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Opening Address by Mr. John Perry, T.D., Minister for Small Business, at the European Parliament Consultation Session on EU Funding available to businesses

SMEs account for more than 67% of private sector jobs and provide more than 58% of total turnover in the EU – Perry

SMEs account for more than 67% of private sector jobs and provide more than 58% of total turnover in the EU – Perry

-         Small businesses - the backbone of the Irish economy and a key contributor to growth and employment at home and within the EU

-         EU remains critical to our growth and socio-economic development across the spectrum

-         SMEs are the key provider of jobs across the country and across Europe

Check Against Delivery

Friday 1st March 2013

Good morning Ladies and Gentlemen,

I am delighted to be here with you all this morning in my own constituency as Minister for Small Business and EU SME Envoy.   I would like to thank the European Parliament for giving me this opportunity to speak to you about the very important issue of EU supports and funding available for business in Ireland today.

Ireland, which currently holds the Presidency of the EU, has been a key player in Europe for over 40 years now and the EU has been and remains critical to our growth and socio-economic development across the spectrum.  There is no doubt that this will continue to be the case.  We are in Europe and of Europe and by working together we will enhance Europe for the benefit of all. 

There is absolutely no doubt that the crisis of recent years has had a negative impact on business throughout the island of Ireland, and citizens are rightly demanding action from their Governments and the EU.  It is essential for us to respond decisively and energetically and I think you can be assured that this Government will not shirk from taking the key decisions needed to get us back on the road to recovery in terms of growth and jobs.  We will deliver and ensure that by 2016 Ireland becomes the best small country in the world in which to do business.

Small businesses - the backbone of the Irish economy and a key contributor to growth and employment at home and within the EU - have been particularly badly affected.  But they are fighting back in the face of very challenging odds and they are beginning to win.

As you are aware, there are some 23 Million SMEs across Europe who are a major source of economic growth and job creation in the EU.  SMEs account for more than 67 % of private sector jobs and providing more than 58 % of total turnover in the EU.

The ability of Small Business to continue to succeed and grow underpins our future potential for jobs, growth and prosperity.   That is why you can be assured this Government is absolutely focused on ensuring that Small and Medium-Sized enterprises are supported in every way to develop their business, increase exports, create jobs and rebuild the economy.  

My role as Minister for Small Business in the Department of Jobs, Enterprise and Innovation and as SME Envoy for Ireland is dedicated to ensuring that the voice of SMEs is heard clearly by Government and that small businesses play a pivotal role in our economic recovery. 

In the EU context, as SME Envoy for Ireland, I am focussed on ensuring that policies developed at national, regional and local level are enterprise friendly and harness the principles of the Small Business Act, in particular the ‘Think Small First’ principle.  This is essential if we are to deliver jobs and growth necessary to secure our future.

While acknowledging that much has already been done in terms of putting the needs of SMEs to the forefront of EU policy, the Small Business Act Review signals that more needs to be done to release the full potential of SMEs.

I will drive this agenda in the future and you can be assured that we in Government are prioritising several measures that will help SMEs tap into more public procurement opportunities, and get better access to credit and research funding.  

Government’s aim is to support and grow SMEs through smart regulation, enhanced business opportunities in public procurement and easier access to EU programmes such the Competitiveness and SMEs Programme (COSME) and Horizon 2020 and to leverage funding from sources such as the EIB/EIF to get money flowing to this sector thus driving the growth agenda.

The new COSME Programme will run from 2014 to 2020.  It is aimed at strengthening the competitiveness and sustainability of EU enterprises, and encouraging an entrepreneurial culture, promoting the creation and growth of SMEs.  My Department and its agencies will do all they can to optimise Irish drawdown under this fund to ensure we address real concerns in each of these areas.

We are also working to support and foster the growth of Europe’s future SMEs and entrepreneurs by focussing on areas of the economy which we believe demonstrate strong growth potential and where the EU and Ireland in the EU can become a global leader. 

This is why we are placing strong emphasis on supporting the next European Research Framework Programme 2014 to 2020, to be called Horizon 2020.  Irish SMEs have performed extremely well in the Research Framework Programmes to date and I know they will face up to the challenges of the new Programme and draw down multiples of what we drew down under FP7.

I very much welcome the measures in Horizon 2020 for access to risk finance for research and innovation.  The debt and equity facilities proposed will also be particularly beneficial to SMEs and will help them push on as the global economy recovers from the worst storm it ever encountered. 

Initiatives at national and European level recognise the vital role of the SME sector and the need to back entrepreneurs who embrace innovation and need support to develop new products and services and get them to the market.  I would urge those of you who have not considered applying for European research and innovation funding to examine what Horizon 2020 will offer – a dedicated SME instrument to provide staged and seamless support covering the whole innovation cycle.  It will be targeted at all types of innovative SMEs showing a strong ambition to develop, grow and internationalise. And it will cover all types of innovation, including service, non-technological and social innovations. 

We have the support mechanisms in place to help those with an interest through Enterprise Ireland the CEBs.   Go out and get them and bring home real rewards for the island of Ireland.

Ireland supports the proposals to establish a dedicated Programme for industrial competitiveness for SMEs which will provide targeted financial support for SMEs.   It will neatly dovetail with the Horizon 2020 Programme and ensure that innovation also receives support.

In particular, we welcome the proposed equity facility for growth-phase investment which will support the development of the EU wide Venture Capital market, as well as the Loan Facility which will provide direct or other risk sharing arrangements with financial intermediaries to cover loans for SME‘s. 

As Minister, I very much welcome the recent agreement by European Leaders on the Multiannual Financial Framework (MFF) which sets the overall budgetary framework for the EU for the period 2014-2020.  This in turn will dictate the prospects for progress on COSME and represents a balanced deal for Ireland and for Europe.  It is up to us to now work within the budget to optimise returns for the whole island of Ireland.

As I mentioned earlier, at national level, the Government, through Enterprise Ireland and our State Agencies, offer a number of support mechanisms to Irish industry in order to achieve the objectives of promoting, developing and growing Irish enterprises in world markets. 

Many of these support mechanisms avail of both Irish and EU funding supports.  The funding provided develops new companies from the start-up stage and helps existing companies to grow and scale.  The assistance available also supports the development, growth and expansion of indigenous companies and can be provided for Research and Development, Training, Job Creation or Capital investment.  The supports provided allow companies to innovate, become more productive and to strive to be lean in a global economy that is very competitive and constantly changing. 

Regarding supports for enterprise projects for the border regions, I am very pleased that my Department has been working closely with the Northern Ireland Administration, under the INTERREG initiative, which is co-funded by the EU and by the Departments on both sides of the border.  

My Department has provided significant financial support towards a number of North/South projects, including enterprise networking and capacity building initiatives for the border counties and Northern Ireland and several other enterprise development projects. Our commitment over the five year lifespan of the current programme will be over €20m. 

The most recent significant project involves the establishment of a North West Science Park, to be co-located in Derry and Letterkenny, in respect of which both our Departments have agreed financial support. 

During the lifetime of the current INTERREG programme for the period 2009 - 2014, a total of €70m from all sources will have been spent on a wide range of enterprise projects, which represents a very significant level of support to assist businesses and enterprise generally in the border region.

In addition to the Enterprise strand, other INTERREG projects have been initiated to support tourism, energy and other infrastructure.  While the current programme is now drawing to a close, with all funding committed and final projects underway, I am pleased that officials in both jurisdictions are also engaged in a process which will hopefully see a new Interreg Scheme initiated when the current phase expires in 2014. 

We have been pressing for a less bureaucratic and more streamlined administrative process  to be initiated by the EU Managing Authority,  for the new programme,  which is intended to  run up to the year 2020.  With this in place, INTERREG will be able to respond flexibly and utilise funds in the best interest of business on both sides of the border.

Cross Border projects are extremely valuable for micro-enterprises, not least in terms of the potential investment available and of their beneficial impacts on job creation.  For example, the Tradelinks Programme, a Cross Border Microenterprise Programme which is a joint initiative of the border CEBs and Enterprise Northern Ireland (ENI), supported by the EU Interreg IIIA programme and the International Fund for Ireland (IFI), has been operating since 2004.  It comprises a suite of business support measures aimed at addressing barriers to trade.  It facilitates business linkages by providing a framework for co-ordinated mentoring and networking opportunities to support micro enterprises based in Northern Ireland and the six border counties.

Both phases of the programme to date have seen a total investment of over €7 million being provided in supports to over 1,100 businesses on both sides of the border.  This investment helped to create over 860 jobs. Not only this, but the participating companies have found that the business networking activities and the advisory services that were provided have increased their confidence in the future of their business. 

This fund will link in well with the National Microfinance initiative launched by Government last year.  This scheme which is available nationwide is open to businesses across the spectrum and should be looked into by any aspiring entrepreneur seeking financial support.

Other successful examples of cross-border initiatives include the CREST and HATCH projects which were fundamental in helping to tackle specific issues such as renewable energy and sustainable technologies, the up skilling of workers in sectors most affected by the economic downturn, including in the construction sector, and female entrepreneurship.

Another organisation in the Cross Border Development Space which is making a big difference to businesses the length and breadth of the island is InterTrade Ireland which has been given responsibility by both the Irish and British Governments to boost North/South economic co-operation to the mutual benefit of both Northern Ireland and Ireland.  InterTrade Ireland works with SMEs across our island to identify and help realise opportunities to improve competitiveness, generate economic growth and create sustainable, quality jobs in both jurisdictions through increased levels of North/South trade and co-operation on innovation and business development opportunities.    This is done through:

·      Business programmes, including equity support;

·      Research and statistics; and

·      Networks and partnerships

As I mentioned earlier, SMEs are an important contributor to growth and employment both in Ireland and in the European Union. In this regard, Ireland welcomes the recent Commission communication on the Entrepreneurship 2020 Action Plan and supports the objectives of this framework proposal, particularly the focus on the fostering and promotion of entrepreneurs, entrepreneurship and an entrepreneurial culture at a European and National level.  This Action Plan will enable us to create a more entrepreneurial Europe and will be driven by all concerned in the months and years ahead.

I am also pleased to say that as part of the Presidency of the EU, an Informal Competitiveness Council (Industry) will be held in Dublin on Friday, 3rd May 2013.  The focus on this Council will be on “SMEs as a driver of European Growth” where the Council will address real issues for SMEs as we attempt to negotiate our way out of the current economic crisis.  Issues to be discussed will include access to finance, regional entrepreneurship and global opportunities.

In addition to the Informal Council the Commission will host its SME Finance Forum on Thursday, 2nd May, 2013 in Dublin in association with the Informal Competitiveness Council.  This Forum was set up to monitor the market situation and to explore new ideas to improve access to finance for SMEs.  Its deliberations will feed into the work of the Competitiveness Ministers on 3rd May, 2013 and will focus Ministers’ attention on the very real financial problems facing SMEs.

SMEs are the key provider of jobs across the country and across Europe.  With over 250,000 private sector jobs lost between 2008 and 2011, it is the SME sector that has to take up the jobs challenge and lead the recovery in the domestic and EU economies.  It will create the jobs to make the serious inroads into our all too high unemployment levels.   

This Government’s Action Programme for Jobs is being detailed in an annual action plan for jobs which lists what needs to be addressed across the system if we are to seriously address the jobs crisis.  The Action Plan for Jobs 2013 was recently launched by An Taoiseach and the Minister for Jobs, Enterprise and Innovation, Richard Bruton and is a key element in rebuilding the economy and getting people back to work.  The 2013 Plan will build on the achievements of the 2012 Plan and continue to improve supports for job-creating businesses and remove the barriers to employment-creation across the economy. 

The 2013 plan outlines 333 actions to be implemented before 31st December 2013 by 16 Government Department and 46 Agencies.  These actions are additional to the 249 actions already implemented under Action Plan 2012, which have helped support net growth of almost 12,000 in private sector employment in the past year.

This is the first time in some years that there has been a positive contribution on the jobs front showing clearly that this Government is working and delivering on commitments made to address our economic woes.  We will continue to pursue these challenges and will not be happy until we have turned the situation around.

Yes, we continue to face serious challenges, but the change from the acute crisis we experienced when taking office to today demonstrates both Ireland’s and the EU’s strength, unity and solidarity in tackling grave challenges and coming out on the right side.  I know by working together we will be successful in this challenge.

In closing, Ladies and Gentlemen, I would like once again to thank the European Parliament for giving me the opportunity to speak to you today and I hope you will find this a very useful and informative event and you enjoy the hospitality of our lovely County Sligo.

ENDS

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