Great opportunity to reset policy on indigenous enterprise
3rd August 2022: ISME has welcomed the decision of the Department of Enterprise, Trade and Employment to initiate a public consultation into the development of a White Paper on Enterprise Policy. In its response to the consultation – Enterprise-Consultation-ISME.pdf – it has stated that is a great opportunity to review and reset Ireland’s policy on enterprise and to look at the development of an indigenous industrial policy.
Built on ten themes, the key elements of the ISME response to the consultation are:
- While foreign multinationals play a huge and valued role in the Irish economy, both in terms of corporation tax and a significant employee pay bill, their contribution to Ireland’s net national product (NNP) is eclipsed by that of the Indigenous small and medium enterprise (SME) sector.
- Emerging international trends such as de-globalisation, onshoring of supply, and shortening of supply chains because of climate change are among the reasons Ireland will have to rethink its industrial policy.
- Current policies on the taxation and treatment of capital, income, equity and dividends represent significant disincentives to Irish entrepreneurs, businesses and their employees. They are also depriving the Exchequer of hundreds of millions of euros in income foregone every year.
- Compared to similar countries, Ireland’s track record in scaling and listing domestic enterprises is poor. With a population just 5% larger than ours, Norway’s Euronext hosted 67 IPOs in 2021. Ireland had two.
- From a business expansion perspective, we are calling on Government to focus particular attention and energy on the 21,000-strong cohort of businesses employing between 10 and 250 employees. The businesses most likely to scale in the short to medium term are to be found in this part of Ireland’s business demography.
“The timing of the development a White Paper for Enterprise Policy in Ireland is optimum in the wake of many very serious issues including rising interest rates and costs, Brexit, the Covid-19 pandemic, the situation in Ukraine, and security of energy supply,” said Neil McDonnell, CEO, ISME. “Irish business however has shown time after time that it is ambitious, innovative and resilient and with the right policy framework and supports can prosper and continue to make a huge and even greater contribution to the nation.”
“We can no longer place all our eggs in the foreign direct investment basket. The existence of a vibrant, profitable and expanding indigenous enterprise base is essential to Ireland’s financial and social wellbeing,” he said. “But perhaps counter-intuitively, it is most important to those who wish to see a “bigger state” and more public spending.”