Challenges ahead for new Enterprise Ireland chief

In November, Julie Sinnamon will succeed Frank Ryan as chief of Enterprise Ireland, the body charged with promoting the development of indigenous enterprise and job creation.

News of her appointment came late in the week. It coincided with reports of a 33,000 year-on-year rise in numbers in employment, with particularly welcome growth in the number of full time jobs.

But with the unemployment rate at 13.7% — well over 400,000 — and with emigration running at 50,000 a year, the new Enterprise Ireland boss will have her hands full.

Sinnamon becomes the first female to head an Irish job creation agency.

She grew up in Northern Ireland, taking a degree in Business Studies at the University of Ulster.

She has private sector experience and would be considered to be straight speaking and approachable.

As head of Global Business Development, she has served at the right hand of the outgoing chief executive, Frank Ryan.

If Ryan could be faulted for anything, it was for a tendency to talk up the economy, promising a rapid rebound, a couple of years back.

The rebound never happened, of course, but the agency, nevertheless, has a decent enough story to tell.

It can point to a rise in exports by Irish-owned firms from €10bn to €16bn over a ten-year period when the economy lost competitiveness during the property and wages bubble and the banking system subsequently crashed.

Despite the credit crunch, food and drink enterprises, in particular have been flourishing. Many Irish construction service firms have broken into new markets in places such as Russia and Asia. Kentz, for example, is fighting off suitors.

But important challenges remain.

Ireland has largely missed out on the emerging markets investment boom, remaining heavily dependent on traditional markets, in the UK and Europe.

The slowdown in these markets has hit Irish exporters hard. Julie Sinnamon’s job has been to reduce this damaging dependence.

Two years ago, she gave this reporter a realistic assessment of the situation.

“Breaking into key markets in Asia will take time. It will take years for some companies to breakthrough after they have established a presence.” But, she added, the potential for food exports, in particular, was “enormous”.

The agency has been criticised in the past for an over concentration on representative offices in established markets. However, Ms Sinnamon pointed to four new offices in China and offices in Brazil, Russia and India. Eighteen months ago, it opened one in Johannesburg, the first in Africa — it is a surprise that this took so long.

But getting key people in the ground in these regions has been a struggle, due to a mix of family reasons and recruitment embargoes.

According to John Whelan, head of the Irish Exporters Association, “in the past six months, Julie Sinnamon has been moving to get additional personnel put into the Asian markets. Overseas offices would be seen as the most valuable part of Enterprise Ireland’s activities. However, they struggle to get enough people transferred out of the home offices. I suspect there is a reluctance to move families to unfamiliar surroundings. This continues to be a major challenge. It is difficult to incentivise staff to move. It will be a huge challenge for Julie”.

Yet it is one that must be surmounted. Despite the difficulties in many emerging economies, the prediction remains that 90% of global GDP growth in the next two decades will take place outside Europe.

The new chief executive will have to play a key role in fulfilling the Government’s ambition to transform Irish firms into engines of growth, backed by new sources of finance and innovation.

Agency sources, this weekend, point to the fact that they have received sanction to recruit 20 executives to work in high growth markets.

But even if markets open up, can exporters, here, meet the demand, given the shortages of available bank credit?

As Sinnamon put it: “There is a high level of engagement. We are working closely with the banks. Areas such as export credit are difficult. It is a journey. There is much uncertainty.”

What is clear is that the issue of finance for entrepreneurs will be a critical one for Sinnamon.

The lack of a strong local stock market, or venture capital market is critical. Agency sources insist that the venture capital market here is strong while accepting that the US acts as the template.

Some €645m in seed and venture capital funding was made available last year to Irish firms — nothing to sniff at, but far from a bonanza, and one mainly targeted at tech firms.

Perhaps, Ms Sinnamon needs to expand her remit by speaking out about the problems faced by local firms which face early termination at the hands of unsympathetic local and State bureaucracies.