Small Businesses are crucial to Ireland’s overall Competitiveness and Growth

Check Against Delivery

• Temporary Partial Credit Guarantee Scheme- key component in suite of initiatives aimed at ensuring flow of credit

• Micro-Finance Start-up Fund will provide small loans up to €25,000 to businesses with up to 10 employees

It is a pleasure for me to be here today and I would like to thank Toni Forrester for inviting me and giving me the opportunity to address you all on my key priorities for the coming months

The Programme for Government, the Jobs Initiative and the fact that I was appointed MinisterforSmall Business all confirm the commitment of this Government to small businesses. We are acutely aware of the importance of the small business sector and its potential for generating employment.

Our speedy delivery of the Jobs Initiative by May should give confidence to businesses that their contribution is acknowledged and supported.

As the newly appointed Minister for Small Business I want to be the voice of small business to Government to reflect concerns and bring forward proposals to assist businesses. My challenge now, and indeed the challenge of the new Government, is to prioritise where we will place efforts to best effect over the coming months - so that we do achieve change and make a difference.

Priorities for the Small Business Sector

I will set out some of my thoughts here today on the importance of small Irish business and some of the key issues which will be advanced over the coming months. My overall priorities are to:

• Consult with Business and to represent business interests;

• Recognise the Diversity of Small Business – I will support and speak for the needs of both locally traded business and those in the exporting sectors;

• Champion Entrepreneurship;

• Tackle the issues that are causing the biggest difficulties, such as small business enemy number one - Access to Finance;

• Promote confidence among businesses and consumers alike.

I want to assure you all that I intend to ensure there is a clear focus on the small business sector and that through my dedicated office I will reflect to Government the key issues that are impacting on the sector.

Consulting with Business

I want to consult and interact as much as possible with the small business community across all sectors, to hear their views, and most importantly, to act on the issues raised. I tell you this very sincerely – some of the best, most grounded information I get about conditions in our economy comes from our small businesses. You can't piece together the full story of our economy without hearing from the people who live it and breathe it every day.

So I will continue to meet with as many owner managers as possible, as this ongoing dialogue will guide my work.

On Thursday 16^th June, together with the Taoiseach, Enda Kenny, I launched the Small Business Advisory Group, which I personally am chairing. Primarily, the Group will provide policy advice to me and my Department, for onward reference to Government, on the key issues affecting the SME sector and what initiatives/actions could address these. I will brief Government, through the appropriate Cabinet Committee structure, on the work and recommendations of the Group. I have been encouraged by the robust and positive engagement by the Members of the Group and by their desire to bring forward practical suggestions to assist the sector.

I have committed to deliver a list of priority actions to the Taoiseach by the end of October.

Supporting Locally Traded Business

I want to emphasise that I recognise the diversity of small businesses and their differing needs. A large proportion of small businesses are owner managed enterprises providing the owner with just enough income to support his family. There’s no glamour, no riches, but this is the true heart and soul of many Irish business.

The dedication and perseverance of business people running locally traded companies and the positive contribution they make to the lives of Irish people throughout the regions should not be underestimated. They are crucial to the enhancement of Ireland’s overall competitiveness and growth and should not be overlooked. Small business is not only a vital part of our economy; it is a vital part of our society and local communities as well. That is why I want to ensure that the business environment is supportive for them.

We are working to:

• Drive down the general costs of doing business;

• Ensure Local Authority costs continue to be kept to a minimum;

• Reduce the impact of the cost of business regulation;

• Place greater emphasis in making public procurement accessible to small businesses;

• Help cash flow by paying our bills on time with the extension of the 15-day prompt payment arrangements across the wider public sector.

Support Exporting Companies

And for those companies who do want to export and indeed for those entrepreneurs who want to conquer the world – it is important that the supports and advice are there and that the business environment does not deter them. One of the key elements for export success is being able to compete favourably on the world stage, and our international cost competitiveness is crucial. We have achieved cost reductions over the last few years, but we have to ensure that this gain in cost competitiveness remains. In 2010, Ireland’s market share in world trade grew, facilitated and supported by the reductions in the cost base for firms, improvements in productivity and labour costs. The negative productivity growth experienced between 2005 and 2009 has been reversed.

However, much more needs to be done in the areas of access to credit, educational attainment and Infrastructure in broadband and distribution.

As a small country with a small domestic market for both products and services, we have to export. It is imperative that small Irish companies with ambitions to grow continue to seek opportunities on the global market. Enterprises in Ireland depend on exports for nearly half of all their sales, 49% is the latest CSO figure.

That is why improving the performance of Irish industry and supporting them to grow internationally competitive businesses is a central part of our enterprise policy.

I would encourage businesses to keep in contact with their local Enterprise Board, or Enterprise Ireland for ongoing business advice and information on development potential.

Enterprise Ireland are supporting companies to establish a presence in the Eurozone market while continuing to grow the existing presence that many Irish companies already hold in the United Kingdom, the United States, Asian markets and further afield.

I recently led a Trade Mission to Australia with client companies from Enterprise Ireland and I was really impressed and encouraged by the professionalism, the capabilities and the knowledge of the Irish delegation of business owners. The Irish exporter of today has to be multi-skilled, versatile and a quick-learner. I have to say I was proud to do my bit to support and promote these companies.

Entrepreneurship

In terms of entrepreneurship, our challenge in Government is to ensure that we can help create an environment in which many of the good ideas of today are turned into great businesses of tomorrow. I want to ensure that entrepreneurship continues to be a valued profession. This Government has made available €15m for direct support to the micro-enterprise sector in 2011 which against the background of considerable pressure on public finances represents a strong State investment in that sector. Here in Donegal, the County Enterprise Board last year alone supported 24 micro enterprise projects and counts 275 enterprises currently operating across the County, among their clients.

Now more than ever we need ambitious and energetic entrepreneurs who can play a real part in driving a positive uplift in the economy. Every one of these potential employers who are willing to take a risk is playing their part in getting Ireland back on track, contributing in a tangible way to the wellbeing of local communities.

Entrepreneurship keeps the economy fresh and moving forward. But there is no machine or formula for generating creativity. Our role in Government is to provide the right supports, the investments and the incentives that will steer entrepreneurs in the right direction towards fulfilling their potential, achieving success and meaningful job creation.

Access to Finance

On the issue of the financing environment for the small business sector, we all agree – we need a financial system that is better suited to the needs of our smaller company sectors. Financing the productive capacity of the economy is critical to long-term economic success. While large businesses have various options open to them, including the capital markets, small businesses are heavily dependent on the banking system.

Many small businesses have contacted me about the problems caused by their difficulties in accessing credit. We are making headway in addressing these difficulties.

The introduction of a targeted Temporary Partial Credit Guarantee Schemewas one of the commitments announced in the Jobs Initiative launched last May and I am pleased to confirm that a design is now underway. We hope to roll out this scheme towards the end of the year.

This Scheme will be closely targeted at commercially viable, well performing companies that have a solid business plan and a defined market for their products or services, thereby demonstrating their ability to repay the loan. The Scheme will provide a level of insurance to banks against losses on qualifying loans to job-creating firms to get banks lending again to industry and entrepreneurs.

Of itself, the temporary partial credit guarantee scheme will not solve all the issues around access to credit but it will form a key component in the suite of initiatives aimed at ensuring the flow of credit.

Micro-Finance Start-Up Fund

The Government is also committed to developing a suitable micro-finance fund for the micro-enterprise sector. Arrangements for the establishment and operation of such a fund are being developed in consultation with the relevant stakeholders, with a view to formalising proposals for this year’s Budget. The Micro-Finance start-up initiative will provide small loans up to €25,000 to businesses with up to 10 employees and will be available to all start-up, newly established, or growing small business concerns across all industry sectors.

With the introduction of the Temporary Partial Credit Guarantee Scheme and the Micro-Finance Fund over the coming months we will have made a big step towards a more sophisticated and accessible financing environment for small businesses in Ireland. And we will have tackled the biggest impediment to small business growth and prosperity.

Prompt Payments

As I mentioned earlier, it is important that Government pay their bills on time to all the businesses around the country who supply goods and services to the public sector. To improve the cash flow of businesses, and particularly small businesses trading domestically, the Government is now requiring the Health Service Executive, the local authorities and all other public sector bodies, excluding commercial semi-State bodies, to pay their suppliers within 15 days of receipt of a valid invoice.

The initiative is an extension of the arrangement that currently applies to payments made to suppliers by central Government Departments. These new arrangements will directly assist SMEs by improving their cash flow.

Conclusion

It’s easy to fall into a mindset that sees only bad news. But what I see every day from business and employees that I am meeting is resilience, perspective, and a willingness to pull together. As long as we move with the times, play to our strengths, I believe we have good reasons for optimism.

While the Government supports an enterprise culture and seeks to nurture entrepreneurship through the County Enterprise Boards the network of Chambers of Commerce also have an important back-up role in reinforcing and promoting business interaction and enterprise development at local level. A strong national economic framework needs strong local roots.

So to conclude, my job will be to promote an enabling environment for business to operate. An environment that supports new companies, new jobs, and new economic opportunities.

That means keeping the doors of Irish business open.

Supporting existing business to scale up and expand and reaching out to more people who have the ambition and drive to set up their own small business.

So thank you again for inviting me here today.

Thank You.

ENDS