

It would also be worthwhile to talk to the companies that sold up instead of scaling up to find out what drove that decision. In some instances, they will do so and perhaps no one can stop them, but anecdotally I hear, since no one is monitoring it closely, that some feel that they do not have an option because the support is not available for them to scale up. They sell up because that seems to be the best option for them. It would be good to hear from them.

Mr. Michael Carey

Again building on personal experience, there are occasions on the entrepreneurial journey when there are incredible personal financial pressures on individuals to get to a point where they can support their families and to allow them the freedom to move on to the next challenge. Irish companies particularly have that challenge. We do not have generations of large companies. There are a lot of young companies. There are probably tax issues and issues around encouraging entrepreneurs to retain control and finding ways to allow them to take the benefits of re-financing and keep going with their businesses rather than being forced to sell because it is the only way they can become financially secure.

Senator Ollie Crowe

I congratulate Mr. Carey on his appointment and wish him well in the role. I thank the witnesses for coming before us this morning.

I have a few questions for Mr. Carey. In August, the UK Government announced its new approach to controlling imports of goods to Great Britain from the EU, including Ireland. It is the UK Border Target Operating Model, BTOM, and will apply from January 2024. The UK is a crucial market for Irish businesses, especially food exporters.

Will Mr. Carey offer his views on what challenges the new UK approach may present and how ready Irish exporters are to handle this issue?

Mr. Michael Carey

Yes, it is a significant new challenge facing businesses. The Deputy raised the food sector. This sector has been going through that challenge in the years since the 2016 vote on Brexit and has continued to progress. The UK remains the largest market for total exports, with €9 billion worth of exports going to the UK last year. The challenges companies have faced in all sectors have been well managed by the Irish companies preparing for those changes. The State agencies, Enterprise Ireland, Bord Bia and others, have supported that transition well with information sharing, advice and education. That is ongoing as regards this upcoming change. I am totally confident that Irish businesses will be ready to manage their way through this step without any undue negative impact in the long term. The UK will always be a hugely important market for Irish exporters and we will find a way to work around it. Enterprise Ireland will also find a way to work with its client companies to support their challenges in this regard.

Senator Ollie Crowe

That is welcome. Mr. Carey mentioned the role of the local enterprise offices and the work Enterprise Ireland does with them. In 2022, the LEOs supported 38,000 jobs and 7,221 small businesses and entrepreneurs nationwide. Having spoken to people who engage with the LEO in Galway, I know there has been tremendous benefit in many cases. These businesses are important in local economies and also have the potential to expand. Does Enterprise Ireland intend to engage with them to see how we can further strengthen that network and enhance the benefits they provide across the country?

Mr. Michael Carey

The relationship between Enterprise Ireland and the LEOs is a very strong one. It is a very positive structure that works with the local authorities to support micro-enterprise in all regions. It is an important feeder of enterprise start-up businesses into the pipeline and a really important local issue across the country. The job impact has been significant. There was a 10% increase in jobs last year in the LEO clients. Working with the 31 LEOs across the country, Enterprise Ireland is very engaged in that process, with areas such as supporting their movement to digital and their efforts with the lean business offer. There is a major campaign running called All in a Day's Work which promotes the need for change for small businesses across Ireland, supported through the LEOs and with a huge focus by Enterprise Ireland. It could not be more important and it is an area on which Enterprise Ireland will continue to focus.

Senator Ollie Crowe

I will leave it at that for the moment.

Deputy David Stanton

I welcome Mr. Carey to the committee and wish him well in his role. I also thank him for taking up that position because it is not everybody who will take on the job. Given his successful career to date, he will bring a great deal to the table. It is great he is in that role.

I note Mr. Carey stated that the board is gender balanced. Is it very well balanced? I think there are six females and four men on the board, as well as Mr. Carey. It is good to see that. The board is a very strong one, with very dedicated and experienced people on it. What direction would Mr. Carey like to take the board in the next while? What vision does he have? He is the leader of the board, as our esteemed Cathoirleach is of the committee here, and he has a huge and influential role. How does he see the board operating? How often does it meet, what topics does he think it should look at and what should it develop and champion?

Mr. Michael Carey

The board is incredibly impressive. It is made up of real experts in enterprise development. These are individuals, men and women, who have extraordinary experience. It is humbling to be chair of a board like it. Having met each of the members individually and spent time with each of them over the past few weeks, one after the other, each has impressed more than the previous member. They are extraordinary.

One of my key roles of the chair of any board is to make sure members can contribute fully and bring all of their expertise and knowledge to the table and that they are listened to and have their views and thoughts taken into account. Regarding the running of the board, the meetings are monthly and run for four or five hours. There is a very robust process, with which I am very impressed, to avoid conflicts of interest among board members. It is an extremely robust process and it is followed clearly.

As I said in the opening statement, I am very keen that we get close to the clients and can establish a network of connections with more client companies to connect with the board. I am keen to establish more advisory panels and reach out more to the clients and other stakeholders using the board to make those connections.

The board needs to focus on the big issues facing Enterprise Ireland. It is crucially important that we have some real experts on the board in some of the areas I mentioned, including sustainability. There are people on the board who have great experience in the areas of digitalisation and scaling. Equally, the executive team in Enterprise Ireland is hugely impressive and its members need to work with the board to get the best out of the time to which the board commits. Each of those board members commits significant time to the process and we need to honour that.

Deputy David Stanton

I agree with Mr. Carey that it is a really impressive team he has in the board. That is good to hear. He spoke about the network of 31 LEOs through Enterprise Ireland's centre of excellence. We have had representatives from the LEOs before the committee previously. Will Mr. Carey tell us more about the centre of excellence? If he does not have notes on that with him, perhaps he could come back to us. There is not an awful lot online about the centre of excellence that I can find. There is a press release dating back to 2012 when Deputy Bruton was the Minister, but that was a while ago. Will Mr. Carey tell us how the centre of excellence operates, how many staff members there are and what his ambitions for it are?

Mr. Michael Carey

To be entirely honest, I am not that close to the detail of how the centre of excellence currently operates but it is a central function to support the local enterprise offices. The working of Enterprise Ireland with the LEOs is a crucial relationship. As I said, this flow of opportunities and enterprises coming through the system from that environment is important. Working with the LEOs on areas such as events and funding opportunities and working with local authorities on funding in some cases is crucial.

Deputy David Stanton

My time is tight. There are 31 LEOs and they all work independently in their respective local authority areas. It has been put to me, and again this is from Enterprise Ireland's own website, that given the range of skills required for people who are starting up and growing small businesses or SMEs, the diversity is huge. I put it to Mr. Carey that there cannot be expertise in every LEO to deal with every possible question, issue or company type that might be out there. LEOs often do not physically visit a company but do a lot of work on the phone and remotely.

Should we look at the whole of the structure and specialisation? For example, if I am in County Cork and am setting up or working in a company that makes widgets and there is nobody in the Cork office with expertise in that area or who knows anything about it but there is somebody in Country Donegal, yet the person in County Donegal cannot talk to me. Should we look at the structure and perhaps specialising or deepening the specialisms more so that they do not all have to do everything? There could be a national network. I wish to hear Mr. Carey's thoughts on that.

Mr. Michael Carey

I will take that on board and will consider how best Enterprise Ireland can influence that. The needs of small microenterprises around the country have some issues in common, such as leadership, talent development and access to customers but the Deputy is right - there are some aspects specific to sectors and there may be a better way of doing it. I will take it on board.

Deputy David Stanton

Enterprise Ireland is focused on international markets, growing businesses, exporting and becoming global, which has already been discussed. Some companies in Ireland do not export and are focused only on the local, national market. How does Enterprise Ireland support those companies?

Mr. Michael Carey

The Deputy is right; domestic businesses are an important part of the economy. Enterprise Ireland's primary focus is on exporting businesses and businesses that can potentially get to that stage. There is a limit to the extent of the support that can be provided elsewhere. That said, a lot of those businesses have the potential to become more significant in scale and will start on the journey of exporting. The LEO structure is effectively there to support that cohort of businesses. As the Deputy said, we need to constantly review and question it. I mentioned in the opening statement that we are starting a process of reviewing our strategy and the aspect of how best to support that early stage - microbusinesses - will be a part of that process.

Deputy David Stanton

What about some businesses that are a bit larger than that but do not export? It has been said to me that they do not get the TLC that others get which export or have the potential to export. That is an area Enterprise Ireland might look at. I do not know how many are out there but they feel a bit unloved. Mr. Carey is familiar with the concept of people establishing businesses under franchise. It has been put to me that they do not get the support either. Will he comment on that? He may not have the answer but may come back to us with a note on it if he does not. What are his views on people establishing businesses under franchise?

Mr. Michael Carey

The business model being applied to startups can be many and varied and franchises can be a very efficient way of starting up a business. I do not see any reason, in principle, that approach to establishing a business should be any different from starting a new brand or business or starting without that level of international connection, perhaps, with an international franchise. It is just a route to establishing a business and should not be any different.

Deputy David Stanton

I am told it is but that may be for another day.

Mr. Michael Carey

I am not aware; if there is a block, it does not seem logical.

Deputy David Stanton

It is just another area that came to my attention that I was surprised about. Enterprise Ireland may have a look at it. Quite a lot of large Irish companies are fleeing the Irish stock market and registering elsewhere. Will Mr. Carey comment as to whether or not he is concerned about that? What can be done to address it? Should it be addressed?

Mr. Michael Carey

It should be addressed. An Irish stock market is an important aspect of a funding source for scaling businesses. Individual companies have their own reasons for changing their approaches to sources of equity. It is important and there are opportunities for small-cap IPOs that could be a really interesting source of funding for scaling businesses. It can only happen with an Irish stock market structure in place.

Deputy David Stanton

A comment was recently made that we are now beyond full employment. How many staff does Enterprise Ireland have nationally and internationally? Are there many vacancies? Is Enterprise Ireland finding it difficult to attract staff? Obviously, it needs, as it has, quite dedicated, experienced and qualified people working with it. Will Mr. Carey comment on that?

Mr. Michael Carey

We have 850 staff, I believe, in the organisation. Like every organisation both in the public and private sectors, the challenge is attracting and retaining the best possible people. I understand that we are just short of 100 vacancies in the organisation currently. Like every organisation and business, it works on being the most attractive place to work. We want Enterprise Ireland to be a place of choice for the very best, capable leaders and potential employees across the structure, be it client-facing, back office, international markets or international offices across the 40 or so markets around the world in which we exist. I understand it is a challenge but like every organisation, it is important that we position ourselves as the best possible place to work and attract the best possible talent.

Deputy David Stanton

I have been looking at the Enterprise Ireland website. I do not see too many career opportunities advertised on it. I am just wondering where those 100 are advertised or are they advertised?

Mr. Michael Carey

I am not familiar with it.

Deputy David Stanton

Will Mr. Carey come back to me about that at some stage with a note?

Mr. Michael Carey

Yes.

Deputy David Stanton

If people are interested in working in Enterprise Ireland, I am interested in how they can apply and the process. There are some on the website but not that many, unless I am missing something. It is just a comment.

Mr. Michael Carey

On a slightly more general point on leadership development, as I said in the opening comment, we have a role to play in creating future leaders. Part of that is creating people who can work within Enterprise Ireland but also creating future entrepreneurs and business leaders. If we can play our role in providing that influx of people to indigenous Irish businesses and to Irish State agencies that is a positive impact.

Deputy David Stanton

I wish also to comment on the Open Doors initiative, which I do quite a bit; I am on the board of the initiative, which Enterprise Ireland supports. I wish to thank Enterprise Ireland for that. The company is industry-led and assists people with disabilities, migrants and people from disadvantaged communities to get employment and get on the job ladder and it helps companies to employ those people. I thank Mr. Carey and Mr. Clancy and the team for being involved in supporting that. I wish Mr. Carey well. He must be quite excited by this role. It is a huge opportunity. He has a great team with him. I wish him the best. I am sure we will do the best we can to support him in his work.

Mr. Michael Carey

I thank the Deputy.

Deputy Matt Shanahan

I welcome Mr. Carey and his team. I congratulate him on his appointment. I have had some engagement with Enterprise Ireland over the years and the previous CEO. I did not know the Chairman but the CEO, Julie Sinnamon, did a great job. To be fair, Enterprise Ireland has a very good leadership team now with Leo Clancy and the others. I wish them all the best.

I am on the record a number of times in saying there is a stream of support in Ireland for companies coming in from the Industrial Development Authority, IDA, and for companies wishing to export from Enterprise Ireland. I have heard it said - even the Taoiseach and Tánaiste reiterated - that the LEOs are now the agency supporting the SME sector. We need more of a statutory body over that space because, as other speakers have already said, there are a lot of SMEs that will never export. The business model is not around export and their challenges are different from those wishing to export. I am not sure that they always get fair representation. I ask Enterprise Ireland to look at that.

Export businesses, in my experience, tend to fall across three broad areas: manufacturers, service businesses and technology businesses, in the main. The challenges in scaling and exporting are different across all but I ask Enterprise Ireland to have a look at a few things which I have, in previous experience, come across. One is difficulties getting support for intellectual property, IP, protection from Enterprise Ireland and, in particular, for patent protection. Someone goes in and they are not necessarily things that Enterprise Ireland wants to support from the get-go yet they are very important, particularly for tech-related companies or those that manufacture gizmos, to get established. What was Waterford Institute of Technology, WIT, now South East Technological University, SETU, has three of the 15 top scientific gateways. A large portfolio of patents are warehoused down there. They are part of scientific development. Those patents are sitting there and being kept recurring. I have asked before why can we not allow people to access some of those and see if they can spin some of that stuff out? It is very difficult but there is a rich vein to tap in trying to marry up clever people with clever technologies that need to be developed.

The other point relates to VC access. As Mr. Carey knows, it is a real problem for start-ups and for developing exporters in this country, and even for indigenous businesses. He is probably well aware of one VC company in Waterford, Suir Valley Ventures. It took a long time to get going. It was very hard to get committed Government support and now it is offering money and doing some very good things. Could we try again and look at that to see how we can get funding into those models? There seems to be a reticence at times from Departments here to try to put funding into that type of activity. We almost do not really want to help people involved in private venture capital to get up and going. It is almost seen as the nasty side of the business that is for profit, yet we are prepared to plough money into research, mentoring, and business analysis that only does so much. That is something that needs to be looked at.

The difficulties of sale versus scale were mentioned. It is a problem. I am sure Mr. Carey has seen it in his own business life. There is a difficulty when a business gets to a certain point when there is a dilution of shareholding. An investor, entrepreneur or promoter will have to wait for a long time and he or she might decide to just cut and run. Often, the investors are not even Irish, which is a hell of a pity and the IP ends up going abroad. I am a member of the Regional Group, which lobbied hard in the budget and the Government has looked more benignly at entrepreneur relief and it has made changes to the employment investment incentive scheme, EIIS, but we need to do more in that respect because it is still a problem. When guys or girls get to a certain point in time the smart thing is actually to get out and, as Mr. Carey knows, it is very hard to keep control on business when you are taking in large amounts of money.

My final point relates to the increasing cost base in Ireland which is becoming a big problem for indigenous business. It is going to be a big problem in the next year or two for exporters, less so for those who have overseas operations, but for those who are trying to produce out of Ireland and remain competitive on the international markets. It is something that EI needs to be looking at in terms of speaking to the Government about the challenges for indigenous manufacturers in particular and those who rely on a manufacturing component in their business have to suffer in terms of wage and salary costs, etc. I would welcome any comments.

Mr. Michael Carey

I have a few comments in response to some of the issues raised by Deputy Shanahan. I will make a note of what he said about patent protection and IP and investigate it further.

In terms of his comments on VC funding, access to funding generally is a real challenge. Having a competitive banking sector is very important for the indigenous Irish sector to provide a source of banking funding but also equity funding. EI already participates in a lot of investment funds and co-invests alongside a lot of equity investment funds. That should be encouraged and progressed but funding generally is one of the greatest challenges facing businesses that want to scale up. We need to find ways, not necessarily to provide the funding but to facilitate the funding and work with others in the public sector to ensure the environment is right for companies to allow them to raise the funding.

Deputy Shanahan describes the issue relating to scaling versus selling, in some occasions it might be the right thing for a business to sell and bring in new equity and international equip perhaps on occasion, but for lots of other companies it is not the right thing and business and business leaders who are forced to make that call for reasons that can be addressed is an unfortunate outcome. We should support those who really have the ambition to take it on to the next stage, who have the bandwidth and energy to keep going. Building generational businesses would really change the Irish economy.

I agree absolutely with the cost-base challenges Deputy Shanahan raises. I see it in my day job. It is a real challenge for exporters. EI's role in that could be to help support investment in areas of innovation, efficiency and further capital spend in businesses to make sure they are competitive. In the long run, if a business is not competitive it will not survive or grow. We must find ways to up the value of the outputs of Irish businesses and the skills that are being used. Innovation is crucial. There are great opportunities in areas around digitalisation and businesses that can move and get ahead of the game. EI has a huge role to play in that, but the world will continue to change and the competitive nature of the world is not going to get any easier. It is fantastic to see so many really successful Irish businesses making progress by doing it right. EI has a big role to play in that.

Deputy Matt Shanahan

Could I just make one final comment?

An Cathaoirleach

Very briefly.

Deputy Matt Shanahan

One other programme in EI was the larger supportive innovation centres where it was paying for innovation site managers to come in and they were given a salary for a year or two in the hope that an enterprise would become self-sustaining. EI has supported a model like that in Waterford which has been very successful. I ask Mr. Carey to look at that again. I know some of the funding is now tapering off. I do not know if it affects the Waterford site but it may affect others. It is great that Mr. Carey well knows the value of getting entrepreneurs all together in a room where they coexist and work together in a facility and how that engenders ambition and expertise, etc.

Mr. Michael Carey

I have noted the comments.

Deputy Richard Bruton

First, I congratulate Mr. Carey on his appointment and wish him very well. Like Deputy Stanton I thank him for bringing his very substantial range of skills to bear on this. I would also like to join Mr. Carey in thanking Terence O'Rourke for his service before him. According to the back of my envelope, in his time, employment in Enterprise Ireland companies went from 140,000 to 220,000, which was no mean feat. That said, I am not expecting Mr. Carey to top that because we are living in a somewhat different environment.

Traditionally, it was all about driving export diversification and employment. Is Mr. Carey's new strategy going to be a significant shift in emphasis? I would be interested to hear his comments on that.

The second area I am interested in is sustainability. When Enterprise Ireland was in here last with the LEOs we heard that sustainability is the key to competitiveness. The impression I get is that to some degree it has not become that central yet to the strategy of Enterprise Ireland and that it is a good add-on as opposed to a core strategy. I am interested in hearing Mr. Carey's comments on whether we can nail down the opportunities that are going to come from a net-zero world and how that is going to shift the environment for enterprise companies now that we are looking at a five-year perspective. It seems that there will be a radical change in that period and I would like to get his grasp on that.

The third question I would like to ask is whether Mr. Carey thinks it would be timely to do a review of the start-up environment in Ireland from an Enterprise Ireland perspective. When I was there, our backs were to the wall and start-ups were a very important ingredient and we did a strategy on them. It is a complex world. It would be interesting to get Enterprise Ireland to do an assessment of high-potential start-ups, HPSUs, which are the iconic brand, to see if they are really delivering when we look at them over a timescale. How are spin-outs from our research centres doing? How do we compare to others who are funding research in a similar way? How do we support the more mom and pop start-up as opposed to the high-potential start-ups – the gazelles or whatever they call them? I am talking about going back and looking at the elements that make up a successful entrepreneurship culture, be it education, innovation, markets, finance or access to venture capital. It would be timely to have a fresh look at that, especially with supply chain reviews and a little bit of nearshoring and whatnot that perhaps we are going to have to look more to our own resources.

I am interested in hearing Mr. Carey's view of the regional enterprise strategies, which again was one innovation we brought in when we were there with our backs to the wall in enterprise terms. It seems that there is a bit of a gap, which is a view Deputy Stanton also expressed. The LEOs are beavering away at a certain level but they do not have the expertise.

Is there a case for developing regional hubs under an Enterprise Ireland brand to enhance the work of the regional enterprise strategies, which bring together education and training, Enterprise Ireland, IDA Ireland and so on? Is there something missing that we could see evolve as Enterprise Ireland looks at its strategy for the next five years?

Mr. Michael Carey

To pick up some of those issues, as regards the new strategy, that process is just starting. Will the emphasis still be on export, development and employment? I believe it will be. While we might be approaching full employment, the environment changes very rapidly. The world is changing very rapidly and technology is changing. The challenges Irish businesses must meet in the face of those changes and that changing environment are massive. We cannot be complacent about the employment numbers today. We also need to have more employment in indigenous businesses, driving on employment and exports. We are a small economy. All the growth is going to come from exports. We will have some domestic businesses but the significant growth will come through exports and that will continue to be the output of the strategy. It is early days, however. We are just starting that process of reviewing where that strategy should go.

On sustainability, there are two aspects to this. One is sustainability of Enterprise Ireland itself and the agency having a robust plan that can show it is taking sustainability very seriously and doing what is right from a sustainability point of view. More important, however, is the impact of sustainability on our client businesses and their impact on sustainability. A relatively low level of client companies have sustainability plans in place - 35% or 36% - and there needs to be more. The real impact on the environment is made by a relatively small number of client companies. They need to be supported through a transition to make sustainability core to their business and part of their DNA. It is not and cannot be a bolt-on.

Deputy Richard Bruton

Food production, Mr. Carey's own sector, may not have a name for having a high impact but if we look at food waste, the food supply chain and methods of food production, the truth is it has a much greater impact on biodiversity, climate and so on than is often thought. We need to look at these supply chains and consider original strategies and good opportunities to ask how sustainable our model is. It may go back to primary producers and it may go forward to how our supermarkets are presenting, but I would not underrate that sector. It is not just about cement.

Mr. Michael Carey

Absolutely. There is a real opportunity for indigenous Irish industries to present themselves internationally as a sustainable source of supply of their outputs if they make sustainability core to what they do. Many companies are doing it, but not enough. The bigger companies really need to make the impact.

The Deputy is right, however. This is not just an issue for big companies. Every business of every scale at every stage along the supply chain needs to take it seriously. Enterprise Ireland has an important role to play in encouraging and perhaps pushing companies along that journey at a higher pace because it is not going to stop. It is going to become a bigger issue.

From a commercial perspective, businesses, customers and consumers are demanding that enterprise and industry step up to the challenge of sustainability. The businesses that do will succeed and the businesses that do not will fall away. There are loads of examples of big customers insisting on sustainability credentials from their suppliers. That is only going to become more important.

Last year, Enterprise Ireland invested €27 million in start-ups, of which 91 were high potential start-ups and 13 have spun out of the universities. The definition of what a high potential start-up is probably needs to be revisited. We need to redefine how big a high potential start-up needs to be. We should be ambitious. We should raise our heads and look at large-scale opportunities. For the smaller businesses, the LEO structures are intended to meet many of those needs locally and regionally.

I note the Deputy's point on the need for regional focus. I know there has been a huge emphasis in recent years on building businesses and supporting the building of businesses outside Dublin. The majority of businesses and jobs have been established outside Dublin and that needs to continue. Regional development is important. I know personally that we have businesses in areas outside Dublin that have different challenges in terms of employment, attracting talent and sustaining the growth of businesses. These challenges outside Dublin are being met in a good and positive way and that needs to be supported.

An Cathaoirleach

That concludes out consideration of this matter for today. I thank our witnesses for visiting the committee. I wish Mr. Carey all the best in his role going forward and well done to him. That concludes the meeting in public session for today. I propose that the committee go into private session to consider other business. Is that agreed? Agreed.

The joint committee went into private session at 12.06 p.m. and adjourned at 12.13 p.m. until 9.30 a.m. on Wednesday, 8 November 2023.