When the General Election is out of the way, it will be essential for the new Government to prioritise support for Ireland’s SME's, says Joey Boland, Business Advisory Partner with RBK.
In October 2019, the OECD published a detailed review of SME and Entrepreneurship Policy in Ireland. The study, commissioned by the Irish Government in 2018, found that while we have a reasonably solid overall policy framework for SMEs, there is scope to improve in a number of areas including productivity growth and increasing SME exports. There are also opportunities to enhance SME management skills, capital investment levels and technology adoption. Running to almost 300 pages, the review contains detailed analysis and numerous recommendations in a range of areas, including:
- Scaling up micro-enterprises, particularly indigenous locally-trading and non-exporting enterprises, and increasing the cohort of medium-sized enterprises.
- Increasing SME access to foreign markets, including non-United Kingdom markets.
- Increasing adoption of best practice management techniques.
- Enhancing financial skills so that SMEs can make better use of the mix of debt and equity finance available in the Irish market. Increasing take-up of guarantee schemes to improve the financing environment for SMEs.
- Encouraging innovation collaborations between SMEs and research institutions, as well as collaborations between SMEs, research institutions and multinationals.
- Ramping up support for the digitalisation of SME business processes;
- Simplifying the administrative processes for SMEs applying for R&D tax credits to encourage more take-up.
In respect of the latter recommendation, it is worth noting that an enhancement of the R&D Tax Credit regime for small and micro companies was one of the measures in the recent Budget and subsequently brought forward in the Finance Bill. Other SME-friendly measures in Finance Bill 2019 include welcome changes to the EII Scheme and the Key Employment Engagement Programme (KEEP). The purpose of these changes is to support businesses, especially small or medium sized enterprises, who will be most affected by Brexit. Only time will tell how effective these measures and the OECD recommendations will ultimately be in practice.
Meanwhile, as negotiations between the UK and the EU get under way, SMEs will be hoping for a positive outcome, however it seems unlikely that a comprehensive agreement can be achieved within the current time frame, given that the transition phase is due to expire at the end of this year unless an extension is agreed in the meantime.
So, while greater emphasis on SME policy and indigenous businesses is welcome, there is no room for complacency. With so much change in the air this year, it will be challenging for businesses to keep abreast of developments. RBK will be monitoring progress closely over the coming months and keeping clients informed. In the meantime, if you have particular concerns, please let us know.