Speech by Mr. Micheál Martin T.D., Minister for Enterprise, Trade and Employment, at the Business Networks Forum at Farmleigh

Tuesday 30th January 2007

I am delighted to join you today in the wonderful setting of Farmleigh for what I believe is one of the most important events of the business and enterprise calendar for 2007 – the first All-Island Business Networks Forum. May I also extend a very warm welcome to Ms. Maria Eagle M.P., Minister for Enterprise, Trade and Investment in Northern Ireland and to those who have travelled from Northern Ireland.

The theme of today’s conference is “Collaborate for Commercial Success” and the attendance at this event is testament to the continued growth, development and strategic importance of networks on the island of Ireland.

Business networks involve the coming together of a group of enterprises, of whatever size, to use their combined talent to achieve a result which would not be possible if the enterprises operated individually. Such business networks play a pivotal role in fostering links and relationships not just between businesses but also between all stakeholders in the wider enterprise development environment.

The British-Irish InterGovernmental Conference, representing both Governments at the highest level, recently highlighted and endorsed this emphasis on business collaboration and networks and called for this Forum to be organised to discuss this new strategic approach on an island of Ireland basis.

This Forum has therefore been organised as a result of collaboration between my Department, the Department of Enterprise Trade and Investment in Northern Ireland and the enterprise development agencies on the island of Ireland.

I am very pleased that this unique occasion brings the Chief Executives of the enterprise development agencies on the island of Ireland here today to give their support to the further development of this competitive success factor. As well as being a response to specific needs and conditions on this island, it is important that we should be having this Forum at a time of increasing global competition and innovation, which is leading to higher levels of business collaboration.

This innovative forum brings together key managers from micro enterprises, the small and medium-sized enterprise sector and the multinational enterprise community, many of whom are members of one or more business networks and who can offer their valued insight in the discussions during the day.

We are also joined by a distinguished group of speakers based on the island and further afield and I would like to take this opportunity to thank them for their contribution to this Forum.

The Forum will highlight the potential business and economic benefits of collaboration across the whole island of Ireland. Throughout the course of the Forum’s proceeding you will hear about some of the approaches taken by Business Networks to address challenges and capture opportunities across a range of business functions from logistics to research and development. The common theme running through all of today’s case studies and presentations is that the benefits that companies received from participating in network projects would not have been achieved on an individual basis.

The Good Friday Agreement set out a new vision for the island of Ireland. As both North and South face the common challenges and opportunities of a globalised market place and continuing the transition to a knowledge economy where science, technology and innovation are vital to economic success, it is appropriate that we should jointly address those challenges and opportunities where there is mutual benefit to be achieved.

This was the underlying objective behind a ‘Comprehensive Study on the All-Island Economy’ completed towards the end of last year. To be globally competitive we must exploit and realise the opportunities of all-island collaboration.

The study makes clear the strong economic imperative driving North/South co-operation and sets out new initiatives to be progressed on a collaborative basis. It identifies a number of areas where co-ordinated policy intervention can prove beneficial to businesses and citizens in both jurisdictions on this island. These include co-operation on trade and investment promotion and the agencies here today are progressing those initiatives.

Since 1999 InterTradeIreland, the all-island trade and business development body, which is co-sponsored by my Department and the Department of Enterprise Trade and Investment has shown the benefits of all-island collaboration and it has established an impressive track record.

InterTradeIreland has identified the strategic advantage of all-island business networks and its key objective is to increase the number, effectiveness and value of all-island trade and business development networks. It plays an important role as supporter and facilitator of business networks.

InterTradeIreland has initiated a policy of establishing and developing trade and business development partnerships and networks as the conduits through which the island’s business resources could be shared and exploited – often in partnership with other organisations.

To date it has provided professional facilitation and project management assistance to a number of All-Island Business Networks, including BioMedIreland, the All-Island Software Network, Plastics and Polymers and the North West Science & Technology Partnership, as well as using a number of its programmes, such as the ACUMEN programme for market development, to assist a number of other cross-border networks and clusters.

InterTradeIreland is also involved in co-operation with the County Enterprise Boards and their Northern Ireland counterparts in the MicroTrade programme.

As I referred to in my opening remarks the economic landscape is now more complex for enterprises on the island of Ireland as a consequence of the increasingly global marketplace in which we exist. Although this has brought opportunities, in terms of increased employment and trade, companies are facing new and different challenges. These challenges include; rapid technological advances, changing business models, new routes to market, and competitiveness pressures leading to demands for increased productivity. The implication of this dynamic business environment is that many of the factors that improve a company’s competitive advantage lie outside of the firm itself. These factors, which include innovation, branding and know-how, can however be found in the relationships and collaborations that many business networks foster.

Collaborative networks are often used when businesses face complex issues, whether in the local, cross-border or international marketplace. A growing number of leading firms are witnessing first hand the positive impact that collaborating as part of a network can bring to their business. There is evidence globally and indeed in Ireland – which will be outlined in the case studies presented this morning - that collaboration and networks can help businesses to:

• Enter new markets and/or increase their market share
• Cooperate in R&D to create new products, services and processes
• Come together to share and develop knowledge, skills and experience in an open learning environment.
• Jointly target and win large contracts, and
• Reduce risks and costs through bulk purchasing

Over the coming years, well-developed business networks will become increasingly important mechanisms for driving success.

One of the keys to improving competitiveness is to focus on business activities where firms can develop a strong leadership position. While Government has a role in the development of enterprise, it is the firms themselves, together with educational and research institutes, that must work together and co-operate to drive the development of themselves and their industry, inform the research agenda, and drive the provision of sector-specific infrastructure, capital and skills.

From the firm’s point of view, networks allow companies to combine resources and enter markets that would otherwise be beyond their reach. For small firms in particular, this can be a response to a sense of isolation in increasingly globalised markets.

The two Departments of Enterprise on the island of Ireland and the various bodies established to advise on policy, such as the industry-led Enterprise Strategy Group and Forfás in the South and the Economic Development Forum in the North, have recognised the strategic importance of business networks.

Added to this is real empirical evidence of what is happening ‘on the ground’ through reports such as the report by InterTradeIreland on Business Networks on the Island of Ireland, carried out in conjunction with Forfás and InvestNI, and the Forfás’ report Innovation Networks. These revealed a higher level of activity than expected, with more than 100 business networks and regional clusters being identified.

While there are many tangible benefits, there are some that may be difficult to measure. Where State assistance is needed, however, it is important that ‘value for money’ indicators are established and projects are measured against pre-established milestones and budget performance.

Enterprise policy in Ireland in recent years has placed an increased emphasis on supporting networks where they can assist in the delivery of strategic enterprise needs and national priorities. Training or skills development and R&D are two areas where business networks have contributed to delivering key development objectives.

In relation to training, Skillnets is the enterprise-led support body dedicated to the promotion and facilitation of learning as a key element in sustaining Ireland's competitiveness. Skillnets support networks of enterprises to engage in training, they are led and managed by the enterprises themselves and have created and delivered training programmes across a broad range of manufacturing and services sectors.

Since 1999, Skillnets has facilitated over 6,000 Irish enterprises, in 114 networks to improve the range, scope and quality of training and allowed over 35,000 employees to improve and meet their skills needs. By the end of the current Programme 2006-2007, it is estimated that a further 3,500 companies and 29,000 employees will have participated in the Skillnets training programme.

InterTradeIreland is currently entering an alliance with Skillnets to expand its learning networks into Northern Ireland

In relation to research and development, Enterprise Ireland has been bringing together groups of companies to specify a common research agenda representing threats and opportunities to their sector. This is then used to support relevant, strategic research in the Third Level Sector. This focuses industry-directed applied research funding on areas which are appropriate for future industrial exploitation in Ireland. To date three Industry-led Research Networks have been supported by Enterprise Ireland - the e-learning Network and the Power Electronics Industry Group and the 'BioIndustry-Led Research Programme' network.

The Enterprise Strategy Group report “Ahead of the Curve” also emphasised the importance and potential of business networks in driving company and economic development. The report recommended the establishment of a fund to promote enterprise led Networks, including all-island networks where complementary strengths are identified.

In response to this recommendation Enterprise Ireland designed and launched a €2.5 million Pilot Scheme to fund Industry Led Networks to undertake collaborative projects. To date almost €1.5 million in funding has been approved under the Pilot Scheme. A total of 16 business networks have been approved facilitation funding to identify and develop collaborate projects.

I am pleased to announce that the first five Industry-led networks have been approved full project funding and are at the early stages of implementation. One of these networks, the Furniture Innovation Network, is a cross-border collaborative project involving furniture companies who are working together to jointly target and compete for contracts across the UK. A representative from this network will present details of this project later today.

Your input and feedback today is essential to ensure that the decision makers on future network policy and existing programme administrators are aware of how industry believe networks can best meet their development needs and, to identify what are the optimal conditions and services to assist firms in collaborating and delivering projects that can yield increased economic returns.

Finally, I would like to thank the Department of Enterprise, Trade and Investment, InterTradeIreland, Enterprise Ireland, Invest Northern Ireland, Forfás and IDA Ireland, for organising and hosting this important forum. I hope you find today’s discussions informative and beneficial. I am sure you will find that, where networks are concerned, it is a case of the whole being greater than the sum of the parts.

Thank you.

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