Monday, 3 October 2022
Thank you, Orlaigh and good morning, everyone.
I’d like to welcome you all to the Royal College of Physicians and thank you all for taking the time to join us today.
Thank you to our speakers, Dr David Skilling, Julie Sinnamon, Shona D’Arcy, Ruairí Ó hAilín and Dr Christian Ketels. Thanks also to John Hughes and all of the government officials involved in organising today’s event.
This Symposium is the culmination of a relatively short, focussed consultation process. We have engaged with many of you through the Enterprise Forum and the SME Taskforce, and also through bilateral meetings and the public consultation.
Economic backdrop
Despite all the upheaval of the last two and a half years – a pandemic, a war in Europe and soaring inflation – the Irish economy is in good health.
Ireland has never had more people at work, youth unemployment is low and female labour market participation has never been as high. Incomes, notwithstanding inflation, have never been higher.
More and more Irish citizens are returning home to live and work here – almost 30,000 people in the past year and a similar number again from the UK and Europe.
We are benefitting from a massive ‘brain gain’ and flow of talent and skills in to the country.
We are running budget surpluses at a time when our peers are running deficits.
Few countries in the world are in such a strong position and it’s pertinent to ask why.
Our formula has been to invest in talent and to welcome talent to our shores; a stable and competitive tax offering; political stability; a track-record; a pro-business environment; and our place at the heart of the European Union, advocating for more integration not less as a founding member of the euro, the single market and the Permanent Structured Cooperation (Pesco) and supporters of enlargement.
Whist this is a strong basis for optimism, it is certainly not grounds for complacency. We must never take our prosperity for granted. Once lost, it will take a long time to regain.
We want Ireland to continue to be a place where people can aspire to have the career they want in all parts of the country. A job for everyone who wants one. Work that pays more with greater flexibility, and better terms and conditions. These are our objectives and what we must fight to protect.
In the past few decades, we have made the right calls – pharma, medical devices, food production, the internet, financial services.
But what are the right calls for the future?
The White Paper
This White Paper will seek to articulate what needs to be done differently to realise our aspirations for our economy in 2030 and beyond. It will set out the risks we face, the policy choices and, importantly, the trade-offs we will need to make.
It will also seek to confirm what elements of the ecosystem are working well, what should be continued, adapted or abandoned.
Ireland’s enterprise and industrial policy has served us well. The recent performance of the Foreign Direct Investment sector has exceeded all expectations. We will continue to nurture FDI and promote Ireland as a bridge to Europe but we must also plan for the possibility that some of the multinational companies based here may not be able to contribute as much to the Irish economy in future.
Our best insulation from an unpredictable global outlook is to create a world-class destination to invest and grow a business. We have that within our grasp.
Indigenous enterprise
Ireland is a very open economy, with huge exports relative to our size, but we have relatively few indigenous exporters compared to our peers like Denmark for example.
We have some extraordinary Irish companies who are the best at what they do globally. Think of Ryanair, CRH, Glanbia. But there needs to be many more.
So, we must broaden and deepen enterprise innovation capability, increasing the number of SMEs investing in RD&I, linking our multinational and SME innovation base and public policy, and embedding a culture of continuous innovation.
We should also borrow from what other countries are doing.
Station F in Paris, now the world’s largest start up campus, only opened in 2017. Station F shows what can be created when the best entrepreneurial thinkers, investors and all arms of the State work cohesively as one community.
We’re doing that here in Dublin and across Ireland but I think we haven’t reached our potential. We can learn from what others are doing and help our neighbours learn from us.
Entrepreneurship
It’s encouraging to see the number of Irish start-ups that have achieved unicorn status in recent years. We should aim to have two Irish unicorns every year and keep them here.
I hear the SME Taskforce’s observation that entrepreneurs in Ireland often do not get the same look-in as the multinational community. It’s right that the FDI gets the priority it does, but we need to match that with a relentless focus on domestic enterprise. As policymakers, we can’t just talk about it, we must act.
We have seen how effective policy interventions can be, such as the Disruptive Technologies Innovation Fund. What other funds and programmes can we develop?
How can our tax system better encourage start-ups, help companies attract and hold on to staff and encourage investment and re-investment in Irish companies?
How can our education system stimulate entrepreneurship?
What more can we do to create clusters and strong specialisations in certain parts of the country, in the way that Galway is known for Medtech or Cork is known for Pharma?
Innovation
Ireland tends to score well on innovation scorecards but there is some evidence that we are beginning to lag. I already mentioned the Disruptive Technologies Innovation Fund and I mention it again to underscore the importance of that link between industry, research institutions and the State – in areas such as cell and gene therapy, AI and renewable technologies.
We can commercialise these technologies for economic and social benefit. I’m not sure how they will manifest themselves in 2030 or 2040 but I know that our children and teenagers are going to figure it out.
Scaling companies
Alongside our ambition on unicorns, we should place a renewed focus on increasing the global footprint of our existing companies. Company valuation is one thing, but entering new markets, scaling, increasing productivity and innovation all require relentless focus and perseverance.
Enterprise Ireland is here to help – and there are few organisations in the world that do it better. We’ve also mandated Local Enterprise Offices to help companies make that journey from micro-enterprise to medium and large-scale enterprise.
Of course, it’s important to emphasise that the FDI and indigenous sectors are not two distinct sectors. They reinforce each other and it is our intention to strengthen that relationship.
Twin transitions of digital and green
I’m worried that businesses will put off investment in digital and green because they are dealing with what’s in front of them now. The financial crisis, Brexit, Covid, Ukraine and soaring inflation – each of these are understandable reasons to put off investment. I completely understand. But we cannot let that happen.
We can ensure we have a fresh Enterprise Policy to inform our actions – and we must also intervene – prompt companies to make that investment through enhanced engagement and grants.
Digitalisation
The digital economy in Ireland is running at two different speeds. While a small proportion of the enterprise base has fully embraced digitalisation, there is a need to accelerate and enhance digital adoption right across Irish businesses and indeed, the public sector.
We want 90% of SMEs to have achieved basic digital intensity by 2030 and 75% enterprise take-up in cloud, AI and big data.
As a so-called digital hub, we shouldn’t accept mid-rankings on European league tables when Europe itself probably lags the world. Unlocking our digital potential will both help us to stay ahead of the curve on innovation and productivity and move up the value chain.
Digitalisation of services in hospitality, retail and other industries will also help us innovate and help deal with the labour shortages we face.
Ireland has a strategic advantage with our rich ecosystem of multinational and indigenous technology companies and we have incredible expertise within those companies and in academic institutions which we must harness to its fullest.
On climate
We will help businesses reduce their reliance on fossil fuels and invest in energy efficiency in the coming years through government grants and loans.
While weaning ourselves off coal, oil and gas is a global challenge, it also presents incredible opportunities for Ireland, specifically electricity generated by offshore wind, backed up by battery storage and interconnection, and of course, green hydrogen.
New technologies and offshore wind present significant opportunities for new enterprises and regional development such as developing our ports. The Shannon Estuary Economic Taskforce is currently looking at those opportunities for the Mid-West and will be reporting before the end of the year.
I believe we can go from being an energy importer to being an energy exporter within a generation, with all the benefits that come with it – greater energy security and price stability, employment and regional development.
Investing in skills and education
We will also help companies plan for the twin transition with better reskilling and upskilling opportunities.
Companies can only grow if they invest in their workforce and plan for the skills of the future.
The new ‘Innovate for Ireland’ partnership between industry and Government will seek to attract up to 400 high calibre PhD students to undertake research in Ireland that tackles national and global challenges such as climate change; global health; water poverty; digital society; and cyber-security.
We will retain what’s good about our education and training systems and nurture the talent that will lead the companies of the future.
Competitiveness
Competitiveness is not just about having a pro-business environment, it’s about other things too, like providing the basic infrastructure expected in advanced economies. I acknowledge the real shortcomings in these areas. We are determined to change that.
Unlike the State’s response to previous economic crises, we will not pull back on vital capital investment when we need it most. That includes Energy, Water and Housing.
Conclusion
My vision for Ireland for the next twenty years is a positive one – a growing population, 6.5 million people and more than 3 million jobs, more investment, more trade – a society and economy that embraces the new technologies of the digital and green transitions and opportunities to create new wealth.
I believe our enterprise policy for the last sixty years has served us well. But the pace of change and the range of challenges now facing us is so fundamental that we must re-evaluate and update that policy. The outcome will likely be one of evolution and adaptation rather than a revolution. Either way, I am looking forward outcome of today’s discussions and publishing a White Paper on Enterprise that will contribute to a more prosperous, equitable and sustainable Ireland.
Thank you.