Government makes pledge over new start for Irish small firms

Government makes pledge over new start for Irish small firms

A Government pledge for a new start in the way it treats Irish small firms has been welcomed by business groups as it prepares to unveil in the autumn a new policy for SMEs under the auspices of the OECD.

Business groups Isme and the Small Firms Association have long complained to the Organisation for Co-operation and Development about the Government’s fascination through the IDA over attracting multinationals with a range of corporation tax lures, while Irish-owned SMEs, they say, have been left in the shadows despite employing hundreds of thousands of people across the State.

The looming prospects of a hard Brexit and the high cost of loans Irish banks charge SMEs have also disgruntled small business owners, who say that they are in the firing line after many years of neglect.

Last year, Angel Gurria, the boss of the Organisation for Co-operation and Development in its major report on Ireland, highlighted the yawning gap between productivity of multinationals based here and Irish-owned firms and the surprising lack of digital skills of a workforce surrounded by foreign-owned tech giants.

After the debt crisies of the late 1980s and the 2008 economic slump, Irish-owned firms enjoy a surprisingly lowly position in the pecking order of policy compared with many continental countries, including Belgium and power-house Germany. The OECD said last year it had listened to the complaints of Irish SMEs and promised to help to review of all the State’s policies in encouraging SMEs, to be unveiled later this year.

At a conference attended on Friday by Taoiseach Leo Varadkar and the OECD second in command, Ulrik Vestergaard Knudsen, some of the details of the initiatives the Government has worked up with the OECD were unveiled.

They include the Government drawing up “an SME and entrepreneurship strategy”; increasing supports to help SME boost exports, with online vouchers and grants from Government agencies Enterprise Ireland and InterTrade Ireland; increasing the influence of Local Enterprise Offices for SMEs; and setting up a committee across government departments to shape SME policies.

They also include making it easier for small firms to apply for R&D tax credits; helping SMEs through Skillnet to boost their technology training; implementing “a simple online diagnostic assessment tool”; promoting standards over competitiveness; and developing the productivity of SMEs, by among other things, encouraging links between multinationals and SMEs.

The pledges will form part of a major new report in the autumn. The conference heard about the relatively small amount Irish SMEs tap from banks compared with their counterparts in Flanders, a region of similar population.

Coincidentally, a regular Central Bank report also published on Friday showed the average cost of new loans banks charge Irish SMEs - already among the highest in Europe - had risen to 4.26% from 4.21% a year earlier.

Business group hailed the initiatives as “a new start”. Sven Spollen-Behrens of the SFA said its “key focus” was the Government’s pledge to set up an inter-departmental group to review all SME initiatives.

Isme’s Adam Weatherley said the OECD had helped shape plans to get many more SMEs to tap exports.

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