Fostering Investment - The Irish Approach Conor O’Mahony Department of Enterprise Trade and Employment, Ireland October

Presentation in 2 parts –Background to recent performance of Irish Economy –Overview of State supports for Enterprise

GDP Growth

Employment Growth 2000 & 2001

World Competitiveness Scoreboard 2001‘00 ’99 ’98 ’97’96 USA Singapore Finland Netherlands Switzerland Luxembourg IRELAND Germany Sweden

Sources of Growth in Ireland EU membership Targeting Education and training Population effects Exports and Globalisation Social Partnership Economic and Monetary Union Demonstration and Agglomeration effects “Intangibles” (English speaking, diaspora, access to decision makers, etc)

EU membership Ireland has been a member since 1973 Access to the Single Market from 1992 Common Agricultural Policy Structural and Cohesion Funds Competition policy development - Reforms Science and Technology (Framework programmes) Enterprise Development (SMEs, linkages)

Sectoral Targeting Small country has to pick winners Computers/Minicomputers/PCs Software Financial Services Healthcare Multimedia/e-business Historic investment in Science & Research

Education and training Long educational tradition Free education in 1960s Third-level expansion Flexibility in curriculum

Population effects Declining emigration High population growth Increase in working-age population Women’s participation Immigration

Exports and Globalisation  17% of Trade with Us  23% of Trade with Rest of World  58% with UK and EU

Social Partnership Initial agreement a response to crisis Originally three partners: Government,workers, employers Membership has broadened (Fourth Pillar) Agenda has broadened also 6 th Agreement concluded this year

Economic and Monetary Union Preparatory period forced monetary and fiscal discipline (Maastricht criteria) Ireland was one of the founders on 1 January 1999 Now twelve members of the eurozone Macroeconomic stability (low inflation, low interest rates)

Demonstration / Agglomeration Existing foreign firms reported favourable investment experiences Clustering of ICT firms in particular to take advantage of skills Specialised services developed (logistics, packaging, localisation)

Enterprise Policy: Strategic Challenge Maintaining growth and raising living standards with slower labour force growth Raising productivity across all sectors Overcoming infrastructure gaps Achieving regional balance Maintaining quality of life Maintaining / improving competitiveness: Ireland as a location for internationally mobile investment Strengthening indigenous enterprise base

Enterprise Support Role of Department of Enterprise Trade and Employment Development Agencies –Structure –“Offer”

Role of Department of Enterprise, Trade & Employment Frequent review of Enterprise Policy “Champion” for pro-business environment –Driving administrative efficiency and flexibility, cutting red tape –Ensuring a light regulatory environment –Competitive Proofing proposals SME Round Table Consultations Partnership Support – Website and Publications, e.g -

Government Internet Portal providing detailed information On: Starting a business, including business registration Funding including the range of funds available and how to access them Legal and Regulatory matters Business Operations and Trade Premises and environment including matters relating to planning permission Employing staff Taxation and finance Returns and other obligations Innovation Expanding your business Selling to government Closing or selling a business

Industrial Promotion Organisational Structure Department 35 County Enterprise Boards (Indigenous) (FDI) (Micro-enterprise)

Forfás Adviser on Industrial Policy Coordinator of Industrial Development agencies National Competitiveness Council

Industrial Development Authority Ireland Responsible for attraction of FDI Markets Ireland as base for Investment Provides some financial assistance (subject to EU State Aids regime)

ENTERPRISE IRELAND indigenous enterprisesOffers services & support measures mainly for indigenous enterprises Services For Enterprises –Focus on fast growth, export oriented start-ups –Provide professional advice on all aspects of company development –Introduce potential business partners –Provide Access to Finance  Venture Capital equity  Employment grants  Management Development –Support for R&D, Innovation and Incubators

ENTERPRISE IRELAND Example of Support Provided –Seed and Venture Capital Funds –Objectives are to: fill the gap left by existing venture capital funds assist start-up operations and early stage development companies stimulate the investment by the Private Sector of funds into Venture Capital

ENTERPRISE IRELAND Seed and Venture Capital Funds (contd) –Partnership with Venture Capital Funds/ promoters with management resources and expertise –Commercial remit. –Mix of private and public funding (incl EIF in a number of funds) –Current programme – State funding of c. €100m leveraged total funds of €400m

County Enterprise Boards Provide support to micro-enterprise (< 10 employees) Network of 35 boards at municipal level Funded mainly by Exchequer Mixture of direct financial support and “soft” supports Promote Entrepreneurship locally High client satisfaction Positive impact on local economic activity

COUNTY ENTERPRISE BOARDS SERVICES Finance – feasibility study (max €5k), employment (max €6.3k per job), capital and equity (max €63k) Management Development Start your own business programme Business Advice and Information Information Seminars Business Mentoring Women in Business network Networking Opportunities E-commerce development

Conclusions Extraordinary performance in past decade, driven by –Good policies –Good timing –Good Luck More challenging environment going forward Have to be aggressive in driving competitiveness, incl implementation of ‘Better Regulation’ agenda. Need to continuously minimise bureaucracy Need to maintain and develop support for business particularly SME sector Industrial promotion framework appears to be working but cannot be complacent Need to constantly review and respond to change.

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