I welcome the Minister of State, Deputy Breen, and call on him to address the House on the report of the Seanad Public Consultation Committee entitled, Report on Small and Medium Sized Businesses in Ireland.
Report of Seanad Public Consultation Committee: Statements
It is a pleasure to see Senators back in their old home in the grandeur of one of the nicest rooms in Leinster House.
We deserve it.
We are worth it.
I am sure they are all happy to be back here again. I am delighted to be here following the publication of the Seanad Public Consultation Committee's report on small and medium-sized businesses in Ireland in May of this year. I congratulate Senator Pádraig Ó Céidigh for his excellent work on the small and medium-sized enterprise, SME, sector. As an entrepreneur, he was in a strong position to talk about the importance of that sector in Ireland. I also congratulate the Chairman of the committee, Senator Paul Coghlan, on the publication of this thorough and well-formulated document. Documents such as these are important and are useful dictionaries for us when preparing policies in respect of SMEs.
I adhere to the central premise of the report, which is that the Government should focus its business policies and support to ensure the best business environment in Ireland. The committee is preaching to the converted. I have been working hard on the SME agenda for the past three and a half years in my ministerial role in the Department of Business, Enterprise and Innovation. I have frequently and repeatedly promoted Irish SMEs and entrepreneurs at many events throughout the regions and internationally. I have been on many trade missions and have had a lot of bilateral meetings with Ministers and it is amazing that the SME sector is important no matter where one goes. It does not matter what kind of economy it is, even in the largest economy in the world, the SME sector is always important.
I take note of the many recommendations, such as the recommendation that a coherent and comprehensive strategy for SME development be developed. I am also glad the committee captured the need to increase the capacity of SMEs to participate in global value chains. I was particularly interested in its recommendation that a regional ecosystem approach be adopted, which would involve identifying regions as specialist areas for targeted cluster or hub buildings.
As a Government, we want to create policies and programmes that are of value to the business community. I want SMEs to feel confident that they are getting the best available supports when they approach any agency or Department of this Government. To do this, it is sometimes important that our country look outside itself for expertise. That is why last year we reached out to the OECD, one of the most reputable research organisations in the world, to carry out work on the importance of the SME sector in Ireland and on how we should move forward.
I would like to take Senators on the journey I took with the Department and its officials on engaging with the OECD on SME policies and evaluation. Internally, the Department, the Minister, Deputy Humphreys, and I had wanted to take the next step in bringing together SME policies spread throughout the Department, other Departments and a number of agencies. While we were all doing Trojan work to support SMEs, there needed to be a review of what was out there, whether it was working for us, and how it could all be brought together.
To investigate how best to do this, I led the Irish delegation to the OECD ministerial meeting on SMEs in Mexico City in February 2018. Here, I could see the scope of what the OECD could bring in many areas. Of particular interest to me, because of my responsibility for EU single digital market affairs, was how to digitise SMEs and how to get the best out of the digital world to give our SMEs the competitive advantage we want them to have. I spoke on that matter as part of a panel of experts. These high-level engagements, along with numerous conversations with the Secretary General, Ángel Gurría, gave me confidence that working with the OECD on these topics would be benefit all of us in Ireland.
At the end of 2018 we were provided with an early draft of the review. One of the most prominent recommendations was to form an interdepartmental group, led by a Minister, and consisting not only of policymakers but also of agencies, representative groups, academics and more important - and Senator Ó Céidigh will agree with me on this - to ensure we have the businesses themselves included. We held our first meeting in March. Many of the people we targeted for this group were present at that conference in July and were here when we launched the review last week. Subsequent to this, we broke it up into pillars, asking for members' expertise to drive forward areas such as standards, skills and internationalisation.
In April of this year, I led the Irish delegation at the working party on SMEs and entrepreneurship. We presented the first draft to the working party at the OECD headquarters in Paris. Four countries peer reviewed it, namely: Canada; New Zealand; Italy and; Sweden. It is important to get a mix of similar open economies with countries like Sweden but also different countries such as Canada. One will then see the best practice models from both types of economy within the review. There was great enthusiasm for the Irish review in the working party, and we received constructive feedback from quite a number of delegates. I met the Deputy Secretary-General of the OECD during that visit and also explored the advantages of the work in the digital area in the OECD, which could be brought into policy in Ireland.
This is an area of the review and roadmap I would like to emphasise, particularly as it is an area under my remit as Minister of State. Digital advancement is an area where Irish SMEs can bridge the gap with the larger multinationals, particularly in the area of productivity. That is something we will highlight this afternoon during the debate and we will examine how we can get Irish SMEs to be more productive and to compete with the big multinational companies. The Government is concerned about that gap, so much so that it is the theme of Future Jobs Ireland, pillar 2 of which is to increase SME productivity. I remember at the Mexican ministerial summit, the delegates also identified this as an area of priority. We can see the importance of the digitalisation process as an action in the roadmap of the report the OECD presented for us. An area of that report mentions ramping up support for the digitalisation of SME business processes. It is an important area because we know the Irish SMEs perform well in the DESI, digital economy and society, index, as the country with the highest percentage of SMEs selling online, the highest level of e-commerce revenue and the most sales cross-border. However, this recommendation relates to digital programmes such as enterprise resource planning and the use of the cloud. I want to push these solid, tried and tested technologies into the business world of our SMEs. The roadmap we have presented in conjunction with the report recommends that the local enterprise offices take a leading role in this process.
To bring Senators onwards on the journey, I also spoke at an excellent SME and entrepreneurship strategy conference last July in the Aviva stadium. As Senators know, the keynote address was given by the Taoiseach. Just last week, we launched the OECD report and review with OECD Deputy Secretary-General Knudsen in our Department buildings and we will now work with my officials to drive forward the SME agenda throughout the Government. Following on from this, I will be attending the OECD's digital for SMEs global initiative on 29 November in Paris. Also, I want to let the Senator know of my deep commitment to ensuring Ireland is at the heart of international SME policy. I will also be attending a useful meeting in Helsinki in November. It is organised by the European Commission and it is important Ireland is represented there because this will be the first meeting of the new Commission under President-elect von der Leyen. This meeting will be on the area of European SME strategy. We will get an idea at that meeting of how much the new Commission prioritises SME strategy. That is why I am determined to drive the SME and entrepreneurship agenda through the recently established SME and entrepreneurship consultative group, which I am chairing, and we had the first meeting in March. This brings together policymakers and programme managers from our agencies such as Enterprise Ireland and the LEOs, all sitting alongside representative groups and businesses themselves. I will lead this group into developing an inclusive SME and entrepreneurship strategy to form part of the Future Jobs Ireland framework.
Working together, we can achieve far more than each on their own agenda. The all-time giant of basketball, Michael Jordan once said: "talent wins games, but teamwork and intelligence win championships." We see here today that it requires a collaborative effort, putting aside any differences and working together to a common goal; to make Ireland a great place in which to own and operate a business. That is why the Government places huge priority on the area of entrepreneurship and start-ups. They are really important, particularly for the regions and it is important we have start-up companies growing all the time because when a small company is successful it grows. We have agencies like the LEOs and Enterprise Ireland that will help them to grow on that journey so they can become an export company.
I would also like to give the committee some background on the current situation for small business owners in Ireland. I understand the importance of SMEs to the Irish economy. The latest CSO business in Ireland report states that in Ireland, SMEs accounted for 99.8% of or 249,450 active enterprises and over 68% of all persons engaged in SMEs generated 50.2% of total turnover in the business economy and over 41% of gross value added was attributed to these enterprises. SMEs are operating in every county, community, town and village and are so strategically important - as Senator Ó Céidigh will know - for all rural areas of Ireland and people in rural Ireland see the benefits of these small microenterprises in their areas. We all know multinationals tend to go into clusters in the large urban areas, and so I believe our policy of having 31 LEO offices around the country is paying off. The LEOs have created a lot of jobs in recent years and I believe they will continue to do so in the future. That is why they are so important for us and I want to see people continuing to live in rural communities. It is to everyone's benefit that rural Ireland prospers and grows. SMEs are the key to this. I am determined to provide the supports that allow this to happen. If we want people to remain in rural communities, especially young people, we need to provide them with quality and rewarding jobs. Primarily through agencies such as Enterprise Ireland and the local enterprise offices, Irish SMEs can access supports in areas such as access to finance, which is so important for many companies; skills enhancement, because upskilling is extremely important and; assistance in exporting and in research and development. Research and development is really important as well. I always say that companies that do not innovate will evaporate and that is why they need to be evolving all the time.
The business environment in the regions will not return to what it was in the past. I am not saying that in a negative way. It will be different. We have to adapt to new ways of working such as remote working; co-working spaces; and digital hubs. That is why we are supporting new regional projects such as the Ludgate Hub in Cork, Donegal Digital innovation hub, the Kilkenny-Carlow design innovation hub and the Kildare community network to name a few. Senator Ó Céidigh will know about the hub in Galway city as well, which is very successful. We have invested heavily through the regional enterprise development funds administered by Enterprise Ireland to support regional stakeholders, both in the public and the private sector, to work together and to bring forward initiatives that build on each region's capacities and strengths. So far, we have invested nearly €60 million in 42 projects under the regional enterprise development fund. All regions received funding under that competitive fund. The Minister, Deputy Humphreys, will shortly be announcing the successful applicants from the €45 million regional enterprise development fund 3, which was launched in the summer.
In recognition of the key role they play, the funding for LEOs has increased by 22% since I have been in the Department. This is used to assist microenterprises in becoming more competitive and better able to cope with the changing environment in which they do business.
Most recently in July, two new funds worth €3 million were announced. The first is the competitive challenge fund, a €2.5 million LEO competitive fund to support LEO-led projects, in alignment with the framework of the future jobs Ireland strategy and the regional enterprise plans. The projects will focus on new approaches and emerging innovations towards fostering and creating sustainable employment and improving productivity through collaborative and joined-up approaches. On 4 October, the Minister, Deputy Humphreys, announced the approval of 16 LEO projects to receive the €2.5 million support. The second is the LEO productivity challenge fund of €500,000, which is now open. This is an important fund as it is primarily aimed at supporting domestically focused small businesses rather than exporters.
The funds will help small businesses to identify opportunities in addressing productivity gaps, embedding the Lean practice we all talk about, greening their businesses and, of course, reducing waste. This initiative will also focus on training and capability development, thereby enhancing customer experience, time and performance management. The scheme is aimed at enterprises employing fewer than 50 people in a variety of sectors and will be delivered via 200 productivity vouchers valued at €2,500 each to help them develop a more efficient and productive business operation.
Enterprise Ireland is supporting indigenous businesses in every county. For example, the numbers in Longford increased from 1,642 to 2,979 in that period. Enterprise Ireland supported companies sustain more than 375,000 direct and indirect jobs nationwide. Enterprise Ireland's records show that last year, 65% of jobs were created in regions outside Dublin. I want businesses to see the wide range of Government supports available to them so they know where to go. This is why I emphasise the importance of the LEOs as the first-stop-shop for many people who want to start a business. I want small businesses to use these supports to seek out new opportunities at home and abroad. I want them to take advantage of the digital revolution going on around us. The digital economy is changing the way we do things and many of the children born today will work in jobs that have not yet been invented. We see the use of robotics, artificial intelligence and augmented reality. We must ensure our SMEs embrace this technology. They must be more productive, as the OECD report stated. They must be leaner so they can compete on the global stage. The digital revolution will bring quality jobs to all of us. It will bring quality jobs to every county, town and village in Ireland. The SME sector is crucial, which is why the Taoiseach appointed me as Minister of State with responsibility for small business in 2016. It is a great honour because it represents so many communities in Ireland.
It was my honour in my role as Leas-Chathaoirleach to chair the proceedings of the Seanad Public Consultation Committee on SMEs, ably assisted by our excellent rapporteur. I welcome the Minister of State for this important debate. I acknowledge the work he is undertaking to bring about improvements in this challenging brief. I specifically acknowledge the input of the Minister of State at the Department of Finance, Deputy Michael D'Arcy, at the public hearings on this topic.
SMEs are the main source of jobs in the economy and it is important we do everything to support the sector, which is such a key source of employment. I was a business man before I entered national politics and I know only too well that the operating environment for business in Ireland, particular SMEs, can be challenging. Business owners are men and women who take significant risks to develop their passion. Many of the contributors to the public hearings of the committee spoke about the contribution of SMEs to the social fabric of a community, their importance to sustaining communities through job creation, particularly in rural communities, and their potential role in environmental sustainability. It has been found that the majority of family-owned SMEs measure success beyond profit and growth to a long-term commitment to communities and employees. This underpins the value of SMEs to local communities on whose support they rely.
Many of the contributors to the public consultation felt there was a lack of support for family businesses. Business owners often work well over 100 hours per week, risking all they and their families have, including their homes and personal assets and finances. As a small open economy, Ireland is, and always has been, exposed to factors outside its control. While SMEs have seen sustained growth in recent years, the potential impact of Brexit looms large as a new challenge for the sector. The importance of safeguarding Ireland's trade interests with the UK is paramount as Brexit unfolds because it will have an enormous effect on SMEs that export goods to the UK. We are inevitably moving towards a less competitive and more expensive trading relationship between Ireland and the UK and SMEs will need time to transition, depending on the nature of the new trading arrangements. While the final shape of Brexit is not yet known, Ireland wants as close as possible relationship between the EU and the UK, including on trade, to minimise the impact of jobs and businesses. I wholeheartedly support this aim.
The committee heard about the increasing cost of doing business in Ireland and a tax system that puts smaller businesses at a disadvantage are major issues for SMEs. The increasing cost of rent, insurance and rates are of particular concern to SMEs as they threaten the very viability of their businesses and are a barrier to business growth. The capital gains tax rate of 33%, increased from 20%, is at odds with other countries throughout the world. This can adversely impact people who wish to retire or sell on their businesses. An improvement in tax rates would allow SME owners to invest in their businesses or new businesses. The committee has made recommendations in the report on finance and funding supports for SMEs.
It is a well-known fact that banks have become extremely risk averse since the downturn. The committee heard that the need to sign personal guarantees to get finance to start a new business can be a major deterrent to somebody thinking of starting up, balanced against the risk of giving up a regular salary and removing the safety net of the social welfare system. Ultimately, the fear of failure can become a stronger emotion than the hope of success. The committee has made a clear recommendation in its report that the requirement to sign personal guarantees as collateral should cease.
Public procurement policy was another issue raised. It was identified by the Construction Industry Federation and other witnesses as a barrier to SMEs tendering for big contracts that should be simplified. The committee has made recommendations in the report to address some of the challenges in this area.
In line with Europe, Ireland has a rate of 9% female entrepreneurs. The committee heard Ireland could become the best in Europe for female leadership opportunities. Six years ago, 8% of start-ups were female-led whereas last year, 28% were female-led. The committee has made recommendations in the report calling for the development of a national strategy on female entrepreneurship.
As we all know, SMEs generally start on a small scale but they have the opportunity to become global players. For example, Kerry Group has enjoyed phenomenal success since commencing operations in 1972 on a greenfield site in Listowel, County Kerry. The company has evolved from modest beginnings to become a leading player in the global food industry. Dairymaster, an Irish company based in Causeway, County Kerry, is a leading dairy innovation and technology companies in the world. We have also had the phenomenal success of Fexco, which was started, and is headquartered, in Killorglin. These companies are a perfect illustration of the importance of innovation, which is key to growth.
The committee heard that entrepreneurial education should be made part of the school curriculum, starting at primary level. The committee acknowledged the great Kerry entrepreneur, Mr. Jerry Kennelly, who started the junior entrepreneur programme.
That programme has made an impact on young students and their thinking. Mr. David Walsh, chief executive officer of Netwatch, reminded the committee that the entrepreneurial mindset comes at an early age when families discuss business at the kitchen table. The Government has a key role in creating the appropriate conditions to support the SME sector. The committee is of the view there should be a stronger unilateral focus at Government level on SMEs and recommends in this report that there should be a dedicated Minister of State for SMEs to develop a policy that fully embraces the diversity of the SME population and the challenges and opportunities this brings, particularly in the context of international developments. The recommendations set out in this report are a valuable and timely input into identifying and addressing the challenges faced by the SME sector and I look forward to engaging further with the Minister of State, who I know takes a strong interest in this issue.
I pay particular tribute to Senator Ó Céidigh for proposing this topic for discussion and for acting as rapporteur in the drafting of this report. The Senator's practical expertise and insight to business start-ups and job creation was invaluable to the committee during the course of this public consultation. His passion for encouraging and supporting SMEs in starting and developing their businesses was the reason he proposed this topic for public consultation. I also thank our excellent secretary, Ms Bridget Doody, who kept us all on track and made us attend to detail, particularly the Chairman. I acknowledge that as well. I thank all the members of the committee for their engagement in this public consultation. I again sincerely thank all those who sent submissions to the committee and I thank the witnesses who appeared before the committee.
I have great pleasure in calling on our rapporteur, Senator Ó Céidigh, to address us.
Tá fáilte roimh an Aire Stáit anseo inniu. Gabhaim buíochas leis agus léiríonn sé an tsuim atá aige i ngnóthaí beaga ar fud na tíre agus é inár láthair. I would also like to thank the Leas-Chathaoirleach for his support in the promotion of this as a topic for investigation and in the preparation of this report for the committee. I very much appreciate that as well as the help from all the other committee members. Gabhaim buíochas le Ms Bridget Doody, Ms Carol Judge agus Ms Ilinca Popa. I also, in particular, thank Dr. Majella Giblin, who is in the Gallery with her mother, Rhona. It is good of her to come here. Dr. Giblin works in National University of Ireland Galway, NUIG. Gabhaim buíochas leis an Dr. Giblin and to Eoghan McCarthy in the National University of Ireland Maynooth, NUIM, who helped with the graphics and county analysis, for their work on academic, evidence-based research along with their colleagues to help develop an evidence-based strategic document to help us as legislators and policymakers to go and create something of substance.
The purpose of this report arose when I became a Taoiseach's nominee. I asked the then Taoiseach, Deputy Enda Kenny, what he thought my focus should be in the Seanad. I also asked Deputy Micheál Martin what he thought my focus should be separately. Both of them mentioned entrepreneurship and SMEs and told me that is what I know about and that is what is in my DNA. That was my focus. From day one, I started working in this space and in developing this space. The Oireachtas Library and Research Service was also very helpful. This is down to 18 months to two years of a journey that has been in gestation and has been continually developing from there. The purpose of the report is to create the landscape of what SMEs are like in Ireland and to examine where we are. There are two parts to it. There is a cross-sectional part and there is a lateral perspective to it. That is looking at it on an industry by industry basis. We asked questions about what the tourism sector is like in Ireland, what financial services in Ireland are like for SMEs and so on. Then when we looked at in a vertical manner on a county by county basis and we discovered significant differences between SMEs in Dublin, for example, and those in Cork, Kerry and Donegal. For example, in Kerry and Donegal, almost 20% of all the SMEs in those counties are focused on tourism and hospitality. It is approximately 8% in Dublin. The strategy from a policy perspective for SMEs in Dublin is different from what is needed in the regions and that is what the report highlighted.
As the Leas-Chathaoirleach rightly said, this came from SMEs and the industry. Together with Dr. Giblin and others, we developed the formulation of the model around that. The process was based on direct and indirect evidence. As the Leas-Chathaoirleach and the Minister of State said, 98% of businesses are SMEs. They employ approximately 1 million people around the country and there are 250,000 of them, which is a significant number. The document makes 129 recommendations. I will not go through them now but there are a number of key areas. I recognise what the Minister of State, Deputy Breen, the Minister of State at the Departments of Finance and Public Expenditure and Reform, Deputy D'Arcy, and their colleagues have done with SMEs. In fairness, the Government has helped bring this issue up the ladder and up the scale in prominence. I go back to 2012 when the then Government got the pillar banks to say they would allocate €3.5 billion towards loans to SMEs, and that happened. I acknowledge that and we need to push this on to the next stage.
Many of the issues the Minister of State highlighted are highlighted in the report. I will mention a couple. I will come back to the LEOs but I will give the Minister of State a sense of where we are with the start-ups up to the end of the third quarter of 2019. There were approximately 5,500 start-ups in quarter 3. In total, since the start of the year, 17,120 companies have started up. Some 42% of those were in Dublin, 8% in Cork, 3% in Galway and another 3% in Limerick. I am hugely supportive of Dublin and I am proud of it as a capital but we need to create different types of support mechanisms for the different regions. That does not mean we do not support Dublin. We support Dublin big time. I would be as much of a Dublin supporter as anybody in every way, except in Croke Park.
The Department of Business, Enterprise and Innovation produced a report in June 2019 on supporting indigenous businesses. The focus was on State support for businesses. That complemented the document we created because that came from the SME perspective. The OECD report the Minister of State referred to was launched last week. It totals 286 pages and relates to 55 members of the OECD. It is a very significant report. I again appreciate and commend the Minister of State on initiating that report. I read the report at the weekend and it was done in a macro sense, looking at where Ireland is compared with other countries. We are looking at talking to the SMEs to find out where they are and what they want and need. That is in our report.
The Department of Business, Enterprise and Innovation has stated there are 170 different Government supports from 27 different Departments and agencies. We need to focus on that. The OECD report mentions that as well. In the Department's report in June 2019, synergy was also mentioned, as was connectivity. We do not have connectivity between all the different supports. We are not looking for more money, believe it or not; we are looking for focus and we do not have that. That must be the next layer and the next strategy. That is what the OECD said in its report that compared us with other countries. That would be a positive direction for us to go in.
Regarding action, we definitely need a Cabinet Minister to synchronise it. The Department highlighted that in a recent report. The Leas-Chathaoirleach mentioned procurement as well. Over the next five years, the State will offer €100 billion in procurement contracts. Irish companies will get less than 3% of that. An SME in any other European country would be getting up to three times that. In fact, SMEs are seriously hindered from tendering for Government contracts. The Minister of State should acknowledge at the end of this debate that this is something he will focus on. I would appreciate that.
I hope others will speak about female entrepreneurship. That is important and Enterprise Ireland is doing powerful work in a number of areas.
With regard to one such area, I do not know if the Minister of State has seen the document called "Powering the Regions". This is Enterprise Ireland's regional plan. Enterprise Ireland is executing a very good strategy in this area. A person in the organisation called Mark Christal is leading on it.
Another area which is important to me is that of the local enterprise offices, which the Minister of State mentioned. There are 31 LEOs in Ireland. Údarás na Gaeltachta has been given responsibility for one of them, but it has not been given any funding in that regard. All of the other LEOs are receiving funding to develop small businesses, but the Údarás na Gaeltachta LEO is not. Something is askew there. I would appreciate it if the Minister of State would actively look at this issue. We are not talking about a lot of money but rather just the provision of a few resources.
I may be coming near the end of my time. All of my colleague Senators here, including the Leas-Chathaoirleach, have direct experience in the SME sector. Senator Devine and I were speaking a while back and I was taken aback when she said that her husband has a business of his own.
It was fortunate to survive the crash.
That is what we have in Ireland - resilience. We need to develop that resilience and empower more of our SMEs and people to take the risk. I have judged a variety of entrepreneurial programmes in Ireland and I have seen hundreds and hundreds of business plans. Companies do not grow; people grow. The environment must be provided to allow people to grow. The work our committee has done, the work I have been doing for years, and the research on which Dr. Giblin and her colleagues have been working is all about ascertaining how we can empower people to grow and develop businesses.
We need to decide on key performance indicators, KPIs, in order to know whether we are doing well or poorly with regard to supports. I mentioned research and development. This is primarily the focus of large companies. Small companies do not do it. That is a fact. Why do they not do it and why do they not access those vouchers? We need to support them in breaking through those barriers.
The Leas-Chathaoirleach mentioned personal guarantees. These are absolutely critical. I echo what he said in that regard.
There is another thing which is very important in respect of productivity. The vouchers are part of it, but another big part is education and our connections with people like Dr. Giblin and others. These connections allow us to build a Venn diagram in which there is an overlap between business, SMEs, the intelligence and ability of academics, and evidence-based research. We are very weak on that. We are much weaker than many other countries, hence our research. I ask the Minister of State to drive Cabinet and to lead in developing that area. I am sure he can do it because I know his passion for it. We have spoken about this area on a number of occasions, albeit briefly.
One of things I am pushing hard is the Perjury and Related Offences Bill 2018. It has gone through all Stages in the Seanad and is now before the Dáil. I have spoken with the Minister, Deputy Flanagan, and he and the Government will support it in the Dáil, as will Fianna Fáil and Sinn Féin. Will the Minister of State proceed with this as soon as possible so that it can go through the Dáil and become law by Christmas, because insurance is a huge issue? Insurance and Brexit are the two big issues we hear about in respect of SMEs. We do not have legislation like the perjury Bill in Ireland, although every other developed country has. There is perjury legislation in Northern Ireland and the UK, but not in Ireland.
Those are my few asks of the Minister of State. Gabhaim buíochas leis. I know he is passionate about this issue. I very much welcome his support and feedback on it. All of my colleagues know entrepreneurship and SMEs, so the Minister of State and I are talking to people who know what this is all about.
I will start by acknowledging the immense work of Senator Ó Céidigh, who has talked to me about this project on a number of occasions, of the Leas-Chathaoirleach, and of the other committee members present with regard to this report. I say in jest that it is very easy to see the amount of work the Senator and Leas-Chathaoirleach have put in because both are a bit greyer today than they are in their pictures in the report, which were taken before they started. Joking aside, a real mountain of work has gone into this. Today is the first time I have had a really good look at it. I will digest the figures further over the coming days. It is a super body of work which brings many facts and figures together in one place. It is a credit to the committee, as are their recommendations.
To come back in where the Minister of State left off, it is said that half of the kids born today will work in jobs that have not yet been invented. I believe that is the throwaway phrase. It is really an incredible statistic if one thinks about it. With regard to people my age, people talk about Intel and Facebook. I am sure it is the same for-----
The Senator has a while to go yet.
The Leas-Chathaoirleach should not get excited. Leading on from there, as Senator Ó Céidigh has said, education is the most important thing. Our schools and colleges have to be able to shift and change course very rapidly. They really have to work hand in hand with small, and indeed large, businesses. If they do not, these jobs will not come about.
I know there has been a slight ramping up of apprenticeships. We have talked about this on the floor here a number of times. There has been a genuine attempt to ramp up the numbers but I feel that people are still caught between a rock and hard place in respect of the apprenticeship schemes. If a kid who is not school-oriented gets fewer than five honours in the junior certificate, he or she will not qualify for an apprenticeship. It may not be the best way to assess some of these kids. Perhaps they should be put into a business, whether in the wet trades, with an electrician, or whatever else, and we can see if they stay the course for a year. If they are keen to progress, one could look at offering them an apprenticeship at that stage. The only way to access apprenticeships if one does not have those qualifications or examination results is to spend three years working with a chippy, a carpenter, or whatever else. That is far too long if we want these kids to progress. It is something at which we can look further. There has been work done but we should look at it further.
Many of us here are from the same background, that of small business and small enterprise. The helps for people who take a chance, perhaps leaving a State job or something to that effect, to set up a small enterprise are not too convincing. We have looked at the contributions from the State that people who fail can avail of. These have changed recently. Some State help is now available to those who fail, which was not the case heretofore. Even though that is now the case, there is still no correlation between the money one pays into the tax system and what one gets out of the contributory State pension at the end of the day. This is not the case if one is a Senator, Minister or State employee. We really have to look at this if we want to encourage more entrepreneurship and throw down the gauntlet as a small trading nation, which we do. We are very lucky in that we develop great entrepreneurs. There is something to be done there. The maximum contributory State pension is €248 or €250. That is not good enough for somebody taking a big chance. If they are going to be successful, employ many people, and pay a hell of a lot of tax, this is the least we can do. They do get breaks and so on in respect of private pensions but many people start off small and are not thinking that they may have a pot of gold at the end to divert into a pension. It may never happen. Even with regard to the State pension, the State cannot lose because it will be taxed anyway.
That is something else at which we could certainly look. There is a certain amount of red tape. I accept that quite a bit of it comes from the European Union. There was reference to it the other day when Senators Norris and McDowell were discussing certain banking regulations. There is a certain amount of red tape which we in Ireland are also quite good at introducing. I could get into a number of examples, but I will not delay our discussion today.
I have also picked out the issue of the Cabinet Minister which Senator Ó Céidigh has highlighted heavily. The Minister of State has excelled whenever he has come before the Seanad. I know that his is the junior position, but the area of small and medium enterprises deserves to be served by a full Minister. I have no doubt that having such a position would help to attract more jobs to the country.
I have two final points related to the county from which I come, Westmeath, in which quite a lot of agricultural activity takes place. I was happy to see the number of small businesses in the county and how highly it rated in some of the graphs included in the report. With reference to agriculture, Burger King has introduced a non-meat burger. I am told that in America one quarter of milk sold is non-dairy. That has happened within a very short timeframe. We have to work to diversify the agriculture sector. We have the land required, very skilled farmers and a lot of know-how, but we have to stay ahead. Senator Coghlan has spoken about the Kerry Group, Dairygold and all of the work great companies such as Origin are doing in producing products, including protein bars and so on. That is the way forward for us and it is something on which we have to work within the agriculture sector. We could be doing smarter things in the agriculture industry, rather than talking about sending stuff to the far end of China. We have very clever guys in the agriculture industry. With the right help from the enterprise bodies, we could do a little more.
I will throw out a point about the planning matrix. I have a lot of interest in planning since my time as a councillor. If one looks at retail units on the main street in any given town, even in Killarney or outside the gates in Dublin but especially in my own town and many others in the midlands, one sees nail bars, hairdressers, coffee shops, fast food outlets, beauty salons and betting shops. Our main streets are populated only by these cheap service industries which make up much of the small enterprise and industry sector and provide much employment, but most of the jobs are paid poorly. Can we do better in that regard? With councils and enterprise bodies, we have to see how we can do better in the retail sector. We are all aware of Internet retail services and how they have hurt main street retail units, but there is also a big gap in the area, which is something at which we could look, perhaps through the Minister of State's Department. A little more thinking or stability could help to create more productive jobs and might be of some help to us.
I welcome the Minister of State, Deputy Breen, and acknowledge his enormous track record in the few years he has been Minister of State with responsibility for this area. I thank, in particular, the rapporteur for the committee, my colleague, Senator Ó Céidigh, and the Leas-Chathaoirleach who is its Chairman. It is a really important piece of work. As I was listening to Senator Ó Céidigh, I was thinking about how we were all small business people. We are involved in enterprise and are like entrepreneurs. I like to keep my language simple. Irish people innately like to make a few bob. We like the challenge of doing something. At the age of 11 years, I kept angora rabbits and sold angora wool. I sent it through the post and was sent back a postal order which I had difficulty cashing. If we bought a bag of sweets for a shilling as little kids, we would cut it open and sell them for a penny each to make a few bob. That is something that is innate to Irish people's psyche. We are dealers. My father was a cattle dealer and I inherited some of his guile and determination, or whatever else one might call it, which drove me to turn a buck and make a bob. I believe it is something all Irish people have. We talk about SMEs and enterprise, but I like to keep it simple. We all like to provide and put a loaf on the table. We realise business is essential in that regard.
I acknowledge, in particular, Senators Coghlan, Ó Céidigh, Ardagh, Buttimer, Byrne, Conway, Mark Daly, Devine, Freeman and Kelleher who make up the committee. The report is a really important piece of work. I will focus in on it but will not take long. It is 186 pages long and includes 129 recommendations. One of the things I really like about the report of the Seanad Public Consultation Committee on small and medium enterprises in Ireland is that it sets out and talks about our key successes. It acknowledges them, which is really positive. It is not all negative or downbeat but acknowledges our key successes. It also acknowledges and sets out the key challenges we face. It is particularly interesting to see how they were built into the report, which is important. More importantly, it includes 129 recommendations. If the report is to have any meaning and not to gather dust like so many others in the Houses of the Oireachtas and Departments, we need to do something about it.
One of the other things I like about the report is the quality of the data. That is what gives it integrity and meaning. I have looked through it and the data and evidence are included. I was taken particularly by the summary of the top four industries in each county, based on the percentage of people engaged in each industry. That is a really powerful infographic included in the report. It confirms everything Senator Ó Céidigh has said about there being different horses for different courses. What works in Dublin might not work elsewhere in Leinster, Munster or different parts of the country. That is an important point.
The report is a great body of work, but it has to have meaning. We need to see its recommendations tracked and a timeline for their delivery. Not everything will happen today or tomorrow. We need to put in place regular reviews of the report to see if it is being implemented. Implementation will be slow, but it is important that the report be implemented and that its implementation be tracked. I know that the Minister of State will agree.
I was particularly impressed by the report's focus on certain issues, one of which I will single out - the farming and agrifood sector. There is an enormous number of small enterprises involved in the production of artisan foods, from mustard to jam to chutney. The country market scene has really grown in Ireland. It is now a popular leisure activity to visit a country market at the weekend. While we have great companies like the Kerry Group at one level, there are loads of little family run niche businesses at another. If a little business just keeps one household going, it is really good. There is a real need to go back to producing holistic and organic products which are home-produced. We are brilliant at it. It is a matter of bringing artisan craft food companies to a higher level. Some of the big companies started in this way. Big oak trees come from small acorns. Businesses have to start somewhere and then grow. If they are nurtured, they will grow. That is a really important point.
I welcome the report's emphasis on farming and, particularly, fisheries. This is an island and the potential of the fisheries sector is enormous, but we have to add value to fish products. We could produce fish-meal, but there are many other things that could be done in the fisheries industry. This ties in with the development of the hospitality and tourism sectors, on which the report also places great emphasis. I was particularly impressed by the focus on innovation and collaboration. These are two key and important words which are central to the tenor of the report.
They are particularly good. I want to acknowledge the importance of the data, demographics, research and information in the report.
In his speech the Minister of State said that on 4 October 2019, the Minister, Deputy Humphreys, announced 16 LEO projects, which is excellent. He also referenced the LEO productivity challenge fund, which totals €500,000. It is not enough. I know times are tough and it is hard to get money, but only 2,500 vouchers are required. It is not a lot of money overall. People should not have to jump through hoops to secure funding. I know the Minister would like to do more and that resources do not allow us to do more, but I would like that to be under constant review.
I am appealing to the Minister of State, his Government colleagues and everybody here. If we are to address the challenges of small and medium business, impediments to local enterprise and give help to the shopkeepers, shoemakers, sweetshops and newsagents which keep our villages and towns thriving, we have to examine how we are funding local government. The reliance on funding the core day-to-day activities of our 31 local authorities through local businesses is grossly unfair.
The property tax was introduced with great promises. People may recall the leaflets, fanfare and publicity around the local property tax and it was said every citizen was going to make a contribution, and rightly so. I am not against the local property tax, rather, I am against the current mechanism and the fact it does not take into account anyone's ability to pay. I understand the Government is examining reform of the local property tax, which I welcome.
I do not think it is right and proper that businesses are propping up the funding of local authorities. I am aware that some councillors, who have spoken to me, are striking rates today. Businesses are up in arms because shopkeepers and businesses are always the soft target. I understand the difficulties faced by local government, but the best thing we could do over the next number of years is reform how we fund local government and remove the burden and over-reliance on commercial rates to support it from the backs and shoulders of small, medium and large enterprises and entrepreneurs.
If we are to ensure things go further, we have to put in place a tracking and delivery mechanism and ensure there is a constant review of the objectives of this report. Well done to all involved.
I welcome this report. It is the second time we have discussed it in the House. I want to speak from a personal perspective. Senator Ó Céidigh made reference to being self-employed. I established myself as a self-employed chartered accountant many years ago and was self-employed for about 12 years before I went into politics. SMEs, in particular startups, were my bread and butter. There is no substitute for experience.
There are a couple of things in the report which I welcome and a number of others to which I would make an addition. It is important that the report was done. It is important that we have someone like the Minister of State, Deputy Breen, with specific responsibility for SMEs.
I want to look at Brexit in a positive, rather than a negative, light. I see it as a wake-up call for us on several levels. We have been over reliant on the UK market for many decades. We have to give SMEs the scope to go into other markets, and that is happening through Enterprise Ireland. In terms of Brexit, we must ensure that whatever supports are required to enable the SME sector to reposition are available. This is particularly important for the indigenous and agricultural sectors, which have a disproportionate reliance on the UK market.
The Minister of State, Deputy Breen, will be aware of the importance of artificial intelligence. Companies which were set up by young people living in Limerick, Clare and the mid west have become multinationals. We need to promote a model whereby we are outward rather than inward looking. Multinationals coming to Ireland are great, but we have to provide an environment where young, vibrant men and women in Ireland can establish businesses, the markets for which are not just Ireland, although that is extremely important, but Asia, Europe and Britain.
People should not be afraid of failure. People in America set up businesses which fail. Many successful businesspeople have failed two or three times. In Ireland people are still worried that if they set up a business they may fail. People should be encouraged to set up businesses because they learn from experience. When one is self-employed, there is no substitute for putting money into a bank account or seeing that an overdraft has gone over the limit. The late Albert Reynolds was quoted as saying that when the peace process was ongoing he was told that the pressure must be horrific, but he said pressure was going out on a Friday night knowing that if he did not collect £10,000 in all of his dance halls and lodge the money in the bank on a Monday morning he would be out of business.
In the early years of my business I was not paid by certain clients. I remember going out for three or four hours on a winter's evening to wait for a client to come back so that I could collect my money. I had a young family. We have to create an environment where people are not afraid to fail and we support SMEs.
That self-employed people are now eligible for jobseeker's benefit is a small but significant and positive change. Payments for the self-employed who become ill is another small but significant change.
The largest employers in the country are SMEs. Multinationals are fantastic and there are many in our region, which I welcome. However, SMEs are major employers and have a significant status in small towns and villages for myriad reasons. They enable people to rear their families nearby, support local shops and pubs and keep post offices open. We have to look at SMEs in a wider context and ask what we can do to support those being established in rural villages, towns and suburbs.
This report is extremely important, and it is now important that it is acted on in a timely manner. We will not get everything right. Having been self employed for many years, I learned that it is tough and banks are extremely important. They are not the only essential ingredient, but having access to cash is critical. Many of my clients over the years could not get overdraft facilities. Instead, they got drafts at the start of the month from the local credit union and lodged them to their current accounts so that they could function. That is why I always stand up for the credit union movement. It has started to evolve and needs to get into public banking. One option is the Canadian model, where credit unions have back-office facilities. Credit unions need to take on the banks.
We need to ensure that the State spends money wisely on behalf of taxpayers in supporting SMEs.
Second, we need to ensure that the State spends money wisely on behalf of the taxpayer in supporting SMEs. I want to see that if somebody wants to have a cut and fail, they should not be penalised to the extent that in many ways they are, both in reputation and in how they are sometimes recognised by banks. This is a feature of being an entrepreneur.
Third, with Brexit, we need to foster an environment where we take up the challenge. I see no positive aspect to Brexit and I am hoping that it will not happen. It is a wake-up call, however, to tell us that we need to diversify more and more, particularly with the SME sector in the non-UK market, even though the UK market is hugely important.
I want to see the continuation of an environment being fostered where our entrepreneurs go into the multinational sector but are based in Ireland. I see many of these entrepreneurs going abroad and being based in America. This should not be happening. I would like to see them based in Ireland. I would like to have seen the Collison brothers being based in Limerick. People will have personal reasons for their views. I would like to see a situation where we are doing business in such a way that entrepreneurs from abroad will come into Ireland. There is so much going for us here and what we have in Ireland is a natural entrepreneurial streak. It is a little bit wild and outside the box, which many of us are. It is endemic in the Irish psyche. I very much welcome this support. It needs to be acted upon and we need to continue to create this kind of environment.
The real dimension is what can we do to get SMEs to set up in their own localities, to employ local people and to suddenly see these blossoming into great multinational companies. We have many examples throughout the country. Fexco is one below in Kerry. We have H&MV Engineering, which the Taoiseach came down to open in Limerick, and companies like ActionPoint and multitudes of others. I want to see that approach being developed and these companies being recognised.
I was not sure if I was the only Dub here, but no, we have a blow-in as well. It seems mostly that this-----
Senator Boyhan is from County Dublin.
We all have connections with Dublin, whether we like it or not.
This debate seems to allude to rural Ireland which I understand, but for myself, I get pretty fed up walking down the streets of this wonderful capital city, but seeing the same ubiquitous shops. It has all become very much the same. There is great excitement when one visits the sticks and finds different crafts and foods, which speak of who we are. Unfortunately, big cities tend to become very bland offering something that one will pick up worldwide. It is the SME that is unique and different.
The Seanad Public Consultation Committee has shown itself, under the tutelage and steerage of our esteemed Chairman, to be an invaluable committee in the past two years. We have proudly covered topics ranging from children's mental health to Travellers' rights. The Citizens' Assembly process has been well-documented and respected in recent times for the positive contribution it makes to our democracy, and I believe the Seanad Public Consultation Committee operates in a similar vein. We invite in the experts and the stakeholders, the people on the ground, and we explore, based on the scientific evidence, what is needed, the data required, and what are the problems and solutions. I look forward to the committee undertaking my own chosen topic; hopefully, we will produce a similarly comprehensive and detailed report and recommendations as was done with this fantastic report we are discussing here today.
On that note, I welcome the chance to speak and I commend Senator Ó Céidigh on bringing this topic to the committee. I was present during the consultation and it was a very comprehensive and enjoyable listen for me. I learned a great deal.
As this report indicates, it is going to take some big and creative ideas to support the growth of SMEs in Ireland, especially within the context of political uncertainty, climate change, and Brexit.
As the engine of the Irish economy, SMEs need a strong State agency advocating for them and providing support to sustain and grow our indigenous enterprise sector. This report recommends that we promote and encourage collaboration, cohesion and communication among the various organisations and bodies delivering supports and initiatives to SMEs.
In Sinn Féin's alternative budget we proposed the establishment of a new Irish enterprise agency to assist domestic SMEs. This organisation would provide the Government with advice and guidance on what SMEs, retailers and other enterprises want. This agency would ensure that the uptake of State supports and assistance being provided is of an equal standard and quality across the State.
We need to tackle some of the unfair cost of doing business. One such cost, as spoken about earlier, is in the area of insurance, and Deputy Pearse Doherty has taken a huge lead on this. These costs have become extortionate, ripping off consumers and closing down businesses. Our plan for insurance reform would stamp out fraud, protect consumers, ban price discrimination by the industry and reduce premiums for everyone.
To do this we need to set up a Garda insurance fraud unit, ban dual pricing by the insurance industry, enact and pass the Consumer Insurance Contracts Bill, abolish premium levies and put €230 million back in consumers' pockets, with State intervention to address the market failure. These measures would ensure fairer insurance premiums for small businesses and stop the rip-off of small businesses by big companies.
This report also makes 129 recommendations, some of which are around fostering female entrepreneurship. In Ireland, women are less likely to be entrepreneurs than men. Some 65% of new business owners are men, 35% are female. Of particular concern, also, is the fact that men and women differ in the terms of their attitudes and perceptions to entrepreneurship. A higher proportion of male adults in the total population, 52%, believe they have skills and knowledge to start up a new enterprise, compared to female adults at only 33%. In 2013, a higher proportion of men than women reported that they believed they had access to training on how to start or grow a business.
This seems to be a general phenomenon. In politics, men are often far more self-assured and self-confident than women. The National Women's Council of Ireland and Women for Election came up with the same idea, and asked whether it is how we are socialised as we grow up. Women are a lot more modest than men, and perhaps a bit more shy as well. What were those barriers? Many of these barriers are socialisation, how we are nurtured and reared, our culture, and our ties to home with children, and such issues. Sin scéal eile for another day. It is certainly stark when it comes to businesses and almost every other area of life.
Some 43% of females cite a fear of failure as stopping them in business compared with 36% of men. Some 25% of females have a role model through knowing a recent entrepreneur where 35% of men do. Further research shows that Ireland has a particularly big disparity between the proportion of men and women in the population who declare they have access to money to start or grow a business.
It is comforting to know that, as the Leas-Chathaoirleach noted, 8% of first-time start-ups six years ago were by women whereas last year this had climbed to 28%. There is hope for us yet.
Lack of female participation is bad for business, which we know. The point was also made during the consultation about apprenticeships, referenced a little earlier. There is a push to encourage more women to take these up, but the value of apprenticeships needs to be acknowledged and respected. It really goes against the grain for me that every child should have an automatic rite of passage to university and that this is somehow the be-all and end-all of their maturity.
We know children sometimes have no interest in university but they still go because it is a bit of a doss. I did it myself quite a lot. Apprenticeships need to be valued and respected and we need to get women involved in them. They are of equal value and they provide the practical, hands-on skills we will need.
The recommendations have invaluable ideas on the overall development of SME but I want to elaborate on two other ideas. We need an increase in the research and development tax credit to 30% for SMEs to help to promote innovation and creativity within our economy. We want diverse and novel thinking, collaboration and Ireland as a leader. A bit more focus on the creation of workers' co-operative development units to promote workers' co-operatives in Ireland would be helpful. Ownership must be shared for society to have a fair and functioning economy that works for workers and for our communities, .
I caution that we prepare SMEs for a just transition to a carbon-neutral economy. In our climate action mission, we will all have to make serious changes, but we have acknowledged we should not leave anybody behind without support, and that includes SMEs. I welcome this report to the House and commend the work of the committee. There is much we can do to promote this from tackling insurance rip-offs to promoting female entrepreneurship. We need to remember and fully appreciate - to repeat what the Leas-Chathaoirleach said - that family enterprises have more attachment and grá for their communities and their employees. I welcome the 129 recommendations and, hopefully, the Minister of State and future Ministers and Ministers of State will have those recommendations embedded in future policies to support, enable and assist small businesses. Déanaim comhghairdeas leis an Seanadóir Ó Céidigh.
As Senator Devine is the only lady present, she should get another five minutes.
The Senator should not encourage her.
Unfortunately, I was just going to say that in accordance with the Order of Business, I am required to call the Minister of State to conclude at 5.54 p.m., which is squeezing Senator Feighan.
I am somebody who grew up in business and employed more than 30 people many years ago long before I entered politics. I welcome this report and I congratulate Senator Ó Céidigh and all those involved in it. A lack of access to finance is a problem for small companies and we know cash flow is the lifeblood of many companies.
I want to resolve one matter in particular. When the recession happened, most people were in businesses and those business are not fit for purpose now. Retail has changed, for example, but new businesses and companies are embedded in our local communities. People do not fully realise that many of those businesses bought bank shares for their pensions. Most people in the public service, such as ourselves, have a pension but most people in businesses did not have a pension plan and they bought bank shares in Bank of Ireland and AIB. Those bank shares were their lump sum and dividend. That is one thing most people do not understand. Those people ended up with nothing. I know most of my friends who were in business - and perhaps the businesses were not fit for purpose - ended up with nothing. I had a shop that I kept going for as long as I could and the only reason it closed is that I ran out of money. Senator Kieran O'Donnell summed it up perfectly. There was an honesty and a loyalty involved in keeping businesses going. Those people were let down by the State because there was nothing there for them. I am delighted we now have some support for self-employed people through the social protection system. I am watching what is happening. I went into the county council in 1999 and I remember every year the county council used to decide to increase the rates by 3% or 4%.
It was shoddy and lazy and I am glad local authorities are beginning to see these businesses were the lifeblood of the streets and they have lost that. I thank the Minister of State for letting me in to contribute. I could talk about this for 20 minutes but I am delighted to get in.
Senator Feighan should continue.
I thank Senator Feighan for his understanding. We are caught with the 6 p.m. deadline.
He is having sleepless nights.
I call on the Minister of State to respond and wind up.
I thank all the Deputies who contributed to an interesting debate-----
We are Senators. We are not Deputies yet.
I have noted all the Senators' comments. I will inquire into the Údarás na Gaeltachta funding for the LEOs for Senator Ó Céidigh. That is well noted.
I noted the comments of Senators Devine and Davitt on apprenticeships. Apprenticeships are important. Thankfully, we are gone from the days when mothers and fathers felt that all their sons and daughters should get academic degrees in universities. There is much more value in high-end apprenticeships or whatever type of apprenticeship one undertakes. Many multinational and indigenous companies prefer to have a worker train with them on an apprenticeship. That person often turns out to a good quality worker.
Senator Kieran O'Donnell mentioned the important of trade missions in diversification. That is very much part of the Department's policy with Enterprise Ireland this year. We have sought to diversify into other markets, such as the eurozone, which is strategically important for us. One time, language was a barrier in those areas but that is no longer an issue. I am always proud to travel abroad with Irish companies on trade missions, particularly with SMEs. I know Senator Devine will not mind me saying many of these are located outside of the greater Dublin area, particularly in the medical technology sector, and they can stand up to any of these big multinational companies, work with them, partner with them and sub-supply them, etc. I am proud of those companies.
Senator Boyhan mentioned the agrifood sector, which is so important to us. He is correct about the supplementary income for jam makers, sausage makers and cheesemakers. All these play an important role in showcasing Ireland in artisan food, particularly in contributing to the significant tourism business we have in Ireland.
Senator Kieran O'Donnell is correct we should reward people who take risks. That is important.
To respond to Senator Feighan's contribution, access to finance is important and it is something we are conscious of for SMEs and small businesses. That is why Microfinance Ireland has played a significant role.
I thank all Senators who made a contribution. It was a valuable exercise. I am glad we had these constructive statements. It is clear we have a shared appreciation of the fundamental role SMEs play in our economy, not only from the business sense but from a social perspective as well. Senator Devine was born in the Liberties and now represents Tallaght but she knows the importance of SMEs in Dublin as well. They are just as important in those sectors all over Dublin. I have visited them and have seen the important role microenterprises play in Dublin, including in the community context. SMEs are the fabric of the daily life of every village, town and region in the country. Even before we go into the central role of developing the strength and resilience of our economy, our SMEs are also the facilitators of the fabric of life so that people throughout the country can provide immediate employment opportunities closest to the people in their homes and communities. One finds that communities build when there are small microenterprises there. That helps families to avoid commuting, which prevents pollution and helps with our climate obligations.
On the basis of the contributions, I am reassured we have a shared understanding of the many leading priorities that should be pursued by Government by seeking to develop and strengthen the SME sector across Ireland. These priorities have been reflected in the excellent report carried out by the Seanad Public Consultation Committee, in the OECD review, which was launched last week, and in the contributions we have heard this afternoon.
To recap, we must ensure our forthcoming SME and entrepreneurship strategy addresses all the crucial aspects, including ensuring we have the appropriate targets and support programmes for SMEs to foster the conditions whereby SMEs can innovate, pursue new and emerging technologies, including digitalisation; develop the skills of the owners and managers of SMEs because it is important they have the requisite skills such as the management of finance; create regional ecosystems based on the development of excellence, which will include clusters and hubs that are enterprise-led and; facilitate collaborations.
A few Senators, including Senator Boyhan, mentioned the importance of female entrepreneurship.
It is important that we put in place and grow female entrepreneurship. Importantly, we must enable and assist our small and medium-sized firms to access export markets and grow exports both in volume and in terms of the capacity of the markets.
I wish to thank all present, including the rapporteur, Senator Pádraig Ó Céidigh, and the committee chairman, Senator Paul Coghlan, for their thoughtful and insightful preparation of this report and for facilitating a positive session this afternoon. I found the contributions positive. It was an hour and a half but it flew by because all spoke from the urban and rural side on the importance of the small and medium-sized business sector in light of the fact that 98% of enterprises in the country are SMEs and they employ 70% of the population.
I thank the Minister of State whose words of wisdom are very much appreciated. I got some ideas that I intend to discuss further with the rapporteur. I believe we can have another follow-up, if I may say so. I thank everyone again. I will call on the Leader in a moment. I thank not only the rapporteur and the committee but especially our secretary, Bridget Doody, who is essential. Without her the committee could not have functioned; her assistance was invaluable, especially to me as Chairman.
I was late getting in. I wish to thank the Minister of State, Deputy Breen, for facilitating the debate tonight.
He was very good.
I commend him on his words of wisdom and explanation. As a member of the committee, I wish to commend Senator Ó Céidigh on his spirit of endeavour regarding the report and in terms of the accumulation of the various witnesses and the end result. In his opening remarks to the House today he referenced speaking to iar-Thaoisigh and the leader of Fianna Fáil. I know who I would listen to in that conversation. He was right. This is his area of expertise. He is a man of renowned entrepreneurship. His ability has transcended business given his role in Cumann Lúthchleas Gael as well. I thank Senator Ó Céidigh. The Tánaiste is on his way. Perhaps we could allow him a few minutes.