Government launches major OECD SME and Entrepreneurship Policy Review as part of Future Jobs Ireland

31st October 2019

• Minister Humphreys commissioned a comprehensive review of SME policy and entrepreneurship in Ireland from the OECD in March 2018.
• Launch is the culmination of a large-scale consultation exercise over 18 months, which will feed into the development of the new SME and Entrepreneurship Strategy to be published by the end of the year.
• Initiative is a key part of Future Jobs Ireland, the whole-of-Government plan to prepare our business and workers for the future.
• New Consultative Group chaired by Minister Breen to drive the recommendations of the OECD Roadmap. 

Thursday, 31st of October - Heather Humphreys TD, Minister for Business, Enterprise and Innovation, and Pat Breen TD, Minister of State for Trade, Employment, Business, EU Digital Single Market, and Data Protection today 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 by Minister Humphreys 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 Deputy Secretary General, Ulrik Vestergaard Knudsen, attended the launch. 

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

Minister Humphreys 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.” 

Minister Breen 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.”

-Ends-

Notes to the Editor

The OECD Roadmap summarises the priority recommendations of the wider Review. The recommendations are broken down into the following themes and actions. 

Theme 1: SME and entrepreneurship policy framework   

• Action 1: Draft a unified SME and entrepreneurship policy strategy document
• Action 2: Implement an online business diagnostic tool 

Theme 2: Innovation and R&D

• Action 3: Simplify the administration procedure for R&D tax credits  
• Action 4: Encourage SME involvement in innovation collaborations
• Action 5: Ramp up support for the digitalisation of SME business processes, especially through the LEO network

Theme 3: Fostering enterprise-led networks

• Action 6: Create a national support framework for local enterprise-led networks

Theme 4: SME internationalisation

• Action 7: Scale up current initiatives to support SME internationalisation

Theme 5: Access to finance for SMEs and entrepreneurship

• Action 8: Scale up current SME credit access initiatives         
• Action 9: Develop an action plan for financial education

Theme 6: SME workforce and managerial skills

• Action 10: Introduce a tax relief for non-domiciled new hires by Irish SMEs
• Action 11: Incorporate industry standards adhesion in SME management development programmes  

NOTES FOR EDITORS 

1. Programme

2. OECD Review of SME and Entrepreneurship Policy in Ireland 

Background

The Department of Business, Enterprise and Innovation commissioned the OECD in March 2018, to conduct a Review of SME and Entrepreneurship policies in Ireland.

This is an 18-month project and it aims to provide tailored analysis and recommendations to DBEI and the Irish government on how to improve the design and implementation of national SME and entrepreneurship policies and programmes, based on an assessment of the country’s current SME and entrepreneurship performance, framework conditions and policies based on international comparisons.

This is a collaborative body of work and involves considerable input from wider Government and stakeholders. This will assist DBEI to develop an SME Strategy as part of the Future Jobs Framework.

Key review Objectives of the report

1. Provide an assessment of current SME and entrepreneurship policies and programmes
2. Strengthen policy design and implementation through recommendations and dialogue stimulation, including through a policy roadmap
3. Provide international comparison of successful SME and entrepreneurship policies

While the Review is a comprehensive and detailed Report, the Roadmap is a shorter document, which identifies the key priority recommendations that should receive the most immediate focus for implementation.

Read Review and Roadmap here 

3. Future Jobs Ireland

Future Jobs Ireland 2019, the first step as part of a multi-annual framework to achieve priority ambitions to ensure a resilient the economy taking into account the opportunities and challenges ahead arising from technology, international risks and the transition to a low carbon economy. Future Jobs Ireland was developed on foot of a comprehensive consultation process the highlight of which was a national summit in November 2018.

Central to Future Jobs Ireland is a re-orientation of policy from the numbers of gross jobs created in the economy, to the creation of more productive and sustainable quality jobs. It focuses on the challenges ahead in terms of ensuring we have skilled people working in quality jobs in sustainable sectors. Future Jobs Ireland will also ensure our enterprises and workers are well positioned to adapt to the technological and other transformational changes our economy and society will face in the years ahead.

Future Jobs Ireland 2019 focuses on five Pillars namely:

1. Embracing Innovation and Technological Change;
2. Improving SME Productivity;
3. Enhancing Skills and Developing and Attracting Talent;
4. Increasing Participation in the Labour Force; and
5. Transitioning to a Low Carbon Economy. 

Pillar 2 of Future Jobs Ireland on improving SME productivity

A driving goal of Government policy is to increase the living standards of our people. Increasing productivity levels is a key enabler of achieving this goal.

Future Jobs Ireland will target an annual average increase in multifactor productivity (which captures how efficiently we use our labour and other resources) in the domestic sectors of the economy by 1% per year to 2025. 

Implementation of Future Jobs Ireland 2019 is ongoing and in July the Government published the first Future Jobs Ireland 2019 Progress Report.  The Report provides a summary of progress towards implementing the outputs for each deliverable in Future Jobs Ireland 2019 due in Quarter 1 and Quarter 2. The Report is available on www.taoiseach.gov.ie.

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