Talk the talk

Peter Coyle of Enterprise Ireland talks to David Clerkin about this week’s annual forum for Irish chief executives.

What does the chief executive forum hope to achieve?

The forum is the major annual get-together under the auspices of Enterprise Ireland and Deloitte for chief executives in Irish-owned manufacturing and internationally traded services companies. It’s an excellent opportunity for them to meet, share views and experiences and consider the issues for their businesses from this year’s theme, which is ‘Scaling up Irish Companies to be Global Competitors’. The event is in its 16th year and takes place on Wednesday in the Leopardstown Pavilion in Dublin. So far more than 500 chief executives have signed up.

Where does Ireland stand in terms of having companies that can compete on a global scale?

In the area we’re focusing on, it is perfectly possible for very small companies to compete globally in very narrow niches. Unfortunately, by definition, this puts a cap on their capacity to grow and, in many instances, they seek to scale-up by moving into adjoining niches. Second, and very closely related to the first point, our feeling is that companies need an annual turnover of at least €20 million if they are to compete internationally. It is an arbitrary figure; it represents a starting point; and yet only 86 out of our 3,000 clients have reached this level.

What’s Enterprise Ireland going to do to encourage the development of these businesses?

We have established a specialist unit to work with companies that have the capacity and the ambition to grow to scale which, we are defining at a minimum of €20m. This unit has been in existence for about 18 months and has built up a portfolio of 39 candidate companies with whom we work intensely.

What do SMEs need to do to build scale? What timeframe is involved?

First and foremost, SMEs must have the ambition to grow to scale: it involves difficult decisions about issues such as board composition, shareholdings, internationalisation, etc and it is not for everyone. Growth to scale is a time-consuming process and our experience to date suggests that a company needs to be in existence for probably seven to 10 years before it can realistically mount an effort to achieve scale to become a global player.

What examples should companies look to follow in becoming scale players?

There are a variety of companies that are excellent role models, for example Glen Dimplex.

What other issues are concerning chief executives at present?

The issues which chief executives of companies seeking to scale are worrying about include the cost of building operations in international markets; the availability of experienced people - particularly in the field of international marketing; and the relative lack of availability of development capital, which comes in after venture capital firms have exited.