Joint Committee on Jobs, Enterprise and Innovation díospóireacht -
Tuesday, 31 Mar 2015

Female Entrepreneurship, Women in Tech Industries, Skills Needs and Balanced Regional Development: (Resumed) Discussion

Chairman

I remind members, visitors and those in the Gallery to ensure their mobile phones are switched off completely for the duration of the meeting, as they cause interference with the broadcasting equipment, even when left in silent mode. We now move on to entrepreneurship among women, women in the tech industry, skills needs and balanced regional development. I welcome to the meeting Ms Tara McCarthy, director of the consumer foods division at Bord Bia, Ms Eileen Bentley, entrepreneurship manager at Bord Bia, and Ms Colette Twomey, director of the Clonakilty Food Company. Representing Kernel Capital, the committee welcomes partner Ms Orla Rimmington, partner Ms Jayne Brady and financial director and partner Ms Denise Sidhu.

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 so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

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

I remind our guests that their presentations should be no more than ten minutes. Members have been provided with the presentations already submitted and they will be taken into account when the committee is making its considerations on the report.

I invite Tara McCarthy from Bord Bia to make her presentation.

Ms Tara McCarthy

I thank the committee for the invitation to address it today. I am joined this afternoon by my colleague, Eileen Bentley, who is our entrepreneurship manager, and by Colette Twomey, the managing director of Clonakilty Food Company.

As many members of the committee will know, Bord Bia, the Irish Food Board, provides a link between the Irish food, drink and horticulture industry and existing and potential customers throughout the world. Bord Bia's mission is to drive, through market insight and in partnership with industry, the commercial success of a world-class Irish food and drink industry. Over the next five minutes or so, I would like to share with you a brief overview of our strategy, in which I will feature a number of our key services for both small and large companies. I will, as requested, also touch on Food Academy. I will close with a case study of an indigenous success story - that of Colette Twomey from Clonakilty Food Company, owner of the Clonakilty brand of black pudding.

Bord Bia's current strategy is built on four pillars. The first is Origin Green, which has as its ambition for Ireland to be a world leader in sustainably produced food and drink. We are currently well on our way on this journey, with 431 companies now signed up to our Origin Green initiative, which was launched in 2012. Today, almost 80% of our exports are now supplied by Origin Green verified companies. Our plan going forward is to have 100% of our exports from companies on the Origin Green journey by the end of 2016. This initiative is a world first and continues to gain momentum as it meets the needs of our key customers throughout the globe. The second pillar of our strategy is enhancing competitiveness, under which we focus on the provision of insight, education and competency support programmes for companies and executives in the food industry. Market and consumer insight are at the heart of our work, with our research, insight and strategic branding specialists acting as the voice of the consumer. Our mission is to use consumer and market insight to drive business growth for our clients, whether smaller startups or well-established businesses. Within this pillar we also invest in entrepreneurs through Food Works, a joint initiative undertaken with Teagasc and Enterprise Ireland, as we look to support the next generation of high-potential food startups. Attracting the best talent to work in the food industry is also relevant, and through our partnership with Smurfit Business School our fellowship programme is succeeding in attracting more than 500 applications for just 20 places each year.

Under our third pillar, enhancing exports, we look to build case studies similar to that of Clonakilty black pudding and others in our export markets, supporting our clients with commercially focused programmes, be that through our network of overseas offices, our participation at over 15 international trade shows annually or the creation of events such as our recent Marketplace International event. Over the course of last week we hosted more than 400 international buyers, culminating in our largest ever speed-dating event last Thursday, in which more than 4,500 meetings were scheduled for the 530 attending buyers and 185 exhibiting Irish companies. Both large and small enterprises and new and well established businesses attended this event, from Glenilen to Glanbia, from Aryzta to Boutique Bake, and from the recently established SynerChi Kombucha to the seventh-generation business Flahavan's. We expect over €30 million to be written from this event, leading to many more opportunities in years to come.

Our fourth and final pillar focuses on the creation of a vibrant home market, with activities such as quality assurance programmes and events such as Bloom and our small business open day. In the last number of years, local food has undergone a significant shift in importance, becoming central to both consumer needs and supermarket strategies. Bord Bia's PERIscope research from 2013 indicated that Ireland is second only to France in terms of the importance of local food to shoppers. Some 50% of consumers in Ireland are buying local food on a weekly basis and eight out of ten consumers believe that local food results in higher-quality products.

Ireland's food producers are ideally positioned to maintain and build local food opportunities, and Bord Bia's Vantage programme has been designed to support the smaller producers in this process. Launched in 2007, Bord Bia Vantage, which serves more than 700 SMEs with a turnover of less than €3.5 million, is a key platform that enables owners and managers to access best practice resources, expertise and processes to help build their respective markets. It consists of three pillars. Vantage Point, a dedicated website for small food businesses, was re-launched in 2015 and is a core part of the small business service, with almost 50,000 visits annually. Vantage Plus, the second pillar, is a programme designed to develop small companies' capabilities and competencies in the key areas of business and market development. Supporting Vantage Plus is the new Food Academy Start programme. Food Academy is a collaborative new initiative from Bord Bia, the local enterprise offices and SuperValu, which was launched in September 2013. The aim of the academy is to provide integrated best practice supports specific to food companies as they progress on their growth journey from startup to national distribution and export. At entry level, or Food Academy Start, the aim is to create a level playing field of food marketing knowledge across all counties and to deliver consistent information to companies in local areas as they begin their journeys as food producers. The Start programme is delivered by the local enterprise offices, supported by SuperValu, which nominates a SuperValu store manager in each county to participate on the programme and provide retailer insights and expertise. Bord Bia has designed the full course content of Start. By the end of 2014, Food Academy had reached more than 200 participants across almost the entire LEO network, with almost 100 participants securing product trials in 150 participating SuperValu stores. In November 2014, Food Academy Advance began, with 30 of the graduate participants of Food Academy Start. This programme, jointly run by Bord Bia and SuperValu, aims to take participants on a supplier development journey with SuperValu that will take businesses from local to regional and eventually national supplier status. In addition to the Food Academy programme, many producers have participated on other Bord Bia supplier development programmes, such as the Tesco Retail programme and the Ireland Food Service programme with Compass Ireland. The final pillar of the Vantage suite is Vantage Promote, which includes all business development and public relations activities for the promotion of the small business and speciality sectors. One of the key vehicles for the promotion of the sector is the annual artisan food market at Bloom. Now in its eighth year, the artisan food market is an established feature of the food village in Bloom. Adjacent to the food market is the Bloom Inn, where 14 craft whiskey, beer and cider producers showcase their products over the course of the Bloom festival. In 2014, 106,000 visitors attended the show over the five days.

The final area I will touch on today is funding. Funding for marketing is always a challenge for companies. To help businesses with a turnover of less than €3.5 million to improve their marketing techniques and capabilities, the Bord Bia marketing assistance programme provides financial support to food, drink and horticulture companies. In 2014, 186 companies were approved grants to a total of €976,000. Additionally, in 2015, Bord Bia launched a new Step Change fund, valued at €400,000. This grant scheme is aimed at companies with a turnover between €100,000 and €5 million which are embarking on a new project to take their business to the next level. In 2015, Bord Bia expects the Step Change programme will benefit at least eight high-potential Irish businesses with individual grants of up to €50,000. As the members of the committee will see from this brief presentation, there is a lot happening in the food industry at present. Over the past five years we have also enjoyed a strong flow of new entrants into our industry, which is why there are so many new programmes for startup companies.

In the committee's letter of invitation, it asked that I be accompanied by an entrepreneur, and in fulfilment of that request I invited Colette Twomey to join me. Ms Twomey will briefly bring the committee through the story of her company and the supports that she received along the way, and share with the committee her insights from the eyes of an entrepreneur.

Ms Colette Twomey

Ireland is exceptionally rich in its traditions, and one of the finest is Clonakilty black pudding, a product that has embraced from its origins the importance of local food, which Ms McCarthy spoke of earlier. To this day it remains true to its original recipe from the 1880s. Starting with my husband in our local butcher shop in 1976, and servicing Clonakilty, today our customer base extends outside the local area, through national distribution in both retail and food service. Today, after almost 40 years in the business, I am proud to say that we are the leading pudding producer in Ireland, producing over 20 tonnes of product per week.

We use only Irish beef and pork in our pudding, sausages, rashers and bacon joints. We have approximately 25% of the total retail market in pudding. I am the sole owner of the company and the only person who knows the secret spice mix for our famous Clonakilty black pudding. We are conscious of our role in the local community, sourcing ingredients in Ireland. In addition to all our beef and pork being Irish, Flahavan's has been supplying us with pinhead oats for over 40 years. These oats give our puddings that lovely crumbly texture.

Today we have 48 staff and have plans to return production to Clonakilty from the factory in Cork. We have national distribution in Ireland and our growth ambitions are in the export markets, where our range is available in the UK, mainland Europe and Australia. Some of the key accounts in the UK include Selfridges, Budgens, Tesco, Morrisons, Asda, Waitrose and Sainsbury.

We have received a lot of support from the State and from colleagues in the food industry to help us get to where we are. Bord Bia supported us by participating in tastings around the country, and these proved to be a fantastic launch pad. Since then, we have participated in many of the programmes that Ms McCarthy mentioned, and we have benefited strongly. Today, we are members of the Bord Bia brand forum, and if I cannot attend I always have one of my team attend. The access to insight and best practice is unequalled at the forum. We were also assisted with early export attempts when Bord Bia held our hands through the challenges a first-time exporter faces, and we continue to participate in the UK support programme. In addition, through the fellowship programme we were able to broaden our footprint as far away as Australia.

Most recently, we started in the Digital Food Hub to help us communicate our message and brand more strongly in the digital age. Last week, we participated in the Bord Bia flagship marketplace international event, where we hosted 18 buyer meetings over the course of one day. Enterprise Ireland has supported me in my personal journey, most recently through the leadership programme. I learned a lot from the academics present and more from the other participating food practitioners. The food industry is an exciting one and I am delighted that in recent years it is getting the recognition it deserves as a leading pillar of the economy. Its contribution to the country, through jobs and investment in rural areas, is unparalleled, and I hope innovative programmes for businesses such as Food Works and Food Academy, as well as events like Marketplace International and the brand forum, remain the focus of organisations such as Bord Bia, local enterprise offices and enterprise boards.

Chairman

I thank Ms Twomey. I now invite Ms Orla Rimmington from Kernel Capital to speak.

Ms Orla Rimmington

I thank the committee for the invitation to appear before it on the issue of female entrepreneurship, women in the tech industry, skills needs and balanced regional development of entrepreneurial hubs. We appreciate that the committee is highlighting these important issues, which go overlooked too often.

I am a partner with Kernel Capital, a venture capital firm with offices in Cork, Dublin and Belfast, managing the Bank of Ireland Kernel Capital venture funds, which are one of the largest and most active sources of equity finance for technology companies on the island of Ireland. I am joined by my colleagues Ms Denise Sidhu, finance director and partner, and Ms Jayne Brady, partner. Our backgrounds are in computer science, finance and engineering, respectively. Kernel has a proactive approach to funding women in business, enabled by the fact that three of the six partners in our firm are female. We do not back a company because it has a female founder or CEO, but we know from experience that female founders and CEOs can create and run great businesses.

Under the leadership of Enterprise Ireland’s first female CEO, Ms Julie Sinnamon, alongside her colleague Ms Jean O’Sullivan, great strides have been made in driving female entrepreneurship in Ireland. In 2014, almost one in every four companies backed by Enterprise Ireland were led by females, an increase from every one in ten in 2012. In addition, we have seen a welcome boost in female-focused startup accelerators and business mentoring programmes pioneered by the likes of Paula Fitzsimmons from Cork Institute of Technology, the DCU Ryan Academy and the National Digital Research Centre, NDRC. However, the reality is that female entrepreneurial potential is still not being tapped to its fullest. It is still a male-dominated space, with a disproportionately low level of women becoming entrepreneurs in Ireland. Research in the US has revealed that private technology companies led by women achieve a 35% higher return on investment than those owned by men. Women are also proving to be better at managing their investment money once they get it. In contrast, men are 40% more likely to receive funding for their new ventures than those led by women, with only 7% of venture capital money flowing into female-owned businesses, according to MIT. The picture in Ireland is similar, and I am keenly aware of this because I meet so many courageous founders every day, but not enough of them are women. I am delighted that we have five great female founders in our portfolio and we are actively seeking to back more of Ireland's most promising female entrepreneurs.

Not only is it important to encourage female entrepreneurs, it is also important to encourage females in senior executive roles, particularly finance and engineering. Female representation on boards of directors is also very important. It would be great if our major indigenous companies and multinationals encouraged and possibly incentivised their senior female executives to mentor and take non-executive roles in early-stage companies. In order to increase the scale of female senior-level engagement, it is important that we create a favourable environment for female-headed enterprises in Ireland and proactively support women to set up businesses. Being an entrepreneur is hard, but no career worth having is easy. We need to go a step further and consider support programmes that will suit family schedules and incorporate child care.

Raising the profile of our female entrepreneur role models in Ireland and recognising and celebrating their achievements is also essential. According to research conducted by the Global Entrepreneurship Monitor, women are five times more likely to set up their own business as a result of meeting other women entrepreneurs. The private sector must be encouraged to build upon the platform provided by Enterprise Ireland, and others such as Bord Bia, so that our female entrepreneur role models can share their insight with the next generation of female leaders and convey the benefits of entrepreneurship, such as flexible work hours, which can pay dividends on the family side.

Overall, it is important to point out that venture capital, along with everything else, is a people game. We invest in intelligent people and reference them from our network, which is a key factor in the industry. People group with people who are similar to themselves, and female investors are more likely to come across opportunities to invest in females. Therefore, it is imperative that we proactively encourage women to develop and maintain active networks. From a venture capital perspective, we also need to see more female CEOs building companies across all sectors, not just where they have a distinct advantage over their male counterparts. Greater female participation in science, technology, engineering and maths, STEM, would address skills shortages and spur innovation and tech entrepreneurship in Ireland. Currently, far more male graduates emerge from STEM college courses than female, and only one in four people working in STEM in Ireland are women. STEM careers are already shaping our future and we need to encourage more young women to get involved in STEM at an early stage. My colleague Ms Jayne Brady will discuss skills needs in more detail.

Ms Jayne Brady

As my colleague, Ms Rimmington, mentioned, I am a partner in Kernel Capital. My background is in electrical and electronic engineering, and prior to taking up this position I held a number of technology leadership positions with multinationals and startups in a variety of global locations, including Europe, China, India and North America. I am also a past chairman of the Institution of Engineering and Technology in Northern Ireland, which is one of the world’s leading professional organisations for the engineering and technology community, with more than 150,000 members in 127 countries.

When I left school to take up a career in engineering, which was almost a quarter of a century ago, the world of technology was a very different place. There was no Internet and there were no smartphones, and only 1% of the population in Ireland had a mobile phone. The percentage of female engineers was 7%. We have seen a massive change in the world of technology, driven by continual innovation. Now, more than 90% of us own a mobile phone. Surely the percentage of woman pursuing careers in engineering has also been transformed? A 2013 report by Engineers Ireland found that men outnumber women in the engineering profession by nearly nine to one, and that male engineers are almost twice as likely to work in senior management compared to female engineers.

The issues here are as much about improving business performance as about promoting equal opportunities for women. If we are to meet the grand societal and economic challenges, the solutions exist in the science and maths domain. One of the greatest natural resources of our economy is our human resource; if we leave 50% of the talent pool of Europe and Ireland behind, we will not be able to meet these challenges.

The business case for managing gender balance in the workplace was well made by Warren Buffett in Fortune Magazine in May 2013:

For most of our history, women - whatever their abilities - have been relegated to the side-lines. Only in recent years have we begun to correct that problem....The closer that America comes to fully employing the talents of all its citizens, the greater its output of goods and services will be. We’ve seen what can be accomplished when we use 50% of our human capacity. If you visualize what 100% can do, you’ll join me as an unbridled optimist about America’s future.

At Kernel Capital we are also optimistic about Ireland’s future. We need the best leaders and entrepreneurs, be they male or female, or we are wasting the assets of our economy. It is crucial that we encourage young girls to take on maths and science courses and to participate in solving these problems of the future. At Kernel Capital we are willing to play our part to support addressing the gender gap, both in our words and in our actions. Kernel Capital were recently promoting female entrepreneurship at the inaugural I Wish event in Cork, a partnership between Cork Chamber, it@cork, Cork city and county councils, UCC and CIT, which aimed to inspire and encourage female transition year students to pursue STEM careers. It was an excellent event that could go country-wide. It really captured the interest of lots of young women who had previously considered STEM to be a male orientated subject area. Hopefully, events like these are a step towards normalising STEM achievement for girls in our classrooms. We are going in the right direction and we need to build upon the momentum already established.

The gender gap does not apply solely to technology sectors; globally in 2014 about 6 % of VC partners were women. I am delighted that Ireland is bucking this trend with prominent female VCs such as Elaine Coughlan, general partner of Atlantic Bridge; Sinead Heaney, managing director of the BDO development capital fund and 50% female partnership representation in Kernel Capital.

My colleague, Denise Sidhu will discuss balanced regional development of entrepreneurial hubs.

Ms Denise Sidhu

As previously mentioned I am a partner and finance director in Kernel Capital. At Kernel we are acutely aware of the need to realise sustained and balanced regional growth of entrepreneurial hubs across Ireland. We strongly welcome the regional focus of the Government’s Action Plan for Jobs 2015, aimed specifically at investing in and developing our regions, which is key to Ireland’s overall recovery. Every region in Ireland must leverage its unique competitive strengths to create jobs and broader prosperity. Being regionally located should no longer be the impediment it once was to addressing international markets. Connectivity is key and of foremost importance in this regard, particularly for ICT and Internet companies, is the availability of high speed fibre broadband. We welcome the ambition from Government in this regard. This ever-increasing regional potential is borne out by the many great initiatives which are regionally located but which address global markets, including investments we have made in areas such as Kilkenny, Wexford, Waterford, Cork, Tralee, Limerick and Galway. Further developing regional hubs such as these and others is the continuing challenge.

Ultimately, the success of all enterprises is driven by its people and sourcing human capital is a challenge faced by many startups across the country. We seek to invest in companies which have an unfair advantage over incumbent competitors; regions, likewise, need to look to their own strengths for their unfair advantage, be it skill clusters, quality of life, natural or geographical factors. Harnessing the collective power of regional stakeholders to drive a region’s individual innovation narrative around its own identity and strengths can then be a powerful enabler.

We have strong regional diversity across our portfolio of 75-plus companies, with over 50% located outside of the Dublin region. Collectively, they employ almost 1,200 people across the island of Ireland, mostly at graduate and postgraduate level and with our assistance, have raised over half a billion euro in equity and debt funding. We have a track record of generating strong returns with divestments including, FeedHenry, Farran Technology, Straatum, Chip sensors and Stokes Bio, which all brought significant foreign direct investment to those respective regions. We are strongly committed to achieving even greater regional spread and travel throughout the country meeting entrepreneurs at local level through our Open Hours events which provide a forum for entrepreneurs to build a relationship with the Kernel Capital team. To date, we have met with hundreds of companies in locations such as Limerick, Cork, Waterford, Galway, Sligo, Letterkenny and Dundalk. We are also heavily involved in the eDIGIREGION FP7 programme. This is a 36 month initiative which aims to increase regional competitiveness via research-driven clusters in the technology domain.

Kernel Capital is the first Irish venture capital firm to be a direct partner of a European framework programme, FP7. This €2.8 million project is led by Waterford Institute of Technology and our Irish partners are IBEC and the South East Regional Authority. Together we are working with our EU partners from Hungary, Spain and Romania, and regional stakeholders in the south east, to develop a joint action plan to boost new international business opportunities for SMEs, drive job creation and long term sustainability of the regions in line with the Action Plan for Jobs 2015.

Our key investors, Bank of Ireland, Enterprise Ireland, The University of Limerick Foundation and the University of Galway Foundation, are exceptionally supportive of the work we do in supporting technology companies across Ireland ensuring we are contributing to the vibrancy of the Irish technology scene. These companies are the beginning of an ecosystem that can eventually lead to larger companies that will create more jobs and fuel the Irish economy. Together we must ensure that we give our country’s leading innovators every chance to succeed.

I thank the Chairman and the members of the committee on behalf of Ms Rimmington, Ms Brady and all the team at Kernel Capital.

Chairman

I invite members to ask questions.

Senator Mary M. White

I defer to my colleague, Deputy Tóibín.

Deputy Peadar Tóibín

Cuirim fáilte roimh na finnéithe agus gabhaim mo bhuíochas leo as ucht an cur i láthair suimiúil. My initial questions are for Bord Bia. Are all Bord Bia's clients indigenous or does it also represent foreign direct investment companies? Does it deal with high potential start-ups in the same way that Enterprise Ireland deals with them? How many companies are dealt with by Bord Bia? Does it collect statistical information on annual net job creation figures, comparative cost per job and the regional spread of those jobs? Many of Bord Bia's clients and their suppliers have difficulties with the multiples. Every supplier will have difficulties with customers at some level but the difficulties with the multiples are quite acute. I ask Ms Twomey to comment.

On the subject of venture capital I have an understanding that Ireland has a low take-up of venture capital compared to other countries as a form of funding for business. Is this the case? What levels of growth have been experienced over recent years because of the crash in banking funding? I imagine there has been some reawakening in venture capital terms. How can this be increased? What is the gender difference with regard to knowledge levels and experience in the area of venture capital and capital markets?

On the question of female participation in entrepreneurship a mix of issues have been identified as contributing to difficulties such as issues relating to education and STEM.

Some have related to role models, which have been mentioned here today, and some have been with regard to family friendly entrepreneur supports. People who have appeared before the committee have mentioned the lack of child care and difficulties with child care as a significant element. Does discrimination play a role in certain situations with regard to female entrepreneurship today, be that with respect to access to finance or in any other engagement an entrepreneur would have? Of all the issues we have discussed, what is the biggest issue and what can be done to resolve it?

Chairman

The first questions were addressed to Bord Bia.

Ms Tara McCarthy

With regard to our client base, every company that manufactures in the Republic of Ireland is a client base of Bord Bia. Whether it is foreign direct investment or indigenously owned is irrelevant to us. What we require is that it is manufacturing here or is working with product that is manufactured here, so if it outsources its production to another manufacturer in Ireland, we will also treat them as a separate client.

We work in partnership with Enterprise Ireland. We do not have the high potential start-up remit within that space, but when we created Food Works it was to support Enterprise Ireland to create a better flow through of high potential start-ups in food. When we looked at that area in 2010 our figures showed that there were approximately 100 high potential start-ups coming through every year, be that in medical, pharmacy or technology, but there were only two or three coming from the food industry. We felt that was challenging because food is our largest indigenous industry. While traditionally we work with every company on a needs basis, we created a programme specifically for new start-ups under the working title of Food Works. That is where we gather the intensive programme of help for that. However, Enterprise Ireland will work with other high potential start-ups outside of Food Works.

Regarding jobs, we do not measure jobs, only exports. Enterprise Ireland measures the jobs and we would not seek duplication with it. It has a remit in that area while ours is very much directed at looking for exports from Ireland. We do that through working with the client companies and also with the Central Statistics Office, CSO, to measure where we are going, and that will influence where we put our offices, where we have our spaces and where we have our services focused. The Deputy will have seen from our strategy that we have a very strong remit both in exports and also in ensuring we have a vibrant home market. As far as we are concerned, a vibrant home market is an essential feed into getting an export orientated industry as well.

Ms Colette Twomey

On the question about the multiples, the situation is that they are really competing with each other. Their remit is to give their customers the best value they can. We are in the very lucky position that we do not do an own brand, it is just the Clonakilty brand. My colleagues who are producing an own brand are in a much more competitive situation. The multiples are the big players and they squeeze on price so it is very competitive, to the point where some smaller or inefficient companies are being squeezed out. However, that is just the business in which we are involved.

Deputy Peadar Tóibín

I have a supplementary question for Ms Twomey. We are currently discussing the Transatlantic Trade and Investment Partnership, TTIP. She is not exporting to the United States, and it appears that TTIP could offer a valuable opportunity for her given the Irish diaspora in the US. Is there a reason for that? Are there regulatory reasons or is it just not part of her strategy?

Ms Colette Twomey

We would hope to in the future. The situation with Australia is that we could not export directly to Australia, so we partnered with a small manufacturer there. We can send our black pudding spice out there and we have a small operation serving the expat community initially. We have only been in operation for 12 months. That was a type of pilot scheme for us and we hope to roll it out, and likewise in the United States. Hopefully, in the meantime, the legislation will be available so we will be able to export into the United States. With the new plant we are building in Clonakilty we will have the set up to be able to do that.

Ms Tara McCarthy

I wish to add a point on the question about the relationship with multiples. They can be very challenging. What we are trying to do with all of the programmes I listed is to work in partnership with retailers. What often drives the challenge is when there is very little growth in a market and when the only differential is price. Then the discussion becomes very one dimensional. What we are trying to do is enhance innovation and create differentiators in the market. That gives the Irish supply base a much stronger negotiating power because it is now able to move the conversation to the consumer needs that it is addressing. That statistic I shared with the committee, that the Irish consumer wishes to buy Irish local products, is the reason we have been able to create programmes to help the retailer address that issue by having more Irish products on their shelves. It is a consumer orientated message it is responding to, rather than just a one dimensional price aspect. That is an important element.

Chairman

There were some questions for Kernel Capital.

Ms Denise Sidhu

Deputy Tóibín asked about the take up of VC as a form of funding and the levels of growth over the last number of years. Ireland has a very strong VC presence, with active fund managers. Bank of Ireland, which is a cornerstone investor of Kernel Capital, has invested more in Irish VC since 2000 than any other Irish bank. As part of the recapitalisation programme for the banks, a number of seed and early stage funds were set up to stimulate entrepreneurship in Ireland. These have been very successful funds. They have been almost fully utilised. Many of the portfolio companies over those funds are now ready to scale and grow and receive growth funding in their series A funds. We believe it to be a very active, vibrant market.

Deputy Peadar Tóibín

Comparatively, does Ms Sidhu believe Ireland has a high proportion of VC compared to other similar economies?

Ms Denise Sidhu

Yes we believe so, for the environment and nation we are.

Ms Orla Rimmington

I concur with my colleague. What came out of the recapitalisation of the banks was a number of seed and early stage programmes. Many of those companies have received the maximum level of funding under those programmes so there is a need to look at the growth element now as we move forward. In Kernel Capital we provide a very broad continuum of funding, from €100,000 investments up to €5 million, so we have it covered, but there is definitely a need to look at that area for the future because we need more companies to scale and grow internationally. They will need series A investment for that.

Deputy Peadar Tóibín

I asked a couple of questions about the challenges.

Ms Jayne Brady

Regarding females in STEM, it starts very early. No female unconsciously decides to go into a career in engineering; it is a conscious decision. Creating the link between females and role models at an early stage and the options that are open to them is key in that. At present, 25% are coming out of schools with backgrounds in science and technology but it is important to give options to children at an early stage to open up those opportunities to them.

Another key aspect for me, as a female engineer and a mother of three young children, is having family friendly policies for all of the family, both husbands and wives. This is not just a female debate but about allowing it to be normal for husbands to participate equally in the child care arrangements.

Senator Mary M. White

Yes.

Ms Jayne Brady

My work as a full-time venture capitalist is only possible through systems that allow both of us to share those responsibilities. It is not just a burden of putting schemes in place to support the female but supporting schemes to support the family, that is, the children, the husband and the wife.

Ms Orla Rimmington

Regarding discrimination, we do not see that in Ireland. We do not feel there is a bias towards men in VC. Unfortunately, however, we do not see enough women in technology, and that is our key focus. We invest in ICT companies with a particular focus on engineering, and we are just not seeing enough in that. Our job as a VC is to seek the best opportunities, the best teams and ensure they are backed at an early stage.

Unfortunately we just are not seeing the level of companies coming forward. Typically, when we have made investments in companies led by female CEOs, we have initiated those funding discussions, so perhaps they have not thought about approaching venture capital investors. When they do come to us, it is typically on the lower end in terms of investment; they are not looking for series A investment to scale their businesses.

Deputy Anthony Lawlor

I have noticed Bord Bia’s involvement with LEOs. We find that LEOs are very strapped for funding. Does Bord Bia support LEOs in this programme with respect to funding? Mentoring of small companies and start-ups is a crucial area. Sometimes the LEOs themselves do not have the expertise, particularly in the food sector. Is Bord Bia actively supporting start-ups through the use of mentoring?

I always welcome the fact that sources of finance other than banks are available to start-ups. Many start-ups have difficulty in accessing finance because they have no track history. The venture capital side of things is, therefore, interesting. The percentage of women being supported was not mentioned in the Kernel Capital presentation and I would appreciate that information. What other sources of finance can start-ups access? It is one question we are asking small businesses. We are trying to explain to them what is available, but they also like to hear it directly from companies that are involved in that.

Is it Ms Bentley who is wearing an Origin Green badge? Could she send badges around to all the Deputies?

Ms Eileen Bentley

Certainly.

Deputy Anthony Lawlor

I have met with Bord Bia previously when we had difficulty with the price of beef for farmers. It is something I firmly believe in as a marketing tool, like Kerrygold. They are symbols we could be using.

Ms Orla Rimmington

We have five female CEOs in our portfolio at the moment, so the percentage of women we are supporting is around 6%, which is the industry average. That would probably be high in Ireland. The good news is that, as I said in the presentation, Enterprise Ireland is making great strides with regard to female entrepreneurship. The emphasis that has been put on this issue is building momentum and we just need to keep that up. From speaking with Enterprise Ireland, I know that 84% of the women it funded last year were female tech entrepreneurs. That is really positive.

Deputy Anthony Lawlor

Does Ms Rimmington think Kernel Capital is risk-averse in respect of women?

Ms Orla Rimmington

No. We are focused on technology-----

Deputy Anthony Lawlor

The percentage of female CEOs, 6%, is very low.

Ms Orla Rimmington

We are not seeing enough women in technology investment. We are primarily seeing consumer and food at the moment. We are saying, as Ms Brady said, that if we could see more women going into STEM at an earlier stage, the number of female tech entrepreneurs would increase. We just are not seeing them, which is why we are not funding them. In the case of three of the five entrepreneurs we have funded, we initiated those funding talks. They are not coming to us. They are not knocking down our doors. We are inundated with queries on funding, but unfortunately the percentage of women is very low. We are a big advocate for female entrepreneurship. Three of the six partners are female. That is why we are here, to bring that message across. We are hopeful for the future, given that such a high percentage of Enterprise Ireland investments this year involve female entrepreneurs. That is very strong. Many of them are at the low stage, with the competitive start fund, but we are hoping that they will, over the next year or so, be ready for series A investment.

Ms Tara McCarthy

I will give some history about our relationship with the local enterprise offices. We commenced a change in our relationship with them in 2012, with the establishment of a memorandum of understanding between our two organisations. One of the key changes happening at that time was that we were getting a huge number of start-ups in the food industry and it was a challenge for us to answer all the queries that were coming through to us. We were also conscious that the county enterprise boards were in a similar position and that there was a significant danger that we were duplicating each other's efforts. If I gave one answer, the county enterprise board might give a different one, and lines of communication were not as fluid as they could and should be. We reached out to establish a memorandum of understanding and to ensure that any food company was getting the right type of help at a local level, rather than having to come to Dublin, where we are based. We worked with the local enterprise offices in this journey. We brought every local enterprise office to Bord Bia to train them in food because, as the Deputy commented, we were conscious that there were varying degrees of exposure to food. The number of companies that would previously have come to a local enterprise office varied, so they did not all have a great degree of experience. Some counties would have had a very strong level of interest, while others might not have dealt with such queries. We brought everyone in to train them on how best to use Bord Bia in the first instance, rather than using consultants or external resources. Once that journey was finished, we designed a programme for them to deliver so that, again, they did not have to use consultants for it. It also had the benefit that one got the same course and content no matter what county one was in. We also facilitated the identification of suitable mentors who were strong in food and had experience in that area, rather than just being strong in the area of start-up businesses.

Financially, we did not contribute to the programme. What we were doing was very much the content element, the contacts and the design of the programme. We funded all of that, but the enterprise offices themselves, which operate on an individual county basis, rather than a centrally-funded basis, funded their own programmes. We also reached out to SuperValu because we felt that would add more value. When we were talking to our entrepreneurs, we found that when the State says something to them it is one thing, but when the retailer and potential customer suggests a change to their packaging or flavours, that change happens much more quickly, as a commercial interest is at stake. The benefits of that programme were huge.

That is a long answer to the Deputy’s question on how we funded it. We fully agree with him that mentoring is very important in the food industry. That is why we were looking for the quality from our Food Academy start-up programme that we received at the very beginning. In all our programmes, whether the Tesco or the Food Works programme, we handpick the mentors we use to ensure they have relevant, recent and robust experience to share. That is one of the key differentiators we use in that selection process. Ms Twomey might add something to that.

Ms Colette Twomey

Bord Bia held our hand throughout the process. We were given a mentor and when we went to look at the broader UK market the first thing we did was to meet our mentor over there. We did an on-the-ground survey. People in the UK did not know where Clonakilty was. They did not know it was a place. White pudding was alien to them. Bord Bia helped us with our packaging. We boxed our product, put the story on the packaging, and even included a guide to what thickness to cut the pudding. These were all practical suggestions about everyday things that we took for granted, but our mentor was an ex-Sainsbury buyer and we could ring him day or night. Likewise for the fellowship programme in Australia, Bord Bia was just superb.

Senator Feargal Quinn

It is a joy to hear from all the witnesses and to hear the success stories. I met Ms Twomey and her husband, Lord have mercy on him, only a few years after she started in 1976. What a smashing job she has done. Innovation is so important, certainly in the food business, which is the one I know best. What Bord Bia is and has been doing is encouraging innovation. In the case of Clonakilty, there is a success story. By the way, today’s edition of The Irish Times also gave Clonakilty great marks for its product.

What are the obstacles? What are the difficulties, particularly in regard to competitiveness? How does one manage to become more competitive, whether the business is engineering, food or whatever? If an Irish company was the same as every other company, then Ms Twomey would not have had a chance when she knocked on the doors of those stores in Britain. She gave an interesting answer to the question posed by Deputy Tóibín. She said her company did not get into a private label but maintained an individual own-brand one. That is an important element which can succeed very well. My questions on innovation, obstacles to exports and the challenges in terms of competitiveness apply to all of the witnesses.

I found the presentations made by Ms Rimmington, Ms Brady and Ms Sidhu very interesting. I was on the board of the Food Marketing Institute in America for 20 years. I am also a former chairman of the Consumer Goods Forum, a worldwide organisation based in Paris, and the Brussels-based EuroCommerce. It was interesting to find very successful female chief executives, although there were not many, in companies such as PepsiCo. These people did not get their appointment because they were women. They were appointed because they were better than all of the other applicants. I do not think these particular companies, which have had such success, had positive discrimination. I think these women had to earn their appointments against all the other contenders.

I want to know the following. What are the difficulties that women face in trying to get to the top? Are they expected to be double-jobbers? Are they expected to look after their homes and families as well as being entrepreneurs and success stories? If so, is there anything that the State or society as a whole can do to overcome that scenario? If we lose out on very talented and competent women we will lose 50% of the available market. We as a society must do something about the matter, but probably not by law or anything like that. There is probably something else that we can do. Have the witnesses any suggestions in that area?

Ms Jayne Brady

I shall respond to the initial question on obstacles to commercial success. We have a portfolio of 80 companies. We have some great technology, universities and institutions here in Ireland. However, we have found that one of the largest challenges for them is the commercialisation of technology. Nothing is as important as technology because it helps to deliver business value and makes sales. There is great focus on technology and innovation, and we have great skills in that space. Unfortunately, there is no focus on international sales, which is a skill we need to develop as a country. In July 2013 we wrote an open letter to the Minister for Education and Skills discussing the need for this skill. We also encouraged a renewed focus on looking at the subject in education. There are a few exceptions to the trend, such as the Dublin Institute of Technology. However, we need to focus on education because the fulfilment of innovation and technology is the commercialisation of that piece. The economy needs to increase core skills to enable us to do so.

Ms Orla Rimmington

One needs to build something that the market wants. One then needs to be able to sell that into the market, and the market will reward whoever does so. It can be difficult when one has an excellent technology. Millions of euro could have been spent on a technology but there could be a problem selling it, which is an issue we need to address. Earlier we talked about STEM, but we are also talking about sales, about CEOs with strong domain expertise who know the market and how to sell into it. Those are the key ingredients necessary.

Ms Denise Sidhu

We have often seen the following. A number of our portfolio companies have a strong technology but they need to validate their technology by getting a reference customer. Who takes the first punch in a startup technology? For example, we have a portfolio company in data storage which we believe to be world class. In order to test the system to its full capacity, one needs an organisation the size of eBay. How does the portfolio company get its first validation customer? For us, it would be helpful if the State-funded companies could act as Government procurement in order to get a reference customer and secure validation. Such an initiative would go a long way to help those companies.

Ms Tara McCarthy

Senator Quinn has asked a very complex question. The food industry is an exciting industry, as he has acknowledged, and it has experienced phenomenal growth over the past five years. There are obstacles and challenges in the food industry, but every single industry experiences them. Let us look at the food and drinks industry. We have a small home market, which means one must export at a very early stage compared with an equivalent UK or French supplier. That means an Irish company must get into the issues faced by much larger competitors earlier. That is one of the obstacles regularly faced by companies.

Remaining consumer-relevant is also a challenge. This is the fast-moving consumer goods industry, and one must keep the consumer at the heart of one's business decision-making at all times. If one is a small business, having the Irish consumer at one's heart is not going to be very good if one wants to export to France. Therefore, companies must ensure they remain nimble to deal with a complex export piece. Ms Twomey mentioned the changes she had to make to her product category, packaging and the way the product was presented. These are all challenges for smaller businesses. It is the constant focus on getting our industry to a value-added stage rather than a commodity play. We have created huge scale in the commodities, as one can see from the excitement happening tomorrow with the lifting of the dairy quota. One wants to make sure, where we get a great opportunity, that investment is returned to farmers, but one can only do so if one is in the value-added piece.

The final challenge in terms of food is attracting talent to the industry. In some ways the recession has been very good to the food industry, because a huge number of people have come back into the industry again. Over the past five years, everything from our fellowship programme to agricultural colleges have been full, which means that food has been re-established in the career path of many. We must continuously be aware that the food industry will only be as good as the talent it attracts. We need to make sure we have a very talent-filled industry if we want to keep the growth trajectory going.

Senator Feargal Quinn

One thing we did not mention in regard to exports in particular is the frustrating inability of most Irish people to speak another language. There have been some great success stories and An Bord Bia have great representatives. My wife and I have five children and we sent them all to school in France for a short term when they were about 13 years of age. It is a dangerous thing to do, because my two girls fell in love with Frenchmen and are now married to them. My daughter Gilliane lives in France. She has a chain of smoothie bars around France, which is not an easy job. It is a real reminder to us that if we are going to encourage exports we must move learning a foreign language higher up on the agenda of everything we do in education.

Ms Eileen Bentley

We reviewed all of our services to see the male-female breakdown in take-up, and discovered it was pretty much 50:50 across the board. The one area that has a higher participation by women is the fellowship programme. It is our international export programme, in which we place graduates into export markets. To return to the last point made by the Senator, we were able to place those women because women and girls have a higher rate of language skills. About 65% of our participants are female, and traditionally women have stronger language skills.

Deputy Anthony Lawlor

Tomorrow is the first day of April.

Deputy Peadar Tóibín

April Fools' day.

Deputy Anthony Lawlor

It is the first day of the removal of the dairy quotas. A lot of people are probably embracing it. Does Bord Bia see fears for the future? In New Zealand, 25% of the economy is based on the dairy industry. We have had a problem with that over the years regarding the construction side of things. I went in to study agriculture in 1976 with all my hopes and aspirations, and came out in 1981 when there was nothing and had to leave the country as a result. Is there a fear that something like this might happen through the expansion in dairy? What are the witnesses' own viewpoints on that?

Ms Tara McCarthy

We are very excited about the possibilities for the dairy industry, but very conscious of the volatility that is part of this new journey. It is important to stress right the way through this that we need to be focused on adding value and not be sucked into a commodity game. Origin Green will be one of the fundamentals that helps to differentiate Ireland from New Zealand, all our European competitors and the US, and this will protect us going forward. In December 2013 we introduced a dairy quality assurance scheme. We have had guests such as Starbucks coming to Ireland specifically because they have the reassurance of this scheme and because Ireland plays as a united front rather than having Irish interests compete with each other. There are many aspects to this, and we would need a huge crystal ball to forecast where dairy is going to go and whether it will be influenced by the consumption patterns of the Russians or the Chinese. The overall dynamic is hugely positive, with increased consumption of dairy. The key piece is that we remain part of the value-added element of that trading and are not just at the lower end. Looking at the journey to date, although we have just 1% of global trade in dairy, we actually have 10% of the market for infant formula. That shows we are playing to our strengths in operating in the absolute top end of that market. With that come huge responsibilities regarding food security, sustainability and the brand protection for customers. We have huge responsibilities but are playing for huge opportunities.

Senator Mary M. White

I thank my colleagues. I knew Senator Quinn would be very impressed, particularly with the venture capitalist ladies, because of the field he is in now, considering all the opportunities he gave to people such as Ms Twomey and ourselves at Lir Chocolates. The cross-party document that we are producing aims to encourage more women entrepreneurs. Our mantra will be that we are not utilising half the population - we are failing to utilise the attributes of women. Our committee is driving for opportunities for women to participate more. It was in the Action Plan for Jobs. The Minister felt it was an area we should deal with as a committee.

I would like to predict that Ms McCarthy will be the future chief executive of Bord Bia. I met her first when I was honoured to be on the board of Bord Bia. Tara made her presentation of the work she was doing in France, and I instantly said to myself, "This is a four star general if ever there was one." She has risen to the top now and it is my great pleasure to congratulate her. My friend Ms Maeve Bracken was telling me this morning how Ms Twomey was on a stand promoting her products - I hope she does not mind me saying so - and she went behind the stand to feed the baby as well, so fair dues to her. Her pudding is just a favourite with everybody; it is tremendous. I knew her husband myself and am very sorry that he died. They were a great partnership and Ms Twomey is a wonderful woman.

What Ms Bentley was saying about the languages is important. The three ladies from Kernel Capital are something else, and their presentations were outstanding. People are not aware of the leadership of women in the venture capital area. We need women in business and women entrepreneurs and we have it here today. Hopefully, under the chairmanship of Deputy Marcella Corcoran Kennedy, we will do a good document. I thank the witnesses. It was pure brilliant, actually.

Chairman

I thank the witnesses sincerely for coming here this afternoon. As Senator White mentioned, she is the rapporteur for our report and we will be incorporating the witnesses' recommendations and the content of their presentations in the final version. When we launch it we will be inviting them all and they will be most welcome to join us and peruse it.

On Tuesday, 14 April, we will be meeting with Connect Ireland and engaging with the chairman designate of the low pay commission. We will also be discussing the report on low pay and the minimum wage.

The joint committee adjourned at 3.15 p.m. until 1.30 p.m. on Tuesday, 14 April 2015.