Manufacturing & Supply Chain

The Government has launched an OECD Review of SME and Entrepreneurship Policy in Ireland and an accompanying roadmap with priority areas for implementation. The OECD was commissioned in March 2018 to undertake the Review, the scale of which has not been seen before in Ireland.

The focus of the Review was to identify policies and strategies to improve Irish SME productivity levels, resilience and the potential for growth and internationalisation. It includes best practice examples from countries with similar challenges to Ireland.

The OECD’s analysis will form the basis for a new government strategy on SMEs and Entrepreneurship, which will be published by the end of the year following further consultation.

The Government has also established a new SME and Entrepreneurship Consultation Group of key stakeholders to consider the Review and areas for action.

Heather Humphreys, TD, Minister for Business, Enterprise and Innovation, said: “Our country has made huge strides since the dark days of the recession. Through resilience, talent, and determination, we overcame enormous challenges. Nevertheless, with global challenges facing us there is no room for complacency. Every generation needs to shake up its enterprise and jobs model, otherwise it falls backwards.

“Through Future Jobs Ireland, the Government wants to nurture entrepreneurship and support our businesses and workers to prepare now for tomorrow’s world. 70% of our workers are employed by an SME, which highlights the crucial importance of Ireland’s indigenous businesses to stability and growth in every region. That is why I commissioned the OECD to undertake a detailed review into Ireland’s SME and entrepreneurship policies in March 2018.

“The OECD’s recommendations will form the building blocks of an ambitious new national SME and Entrepreneurship strategy, which I will bring forward by the end of this year.”

The key OECD recommendations for Ireland and areas for focus in the forthcoming new strategy include:

• Publish a unified cross-government policy statement covering both SMEs and entrepreneurship, setting out ambitious targets and aligning all relevant policies and schemes. Implementation of the national strategy should be overseen by a new interdepartmental committee on SMEs and entrepreneurship.
• Target a 50 per cent increase in the number of SMEs exporting including by driving ambition and innovation among indigenous SMEs.
• Broaden the remit of Local Enterprise Offices to include scaling small businesses of between between 10 and 50 employees. As part of this work, introduce a simple online tool for micro and small enterprises to better match enterprise needs with the services available.
• Increase adoption of best practice management techniques, including in the key areas like digital and automation skills and in sales, marketing and accountancy. Also encourage a wider take-up of Skillnet Ireland programmes to develop management capabilities in Irish SMEs.
• Achieve a step-up in financial skills and knowledge among SMEs so they can make better use of the mix of debt and equity finance available in the Irish market. Similarly, increase the take-up of guarantee schemes to improve the financing environment for SMEs.
• Encourage and support SME involvement in innovation collaborations between SMEs and research institutions, as well as collaborations between SMEs, research institutions and multinationals. This will benefit everyone involved and also help SMEs to discover new technologies and improve their management practices.
• Ramp up support for the digitalisation of SME business processes, especially through the LEO network;
• Simplify the administrative processes for SMEs applying for R&D tax credits to encourage more take-up. This will build on the improvements already made.
• Support greater SME engagement in the areas of energy and the environment, particularly in research, innovation and procurement. This will improve productivity and competitiveness, and accelerate the transition to the low-carbon economy.
• Roll-out a new standards adoption programme for SMEs. This should include guidelines on integrating standards in products and services together with consulting advice on adopting appropriate standards. Standards development and use can enhance productivity in SMEs, facilitate supply chain linkages and international collaborations, and enhance spill-overs from multinationals to SMEs.
• Establish a national support framework for local enterprise-led networks and clusters across the country to drive SME participation. This will help to spread the message around the supports and opportunities available. It will also support the professional development of managers of these networks.

Minister Humphreys added: “I am acutely aware that our indigenous Irish companies are the engine of our economy, and I want to ensure we are doing everything in our power to support them. In the past, smaller firms have sometimes felt overlooked by governments and I want to change the narrative. Our new SME strategy will be about creating the future we want by ensuring that indigenous firms are given the red carpet treatment they deserve.”

Pat Breen, TD, Minister of State for Trade, Employment, Business, EU Digital Single Market, and Data Protection, said: “Having engaged with the OECD throughout the process, I have seen the advantage of their knowledge and experience in the area of SME and Entrepreneurship policy. Having an external body examine the programmes and policies for Irish SMEs has been a thorough and rewarding experience. We have learnt not only of our strengths and areas in need of improvement but also real, best practice examples from around the world. I am delighted to see the emphasis on digital transformation, an area under my own remit. SMEs can be more agile and innovative than larger businesses and the digital world allows them to take advantage of this as never before.

“As chair of the new Consultative Group, with over 40 members including representative groups, programme managers, policymakers and SMEs themselves, I will lead the drive to progress the recommendations of the OECD Roadmap and their integration into actions within the Future Jobs framework.”