JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION díospóireacht -
Wednesday, 22 Feb 2012

Promoting Entrepreneurship: Discussion with Enterprise Ireland and IDA Ireland

Vice Chairman

The joint committee will now discuss ways of promoting entrepreneurship. I welcome the following witnesses from the IDA: Mr. Barry O'Leary, CEO; Mr. John O'Brien, divisional manager of corporate services, planning and financial management; and Mr. Brendan McDonagh, planning, EU and tax. I also wish to welcome the following witnesses from Enterprise Ireland: Mr. Frank Ryan, CEO; Mr. Greg Treston, divisional manager, scaling and high potential start-ups; and Mr. Tom Hayes, divisional manager, entrepreneurship and regions.

Members of the joint committee are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. By virtue of section 17(2) (l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they 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. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

With that in mind, I now call on Mr. Frank Ryan to make his presentation.

Mr. Frank Ryan

I wish to thank the Vice Chairman and members for the opportunity to attend the joint committee this morning and contribute to the committee's work. I also thank the Vice Chairman for having introduced my colleagues. With his permission I will take the committee through some of the key points of my written submission. The Minister for Jobs, Enterprise and Innovation recently published the Action Plan for Jobs 2012. I welcome the publication of the plan and, in particular, its emphasis on the role that Irish companies and entrepreneurs from Ireland and abroad can play in bringing about economic renewal. Enterprise Ireland works very closely with our sister agencies and relevant bodies to deliver on the Government's objectives for Irish industry.

Above all else, Enterprise Ireland's objective is to grow jobs in Irish companies. Our job is to help companies create jobs. Enterprise Ireland client companies employ more than 141,000 people in the Irish economy, supporting direct and indirect employment which is estimated to total more than 300,000 jobs. I draw the committee's attention to the fact that Enterprise Ireland client companies have a similar economic impact in the country to foreign-owned companies here, in terms of the number of jobs supported and also the estimated €19 billion in annual expenditure in the economy.

In order for companies to grow their employment, they need to grow their sales. Export growth provides a sustainable route for companies to grow. We work in partnership with Irish enterprises providing a cohesive set of supports to help them start, grow, innovate, and win export sales on global markets driving sustainable economic growth, regional development and job creation. A major component of Enterprise Ireland's responsibility is to deliver maximum economic return from the Irish research system. Our supports for entrepreneurship and start-ups sit within this framework.

When it comes to promoting prosperity through job creation, the role of new enterprises can hardly be overstated. New enterprises are a critical source of new jobs. In addition, entrepreneurship activity provides the Irish economy with increased levels of innovation in the market place, increased productivity, and cost efficiency. Enterprise Ireland's challenge is to ensure we can support entrepreneurs to turn good ideas into great businesses. Opportunities for entrepreneurship range from locally focused micro-businesses to highly scalable internationally focused companies. All types of entrepreneurship are critical to the health of the economy. Since the early 1990s, thousands of jobs have been created by Enterprise Ireland supported start-up companies. It has supported more than 800 high potential start-ups since 2000. Those that are still in existence employ around 7,000 people. In addition, well in excess of 5,000 jobs were created in start-up companies that have since been acquired by multinationals

Ireland's rate of entrepreneurial activity is high compared with other European countries, ranking second for early stage entrepreneurship and fourth for established entrepreneurs. Ireland's high rate of established entrepreneurs, 8.6%, is on a par with Australia, 8.5%, and slightly ahead of the US, 7.7%. The 2010Global Entrepreneurship Monitor found that Irish entrepreneurs are the most innovative of advanced economies, offering innovative and novel products and services to global consumers.

Enterprise Ireland's entrepreneurship and start-up supports range from encouraging entrepreneurship in third level students and supporting community enterprise centres which provide business space for local micro-enterprise through to stimulating the seed fund industry in Ireland and directly investing in high potential start-up companies. Our regional offices and networks with banks, chambers of commerce, solicitors, accountants, colleges, local industry and business angels throughout Ireland provide a pipeline of early stage entrepreneur inquiries. This ensures that Enterprise Ireland is well-positioned to identify those entrepreneurs with the capability to grow exports and employment in the economy.

In 2011, Enterprise Ireland supported 93 new high potential start-up projects that are expected to create in excess of 1,500 jobs in the next three years. These are ambitious companies, with highly innovative products and business development strategies that will enable them to carve out a place in global markets, driving jobs, growth and export sales.

Enterprise Ireland actively works to build a pipeline of high potential start-ups from a wide range of sources including from third level research, internationally mobile entrepreneurs, and existing companies and serial entrepreneurs. Of the 93 high potential start-ups supported in 2011, ten were international entrepreneurs and ten came directly from State-funded research.

In line with the Government's Action Plan for Jobs, Enterprise Ireland is committed to delivering support to 95 new high potential start-ups in 2012 including an increase of 50% in the number of overseas entrepreneurs supported, to 15, and an increase of 40% in the number of high potential start-ups arising as spin-outs from research to 14. We also have a target to support five high potential start-ups with female promoters. Our efforts if successful will see us supporting the greatest number of high potential start-up companies ever in one year. By 2013 Enterprise Ireland aims to support 100 high potential start-ups.

In order to ensure a high quality flow of high potential start-ups, Enterprise Ireland actively promotes Ireland as an attractive location for internationally mobile start-ups to establish a business. The new dedicated €10 million international start-up fund targeting investor ready overseas entrepreneurs, the recently announced start-up entrepreneur programme visa initiative, and Enterprise Ireland's start-up ambassadors in international markets are all part of a strategy to promote Ireland's offering and encourage overseas entrepreneurs to locate start-up businesses in Ireland.

Spin-outs from State-funded research are another important and growing contributor to the flow of high potential start-ups, ten in 2011, a target of 14 in 2012. Enterprise Ireland has taken the lead in driving the commercial return from research by building the technology transfer infrastructure within the universities, establishing commercially relevant research centres in institutes of technology, and putting in place campus incubation facilities to support new technology companies in their formative years. In addition, Enterprise Ireland staff have made very considerable efforts to drive changes in culture and ensure that collaboration happens. Enterprise Ireland's approach represents a commercialisation "end-to-end" solution facilitating the creation of new spin-out companies and the creation and transfer of industrially relevant technology to Irish companies in order that they can grow sales and jobs. These supports and systems facilitated the transfer of more than 100 pieces of commercially valuable technology to industry in 2011 and the creation of 30 new companies. The system is expected to create a similar number of new spin-out companies in 2012.

There are 22 business incubation centres on higher education campuses throughout Ireland. These centres host about 300 companies that employ more than 1,300 people. The main aims of the campus incubation programme are to foster the development and expansion of campus company activity, support the commercialisation of research carried out in the third level sector, and promote balanced regional development.

At the other end of the spectrum, Enterprise Ireland's innovation vouchers are designed to build links between Ireland's public research providers and small businesses, creating a cultural shift in the small business community's approach to innovation. In 2011, Enterprise Ireland awarded more than 700 €5,000 vouchers to small and medium-sized enterprises in order to help them undertake a small research project with the help of an Irish university or institute of technology.

Closures and downsizings are devastating for employees and the region and locality involved. Working in partnership with IDA Ireland, county enterprise boards, and SOLAS, Enterprise Ireland has taken a co-ordinated and cohesive approach to the downsizing and closure of indigenous and multinational industries. For example, Eistec, a Waterford-based high potential start-up company founded by former TalkTalk Telecom employees began providing consumer contact centre services in 2011. A recent substantial Enterprise Ireland investment will help to secure 250 new jobs by mid-2012 as part of a major expansion at the company's new facility at the Cleaboy business park in Waterford.

A competitive start fund launched in 2011 is focused on accelerating the growth of start-up companies by providing critical early stage funding to young companies to test the market for their products and services and progress their business plans. In 2011, Enterprise Ireland supported 55 emerging start-up companies under the fund, building a strong pipeline of companies that have the potential to create sustainable jobs. We have a target to support 60 projects under the fund in 2012.

A €200,000 competitive feasibility fund was piloted in January 2012 aimed at stimulating start-ups and creating jobs in the south east. The fund is one element of Enterprise Ireland's response to tackling the persistently higher rates of unemployment that the region faces.

Enterprise Ireland works intensively with high potential start-ups to drive growth. Our dedicated accelerated growth team for high potential start-ups is focused on 100 companies that have the potential to scale significantly and achieve rapid international growth. The Internet growth acceleration programme is an intensive management development programme aimed exclusively at high potential Internet companies in the Irish Internet industry. Enterprise Ireland's financial supports directly assist entrepreneurs and leverage critical matching funding from banks and investors to ensure that start-ups have access to the capital they require to execute ambitious growth strategies. The seed and venture capital sector is an absolutely vital element of the funding environment supporting the creation of jobs and start-ups in Ireland. By the beginning of 2011, €124 million was under management by four seed funds. This is a fourfold increase on the amount of seed funding available in the past three years. More than 40 investments were made during 2011 and it is expected that a similar number of investments will be made in 2012.

Business angels are another key source of seed and start-up capital. Last year saw record levels of business angel investment in Ireland with investments in approximately 33 companies worth €10 million, double 2010 levels.

In addition to the assistance I have outlined, Enterprise Ireland has put in place a broad system of supports including workshops, seminars and training courses for entrepreneurs across Ireland which are designed to aid the development of business plans, and assist companies in getting off the ground. These include IdeaGen which brings researchers and prospective entrepreneurs together to explore collaborative opportunities; Enterprise START workshops which help prospective entrepreneurs to develop a business plan; and the enterprise platform programme which supports entrepreneurs to establish start-up businesses across Ireland.

On average, 180 participants enrol annually on the enterprise platform programme with 70 to 80 start-up businesses emerging, approximately 15 of which are high potential start-ups. Enterprise Ireland's network of more than 290 mentors help to build capability and accelerate growth in early stage enterprises while companies that are moving into new markets can participate on first flight programmes and retain the services of a business accelerator to support their expansion and development into an export market.

Sowing the seeds of entrepreneurship and exposing students to the fundamentals of business is a key part of promoting an entrepreneurial culture. Enterprise Ireland manages the Think Outside the Box Awards at third level. The priority is to get students thinking about starting their own business as a viable career option once they graduate.

County and city enterprise boards offer a first port of call for prospective start-ups and play a vital role in entrepreneurship stimulation in local communities. In line with the Government's Action Plan for Jobs, Enterprise Ireland will work with the county and city enterprise boards, the Department of Jobs, Enterprise and Innovation and local authorities to establish a new micro enterprise and small business unit and a network of local enterprise offices.

The availability of business space is a fundamental infrastructural requirement for businesses to establish and grow in any location. Community enterprise centres provide this space helping the development of entrepreneurship in urban and rural locations. The 110 community enterprise centres across Ireland accommodate approximately 875 companies that have a combined employment of approximately 5,000 people. A new community enterprise centre development programme of €2 million is targeted at maintaining or establishing a strong business development function manager in these centres.

Entrepreneurship is a key engine of growth for the economy. The entrepreneurs of today generate the jobs, sales, and exports of the future. Enterprise Ireland works with other agencies and bodies to support entrepreneurs from the initial seed idea through to investing financially in high potential start-ups. Despite the challenging domestic and international economic environment, ambitious entrepreneurs with highly innovative products and business development strategies are continuing to build their presence in export markets successfully. Enterprise Ireland works with them to achieve this and generate sustainable growth for the economy.

Mr. Barry O’Leary

I thank the Vice Chairman and members for the opportunity to address the committee on IDA Ireland's role in job creation. IDA Ireland is responsible for attracting new foreign direct investment, FDI, to Ireland and encouraging the transformation and expansion of the existing client base.

FDI companies account for approximately €115 billion of exports in the economy, two thirds of all corporation tax and spend on research and development and a €19 billion spend, of which €7 billion is payroll. In the areas that Ireland chooses to play in to attract FDI, we tend to get a high market share. In the technology and information and communications technology sector, we have eight of the top ten leading companies in the world, in pharmaceuticals, nine of the top ten and in medical devices, 17 of the top 25, as well as half of the world's leading financial institutions. In the more recent areas, we now have attracted the top ten global Internet players as well as three of the top five games companies. The history has been to go for high-market share.

However, it is easy to relate to the big name brands such as Intel, Apple, HP, Johnson and Johnson or Pfizer. Increasingly, we are targeting mid-tier companies which typically have revenues of between $100 million and $750 million. In January 2010, we started a new programme to target emerging businesses, predominantly from the United States. These are companies with fewer than 200 employees and revenues of less than €40 million, if any at all. They would have been either through either one or two rounds of private equity or ensured capital funding. So far we have attracted 35 of those companies in the first two years of the programme.

In 2011 there was a strong flow of FDI into Ireland, the most positive in over ten years. More than 13,000 new jobs were created in the economy directly by multinationals with more than 148 investments backed of which 61 were brand new companies with no previous involvement in Ireland. It was also the best net increase in employment in over ten years.

The most productive sectors are technology and ICT, life sciences, which is the combined pharmaceutical, biopharmaceutical and medical devices, international financial services, digital and social media and professional and international services. The strong flow of 2011 continued in the first two months of 2012. From 1 January to date, we have had 12 project announcements. Yesterday, members will have seen the coverage of PayPal setting up operations in Dundalk to employ 1,000 people. Other notable projects include Allergan's decision to invest $350 million in its Westport plant which will create an additional 200 jobs and the added benefit of 300 people involved in the construction of the new facility. There is also Abbott's €120 million investment in Sligo which will lead to 175 jobs directly and 200 indirect construction jobs. Last week, MasterCard announced it would add 130 technology professionals to its operation while HP would add 280 people to its Leixlip and Galway facilities.

Having more than 1,000 companies in our portfolio, our largest challenge is to ensure companies constantly transform their operations. If they do not do that, they will not be long in Ireland. Apart from attracting new businesses, we have a suite of supports to drive the transformation agenda with skills and technology uplifts, process development support, research and development and energy efficiency supports. We play a role in assisting companies to deal with cost pressures and the need to deliver productivity improvements. That is a strong part, and as companies come under more cost pressure and the need to deliver productivity improvements, we play a role in that. In terms of outlook in the business - the pipeline momentum in 2012 - there is a good immediate pipeline, and by immediate I mean in the next three to four months, in the technology sector, the life sciences, financial services and digital media. However, many of those projects have a strong demand for people with science, technology, engineering, maths and multilingual skills. That is an important part of this country's offering and needs to remain so.

We are conscious of the slow-down in the European market with many countries in Europe showing flat growth, if any growth at all. As many of the clients who come to this country are servicing predominantly the European market, it is something that is of concern. However, there is still good growth in the sectors in which this country is strong such as technology and life sciences. In order to meet the targets set out in our strategy we must have more than 100 projects in play. That means that we have identified projects, and that we are in discussions with companies but there are other competing locations around the world. At this time of the year it is very much a case of generation and back-filling as the pipeline is delivered.

On the entrepreneurial side, while we deal with established companies in the main, there is no doubt that there are some excellent examples in some of the spin-offs from the management teams in the multinational community where Enterprise Ireland has backed a number of such managers, in particular, in the software and the medical devices area. There are some fine international players backed by Enterprise Ireland now. We also partner Enterprise Ireland in the programme for international entrepreneurs. A number of emerging companies are serial entrepreneurs. For example, Engine Yard, which recently came to Dublin, was an entrepreneur that has been through three companies, two of which had already invested in this country years ago.

Deputy Willie O’Dea

I thank the witnesses for their presentations. Mr. O'Leary mentioned that the figure for exports arising from foreign direct investment, FDI, was €115 billion. What is the equivalent figure for the indigenous sector?

Mr. Frank Ryan

It is €15 billion.

Deputy Willie O’Dea

I wish to pursue the issue of assisting the indigenous sector in the export market, in particular SMEs. Reference was made to the business accelerator plan and the first flight programme. The witnesses are aware of the level of criticism coming from the SME sector in particular about a lack of support to help them get into the export market. It was indicated that an export unit is being set up in Enterprise Ireland. That was mentioned in the Government's jobs plan. Could the witnesses indicate when the setting up of the unit will be completed?

The traditional problem is that companies employing up to ten people are supported by county enterprise boards and companies employing more than 50 people can turn to Enterprise Ireland but there is a gap. There appears to be an attempt in the Government's jobs programme to deal with that by reconstructing the county enterprise boards as, more or less, one-stop-shops. When will the process be undertaken and completed? How is it envisaged that it will evolve? Will it require extra staff in the one-stop-shops? It seems obvious to me that it will and that extra funding will be required. Will existing staff have to liaise with Enterprise Ireland at a distance? That does not seem to be a clever way to go forward. What funding is available for the competitive start-up fund?

Mr. Frank Ryan

I thank Deputy O'Dea for his questions. We have been working on the new exporters division for several months. We expect to go public with it before St. Patrick's Day. There is a rapid implementation of that. We recognise the need for the services and also that it will enable us to reach out to many companies that heretofore would not perhaps have seen Enterprise Ireland as a natural ally in seeking to expand their business.

County enterprise boards, as they are currently constructed, are legal entities in their own right and therefore legislation will be required before the current situation comes to an end. We cannot move to the new system until the legislation is passed. I will ask my colleague, Mr. Tom Hayes, who is responsible for the regions and entrepreneurship, to address the other issues raised by Deputy O'Dea on the operation of the local enterprise offices. I will deal later with the competitive fund.

Mr. Tom Hayes

We welcome clarity now that the Government has decided to disband the city and county enterprise boards and to move the functions to local authorities. As it stands, it is still business as usual. The staff, supports and city and county enterprise boards are fully funded for 2012. In the coming months we would envisage that the staff currently with the city and county and enterprise boards will move to the local authorities. They will provide a one-stop-shop so that a holistic support will be available within each and every single county to potential entrepreneurs who start a business. That will range from legislation to regulation to then providing the soft business supports in terms of how one prepares a business plan, value proposition and financial projections. That is the kind of support Enterprise Ireland will provide to local authorities.

Deputy Willie O’Dea

I am sorry for cutting across Mr. Hayes. It is obvious that extra staff will be required over and above what is involved with county enterprise boards currently.

Mr. Tom Hayes

We would not envisage that.

Deputy Willie O’Dea

Would Mr. Hayes not envisage that?

Mr. Tom Hayes

The staffing levels will remain the same. Many of the supports are already provided through the local authorities so it is a matter of upskilling those staff. The people who are in county and city enterprise boards are well skilled in terms of challenging entrepreneurs, providing them with advice and signposting them on where to go to develop and support their businesses. Under the service agreements we will be charged with initiating local service agreements with the local councils. We will bring the technology and the support mechanisms we use with early stage companies to enable the individuals that will staff the local authorities to provide that support to early stage companies. What will happen is that they will get a very comprehensive holistic support through the one-stop-shop. For the companies that are emerging there will be a pathway for those with ambition that wish to grow and develop and those companies will migrate to Enterprise Ireland for support under, for instance, our high potential start-up programme.

Mr. Frank Ryan

I will address the competitive start-up fund. That was introduced to do the best we possibly could to ensure that entrepreneurs would have access to money to start up their businesses. My colleague, Mr. Greg Treston, has responsibility for our high potential start-up activities and our scaling activities. He also has responsibility for the competitive start-up fund initiative. I will ask him to comment on it also.

Mr. Greg Treston

The competitive start fund was introduced to deal with the financial gap for very early stage companies before their proposition is at a stage where it can attract private investment. It is effectively an offer for young, first-time entrepreneurs, in particular those involved in technology. We piloted it in the games industry and then we moved it to the other industries. It is an offer of €50,000 of equity against a €5,000 investment by the promoter. It is designed to market test the product. It takes the idea to a stage where it can be put in front of customers on a pilot basis and be tested to see whether it has viability from a customer point of view. The real intention of it is to bridge the gap so that more entrepreneurs can get a project to a stage where they can raise private sector equity finance. We carried out four pilot projects in 2011 and supported 55 companies with €50,000. The target for 2012 is to support 60 companies through competitive calls. Expert panels will be drawn from target sectors to evaluate projects, following which they will be passed to our approval committee.

Deputy Peadar Tóibín

Fáilte róimh anseo. Cuirim fáilte roimh na hoifigigh. Gabhaim comhghairdeas leo as ucht an cur i láthair iontach a rinne siad agus an obair atá déanta acu sa bhliain atá thart. Much of the IDA and Enterprise Ireland's good work has been done with reduced budgets. The budgets of Enterprise Ireland and the county enterprise boards, CEBs, have been decreasing since 2009. Some of the IDA's budget decreased last year.

How many jobs have been gained thanks to both organisations in the past couple of years and how many have been lost? What has been the cost per job? As we are referring to businesses, it might not be possible to supply exact information, but how much money per job is spent on attracting foreign direct investment, FDI, and how does it compare with, for example, Denmark, which is the same size as Ireland?

I have already communicated my next concern, but it is an important one. When administrative offices are set up regionally, the distribution within regions is uneven. For example, the IDA conducted 79 FDI client site visits to County Louth in the past three years but only four to County Meath. If a business cannot see the location or understand the experience therein, it is difficult for it to know what is available. Meath is only one example. In the same period, 20 counties might only have had three or four site visits whereas others received many more. In the past year, County Kildare has received nine times more investment from the IDA than County Meath has. This shows an unevenness within regions and I hope it can be rectified.

In terms of FDI, what are the State's top five competitive advantages and how can they be strengthened?

CEBs find it difficult to get their heads around how their proposed relationship with local authorities will work. Undoubtedly, local authorities do good work in their areas. In my experience, however, they are not enterprise-oriented. Changing this culture will present a serious challenge. Some councils have not granted planning permission to enterprise opportunities, as a result of which jobs have been lost.

The 22 incubation centres were mentioned, but most of them are located in third level institutions. If they could be located in the largest town or city in each county, it would be better. Through the use of hot-desking and so forth, small businesses could bring customers to professional spaces where they could access Internet servers.

I do not want to draw the witnesses into the political domain, but the Action Plan for Jobs 2012 refers to 100,000 jobs to be created in the next while. What is the gross number of jobs that need to be created to achieve that net figure? There was a little bit of confusion on the Government side, in that the Minister of State, Deputy Cannon, stated that 300,000 or 400,000 jobs needed to be created.

It has come to my attention that innovation by-----

Vice Chairman

I apologise, but many members wish to contribute.

Deputy Peadar Tóibín

I understand, but I only have a few more points to make.

Vice Chairman

I ask the Deputy to be as quick as possible.

Deputy Peadar Tóibín

Have innovation vouchers been fully delivered upon by third level institutions?

A number of businesses are in emergency situations, but no emergency response unit appears to be available to them through the Department, Enterprise Ireland or the CEBs. Such a unit could visit a business before the latter is on the edge of collapse, examine its business plan and structure and determine whether they could be altered to save jobs. Other business interests, for example, property, that are dragging down the actual business to which the jobs relate could be ameliorated by Enterprise Ireland.

What is the all-Ireland approach? The IDA and Enterprise Ireland have a network of offices across the planet. Given the cross-Border era we live in, we have received tentative signs of some co-operation with Invest NI. Some businesses from the North have accompanied the IDA and Enterprise Ireland on trade delegations and vice versa. Many savings could be made and much potential could be harvested were there far greater integration and co-operation with enterprise facilities in the North.

Mr. Frank Ryan

At the end of 2011, the net change in employment in Enterprise Ireland's companies was plus six. The total number of jobs created in 2011 was 9,076, but losses amounted to 9,070. Approximately 60% of these losses were directly attributable to the construction sector and related engineering sectors. Enterprise Ireland has almost all of the construction companies, from construction services to construction products, and our portfolio has taken the full brunt of the recession. However, Enterprise Ireland hopes it is a positive development that last year's figure for job losses was the lowest in any year since 1979. It is our belief that our figures for job losses has bottomed out and, therefore, there will be a greater employment gain. However, there has been no way for us to avoid the hit in the construction sector and it must be presented in the data.

We publish the figure for the ongoing cost per job in our annual report. As set out in the 2010 annual report, the cost per job was €12,254.

Regarding the CEBs, there may be a cultural issue. The boards and their staff will bring much to local authority offices when they arrive, including a culture that is more attuned to the marketplace. This will be a positive contribution.

We have established incubators in every university and institute of technology in the State at considerable cost, as Enterprise Ireland has funded approximately 95% of the cost of each incubator. We have also funded 110 community enterprise centres. We point to the success of the centre in Navan as a role model for other community enterprise centres. The centre in Wexford is particularly impressive.

The innovation voucher initiative has been a great success. For decades, breaking down the barriers between small business and universities and institutes of technology was problematic. In many ways, the third level institutions are regarded as ivory towers that are unapproachable by small businesses. The voucher idea has been great. It is €5,000 to do something clever with one's product or market and to get the input of a staff member of a university or institute. It has given the universities and institutes confidence to engage with small companies, as they know that, when they finish their work, the voucher is guaranteed by the State and they will be paid. There are issues on both sides, but the voucher has been a success. The innovation voucher has been our most significant initiative to break down that barrier in several decades.

The emergency response unit has essentially been put in place by Enterprise Ireland and the IDA to deal with downsizing and companies that get into difficulty. We are available for discussions with such companies but in many cases they simply require funding. Three years ago we approached the then Government to seek its assistance in providing funds to companies that were vulnerable but viable and through the enterprise stabilisation fund we invested approximately €70 million in companies around the country. That funding is a commercial contribution and is repayable with a small interest rate.

The development capital proposal in the action plan also brings us into that area. With the approval of Government we intend to commit €50 million in funding and we expect the private sector to contribute at least €100, which will provide a total of €150 to invest in good Irish companies which in the past several years engaged in mission drift by getting involved in areas such as property, whether in this State or outside it. Their balance sheets are significantly weakened at this point in time but there is nothing wrong with their businesses other than the collateral damage inflicted on their vision for the future. That development capital can be used to best effect in sustaining jobs.

The plan calls for the creation of 100,000 jobs, comprising 50,000 jobs created through the development agency and a further 50,000 jobs created indirectly through our efforts. Recent analysis of the impact of the jobs created within the agencies suggests that every job created in IDA companies results in the creation of 0.7 of a job outside these companies. We estimate that every job created in Enterprise Ireland-supported companies results in 1.3 jobs elsewhere. The difference between 0.7 and 1.3 is largely explained by the role of the food sector, which is highly integrated in Ireland and produces a repeated knock-on benefit of expenditure within the State before the moneys go elsewhere. Other estimates suggest that two to three jobs are created indirectly as a result of our activities but I do not know the basis for these claims.

In regard to overseas offices, we have been developing our co-operation with Invest NI, including the agreement of a formal memorandum of understanding. Deputy Tóibín is correct that Northern Ireland companies can participate in our trade missions, and vice versa, but the co-operation has gone further in that several of the management development programmes we undertake, particularly at the level of senior management teams and CEOs, now include participants from Northern Ireland companies. I agree, however, there is further potential for co-operation.

Mr. Barry O’Leary

The figures published in our annual report reflect the cost of maintaining a job in Ireland for seven years, which comes to between €13,000 and €14,000. As regards the net and gross cost of jobs, over 13,000 new jobs were created in the IDA portfolio in 2011 compared with 6,950 job losses, which equates to a net increase of 6,100 jobs.

On financial support, both generally and in the specific case of PayPal, over 50% of all new companies coming to Ireland do not receive any form of grant support. We only use grant support where it is required to swing an investment decision. For competitive reasons we never reveal the amount of money we pay for individual projects, such as PayPal's investment in Dundalk, because we face intense competition from all around the globe and this is commercially sensitive information.

On the question about the spread of investment around regions and why particular areas receive more site visits and investments than others, we have to market Ireland as a country first of all because it is always a case of Ireland versus countries like Switzerland, Singapore, Spain and the UK rather than a comparison between Dublin, Cork, Limerick, Galway or Dundalk. We try to incentivise companies to locate in the regions, with a particular concentration on the gateways and hubs, but we recognise the infrastructure dividend Ireland can achieve from the massive investment it made in motorways. To draw comparisons with Dublin, Meath and Louth, one must consider commuting times. For example, Kilkenny is a 20-minute commute from Carlow, compared with 30 minutes from Waterford. Although we will put forward priority locations and try to offer incentives to companies locating there, this is ultimately the company's decision and we will not make them go to areas against their wishes. In a number of projects with which are currently dealing the choice is between Dublin, Amsterdam and Geneva and Ireland needs to win the business. We try to achieve a regional spread, however, and over the past 12 months we have attracted new investment to Tralee, Limerick, Athlone, Waterford, Sligo, Westport, Dundalk and Roscommon.

I wish I could be generic in setting out our five biggest competitive advantages but they vary according to sector. The advantages relevant to the life sciences will be different to those considered by ICT companies. Advantages which apply across the board include our talent pool, tax rates, strong track record of established multinationals, technology capability and ease of doing business. If, for example, one asks what competitive advantages we possess in bio-pharmaceuticals, the answer would include the new investment in the national institute for bio-processing research and technology, the Irish Medicines Board and the regulatory environment.

In regard to creating 100,000 jobs across the economy we estimate the ratio between gross and net jobs in the portfolio at approximately 2:1. In other words, one would need to create two jobs for every job created from a net point of view.

Deputy John Halligan

Deputy Tóibín referred to the regional balance. The south east has the highest unemployment rate in the country, with direct impacts on jobs nationally. In the context of the advances in technology that will occur over the next 15 to 20 years in the ICT and life sciences sectors, are the witnesses prepared to comment on the impact that the lack of a university in the south east will have on high technology jobs? Dell specifically stated that one of the reasons it chose Limerick was the presence there of a university. I am not being parochial because I am speaking about the south east in general. Does the presence or otherwise of a university in a particular area have a direct effect on attracting jobs?

How many have access to the €200,000 competitive feasibility fund that was established? What are the criteria for access to funding? I believe it specifies a maximum of €20,000 per entrepreneur. Is the €10 million international start-up fund specifically for people outside the country who want to start up businesses in the country? How do they access that fund and how are those people contacted?

My next question is particularly directed at Enterprise Ireland. We meet many people who have good prospects of establishing companies and who have expertise in their own right but cannot access proper funding from banks and other lending institutions. Obviously when people approach Enterprise Ireland it makes a decision based on whether it believes the businesses are likely to be viable. Is Enterprise Ireland then in a position to contact lending institutions to recommend that a particular business is viable and should be supported? The big issue is that people are coming forward with specific projects, which Enterprise Ireland might recognise as being good, but when they approach the banks or lending institutions they find money is not available. What input does Enterprise Ireland have in assisting small businesses to access funding?

Vice Chairman

People should realise they should turn off their mobile telephones as they interfere with the sound system.

Senator Fidelma Healy Eames

I compliment Enterprise Ireland on its showcasing of Ireland to the world during the recent visit of the Chinese Vice President. I attended the investment forum on Monday and was very impressed by the way both agencies presented Ireland. Does Enterprise Ireland have a China strategy? I work with two groups of people and we will have a major conference on the issue in NUIG at the end of March. There is a view that there is a mismatch between our offering to China and what its needs are, and that we are not capitalising on innovation clusters. As Mr. O'Leary has said, we are very fortunate to have attracted quality FDI into the country, particularly from the US, over the years. The Americans have very valuable intellectual property with which they do not trust the Chinese. The Chinese have the market. I believe we should use Ireland as a base to develop the products and sell to that market. What are Enterprise Ireland and IDA Ireland doing about that? We heard the Chinese Vice President talk about his country's needs in that area. The Chinese public procurement market is huge and it works on a government to government basis. We have that relationship and it is now time to move on that. I ask Mr. O'Leary and Mr. Ryan to comment on that.

I learned that New Zealand does very well in China because it negotiated zero tariffs into China. Has Ireland done anything like that with China? We are doing quite well at attracting Chinese third level students. However, we should also attract their second level students. We have schools, including residential schools, and a good quality education. It is appropriate to bring them here now so that we can have them here for third level. We will lose out to places such as Harvard and MIT if we do not bring them here earlier. What are Enterprise Ireland and IDA Ireland doing about this? Do the two agencies have a joined-up China strategy?

What the agencies are doing at third level institutions is quite good. The innovation clusters are brilliant - I have been to the one at GMIT which is very impressive. However, they are missing out significantly at second level. Some 50% of second level students will end up in some form of business, but their creativity is not being harnessed early enough. Are the agencies open to doing more at second level? I do not believe this enterprise module, with a little smattering in transition year, is adequate. Many companies, for example PayPal, require people with multilingual skills. Are the agencies driving that at second level?

Deputy Áine Collins

I congratulate both agencies on their great work as I recognise the challenging environment facing them on the ground. I have a question on one-stop-shops for Mr. Ryan. With the dissolution of the county and city enterprise boards, do we also need to consider widening the framework under which Enterprise Ireland operates in order to look after indigenous business? What is the timeline to have this on the ground? While I know there are some good initiatives, I am not sure how much Enterprise Ireland is doing in the area of leadership training. I believe there is a gap whereby good companies employing ten or 15 people may be missing out on export potential, but that could be developed with the right support.

Is there a special avenue for attracting business angels? My colleague spoke about the skills shortage and entrepreneurship in second level. I am sure Mr. Ryan is aware of the very successful Jerry Kenneally programme in Kerry, which is linked up with the Institute of Technology, Tralee. While it might not be in the scope of Enterprise Ireland, could something like this be considered on a national level? Is there anything Enterprise Ireland can do to help SMEs get funding from banks?

I recently met Mr. O'Leary at EMC, a fabulous company in my constituency, which employs almost 3,000 people. Employees there have told me the company would not be there but for IDA Ireland. I congratulate IDA Ireland on the great work it does there. It is not just about the funding, but about all the funding such companies get throughout the world.

Mr. Barry O’Leary

Deputy Halligan asked how a university in the south east might assist in attracting foreign direct investment. Evidence in the past 12 months shows that Sumitomo, the second largest Japanese bank decided to establish its western hemisphere IT development centre in Tralee and Enercon, the German wind energy company, also set up in Tralee, which has no university. American Medical Systems and NPD choosing to locate in Athlone provides further evidence of institutes of technology assisting greatly in attracting the business. It is more down to the quality of the institute than whether it is an institute of technology or a university.

By and large funding is not an issue for the multinational community, whose companies fund themselves on a global basis and so the local banking environment is not one that hinders them in any way.

Senator Healy Eames asked about a China strategy. China is a huge market and we have two offices there in Shenzhen and Shanghai. There needs to be delivery in the medium to long term. However, trading with China is one thing and the other is getting investment from China. Let us consider the areas where Ireland is strong and the strengths we have to offer in the sectors. For example in the technology or IT sector, apart from a small number of Chinese companies, China is not strong in that area. There are two big telecommunications companies, Huawei and ZTE, but apart from them there is no pool. Approximately 6% of Chinese FDI comes into Europe, which today is a relatively small part of it. However, there are undoubtedly opportunities in financial services. One of the biggest banks, ICBC, has more than €2 billion in assets in aircraft leasing here and is expanding its operation. By and large we are finding it to be a tough market. The focus is very much on the telecommunications, digital media and financial services areas as well as establishing European headquarters or operations centres for Chinese conglomerates. That is a work in progress and many other counties compete for this business. There is a strong working relationship with Enterprise Ireland because often the way to foreign direct investment is through a partnership with an Irish company. There are many Irish companies doing good business in China. I thank the Deputy for mentioning EMC, a typical example of one of the great technology leaders of the world which Ireland - Cork in particular - has got.

Vice Chairman

I have three more contributions.

Senator Fidelma Healy Eames

The whole issue of the education sector was not addressed. What are the delegations doing in this area? How are they driving the sector to ensure we are harnessing the entrepreneurial spirit and culture?

Vice Chairman

Deputy Halligan asked a question as well. Can you repeat it?

Deputy John Halligan

I asked about the contacts with lending agencies and the feasibility fund.

Mr. Frank Ryan

I have taken a note of the questions and I will run through them quickly, if that is helpful. Deputy Halligan asked about feasibility funding for the south-east region amounting to €200,000. The Deputy is correct. Funding of up to €20,000 per project was offered under criteria set out clearly in a public call for submissions. This was advertised and we received 46 applications which have been assessed. Some 21 of these were shortlisted for what we call pitch sessions. This means the promoters are invited in to present their business plans. It is not simply a desk research assessment. We called in the promoters to do presentations. Following this, some 14 projects were recommended for funding to our investment committee which will meet on 24 February. Shortly afterwards I expect the Minister, Deputy Bruton, will be in a position to be able to announce the outcome of the process. As things stand, the full €200,000 will be drawn down and made available to these people and their ideas.

The Deputy asked about the international start-up fund of €10 million. Mr. Treston will comment on that.

Mr. Greg Treston

We launched that fund last year. It is intended to attract quality international mobile start-ups. We are seeking companies from the top 25% of our start-ups. We are looking for quality start-ups from strong teams and repeat entrepreneurs. We have a marketing programme in place, run with the IDA marketing programme. We promote it at events we attend such as the upcoming South by Southwest event in Texas. The IDA and Enterprise Ireland will be there. We will run a promotion there for starting business in Ireland. That is a major start-up event.

We also run other events. We are presenting to the Irish Business Network Dubai and at various other locations. There is a programme of these presentations and during the month of February we will carry out eight presentations overseas. This is how the fund is promoted. It is intended to bring in additional projects of high quality. We use the contacts of IDA and our contacts as well. Last year we supported ten projects including a fine project in the medical devices area. This came through the IDA and was referred on to us. We work closely with the two agencies and the individuals involved work closely using what we have abroad and our resources to promote it.

Mr. Frank Ryan

The issue of banking and access to funds for small and medium-sized enterprises, SMEs, was raised by the Deputy. I thought this might come up so I wrote a short comment on it and I wish to read it into the record with the permission of the Vice Chairman. There is a good deal of confusion in this area and I hope this will be helpful with regard to Enterprise Ireland's role.

Enterprise Ireland has been and will continue to be highly proactive in working with the banks to create an approach to meet the needs of enterprise. Enterprise Ireland's banking relationship team, established in 2009, works with the banks to encourage skills development and support for exporting clients. The team works with the three primary banks, AIB, Bank of Ireland and Ulster Bank as well as other banks including HSBC, Barclays Capital, Silicon Valley Bank, National Irish Bank-Danske Bank, ACC Rabobank, KBC, Close Brothers and Bibby Financial Services.

To date this has delivered more than 350 individual client cases discussed directly with the banks on behalf of individual exporters. AIB and Bank of Ireland have established units, led by senior mangers, responsible for the relationship with Enterprise Ireland. Two-way secondments between the banks and Enterprise Ireland have been undertaken as have a series of knowledge-sharing workshops on themes ranging from invoice discounting, performance bonds, trade finance, leasing finance and the software and life sciences sectors. There have been briefings on Enterprise Ireland and the role we play for our clients and the development of sectoral expertise within corporate and business banking networks in AIB and Bank of Ireland to support emerging technology sectors. There is an active relationship with the banks. I have commented on this before. I have also commented publicly on the need to increase the pace of cultural change and progress on this issue within the banks. I have no doubt that they are focused in the right direction and I have stated as much publicly. I also stated at the Irish Banking Federation annual conference that I remain concerned about the rate of progress the banks are making and I realise the Government is concerned about that as well.

Senator Healy Eames raised the question of a joined-up plan. Mr. O'Leary addressed that matter. Students are remarkably influenced by their parents and guardians in the area of education. If their parents and guardians are operating in a different time warp to the job opportunities that exist for young people now, it poses a problem. This poses a problem for Irish society as well. In future, it is more likely that people will be self-employed or working in a small or medium-sized enterprise rather than working for the Government or for a large company. This is the way it goes in a developed economy. We have had great difficulty in getting this message through to people. If the message got through there would be a stronger demand at second level from parents and guardians.

Senator Fidelma Healy Eames

What does Enterprise Ireland provide at second level?

Mr. Tom Hayes

I will back up Mr. Ryan on that question. At second level the county and city enterprise boards have been running a programme aimed mainly at transition year students. This culminates in an annual event - last year it was held in Croke Park - as part of which each county and city enterprise board puts forward a winner or a best and most innovative idea. This is to promote the culture of entrepreneurship within second level. The county and city enterprise boards have undertaken this. Enterprise Ireland also runs the Think Outside the Box Awards aimed at third level. This has been a successful programme.

Senator Fidelma Healy Eames

We need that at second level as well.

Mr. Tom Hayes

That is perhaps for second level as well. This is something we will consider in the context of the new paradigm or the new scenario given the changes taking place within the county and city enterprise boards.

Mr. Frank Ryan

We try to make a personal gesture of support at second level. I was in the Galway-Mayo Institute of Technology, GMIT, one month ago to speak at the science week there. It has very good science week. Some 500 second level students gathered together at GMIT to discuss the science, technology, engineering and mathematics, STEM, sectors. Positive gestures can be made by way of signposting for people to enable them to position their careers for future job opportunities that will arise.

A member raised a question about New Zealand and tariffs. The tariffs in place with regard to China are EU tariffs and any change in tariffs would have to be negotiated at EU level. Deputy Collins raised the issue of the framework for Enterprise Ireland. We welcome the Government's decision on the establishment of local enterprise offices. However, our framework is set out clearly in legislation. We are empowered to operate in the manufacturing and internationally traded services only. Until there is some change to that we cannot operate outside of our legislative remit.

In the past six years we have undertaken a range of leadership training initiatives and interventions focused at the level of the chief executive or at senior management team level. We are not an educational institute nor have we any wish to become one. We will carry out particular programmes necessary to the scaling up of our companies and to providing the academic underpinning with regard to how they should go about this and will expose them to international people who have done just that. These people can talk to them about the practical side of scaling up their companies and the academic underpinning of that. General training is a matter outside of our normal remit.

The Deputy also raised the issue of business angels and I will ask Mr. Hayes to address that.

Mr. Tom Hayes

The ecosystem now in Ireland has spawned a significant number of individuals who have resources available to invest in early stage companies. A business angels network operates within Halo, which we run within the trade and which is based in Newry. Each of the big four business innovation centres also has a network of individuals who are willing and ready to invest in early stage businesses. There is quite a significant number of individuals who are prepared to invest in good, innovative start-up projects.

Deputy Mary Mitchell O’Connor

This has been a very informative meeting and well done to the representatives of the IDA and Enterprise Ireland. Government can put forward a job creation strategy, but we are dependent on agencies like these to negotiate and bring in as much foreign investment and as many jobs as possible.

I have six questions and will fly through them. The issue of education was mentioned, but will the witnesses speak to us about multilingual skills? Yesterday, I spoke to somebody with whom Enterprise Ireland deals, who told me we have approximately 16,000 people employed in the translation industry. I was not aware of that, but I can see why multilingual skills are so important.

What comment would the IDA and Enterprise Ireland make with regard to high street jobs? We talk about sustaining jobs, but we are losing jobs on the high streets. We are not helping with commercial rates and high street traders feel they are being ignored. They see the money going into creating jobs while jobs are being lost on the high street.

I am aware of a number of companies that are spending significant amounts of monies on tendering for work elsewhere and so on. Then, when they move some part of their company to England or elsewhere, they have to set up a whole section that will find out about tax and other issues. Is there anybody available to help companies like this that are based in Ireland when they go elsewhere to find a market?

One Deputy mentioned the five positives, but I would like the IDA and the Enterprise Ireland to explain the negatives to me, because sometimes we are our own worst enemy here. Will they comment on the issue of sick pay and who should be responsible for paying it? I do not wish to be combative, but will they also comment on the reason BSkyB almost pulled out of Ireland? I believe it was because NAMA had not informed either Mr. O'Leary, Mr. Ryan or the Ministers of the position. How can it happen that nobody seems to know a company wants to set up business in Ireland, but that when it is about to change its mind and pull out, almost by default it is retained? There was comment in the newspapers at the weekend about another company where much the same happened. However, my question refers specifically to BSkyB, because that is the one I know about. I would appreciate it if the witnesses could comment on these questions.

Deputy Tom Fleming

I also welcome the representatives of the IDA and Enterprise Ireland. It is very encouraging to hear our export markets are buoyant currently. Is it projected that there will be an increase in the €115 billion for FDI companies over the next three years and in the current €15 billion for EI enterprises? With regard to the potential for the food sector, both agriculture and fisheries, are efforts being made to maximise the benefits for this sector and to reach out to markets with our high quality food products? Our producers produce top class and organic food with a good green image and we should capitalise on that indigenous sector.

Since 2000, some 7,000 people are now employed in 800 high potential start-up projects. I see that as a poor return over 12 years. With regard to the county enterprise boards, have there been discussions on the integration of these boards with Enterprise Ireland? How is it proposed to get the best return from this move? How are the one-stop-shops to be organised to ensure we get the best return from them? There is an opportunity there for small firms and companies to create jobs, but we need to get down to that. These kinds of jobs are often secure, but we need back up services. I do not agree that the liaison between Enterprise Ireland and the banks is working out well. From my experience from talking to people in SMEs, there appears to be no credit available and the response from the banks has been poor and mostly negative. The Government and Enterprise Ireland should address this as a matter of urgency.

With regard to the IDA, there is significant variation throughout the country with regard to grant aid. For example, grant aid for setting up in Galway is 15%, but this is down to 10% in the mid-west. Unfortunately, Kerry is lumped in with Cork and there is no grant aid to incentivise firms to locate in the county. What can the IDA do to remove the imbalance and make the situation more equal? I welcome the news of the initiatives with regard to the technology park in Tralee. We are very fortunate to have that park. However, the situation with regard to job creation in our corner of the south west in County Kerry is pretty pathetic. We are a wasteland with regard to jobs and the setting up of companies. I would like to see action taken in this regard and would like to see a sub-office set up there which would liaise with Enterprise Ireland and the county enterprise board. We need an action plan immediately. To be fair, our area is every bit as bad as the south east and has up to 20% unemployment. We are on a par with the south east. I ask for urgent action to be taken.

The Aetna company in Castleisland supported 120 jobs up to a few months ago but now the plant is up for sale. It is devastating news to hear the plant is to be sold. I urge the IDA and Enterprise Ireland to step in and ensure the plant is not sold off and never used again for employment purposes. I ask them to intercede in this immediately. I would also like to refer to the Shannon LNG plant in Tarbert.

Vice Chairman

The Deputy has had a good run. I ask him to conclude his remarks.

Deputy Tom Fleming

There is an impasse there at the moment. I would like it to be corrected and addressed so that jobs can be created. Can the representatives of Enterprise Ireland state what stage the pharmaceutical proposal for Tralee is at? It was suggested that a number of jobs could be salvaged.

Senator Deirdre Clune

I will try to be brief. I heard Mr. O'Leary's recent comments on skill shortages. That was touched on in previous questions. We need to work with those involved in the education sector. We need to encourage science, technology, engineering, mathematics and languages. Our efforts in that regard are probably ongoing. Can Mr. O'Leary comment on the immediate situation? I have read many interviews with chief executives of technology and information technology companies. They keep referring to skill shortages. The same thing can be said of languages.

I would like to ask Mr. Ryan about another issue that I have heard people commenting on. He said that well over 5,000 jobs were created in start-up companies that have since been acquired by multinationals. I do not think that is a bad thing, given that people are getting experience and an opportunity to expand. Some people have criticised it on the basis that Enterprise Ireland funding was invested in start-up companies, only for the value and expertise to be soaked up by multinationals. Can Mr. Ryan comment on that? Is it an issue for Enterprise Ireland? If not, should it be?

Vice Chairman

I invite the witnesses to respond.

Mr. Barry O’Leary

I agree with Deputy Mitchell O'Connor that multilingualism is incredibly important. Many of the operations we attract to Ireland are pan-European or cover Europe, the Middle East and Africa. Language availability is an important part of that. If anything, the demands are increasing. A company like Google services over 60 foreign languages from its Dublin operation. It is an important issue.

The Deputy also referred to high street jobs. Like Enterprise Ireland, the mandate of IDA Ireland relates to manufacturing and international services. It is clear that as we bring in more foreign direct investment, more money is spent in the economy and more demand is created.

Deputy Mitchell O'Connor also spoke about negatives. IDA Ireland goes around the world selling the positive aspects of Ireland. That is what we will concentrate on doing. We will use our influence behind the scenes when things need to be improved. It would not be helpful if we were to quote statements that are made about Ireland to our competitors.

The only comment I will make on the sick pay issue is that Ireland has made good strides in competitiveness over the last few years. We are seeing an increased flow of foreign direct investment, partly as a result of that. Therefore, any move to add to the cost of employment would not be welcome.

Many of those who are relying on newspaper reports for their knowledge of the BSkyB issue are assuming that what they are reading is the truth. A particular issue arose with regard to NAMA. When one is winning investments, issues always have to be sorted out. Issues can arise with the local council or with regard to education, for example. In this case, NAMA happens to be one of those issues. The important thing is that we intervened when we became aware of it. We have a good relationship with NAMA. The issue was sorted over a period of seven or ten days. One of the good things about winning investment is that issues which are highlighted can be sorted.

A question was asked about information technology skills. One of the positive things about Ireland is that 13,000 new jobs were filled last year. A significant number of them would have been in the technology sector. Jobs are being filled. This is a worldwide issue. It arose when I was in India last week. There is massive labour turnover - 22% per annum in the technology sector - in India. There is substantial worldwide demand in this sector. It is important that we produce a certain number of people with these skills. We can increase that number by providing more conversion courses. It is also important that we ensure Ireland is an attractive place to which people can be attracted. Regardless of where one goes in the world, one will find that people working in technology are multicultural.

Deputy Tom Fleming asked about the variation in grant aid in the south west, compared with another part of the country, and expressed concern about the fact that counties Kerry and Cork are considered together for these purposes. The latter issue goes back a number of years and relates to the EU regional aid guidelines. The grant levels of 15% and 10% that the Deputy mentioned are maximum levels. They do not necessarily mean that everybody in Galway gets 15%. That is definitely not the case. The operation of the new regional aid guidelines has already started. The Department of Jobs, Enterprise and Innovation will be responsible for ensuring the Government's wishes in that regard are pushed home as much as possible.

Mr. Frank Ryan

Senator Clune spoke about multilingual skills, which are rightly the subject of a great deal of discussion at the moment. I am often asked what the most important language is. People suggest it is German, French or Mandarin. The most important language for any company is the language of its customer. One had better be able to speak the language one's customer is speaking. As Ireland is one of the most open economies in the world, Irish companies will be involved in a multicultural environment in the years to come. They have to be in a position to deal with customers throughout the world, regardless of the languages they are speaking. It is not sufficient to rely on English all the time. The Senator also asked about the provision of assistance to Irish companies that are trying to enter the UK market. I ask Mr. Hayes to respond to that query.

Mr. Tom Hayes

Enterprise Ireland intends to launch a potential exporters division quite soon. There is a myth that it is easy to export to the UK. Although we share a language with the UK and many of the checks and balances in both systems are quite similar, it is a substantial challenge for Irish small and medium-sized companies to sell in the UK. Local authorities were mentioned. Every local authority in the UK has a different way of tendering and doing business. One of the main objectives of the potential exporters unit will be to ensure companies are ready, prepared and fit for exporting. We will do that through training and mentoring provided by individuals who have succeeded in selling in the UK. They will act as advocates and mentors and help companies to bypass some of the difficulties and hurdles that exist. It is absolutely right to suggest that small and medium-sized companies enter a minefield when they invest significant resources to access a market as close as the UK. We are in the process of establishing a potential exporters division. We hope it will help some of those companies to overcome some of the difficulties in question and make it easier for them to enter the public sector market in the UK.

Mr. Frank Ryan

Deputy Tom Fleming spoke about the potential of the food sector. Yesterday was a very good day for Kerry because Kerry Group reported some impressive results, including increases in its turnover and profitability. I congratulate Mr. Stan McCarthy and the company's workforce of 23,000 people in Ireland and overseas who have helped to achieve that growth.

Deputy Tom Fleming

I would like to comment on that. Unfortunately, Kerry Group is providing very little employment in County Kerry. I ask Enterprise Ireland and IDA Ireland to liaise with Kerry Group, which is an excellent company. I expect they will receive a favourable response. All of Kerry Group's business is outside County Kerry, with the exception of its local offices. I give it every credit for employing 23,000 people, but I think it should play a part in developing the economy of County Kerry. Its success is very positive for the people of County Kerry in the sense that they are getting financial returns on their shares. I will liaise with Enterprise Ireland and IDA Ireland in this regard. In addition, I would like clarification on the Aetna plant in Castleisland.

Vice Chairman

The Deputy has made this point three times across his two contributions.

Deputy Tom Fleming

I want to hear something positive.

Vice Chairman

We will get a response to that.

Deputy Áine Collins took the Chair.

Mr. Frank Ryan

The Kerry results are indicative of the performance of the food sector in general currently and this is very positive. The Minister, Deputy Coveney and Bord Bia are very active on that mandate of further expanding our exports. It is a challenging environment as there is much international competition and also a fair degree of international uncertainty at the moment but it is great to see that Irish food companies are winning through. Enterprise Ireland involvement is on the manufacturing side and on the balance of the value chain. We continue to work very closely with it.

The Deputy also raised the issue of the integration of the county enterprise boards, CEBs and I will ask Mr. Tom Hayes to deal with that question.

Mr. Tom Hayes

At least now there is clarity with respect to what is happening with the CEBs, county enterprise boards. We will work with our own parent Department and we will work with the local authorities over the next number of months to ensure a seamless transfer so that the client companies or the individuals who wish to start a business will effectively not notice any significant change. The individuals who currently work in the CEBs are the people with the knowledge, skills and experience of dealing with early stage companies. Over the next while, these people will transfer to the local authority offices and the skills that have been available to entrepreneurs and to local start-up businesses will, in effect, still be available. A local service agreement will be in place with the local authorities. Enterprise Ireland will provide them with the technology, and such as the soft supports in terms of signposting, and the knowledge on how to and where to go. An individual walking into any of the offices, the one-stop-shops, in any of the counties in Ireland will be able to access under one roof all the practical guides and tips needed to start a business.

Mr. Frank Ryan

Deputy Tom Fleming also raised the issue of liaising with the banks and I refer to my comments about our role in this regard. The role of Enterprise Ireland as regards the banks is confined to the relationship of manufacturing and actually trading companies and we are not permitted to go beyond that remit. The Credit Review Office is available to any company in Ireland which is of the view it has not been dealt with appropriately by any of the financial institutions. Any company with a complaint in that regard should contact the CRO.

On his specific question about Tralee and the pharma initiative, I am not aware as I sit here, of the up to date situation but I will find out and communicate it to the committee.

Senator Clune asked about the skills shortages. We very much welcome the announcement by the Minister for Education and Skills, Deputy Quinn, of the conversion course and other short-term initiatives taken in an attempt to increase the number of people available particularly in the ICT sector.

As regards the 5,000 jobs being acquired by Irish companies and transferring from our portfolio into the IDA portfolio, this can be looked at in two ways. In our view, Enterprise Ireland should be assisting companies in Ireland to grow their global competitiveness and if they are globally competitive then somebody will want to buy them. If we were not growing companies or helping companies to grow which nobody wanted to buy, this would be a much greater concern to us. Also, Enterprise Ireland has very good evidence that when the companies are acquired and they are put into the IDA portfolio, they then expand further. It does not make a great difference as to which portfolio they belong to because what matters is that the activities continue to develop within the State so that the economy gains in overall terms.

Mr. Barry O’Leary

I did not respond to the question regarding the Aetna facility in Castleisland. We have tried to interest companies but as yet without success, regrettably.

Deputy Tom Fleming

The worrying aspect is that the company has put it up for sale on the public market. I think we should intercede here to ensure that this will remain as a building which will provide sustainable long-term jobs. Immediate action must be taken.

Acting Chairman (Deputy Áine Collins)

I thank Deputy Fleming for his comments.

Deputy Mary Mitchell O’Connor

I have a supplementary question. What is the most important factor to be considered by Ireland?

Mr. Frank Ryan

On the enterprise side, the most important consideration is ambition. We need to be the author of our own future, to regain our economic sovereignty and to drive forward. We now have the opportunity to stand up internationally and to be counted. From our point of view in Enterprise Ireland, our clear intent is that Ireland will become the comeback economy of Europe.

Mr. Barry O’Leary

From our point of view in IDA Ireland, the view of people looking at Ireland from outside the island is far more positive than on the island itself. This is an important point of which all stakeholders in the community should take note.

Deputy Nicky McFadden

I congratulate IDA Ireland on PayPal and Enterprise Ireland for its great mentoring and business acceleration. I have a question regarding the Chinese hub in Athlone. In light of the visit of the Chinese Vice President at the weekend, will IDA Ireland be in a position to advocate on behalf of the Chinese hub in Athlone?

Mr. Barry O’Leary

There is a proposal for another Chinese hub in another part of the country. I really cannot say. It is a very ambitious project and how realistic it is has yet to be proven. It is slow-moving and that is all I can say.

Deputy Nicky McFadden

Would the IDA be an advocate for the project?

Mr. Barry O’Leary

Yes, the IDA would be in favour of anything that leads to attracting more economic impact onto the island of Ireland.

Deputy Brendan Griffin

I have a question for Mr. O'Leary with regard to his past experience with potential investors in County Kerry. Has the issue of road access, in particular the poor road access from the Cork direction, arisen in the IDA's discussions with potential investors? To a lesser extent, has road access from Limerick been an issue in the past?

Mr. Barry O’Leary

There is no doubt that those areas where road access has been improved has been of great assistance in attracting foreign direct investment. An example is the access from Dublin Airport to Dundalk is as easy as from Dublin Airport to Sandyford. There is no doubt that it is an advantage to have good road access. However, more than anything, one of the most important considerations from a foreign direct investment point of view is that most companies look to see where there is a strong catchment area. We are often competing for business against cities around Europe in particular. Cities of scale are regarded as cities with more than 1 million people. Therefore, if the access is not very good into a particular part of the country, this certainly does not help. However, I think it is more a consideration of the critical mass, a broad skill pool, which is equally important.

Deputy Brendan Griffin

I refer to the road from Cork into Kerry and I ask if there are specific instances where this has been mentioned as being a deterring issue for a potential investor to invest in Kerry.

Mr. Barry O’Leary

I am not aware of any instance.

Deputy Brendan Griffin

Would it be possible for Mr. O'Leary to check with colleagues to see if it has arisen in the past?

Mr. Barry O’Leary

Yes, certainly.

Deputy Kieran O’Donnell

I welcome Mr. O'Leary and Mr. Ryan and their colleagues. I commend them on the jobs they have brought both in terms of FDI, indigenous high-tech start-ups and so forth, which are export orientated. What are their current strategies for Limerick in terms of job delivery? Will they give me an update on the current position and the plans in the pipeline vis-à-vis Limerick?

Mr. Barry O’Leary

In Limerick, we have a particular concentration on the life sciences area, the technology sector, ICT, and on the financial services area. They are the three areas in which we believe there is good delivery.

In the past 12 months, we have had investments from Dell, Analog, Gilt, Teleflex and Vistakon. We continue to promote Limerick very strongly. From the position three years ago, there has definitely been a good improvement in the flow and Limerick is in play for a number of investments at the moment. Our strategy is very much focused around those three particular areas because there is strong expertise in the Limerick area in those sectors.

Mr. Frank Ryan

My colleague, Tom Hayes, has specific responsibility for entrepreneurship in the regions, so he will answer the Deputy's question.

Mr. Tom Hayes

In the context of Limerick and the mid-west region, we would initially encourage entrepreneurship. That is fundamental in terms of encouraging individuals to start a business. We would do that through local advertising and working with the local third level colleges. In terms of the start your own business programmes, we would co-operate with the county and city enterprise boards in operation there. We have an enterprise platform programme operating with the two universities, LIT and UL. We have a number of individuals on those programmes who are undertaking feasibility studies and developing the programmes and some of those individuals will move on to participate in our high potential start-up programme.

Limerick is obviously a key focal point and we would see it as one of the key hubs in which we would want to promote early stage start-ups and entrepreneurial activity.

Deputy Kieran O’Donnell

I thank the witnesses for those positive comments. I note Mr. O'Leary said Limerick is very much in play for investments. As he is probably well aware, Limerick has much to offer, including a very educated workforce. I look forward to jobs flowing.

Acting Chairman (Deputy Áine Collins)

I thank Mr. O'Leary and Mr. O'Brien from the IDA and Mr. Frank Ryan, Mr. Treston and Mr. Hayes from Enterprise Ireland. It was a very worthwhile discussion. I thank them for their time and for engaging with us so thoroughly. We really appreciate it. This is a very important element of our work programme and, as I said, the discussion has been very useful.

The joint committee adjourned at 11.45 a.m. until 9.30 a.m. on Wednesday, 29 February 2012.