Enterprise-2025-Background-Report

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Enterprise 2025
Ireland’s National Enterprise Policy
2015-2025
Enterprise2025Ireland’sNationalEnterprisePolicy2015-2025
Background Report

DJEI ENTERPRISE 2025
i
Table of Contents
Executive summary v
Section A – Setting the context 1
The economic context 3
A challenging decade 3
A focus on reform and restoration 3
Economic growth forecasts 4
Challenges and opportunities post-2014 6
Enterprise policy – a broad agenda 7
The European Union policy context 8
The wider policy environment 9
The inter-connectedness of policies … the challenges 11
New thinking in enterprise policy 12
Whole of Government – DJEI as the principal advocate 14
Global trends and implications for policy 15
Global drivers of change 15
Emerging trends 16
Implications for enterprise policy 22
A review of Ireland’s enterprise performance 25
Background 25
Key findings - enterprise performance 25
Implications for enterprise policy 32
Section B – Vision, strategic objectives and potential 35
A vision for Ireland's enterprise potential 37
Our vision for enterprise to 2025 38
Our ambition 39
Our strategy - differentiators 41
Our strategy - resilience 43
Our strategy - excelling in getting the basics right 43
Measuring success 44

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Section C - Differentiators 47
Talent 49
Future ways of working 50
Skills development - meeting enterprise needs 52
Leadership and management development 59
Attracting and retaining talent 60
Effective employment regulation and ensuring work pays 62
Enhancing the employment prospects of the unemployed 65
Place-making 67
Regional policy in Ireland 68
Regional employment trends 69
Place-making in Ireland's regions - overarching considerations 70
Realising potential - harnessing regional difference 76
Developing city regions throughout Ireland 80
Innovativeness 85
Ireland’s national innovation system – an overview 86
The international context 90
Grand challenges - strengthening Ireland's systems approach 92
The enterprise objectives and challenges 94
Innovativeness – a mind-set, a culture and way of working 101
A pro-innovation supportive environment 106
Connectedness 109
Ireland's trade imperative 110
Global value networks 123
Clusters and clustering activities 128
Digitisation 132
Section D - Resilience 139
Strengthening resilience in the enterprise mix - a sectoral perspective 141
The evolution of sectors - where opportunities will come from 141
The changing dynamic - change is the only constant… 143
Advancing our policy approach to sectoral development 146
Sectoral cohorts - characteristics and policy emphasis 150
Convergence and adjacent possibilities 158
Strengthening resilience – enhancing overall enterprise performance 161
Entrepreneurship - stimulating a pipeline for growth 162
A focus on locally trading enterprises – enhancing competitiveness 167

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Growing the contribution by Irish owned enterprises - building scale and
international visibility 168
FDI - delivering economic impact in a changing global environment 174
Leveraging our distinctive enterprise base 179
Strengthening collaboration 180
The role of the agencies - supporting transformation and resilience 183
Enterprise supports 185
Agency supports delivering impact 187
A suite of supports – tailored to deliver greater impact 190
Strengthening evaluations: best practice in a complex environment 193
Section E – Excelling in getting the basics right 199
Finance for growth 201
Taxation policies 213
Cost competitiveness 217
Infrastructure priorities 227
Section F – Effective execution 231
Effective execution 233
Moving toward a systems approach to enterprise policy 233
Engaging effectively with the EU 233
The regulatory environment 234
Data on enterprise performance 234
Appendices 237

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Executive
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Enterprise-2025-Background-Report

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Executive summary
Introduction1
Competitive enterprise drives economic growth and creates jobs
As we emerge from the most severe recession of recent decades, this strategy Enterprise 2025
sets out our longer term ambition for enterprise growth and job creation over the coming
decade.
We have 126,000 more people in work today than were employed when the Action Plan for Jobs
(APJ) process was launched by the Minister for Jobs, Enterprise and Innovation in 2012
2
.
Companies supported by our enterprise development agencies contributed almost 40,000 jobs
to 2014. Our exports in 2014 reached their highest ever level at €215 billion
3
.
We know from the progress achieved in restructuring the economy since 2011 that a
competitive export-led enterprise base is at the heart of Ireland’s longer term economic growth
prospects.
A competitive enterprise base drives productivity growth, innovation and investment and
creates jobs, delivering higher standards of living for all. Through exchequer returns, enterprises
contribute to the provision of essential public services including infrastructures, healthcare and
education. Enterprises also contribute to enhanced quality of life and the attractiveness of our
towns and cities by providing quality retail outlets, restaurants, professional and personal
services and by engaging in collaborative regionally based initiatives. In addition, innovative
enterprises can contribute to realising national policy priorities in areas such as smart
infrastructures, healthy ageing, food security and a sustainable environment to deliver better
outcomes for our citizens.
Although we have made significant progress over recent years, we cannot be complacent.
Ireland operates in an intensely competitive global environment, where change is the only
constant, and where change can have a transformative impact on our enterprises.
We are ambitious for Ireland’s future growth prospects. Realising our ambition requires a step
change in how we align our policies across government and invest in those areas that will
support longer term sustainable enterprise growth and stability. We will need to be agile, to
anticipate and respond to change and ensure that our enterprise and complementary policies
remain fit for purpose over the coming decade. We will also need to remain vigilant and to
monitor employment growth patterns across sectors of the economy so as to avoid the mistakes
of the past.
Enterprise 2025 sets the strategic framework for coherence across government departments to
focus our resources in order to foster a better future and to deliver sustainable enterprise
growth and jobs4
. By taking the actions set out here we can realise a more ambitious scenario
1 A short-form version of this report Enterprise 2025: Innovative, Agile, Connected, Summary Report
has been published separately and is available at http://www.djei.ie/en/Publications/
2 Based on QNHS Q2 2015 seasonally adjusted data
3 Balance of Payments Annual Series (BPM6), CSO Statbank
4 Enterprise 2025 Background Report is available at https://www.djei.ie/en/Publications/

viii
than that set out in the projections framed in the context of Budget 2016
5
, delivering more jobs
and an unemployment rate of 6 percent by 2020.
Signs of recovery
Much has been achieved over the past number of years in restoring fiscal sustainability,
stabilising the banking system, improving our international competitiveness and in creating jobs.
We are seeing the impacts of the actions we have taken since 2012 through the APJ process:
There are now 1,958,700 people at work (Q2 2015) – more than was employed a decade
ago. In agency supported enterprises, job losses are at their lowest level for more than a
decade;
New company incorporations have increased by over a quarter since 2012;
Total exports from Ireland were €215 billion in 2014. This was the highest exports on
record, and over three times higher than in 1998;
Exports from Enterprise Ireland supported enterprises reached an all-time high of €18.6
billion in 2014, having recovered since the recession and exceeding levels experienced
during the height of the economic boom; and
Direct expenditure in the Irish economy in 2013 for both Irish and foreign owned
enterprises
6
was €43.8 billion and surpassed levels experienced in 2008.
Higher levels of productivity growth, sustained investments in RD&I and increased levels of
export intensity point to continuing improvements in the capacities, capabilities and
competitiveness of our enterprises. Job churn is a natural consequence of restructuring within
the enterprise base. A reduced level of job losses within the agency portfolios in 2014
demonstrates a welcome sign of resilience and sustainable employment – gross job losses at 6.5
percent for both agencies is less than was the case even in the peak employment years when
job losses stood at around 9 percent annually
7
.
Structural issues persist….
While progress has been made in terms of creating jobs and growing exports, many structural
issues persist. We continue to face challenges. Our unemployment rate is still higher than we
would like at 9.8 percent. There are indications of upward cost pressures. Our investments in
RD&I remain below comparator countries, and the proportion of enterprises engaging in
research and innovation is too low; there are some skills areas in which job opportunities exceed
supply; investment in workplace learning and management development is low; we have a
narrow base of exporters and not enough Irish owned firms growing internationally; productivity
levels are below comparator countries (with the exception of some FDI intensive sectors); and
we remain highly concentrated in terms of export markets and source markets for inward
investment. Many government departments have a role to play in addressing these issues. In the
context of increasingly complex global business models we need to ensure that Ireland’s export
growth continues to be underpinned by substance and economic activity.
5 Short-term economic outlook, presentation to the Oireachtas Committee on Finance, Public
Expenditure and Reform, Economics Division, Department of Finance, 6th October 2015
6 Agency supported enterprises, Source DJEI Annual Business Survey of Economic Impact (ABSEI)
7 Gross job losses are calculated as job losses as a percentage of the previous year employment base

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…and external uncertainties remain
As a small open economy we rely on external demand and international markets for sustainable
and continued growth. Global economic uncertainty remains high. Global economic growth
and trade is slowing. We are acutely aware of potential disruptive geopolitical, technological and
financial forces that could have implications for Ireland’s future growth path in an increasingly
interconnected world
8
, including for example the UK negotiations with regard to the EU, and the
ongoing negotiations in relation to the Transatlantic, Trade and Investment Partnership (TTIP).
Countries in South East Asia are attracting growing shares of mobile FDI. The competition to
attract FDI has intensified significantly, and all of FDI is hard won. More countries are offering
attractive locations for investment at a time when FDI project flows have reduced.
Change is the only constant for enterprise…
The increasing integration of the global economy and freer movement of people, information
and finance has accelerated the pace of change for enterprises.
People are increasingly mobile and are making decisions about where they want to work and
live – and the war for talent is global. Global value networks are resulting in the progressive
disaggregation of supply chains and creating new ecosystems involving multi-dimensional
partnerships between companies, suppliers, competitors and research institutes in different
locations throughout the world. Digitisation is pervasive in its impact, driving transformative
change across all sectors of the economy and changing the way in which companies do
business, engage with customers, reach new markets and innovate. The environmental
sustainability agenda presents both opportunities and challenges for enterprises
9
– and all
enterprises need to adapt in terms of product lifecycle management, minimising environmental
impacts and enhancing energy efficiencies. For enterprises, change is the only constant –
presenting opportunities and challenges.
Ireland’s economy is at an inflection point…
We are right to acknowledge the considerable progress that has been made since 2011, and
that we are experiencing a return to growth following a period of deep recession. We have a
strong basis from which to grow, and we have significant potential for growth in both
manufacturing and services activities. But we cannot and should not underestimate the genuine
and considerable challenges facing us as we look out over the next decade:
global competition for investment and talent has intensified as we aim to be recognised
internationally as innovative and entrepreneurial;
new technologies are disrupting industry norms and enabling transformational change.
We want to ensure that our enterprises are well placed to take advantage of such
opportunity;
relative competitiveness is a moving target and we want to be placed in the top rankings;
we have had higher levels of emigration and a higher level of unemployment than is
acceptable; and
8 Refer also to Draft National Risk Assessment 2015: Overview of Strategic Risks, Department of the
Taoiseach
9 Refer also to the recently adopted UN international agreement on sustainable development,
Transforming our World – the 2030 Agenda for Action, September 2015

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a range of structural issues in our economy and enterprise base remain that need to be
addressed.
We have developed Enterprise 2025, reflecting on the global environment and putting in place
new approaches to ensure that our policies across government remain fit for purpose in a
changing world. Our policies will continue to be anticipatory and responsive and informed by
analysis and evaluation.
Enterprise policy to 2025 – a systems approach
Internationally, enterprise policy is evolving toward a ‘systems’ approach, with the role of
Government acting as a facilitator, coordinator and market creator in addition to an investor
10
.
Governments in other countries are increasingly engaging in creating networks, enabling cluster
development, addressing coordination failures, and aligning strategic priorities through effective
and ongoing dialogue with enterprise. A systems approach recognises that enterprise can play a
constructive role in addressing broader policy objectives through innovation and partnership -
so called ‘grand challenges’, including for example sustainable energy, healthy ageing, smart
cities etc. This evolution in enterprise policy internationally has informed our own policy
approach.
Enterprise policy is broad reaching and requires a whole of government commitment. Although
DJEI is the principal governmental advocate for the enterprise sector, many other government
departments play a crucial role in delivering on complementary policy actions to provide an
environment that is conducive to job creation and supports the development of a competitive
and sustainable enterprise mix
11
.
10 See Beyond Industrial Policy: Emerging Issues and New Trends, Warwick, K. I, OECD STI Policy
Papers, No. 2, 2013; and Enterprise policy evaluation: Is there a ‘new’ way of doing it?, Lenihan, H.,
Evaluation and Program Planning, 34 (4), 323-332, 2011
11 A number of policies and strategies are currently being developed or have recently been completed
that are directly pertinent, including for example: National Skills Strategy; Strategy for Science,
Technology and Innovation; National Planning Framework; Food Wise 2025; Construction 2020;
Harnessing Our Ocean Wealth; People, Place and Policy: Growing Tourism to 2025; IFS 2020; successor
to Trade, Tourism and Investment Strategy

Our Ambition & Strategy for Enterprise 2025
Enterprise resilience
> Across a range of sectors
> Pursuing new opportunities
> Building supportive ecosystems
> A step change in enterprise performance
2.180m
at work
by 2020
Irish owned
exports
+€10bn
by 2020
Top 3
competitiveness
ranking
Sustaining
full
employment
Differentiating Ireland
> Talent
> Place-making
> Innovativeness
> Connectedness
Excelling in the basics
> Finance for growth
> Taxation
> Costs
> Infrastructures
INNOVATIVE AGILE CONNECTED
Ireland – the best place to succeed in business
delivering
sustainable employment and higher standards of living for all

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Our vision for enterprise to 2025
Our successful enterprises will be competitive, productive and globally connected, enabled by our
entrepreneurial and innovative culture that is embodied in people, place,
the policy system and government
where
Enterprise is valued for creating quality jobs and for driving sustainable growth
and where
Enterprises play a crucial role in addressing grand challenges including through partnerships in
research and innovation
delivering higher standards of living for all
Our ambition and strategy
Driving export-led growth – delivering sustainable employment
For Ireland as a small open economy, sustainable long term growth is dependent on continued
success in international markets. Our policy focus is predicated upon growth fuelled by foreign
earnings derived from exports in the first instance as distinct from being driven primarily by
domestic consumption, which we know is an unsustainable growth model.
Our ambition is to:
achieve the potential for growth in Irish owned manufacturing and services exports by
between 6 and 8 percent annually to 2020;
realise increased export intensity of Irish owned firms to between 55 and 60 percent; and
support geographic market diversification (including to high growth emerging markets)
so that Irish owned exports to non-UK markets increase by 50 percent; and
attract and grow export oriented foreign direct investment.
An export led strategy is not just about exporters. In addition to generating greater wealth than
would be possible through only domestically traded activities, there is a substantial ripple effect
in terms of job creation across the entire economy and an increase in technology adoption,
innovation, standards and best practice overall.
Stretching our employment ambitions
We are ambitious. We can achieve full employment that is sustainable and resilient over the
longer term by taking the actions set out in Enterprise 2025.
Ireland - the best place to succeed in business
delivering

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Our ambition is to:
reach 2.180 million people in employment and an unemployment rate of 6 percent by
2020; and to
sustain full employment over the decade to 2025.
The potential to reach 2.180 million in employment by 2020 is based on the premise of export-
led growth and would see an additional 266,000 people at work from a 2014 base
12
. We see
the potential to achieve a 6 percent unemployment rate at a faster pace than that set out in the
projections prepared in the context of Budget 2016 that forecast a 6.5 percent unemployment
rate by 2020. We are aware that this will be challenging and that we have no control over global
demand and other external factors. We can strongly influence our chances of success by
focusing on supporting the productive sector, enhancing our relative competitiveness,
leveraging existing comparative advantage in key sectors, addressing structural issues in the
economy, improving productivity and our capacity to innovate.
Our enterprise development agencies, IDA Ireland and Enterprise Ireland play a key role in
providing direct supports and services to export oriented enterprises. They will contribute circa
140,000 jobs (i.e. 75,000 direct jobs that will stimulate an additional 65,000 jobs indirectly) to the
potential private sector employment growth to the period 2020. There is potential for a further
30,000 tourism related jobs
13
.
We will continuously monitor our employment growth patterns in terms of an export/non-
export ‘balance’ and avoid the mistakes of the past.
Our policies will facilitate the creation of quality employment, taking into account the multi-
dimensional aspects that define quality including: ensuring opportunities for advancement that
involves workplace learning and development; ensuring that people are educated and trained to
meet the needs of industry; recognising the opportunities presented by entrepreneurship as an
alternative career path; and ensuring a system that facilitates flexibility without exploitation.
Enterprise 2025 envisages the creation of a range of career opportunities across a broad
spectrum of skills and across manufacturing and services activities.
Enhancing the employment prospects of the unemployed
We will ensure that individuals are trained in relevant skills and competences to enhance their
prospects for employment and that meet the needs of enterprise in a changing environment.
Looking out over the next decade, a return to sustainable economic growth and job creation will
likely lessen the unemployment challenge considerably, although unemployment remains at an
unacceptably high level at present. The activation initiatives as set out in Pathways to Work 2015
remain relevant and aim to enhance peoples’ prospects for employment. Although the demand
for these initiatives over the coming years will decline as more employment opportunities come
on stream, a more intensified engagement may be required with the reducing cohort of
unemployed to achieve our ambition for full employment.
12 Annual average employment over four calendar quarters, 2014
13 People, Place and Policy: Growing Tourism to 2025, Department of Transport, Tourism and Sport,
includes an overall target of 50,000 additional jobs in the tourism sector by 2025 - the data set out here
has been interpolated to align with overall employment potential to the period to 2020

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Investing for competitive advantage
We will realise a step-change in the growth potential of our economy by focusing our capital
investments to support the productive sector across a range of key areas.
Our ambition is to:
restore our competitiveness to rank in the top three of the most competitive small
countries in the world;
realise productivity growth across the economy to levels ranking amongst the top five EU
countries averaging 2.0 to 2.5 percent per annum over the long term; and
contribute to the restoration of living standards to pre-recession levels through our
enterprise policies and maintain an above average position relative to the EU-19 average
over the period to 2025.
In the long run productivity growth is essential to improving living standards. Many of the
resources that enterprises draw on to maximise productive capability come from the
surrounding environment, including for example, a sound macroeconomic environment, the
education and skills base of the labour force, transport and communications networks, science
and technology know-how, competition and regulation policies, finance etc. It is important that
increases in labour costs are accompanied by productivity improvements in the coming years.
Focusing on Ireland’s differentiators
We will build competitive advantage and differentiate what Ireland has to offer in terms of:
Talent - developing and attracting talent for the 21
st
century, aligned with the needs of
enterprise;
Place-making - developing attractive places to invest, live and work throughout Ireland
and optimising the potential of our regions;
Innovativeness - strengthening our innovation system, and supporting enterprises to
derive competitive advantage through innovation; and
Connectedness - building connections regionally, nationally and internationally through
business, people and the research system.
Building resilience and achieving a step change in enterprise performance
We will take a whole of enterprise approach, leveraging the potential in all sectors of our
economy. This will strengthen our resilience in today’s global environment where the pace of
change has accelerated and where competition for investment and mobile talent has intensified.
We will focus our efforts to achieve a step change in enterprise performance in terms of
productivity, the capacity to innovate and to grow to scale. We will:
stimulate a flourishing of entrepreneurship across all sectors and throughout the regions;
work with ambitious companies to achieve a significant step up in their potential to scale
and to grow on international markets;
assist locally trading and employment intensive enterprises to improve competitiveness;
attract, transform and sustain FDI that will add value to our economic fabric and will
enable access to global value networks for Irish owned enterprises;

xv
achieve a significant uplift in enterprises investing in RD&I – with more enterprises and
greater levels of investment – delivering innovative products and services, and
stimulate greater collaboration between foreign and Irish owned enterprises and between
enterprises, HEIs and the research base to develop critical mass in key sectors and clusters
of sustainable advantage.
Excelling in getting the basics right
Unless we address the basics in our business environment, the impact of other interventions will
be compromised, and will make it difficult to meet the ambitious (yet achievable) potential. We
will ensure a continued focus on:
ensuring a competitive funding environment that provides a range of options to support
our enterprises from start-up to growth;
sustaining a competitive tax environment, including a competitive offering for enterprise
and entrepreneurship, and contributing to Ireland’s attractiveness for talent;
addressing structural issues that impact on relative cost competitiveness; and
investing in quality infrastructures (or providing the regulatory and certainty required for
private investment) that support the establishment and scaling of enterprises in Ireland.
Without the business environment basics the impact of other interventions will be
compromised.
Taking strategic action
This Government is committed to working together with business, to create the optimum
environment in which enterprise can establish, grow and thrive. Our ambition as a government
system is to be anticipatory, responsive and adaptive – demonstrating an enviable agility that
can be more easily embedded in a small country such as Ireland.
We aim to deliver sustainable growth and job creation – impacting positively on the economy,
on society and on the environment.
The following section sets out the strategic actions we will take to realise our ambition for
sustainable growth over the period to 2025, delivering jobs and a higher standard of living for
all. Delivery of an impactful enterprise policy requires a whole of government response.
Enterprises playing their part
Our strategies, policies and interventions work best when they are informed by the needs of
business and when industry engages effectively and with commitment. We need enterprises to
play their part by: engaging with the education and training sector; acting as champions in their
own locale; providing opportunities for students with structured industry placements; and
participating in apprenticeship programmes.
This heightened level of collaboration across enterprise and the broad government system is a
challenging but essential element in achieving the ambition set out in Enterprise 2025.

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Building resilience in our sectoral mix
There are a number of areas where Ireland can take action over the coming years to underpin
the resilience of the enterprise base, the sustainability of employment and be better prepared
for the technological and other shocks the global economy may face into the future.
We will embed a systematic approach to sectoral development and, taking a whole of enterprise
approach, we will tailor interventions as appropriate to stimulate productivity improvements and
greater engagement in RD&I and including leadership, management development and skills.
Sectoral ecosystems
A more systematic approach to sectoral ecosystem development will be rolled out in the context
of the accelerated pace of change, technology disruption, intensified international competition
for investment and talent and in order to stimulate entrepreneurship, to respond to impending
sectoral disruption and to take advantage of new and emerging areas of opportunity.
New approach to sectoral ecosystem development to accelerate growth and
deliver greater economic impact
1
Implement a systematic approach to sector ecosystem development in the
context of intensified international competition, the pace of change, evolution of
sectors and emergence of new areas of opportunity to enhance economic
performance, impact and international reputation and visibility by:
developing Sector Briefs, and working closely with the enterprise
development agencies and other relevant government departments,
introduce a more systematic and comprehensive approach to
horizon scanning that will harness in-market and sectoral
knowledge. This strengthened horizon scanning will facilitate the
identification of emerging opportunity areas and or disruptive
trends, the early assessment of potential and whether or not there
are sector specific policy implications that necessitate a policy
response;
establishing sector specific Ecosystem Development Teams for
limited periods to progress key sectoral initiatives; and
introducing effective oversight to monitor sector development
across the economy together with emerging requirements for
policy.
DJEI
Agencies,
Govt Depts,
Int’l
Networks
Driving all island approaches to sectoral development
2
Strengthen all-island approaches to sectoral ecosystem development as
appropriate and as opportunities arise to deliver greater economic opportunity
and potential for investment and job creation.
ITI (and
DJEI)
Building on strengths
These are the sectors in which we demonstrate comparative advantage and they contribute a
significant proportion to Ireland’s exports. These sectors are continuously evolving and we will
tailor our suite of interventions delivered by the agencies to ensure ongoing transformational
change and to deepen our global innovative capabilities at the level of the enterprise. These

xvii
sectors include ICT, Health Lifesciences, International Financial Services, Agri-Food,
Internationally Traded services and Engineering/Industrial products.
Deepening Ireland’s comparative advantage
3
Strengthen Ireland's comparative advantage by attracting new investments,
leveraging State investments in prioritised research areas, effecting continuous
transformational change and being open to new areas of opportunity arising
through convergence and adjacent possibilities. This involves both an
anticipatory and responsive approach in an intensely competitive and fast paced
global environment.
Coordinated action will also be required involving researchers and education and
training service providers.
The recommendations relating to an enhanced approach to sectoral ecosystem
development, trade, strengthened clustering initiatives, enhanced agency
collaboration, RD&I, and cross-sectoral/convergence initiatives are all directly
relevant. Business environment factors that enhance relative competitiveness with
other economies remain crucial to the continued success in these sectors.
DJEI,
Enterprise
agencies
Realising un-tapped potential
This includes: Marine/maritime; green technologies and environmental services; creative sector
(including design service providers); as well as the increasing potential for private provision of
international education and healthcare services (including e.g. eHealth). These sectors involve a
broad range of sub-sectors and activity which (in general) span a number of government
departments. Activities are distributed throughout Ireland, with likely potential for regional
initiatives / test beds etc.
4
Develop and deliver regionally based sectoral initiatives, including collaboration
across regional boundaries, taking advantage of the €100 million regional
collaborative fund launched by DJEI in 2015, aimed at bringing the key
stakeholders together to take the necessary action to deliver jobs and growth
based on harnessing regionally based assets.
The recommendations relating to addressing grand challenges are particularly
pertinent and require direct engagement by Departments of Health, Education,
Environment and others aimed at delivering increased efficiencies and outcomes
while providing opportunity for Irish based enterprises.
DJEI
5
Develop the full potential of the Marine economy through the implementation of
the Harnessing Our Ocean Wealth strategy.
Develop and implement strategies for new areas including eHealth, Healthcare
services, Creative Industries and Design.
DAFM
Various

xviii
Employment intensive sectors and locally trading sectors and activity
Employment intensive sectors include construction, retail, tourism, primary production
14
, sub-
supply and other manufacturing. They are primarily locally trading and are mature, well
developed sectors. Digitisation, ‘green’ and design are likely to have a disruptive impact on
many of these sectors, offering significant opportunity for enhanced productivity, innovation
and sustainable job creation. They are sectors upon which most of our other sectors in the
economy rely, and therefore, their competitiveness has a wider beneficial impact across the
economy.
Enhancing the productivity and innovative capacity of locally trading and
employment intensive sectors
6
Develop and implement a programme to target a broader cohort of small
enterprises in these sectors (and operating within state aid guidelines) to deliver
improved productivity, innovation and competitiveness, including for example
the use of innovation vouchers, establishment of Skillnets, management
development, mentoring, peer-to-peer networking, lean initiatives and
awareness raising.
The recommendations relating to broader business environment and cost
competitiveness are directly relevant.
DJEI &
relevant
actors
Key drivers transforming sectors
Digital technologies, the green agenda and the use of design have a pervasive impact across all
sectors and enterprises in the economy. They can deliver substantial and transformative change,
create new opportunities for innovation and growth and deliver enhanced productivity and
sustainable jobs.
Digital
Ireland a digital economy hot-spot within Europe
7
Ireland will achieve a leadership position as a digital ‘hot-spot’ in Europe in the
adoption and use of advanced ICTs across all aspects of the enterprise economy
and the public sector, including initiatives as part of EU's Digital Agenda for
Europe, and we will:
leverage on our core strengths in enterprise in ICTs (incl. supply
chain management; business process outsourcing; manufacturing
processes; data analytics; software development; etc.)
strengthen our ICT RD&I capabilities;
stimulate adoption of technologies across the enterprise base,
leveraging expertise within HEIs and public research institutes;
meet three quarters of demand for high level ICT skills through
domestic supply of graduates by 2018;
ensure a favourable regulatory, IP and data security environment;
Whole of
Government
14 Primary production is critical to achieve the ambition for Ireland’s agri-food sector – See also Food
Wise 2025, Department of Agriculture, Food and the Marine

xix
ensure the availability of ubiquitous fast speed broadband by 2020;
and
use public and private partnerships with enterprise and the research
community to facilitate technology and market ‘test-bedding’ to
contribute to addressing grand challenges through innovative use of
ICTs to develop new products, services and solutions.
Green technologies
Taking policy actions to achieve our EU commitments and to leverage our
natural resources by 2030
8
We will build on our many advantages and will enhance our reputation
internationally as a sustainable and green economy, and will:
enhance our RD&I capabilities and stimulating start-ups and growth
in green/clean technology enterprises;
stimulate increased focus by enterprises on investing in improving
energy efficiencies and minimising waste (including through
initiatives such as Lean) and delivering on corporate social
responsibility objectives;
address barriers and ensure mechanisms to realise the potential
from investment in energy sourced from renewables are efficient
and effective;
implement Food Wise 2025, published in July 2015, with a strong
emphasis on environmental sustainability;
encourage sustainable approaches to spatial development and
planning; and
progress smart city-region initiatives (which also leverages ICT
capabilities).
Whole of
Government
Design
Leveraging the potential of design
9
Building on the Year of Design 2015, we will roll-out a strategy for increasing the
application of design across the enterprise sector, including initiatives to increase
the use of design-thinking and its application in, and potential to, stimulate
innovation within SMEs including manufacturing and services activities.
DJEI
Enhancing overall enterprise performance
We will focus on realising the potential of the whole of enterprise to contribute effectively to
Ireland’s future economic growth by transforming operations, enhancing productivity and
embedding innovativeness.
We will optimise the contribution from entrepreneurship, from Irish owned enterprises by
supporting a more aggressive scaling agenda, from locally trading entities by accelerating

xx
productivity growth and competitiveness, and from our FDI as key contributors to Ireland’s
economic development and national enterprise policy objectives.
We will deliver an integrated approach to enterprises, ensuring that the range of services on
offer from a range of agencies and organisations is coherent and aligned.
We will build on the capabilities and expertise developed in undertaking enterprise related
programme evaluations to embed a culture of evaluations within DJEI and the enterprise
development agencies and to ensure a continuous feed-back loop to inform effective policy
decisions and interventions.
Strengthening our entrepreneurship ecosystem in an international context
10
Implement the National Entrepreneurship Strategy to achieve a 25 percent
increase in the rate of start-up, survival and scaling of new businesses in Ireland.
The National Competitiveness Council will monitor Ireland's entrepreneurship
ecosystem and assess national performance against international comparators
across a range of key indicators and report to the Minister for Jobs, Enterprise
and Innovation on an annual basis.
DJEI/Whole
of
Government
Delivering a coordinated approach to attracting mobile entrepreneurs and
emerging companies
11
Establish Ireland as a leading Start-up location for internationally mobile
entrepreneurs through developing and promoting the Ireland value proposition
that packages the elements to position Ireland as a leading European location for
start-ups and fast growing businesses including: the funding environment; IP
framework; structured access to Enterprise Ireland's overseas network and its
market-led innovation programmes in commercialisation, technology
development and diffusion and in internationalisation, marketing and leadership;
an enhanced visa regime and extension of the tech visa to other areas of unmet
demand in high skilled areas; and place and quality of life attributes etc.
DJEI/ EI/
IDA and DJE
Growing our Irish owned enterprises to scale
12
Support a greater number of Irish owned enterprises to grow to scale at an
accelerated rate, beyond their current turnover levels. This will require a tailoring
of interventions to meet the specific needs of the scaling enterprise, with the
objective of delivering to Ireland's enterprise policy objectives to grow exports
and employment.
EI
Attracting, expanding and sustaining Foreign Direct Investment
13
Implement the Policy Statement on Foreign Direct Investment in Ireland, and
deliver on the IDA strategy
15
to attract and sustain investments that contribute to
our national enterprise policy objectives.
DJEI/ IDA/EI
15 Winning - Foreign Direct Investment 2015-2019, IDA Ireland, 2015

xxi
An integrated and collaborative approach to supporting enterprises
14
Deliver an integrated approach to meeting enterprise needs, ensuring that the
range of services on offer across the development agencies as a whole is aligned
and coherent to business, in areas such as linkages, entrepreneurship, leadership
and management development, sectoral ecosystem development, and trade and
investment promotion. This includes agencies of other Departments such as Bord
Bia in relation to food companies, Fáilte Ireland in relation to tourism, and of
entities such as the LEOs, BICs, LEADER and IoTs in relation to small firms and
start-ups nationally and regionally.
DJEI and
others
Embedding a system of evidence based policy development to maximise
economic impact arising from state intervention
15
In the immediate term:
undertake an evaluation/review of Ireland’s trade and investment
promotional activities overseas as part of the overall system to
stimulate trade and investment; and
using the concept of developmental evaluation, identify an
appropriate intervention in the short term and undertake an ex-ante
review (An example might include the proposed clustering initiatives
or grand challenges approach).
DJEI
DJEI
Developing and attracting talent for the 21st
century
Skills development and education and training
Our ambition is that Ireland will be internationally renowned for its talent, for its highly skilled
and adaptive people, equipped with the higher order capabilities required in the 21st century
workplace and for its openness to continuous learning. Our people are our primary asset and
can differentiate Ireland’s competitive positioning, deliver high levels of productivity and
innovativeness. We aim to develop our own people through the education system, to embed a
culture of workplace learning and to create an environment that attracts talent from overseas to
live and work here. It is important too that we optimise opportunities for participation in the
workplace. Access to quality, affordable childcare is pertinent in this regard and the options and
recommendations set out in the report of the IDC working group established by the Department
of Children and Youth Affairs is being considered by Government16
.
The Department of Education and Skills is developing a National Skills Strategy and Enterprise
2025 will inform the process from the perspective of future enterprise needs. No assessment of
resource implications for the National Skills Strategy and/or for ongoing development of the
apprenticeship system has been undertaken during the development of Enterprise 2025.
16 Report of the Inter-Departmental Working Group – Future Investment in Childcare in Ireland,
Options and Recommendations for Government, Department of Children and Youth Affairs, July 2015

xxii
Education and training for the 21st century
16
Develop a National Skills Strategy to ensure alignment between the future skills
needs of the workplace and the education system, so that individuals
progressing from our education and training systems are equipped to adapt to
the work environment of the future, taking into consideration the following areas
in particular:
higher order skills, attuned to the increased need for strategic and
creative capabilities, and project and risk management capabilities
to manage in uncertain and more complex working environments;
integration and clear career progression through the education and
training system - promoting alternative pathways and recognition of
prior learning and experience so as to progress along the
qualifications ladder; and
developing alternative modes of delivery including online offerings,
an integrated digital-enabled system, and a wider range of
accreditation of learning in particular for the workplace setting.
DES
17
Double investment and participation in workplace learning and development by
enterprises over the period to 2020.
DJEI, DES,
Agencies
18
Launch regional skills fora being developed under the DES, to facilitate employer
engagement with the education and training system at all levels to enable local
delivery of skills needs identified in the regional context.
DES
19
Strengthen the mechanisms and metrics for ensuring delivery on the skills needs
identified at sectoral and occupational level through the Expert Group on Future
Skills Needs and SOLAS and develop further the communications mechanisms
between the EGFSN and higher education and further education and training
institutions to respond to identified shortages.
DJEI, DES
20
Develop the new apprenticeship system on an ongoing basis to cover the broad
range of skills needed for the economy to ensure the system is resourced to
adapt to the changing needs of the workplace and employers over the coming
decade.
DES

xxiii
Future ways of working
Technological and work organisation changes are having profound implications for how people
do their job, how they learn and shape their career pathways, from where they work including
for example homeworking and teleworking17
, and how employers organise their activities. There
is a need to both strengthen our understanding of new ways of working and policy implications
for employees and employers and to ensure we have the required flexibility to succeed for the
future.
21
Develop new partnership approaches at enterprise level, based on industrial
relations that encourage participative approaches to securing the sustainability
of the business and that provides for continuous learning and upskilling for
workers to respond to the competitive demands to increase productivity and
adaptability.
DJEI, DES
22
Ensure that in the context of future ways of working our employment legislation
and labour relations architecture remains fit for purpose and is grounded on
evidence-based research and data collection on new forms of work, workplace
innovation, workplace learning etc., and takes account of the impacts on
individuals and enterprises and of the policy implications arising.
DJEI
Leadership and management capability
Strong leadership is critical to drive the growth, innovation and adaptability required of the
successful enterprise over the coming decade. Strong leaders are essential to drive our scaling
agenda and to raise the profile internationally of our highly innovative Irish owned enterprises.
Managers and leaders will increasingly need to motivate an empowered employee, to harness
the capabilities of a multi-disciplinary, multi-cultural and sometimes dispersed workforce.
Our evidence shows that management capability is the primary driver of a successful company –
at whatever scale.
Deliver a demonstrable uplift in leadership and management capability across
the enterprise base
23
Achieve a demonstrable uplift in business leadership skills to drive innovation
and internationalisation across a broader cohort of enterprises, and in
management capability across the enterprise base, so that all firms have the
potential to achieve a one-step-up to higher business performance and growth,
using the most appropriate intervention to deliver to the specific needs of the
enterprise, scale and stage of development.
DJEI, DES, EI,
IDA, LEOs
17 Investment in broadband infrastructures is also relevant – refer to Action 54

xxiv
Employment regulation
We will ensure that Ireland continues to create the environment for quality jobs, enabling
flexibility without exploitation, and that we have a responsive regulatory environment that
remains attuned to changing work organisation and society over the coming decade.
24
Ensure the Workplace Relations Commission can respond to the changing needs
of the workplace, employees and employers over the next decade.
A continued focus on:
ensuring that the statutory wage setting mechanisms remain
responsive, flexible, fair, and fit for purpose; and
engaging proactively with EU initiatives and EU employment law to
ensure that the EU legislative framework takes account of changes
in work organisation and the evolving needs of the Irish economy.
Review and update employment legislation and ensure it is fit for purpose for the
coming decades.
DJEI
Enhancing employment prospects
There are a number of activation initiatives in place that remain relevant as set out in Pathways
to Work 2015. As we achieve the ambition set out in Enterprise 2025, the demand over time for
these initiatives will likely reduce. In a changing environment, we need to ensure that individuals
are equipped with the relevant skills and competences that meet the needs of enterprise and
reduces risk of unemployment.
25
Mainstream best practice from focused labour market activation programmes
within the further education and training and higher education system such as
Springboard and Momentum to provide skills in demand by employers, improve
transitions from education to employment, and reduce the risk of
unemployment.
DES, DSP

xxv
Optimising regional potential – place-making
There is a strong interdependence between place-making (the planning, development and
creation of an attractive environment) and enterprise development. We will take the policy
actions necessary to realise the potential of the regions throughout Ireland to contribute to, and
benefit from, sustainable employment and growth over the next decade. We will ensure that our
national policies can be translated effectively into regional action, informed by our
understanding of regional strengths and potential.
We aim to harness regionally based actors to stimulate collaborative action to enhance the
potential for employment creation in their locale18
. Effective information sharing between
enterprise and spatial policy development and implementation will be key to achieving our
ambition.
Urban areas will play a key role in realising the potential of our regions throughout Ireland. The
development of the National Planning Framework and Regional Spatial and Economic Strategies
(informed by the Regional Action Plans and Enterprise 2025) will take account of the role that
regional growth centres can play in Ireland’s future economic development. We need also to
remain aware that the international visibility and reputation of our capital city is crucial for the
continued attraction of FDI, entrepreneurship, tourism and talent. Dublin, as Ireland’s main
national access point is a key attractiveness factor for any ultimate location in Ireland and IDA
Ireland has a strong regional focus in its recently published strategy.
Ireland has the potential to see regional unemployment rates no higher than one percentage
point away from the national employment rate by 2020.
Realising the potential of our regions
26
Develop and publish the National Planning Framework (the successor to the
National Spatial Strategy) to set out the spatial forward planning framework and
overarching principles, including a clear urban policy that reinforces the
importance of Dublin as our Capital city and of other city regions throughout the
country, and that informs strategic national investments (with regional impact)
and priorities over the coming decade.
DECLG
18 This includes a broad range of actors, including the development agencies (EI, IDA, Údárás na
Gaeltachta), Local Enterprise Offices, Local Authorities, Western Development Commission, Business
Chambers and associations and others

xxvi
27 Roll out the Action Plan for Jobs at regional level (NUTS III areas). DJEI
28
Support the development of regional collaborative initiatives among private and
public sector actors in the regions that promote innovation and productivity
growth through competitive funding calls over the period to 2020. It is envisaged
that the funding calls will attract some matching funding from other regional or
private sources. The three funding areas include:
€5 million focused on community driven enterprise initiatives;
€5 million focused on providing additional funding to LEOs on foot
of innovative proposals specific to their region; and
€40 million to support significant projects to improve or leverage
identified enterprise capability in the region.
Competitive calls for proposals will be informed by the Regional APJs, with the
first tranche of the regional fund launched in 2015 to stimulate collaborative
action and novel approaches to harness regional assets with a view to realising
potential and accelerating growth.
DJEI/EI
29
Develop the Regional Spatial and Economic Strategies (RSES) led by DECLG, in
conjunction with the Regional Authorities, DJEI and others, with a strong focus
on creating competitive regions in which enterprise and entrepreneurship can
succeed. The RSESs will provide an overarching framework for the creation of
new places with attractive characteristics and infrastructures to stimulate
enterprise investment and to realise economic potential.
DJEI, DECLG
30
Formulate and implement Local Economic and Community Plans to maximize the
potential of local areas and guide local authority action to contribute to the
collaborative development of strong regional economic growth centres.
Local
Authorities
31
Strengthen the role that HEIs will play within their regions for a strengthened and
richer industry liaison system to stimulate greater engagement with enterprise
(and SMEs in particular) across a broad agenda including innovation, knowledge
sharing and dissemination, peer networking and entrepreneurship with the aim
of accelerating enterprise growth.
DES, DJEI,
HEA, EI, IDA
32
Prioritise place-specific infrastructure deficits that are impacting negatively on
the attractiveness of our city regions for enterprise investment. This will include
orienting the Public Capital Programme toward investments that support
business needs and targeting European investment/development funding over
the 2015-2025 period.
DPER,
DTTAS,
DECLG, DJEI
33
Roll out a 5-year €150 million capital investment programme to help attract
more foreign investment and jobs into each region. This programme will include
investments over the coming years in building advanced manufacturing and
office facilities in Sligo, Tralee, Castlebar, Galway, Dundalk, Limerick, Athlone,
Carlow and Waterford.
IDA

xxvii
Embedding innovativeness in our enterprises and systems
Successful enterprises are those that innovate. Innovation enables enterprises to differentiate
their product and services offerings, to develop new ways of reaching customers and markets, to
disrupt existing business and revenue models, and to improve processes, systems and
organisational structures. Innovation plays a crucial role in creating competitive advantage,
enhancing productivity and ultimately increasing profitability so that a company can reinvest in
its future growth.
Since the early 2000s the State has invested significantly in developing Ireland’s RD&I
infrastructures and capabilities. Investments in scientific excellence; in developing highly
qualified researchers that meet the needs of our innovative enterprises; in driving collaborations
and linkages between our research centres and enterprise; are key ingredients for Ireland’s
future economic development and growth.
The Government will adopt a new Strategy for Science, Technology and Innovation later this
year and will set out specific actions. From the perspective of enterprise, we aim to build on our
investments and achievements to date, increasing enterprise RD&I activity and leveraging state
investments for competitive advantage.
Enhancing innovation in enterprise
34
Bring forward a successor to the Strategy for Science, Technology and
Innovation, which will underpin the development of Ireland as an innovation
economy, built on excellence in strategic areas of research, on market-driven
translation into commercial opportunities of the technology and research
capabilities and on entrepreneurship. Key elements of innovation policy over
the coming decade will include:
building on existing research capacity and infrastructure, ensuring
that a broad base of support is in place across the full continuum
of research and including at the higher (closer to market)
Technology Readiness Levels;
exploring the options for a cross government ‘grand challenges’
approach that ‘creates’ a market for innovative products and
services and addresses specific national priorities;
using the State’s circa €8.5 billion procurement budget to stimulate
innovation in SMEs to develop solutions to meet the needs of the
public sector including through rolling-out further Small Business
Innovation research (SBIR) initiatives;
ensuring that Ireland’s Intellectual Property (IP) framework remains
fit for purpose and stimulating an increase in activity by enterprises
across all forms of IP;
promoting innovation in services and business processing with
measures tailored to the unique characteristics of this activity;
ensuring supply of researchers and human capital to underpin an
innovative enterprise sector; and
promoting greater collaboration between enterprise and HEIs
including increased mobility between industry and academia.
DJEI

xxviii
35
Establish appropriate governance and institutional arrangements to facilitate a
cross government approach to implementation of the SSTI so as to create a
dynamic, cohesive and well-functioning national innovation eco-system that
delivers economic and societal impact and outcomes.
DJEI
36
Achieve a 30 percent increase in the number of Irish and foreign owned
enterprises with innovation activities of scale, and broaden the base of RD&I
activity in Irish based enterprises generally.
EI, IDA, LEOs
37
Monitor our R&D Tax credit offering to ensure it has an appropriate impact on
R&D activity in enterprise, is internationally competitive, is attuned to evolving
enterprise sectors and activities, is not overly complex or administratively
burdensome on business and to ensure clarity and consistency for enterprise.
DoF
38
Drive participation in EU and international research programmes in areas of
relevance and impact to the economy and enterprise base so that we achieve
the ambitious target of €1.25bn for Horizon 2020, led by the national support
network based in Enterprise Ireland.
Deliver the ex-post evaluation of the FP7 programme and ex-ante evaluation of
Horizon2020 so that we take the necessary and appropriate actions to maximise
potential and impact towards the target of €1.25bn drawdown by 2020.
DJEI/EI
Innovativeness – a mind-set, culture and way of working
The concept of innovativeness envisages a pervasive innovation, implemented by routine across
operations, involving a high degree of entrepreneurialism amongst the management team and
extending across the workforce as a whole. It involves strong leadership, management
capability and a culture of problem-solving and learning within the workplace – elements that
relate to the absorptive capacity of the enterprise. We know that in general, absorptive capacity
in SMEs needs to be strengthened and that we need to encourage more foreign owned entities
based here to engage in RD&I activities.
We already have initiatives in place that can be rolled out to a wider enterprise base that will set
the context for innovation, for new product, process and services development. For example, an
enhanced understanding is developing of the pervasive nature and end-to-end business
implications of Lean principles that is fundamentally about a change in culture and ways of
working that harnesses people’s creativity and problem-solving capabilities.
Facilitating a culture of innovativeness across all of enterprise
39
Develop new approaches appropriate to the scale and capability of the firm to
boost the absorptive capacity of the enterprise base and to stimulate a shift in
culture and mind-set including:
the introduction of Lean principles and approaches to problem
solving and including manufacturing and services activities;
broadening the reach of programmes catering to management
development for the innovative enterprise; and
stimulating cross industry-research community mobility through
for example, secondments and placements.
EI, LEOs, IDA
EI, LEOs
EI, IDA

xxix
40
Ensure our regulatory environment remains sufficiently agile in an increasingly
disruptive innovative environment to accommodate sectoral development and
emerging areas of potential.
Various
41
Strengthen the role of NSAI as a crucial element of Ireland’s sectoral and
innovation ecosystem, by promoting the benefits of standards to the widest
cross section of industry and ensuring that its focus is aligned with Enterprise
Policy 2025 and informed by the future needs of enterprise.
Raise awareness of the importance of standards in the context of RD&I and
encourage more companies to participate in the standards setting process.
DJEI, NSAI
NSAI, EI
Connectedness – internationally, nationally and regionally
As a small open economy Ireland and its people need to be connected internationally.
Our trade relations, policies and strategies, our connections to global value networks, our
approach to developing higher visibility clustering activities and openness and engagement in
all aspects of the digital economy are pertinent and critical to enterprise growth and economic
performance.
Trade, tourism and investment
Irish enterprise and Government have successfully realised the growth targets set out in the
Trade, Tourism and Investment Strategy (2010- 2015). The following elements will be reflected in
a successor to that strategy to achieve specific objectives over the next five years and beyond.
Realising our ambition
42
Deliver on our trade, tourism and investment potential over the next five years,
to include:
growing the exports of Irish owned firms by 6-8 percent per
annum to 2020;
securing 900 new FDI project investments over the period to 2019
as set out in IDA strategy (2015);
increasing tourism revenue to €5 billion and overseas visitor
numbers to 10 million annually by 2025 as set out in the tourism
policy statement (2015);
broadening the geographic market focus of the Irish owned
enterprise base beyond UK markets to reach exports of between
€5 and €6 billion by 2020;
further diversifying Ireland’s export markets to the Eurozone and
high growth markets;
increasing the number of Irish owned firms that export to more
than one country;
increasing the export intensity of the indigenous firms to between
55 and 60 percent from just over 50 percent currently; and
further diversifying the sectoral profile of exports overall.
DJEI, DTTAS &
relevant State
Agencies

xxx
We will also implement:
a more structured approach to dissemination of in-market
intelligence garnered by the agencies and the embassy network
that maximises opportunities;
a beginning to end process to optimise Irish interests in
negotiation and implementation of EU trade and investment
agreements, in particular, the Transatlantic Trade and Investment
Partnership, China, Japan, India and ASEAN; and
six-monthly reviews of Ireland’s trade, tourism and investment
performance and of the operational effectiveness of Local Market
Plans.
EI, IDA, other
Agencies &
DFAT/embassy
network
DJEI &
relevant Depts
& Agencies
DFAT, DJEI &
relevant Depts
& Agencies
43
Bring forward a successor to the Trade, Tourism and Investment Strategy 2010-
2015 that incorporates the elements set out above.
DFAT, DJEI &
other Depts &
Agencies
Global value networks (GVNs)
Deepening our connections with global value networks
44
Through the development agencies, strengthen Ireland’s engagement in GVNs,
leveraging our distinctive enterprise base of globally diverse foreign owned
multinationals and innovative Irish owned enterprises, in order to realise
accelerated growth, value add and economic impact.
Focus on opportunities to capture increased value to Ireland from services GVNs,
including the services component within manufacturing and contract
manufacturing services.
DJEI &
Enterprise
Agencies
Clustering
Clustering activity involves the interaction between enterprises, HEIs, researchers and other
players in the eco-system that ultimately delivers mutual gain above what might otherwise be
achieved from ‘going it alone’. Clustering activity in Ireland can be described as nascent relative
to other developed economies which have used clustering initiatives as an effective policy tool
for enterprise and economic development for many years. This initiative may provide a vehicle
through which the grand challenges approach can be progressed.
Sustained clustering activities of scale and with international visibility
45
Design a new approach for a National Clustering Initiative in the key sectors of
strength building on the existing initiatives through competitive calls that seed
cluster activities, to stimulate more extensive clustering on a sustained basis, at a
scale and depth that delivers to enterprise policy goals and has visibility and
stature in an international context.
DJEI &
Enterprise
Agencies

xxxi
Data-intensive world
Reaping the benefits of the increasingly digital world requires that we provide a robust and well
balanced regime for the digital economy and engage effectively with our EU partners.
Ensuring a digital friendly regime
46
Ensure that Ireland sustains its leadership position in providing an
internationally recognised robust and well balanced regime for the digital
economy that protects individual interests while facilitating enterprise
development and growth including, through:
updating our intellectual property legislation to ensure that it is
fit for purpose in the digital age;
close engagement with our EU partners in relation to the
advancement of the EU's Digital Single Market agenda in all of
its aspects;
ongoing and regular review of global and international
developments and timely policy responses if/as needed; and
the full implementation of Ireland's data protection roadmap,
and National Broadband Plan.
DJEI, DCENR,
DJE, DPC
We will continue to focus on enhancing the broader business environment and on ensuring that:
we have a comprehensive and competitive funding environment to support our
enterprises' ambitions through from pre-start up to maturity;
our tax regime remains internationally competitive (and especially relative to our nearest
trading partners), supports productive activity and provides certainty, stability and
predictability for enterprise and entrepreneurs
19
;
we drive productivity growth as a national imperative;
we focus on maintaining relative cost competitiveness and on driving competition across
all sectors of the economy; and that
we invest in, or enable investment in productive infrastructures.
19 Department of Finance engaged in a consultation process in June 2015 in relation to tax and
entrepreneurship

xxxii
Finance for growth
Delivering on the actions set out below will require engagement with a broader range of
stakeholders including the enterprise development agencies and other bodies.
47 Establishing a robust funding environment for enterprise
Drive competition in the lending market and the provision of the widest range
of services to meet the needs of internationally trading and innovative
enterprises.
DoF
Work with financial institutions (both nationally and internationally) to facilitate
the creation of a comprehensive and competitive funding environment to
support our enterprises' ambitions through from pre-start up to maturity
including to:
Stimulate greater equity and quasi-equity investment;
Encourage the use of capital markets in the funding eco-system for
indigenous companies, in areas such as early stage listings;
Strengthen the capabilities of Irish owned enterprises in terms of
strategic use of funding options for growth; and
Promote new alternative sources of funding such as peer-to-peer
lending and ensure our regulatory regime is fit for purpose and
adaptive to new and alternative forms of funding/financing.
DoF, DJEI,
DPER, EI
Engage with European and International financial institutions and funding
streams - ensuring that we optimise the potential to enhance Ireland's funding
environment over the coming years.
DoF, DPER,
DJEI, EI
A growth friendly tax regime
48
We will continue to maintain our commitment to transparency and stability
and on enhancing the environment for business investment, innovation and
entrepreneurship
We will continue to implement the changes set out in the tax roadmap for
Ireland’s tax competitiveness , and will:
maintain the competitiveness of our Corporation Tax Rate;
continue to expand Ireland's tax treaty network; and
implement a Knowledge Development Box in 2016, within the
guidelines agreed at various international fora.
DoF
We will continue to enhance the relative competitiveness of the taxation system
(and especially relative to our nearest trading partners), and will:
support entrepreneurship, start-ups and the competitiveness of Irish
SMEs that includes a range of aspects such as investment incentives,
CGT etc.;
DoF

xxxiii
address disincentive effects within the tax and social welfare systems
affecting the self-employed, taking into account, and with regard to,
the differing treatments between self-employed tax payers and
PAYE workers within a stated timeframe; and
ensure that existing initiatives are subject to periodic review to
enhance effectiveness and optimal levels of take-up.
Productivity
49
We will drive productivity growth as a national imperative and support
enterprises to get to international benchmarks relevant to their sectors
The National Competitiveness Council will place a high priority on the measures
required to drive productivity growth in the economy over the next five years, as
we seek to grow jobs, improve standards of living, and international
competitiveness.
DJEI/NCC
Sustain the focus on productivity performance in deliberations on wage increases
and emphasise the need, from a sustainability and competitiveness perspective,
for wage growth to be underpinned by productivity.
DJEI, DPER
Many of the other recommendations set out in this strategy are directly relevant to
driving productivity growth including those relating to education and skills, science,
technology and innovation, infrastructure investments, interventions at the level of
the firm focused on capability building etc.
Cost competitiveness
50 We will take the actions necessary to improve Ireland’s relative cost
competitiveness in the areas that are within our control
Energy
Position cost competitiveness as well as environmental considerations at the
centre of Ireland's national energy policy and its negotiating position in relation
to environmental and energy policy at EU level, with improvements in Ireland’s
environmental sustainability done at least cost.
DCENR
Bring forward measures to secure the optimal functioning of the North-South
Integrated Single Electricity Market so that future energy needs are met at least
cost.
CER

xxxiv
Waste
Promote private investment in and competition between cost effective,
commercially viable, integrated and diversified waste treatment options across
the waste management spectrum through the framework of the new regional
waste management plans
20
. These options include energy recovery thermal
facilities, which can play a role in meeting renewable energy targets.
Local
Authorities
Implement the EU's environmental obligations in the most cost effective manner,
and ensure that Ireland's negotiating position on EU waste policy issues is
informed by enterprise competitiveness as well as environmental considerations.
DECLG, DJEI
Property
Drive the efficient and productive use of land, discouraging land-hoarding and
helping to resolve the current housing and commercial property challenges,
including consideration of mechanisms such as an annual site value tax.
DECLG, DoF
Fully implement the Construction 2020 Strategy, including creation of a coherent
policy response and regulatory certainty around planning and zoning, to ensure
delivery of an appropriate mix of commercial property.
DoT and
other
relevant
Departments
Working with enterprise to increase efficiencies
Develop initiatives to ensure that businesses are aware of how best to:
reduce their energy use; and to
exploit waste management reduction processes and technologies.
DJEI, SEAI,
Enterprise
Agencies,
Business
Rep Bodies
Business regulation
Drive the system-wide initiative to reduce the regulatory administrative burden
for businesses under the guidance of the High Level Group on Business
Regulation.
DJEI and
other Govt
Departments
Raise awareness and better inform business of the regulatory and compliance
information applicable to them informed by a review of the functionality of the
web portal www.businessregulation.ie.
DJEI and
other Govt
Departments
20 Refer also to A Resource Opportunity, Waste Management Policy in Ireland, DCENR, 2012 which sets
out how Ireland can minimise waste while maximising the resources we can recover from waste
(resource efficiency)

xxxv
Competitive markets
In terms of the future competition policy agenda, from an enterprise perspective, it is important
that progress is achieved on competition issues where they affect business input costs, including
the regulated sectors, such as energy, waste and the construction sectors. Implementation of
this agenda lies involves the CCPC and also the relevant sectoral regulators.
Strengthening competition
51
Drive and promote competition across all market sectors of the economy to inter
alia address barriers to entry and create a level playing field for all entities.
In this context, set benchmarks to be achieved on a continuous basis in areas for
particular action.
DJEI/CCPC,
Relevant
Govt Depts/
Sectoral
Regulators
Infrastructures
Much of the investments in infrastructures will be made by the private sector over the coming
decade. We will continue to focus on putting in place the appropriate policy framework to
stimulate investor confidence in long-term projects (e.g. to provide regulatory and planning
certainty).
52
Delivering sustainable, reliable and quality transport networks, water, energy
and telecoms
Starting with the Government's new Infrastructure and Capital Investment Plan to
2021, prioritise productive investment in line with the needs of enterprises
competing internationally, paying particular attention to the areas set out below
where funded from the exchequer.
DPER
Energy:
Increase electricity interconnection to the North, Britain and continental Europe
and diversify gas sources and supplies (installation of a twin gas pipeline at
Moffat and new gas storage facilities) to ensure security of supply.
DCENR
Water services:
Deliver on Ireland's potential to make water services a competitive advantage in
the attraction of mobile investment and the development of indigenous
enterprise in water intensive sectors in the longer term.
Ensure that Irish Water prioritises the medium and longer term investments
required to address enterprise needs and drives efficiencies in water service
delivery - particularly by addressing urgent service constraints in Dublin, and
ensuring sufficient capacity in large regional urban centres. Priority for required
capacity and quality levels should be given to enterprise and development zone
locations.
CER, DECLG
CER, DECLG

xxxvi
International and internal access:
In air transport implement the 2015 National Aviation Policy to help secure new
investment in Ireland's international connectivity, and provide regulatory
certainty. In particular investment will need to accommodate the trend towards
larger aircraft, and development of Dublin as a hub airport, both of which can
help ensure competitive direct access for business passengers, tourists, and
freight to long haul destinations in existing and emerging growth markets;
In sea transport: Implement the 2013 Ports Policy framework such that the
future needs of maritime connectivity are periodically reviewed; that access to a
wide range and frequency of port services at competitive prices is ensured; and
that deeper water facilities are provided at Irish ports that can accommodate the
international trend towards larger shipping vessels;
In land transport: Invest to maintain, renew and improve the network to
efficiently address congestion and to address bottlenecks in key urban centres;
increase use of Intelligent Transport Systems; improve connections to key
seaports and airports; underpin identified national and regional spatial planning
priorities (including improving access between main urban centres where
required and providing access to poorly served regions); and support large-scale
employment proposals
21
; and
Ensure that our regulatory environment is capable of facilitating the provision of
safety focused, cost optimal services.
DTTAS, CAR
DTTAS
DTTAS, NRA,
NTA
DTTAS
Telecommunications:
By 2020, under the National Broadband Plan, secure investment in the provision
of high speed and competitively priced broadband services to ensure that no
region of the country is disadvantaged
22
.
Promote and facilitate the provision of the resilience and low latency that
enterprises and particularly data intensive activities require, and work with the
market to accommodate ever increasing transatlantic data capacity through
direct international fibre connections to Europe and the US
23
.
Take a proactive approach to the shaping of the European Commission's plans to
further develop the digital single market, and ensure that EU spectrum policy
continues to allow Ireland discretion to use the spectrum innovatively and
efficiently.
DCENR
DCENR
DCENR,
COMREG
21 Refer also to Investing in our Transport Future – A Strategic Investment Framework for Land
Transport, Department of Transport, Tourism and Sport, August 2015
22 The draft Broadband Intervention Strategy, published in July 2015, sets out the Government’s
proposals to ensure that all business and citizens will have access to high speed broadband services by
2020. Commercial investment in broadband infrastructure and services since the National Broadband
Plan (2012) has exceeded expectations
23 It was announced in April 2015 that funding has been secured for a high-speed fibre-optic network
between New York and County Mayo. Construction is scheduled to begin in the summer of 2015, and
be ready for use in early 2016

xxxvii
Effective execution
Policy interconnectedness – cross government commitment
Enterprise Policy does not sit in isolation – other Departments have a key role to play in
delivering on the differentiated eco-system – aware of, and informed by, the evolving needs of
enterprise in an intensely competitive global environment. Moving toward a systems approach,
DJEI plays a key role as the advocate for enterprise.
The strategic actions set out in this report require the commitment of government departments
and a consistent, coordinated approach to ensuring a robust, agile policy system remains in
place - with sustainable job creation and growth at the core as the means by which better
standards of living can be achieved by all. We will take a whole of government approach to
progressing implementation of Enterprise Policy 2025, building upon the existing Action Plan for
Jobs process.
A systems approach to delivering on our ambition
53
Ensure a whole-of-government approach to progressing implementation of
Enterprise 2025 to establish a top three competitiveness position, to boost
productivity and innovation in the public and private sectors, to sustain full
employment and to improve living standards over the longer term.
DoT, Gov
Depts
Engaging effectively with the EU
Ireland’s policies are informed (to a great extent) by EU. It is important that such discussions are
informed by our enterprise policy objectives. We need to ensure that the priorities for Ireland's
ongoing engagement with EU in a range of fora are informed by this Enterprise Policy 2025 and
that there is a continuous feed-back loop to facilitate and inform any policy flexibilities required
in response to new and emerging external influences, while maintaining a focus on Ireland's
longer term enterprise policy objectives.
Engagement with EU
54
To ensure that Ireland remains an attractive place for Irish owned enterprise to
grow, and to win new investment in high-technology areas from foreign and Irish
owned enterprises for Europe, we will pursue an active policy at EU level to
accelerate progress on: developing the EU Single Market for goods and services;
European competitiveness and reform; on international trade agreements to
provide access to international markets, including the completion of the TTIP;
and to influence progress at WTO level in the removal of all barriers to trade with
the aim of achieving positive outcomes.
Gov Depts

xxxviii
Data on enterprise performance
In a context of a changing environment for enterprise generally, there is an emerging lack of
data in certain areas important for measuring enterprise policy objectives and outcomes.
Strengthening data collection
55
Strengthen data collection and monitoring of metrics in relation to the expanded
range of international business expansion modes, including ODI and M&A with a
particular focus on determining more accurately the economic impact of such
activities within the Irish economy.
DJEI, CSO
56
Adapt existing surveys to include relevant questions that will serve to increase
our understanding of where and how cross cutting technologies and disciplines
are being applied and where and how they add value (ICTs, Green and Design).
Such analysis would serve to inform the development of policies and facilitate
ongoing monitoring of developments.
DJEI, CSO
Measuring success
Measurement itself is complex and no one measure shows the complete picture. At the same
time, it is important that we focus on a number of overarching metrics complemented by firm
level performance metrics to assess economic and enterprise performance. The Action Plan for
Jobs 2015 has placed a heightened focus on impact and outcomes arising from the broad range
of actions it sets out
24
. The National Competitiveness Council (NCC) undertakes a
comprehensive analysis and benchmarking of Ireland’s business environment against
international comparators on an annual basis
25
across a range of competitiveness indicators,
broadening analysis to encompass for example the environment for entrepreneurship and
clustering.
There are many factors that impact upon an individual firm’s performance, and therefore upon
the aggregate of enterprise performance and its contribution to Ireland’s future economic
growth. As a small open economy, global factors are outside of our control. Nevertheless we
need to have visibility on whether or not the actions being taken by government and its
agencies to support the development of enterprises and actions taken by enterprises
themselves are making a difference.
Appendix I sets out the suite of metrics by which we will measure success, both in terms of
overarching national outcomes and at the level of the enterprise. They are informed by existing
strategies including the Spring Economic Statement, EU2020 strategy, agency strategies and
international norms (where applicable). The metrics set out a baseline (most recent)
performance and future potential to 2020. Additional relevant metrics will be set out in the
forthcoming National Skills Strategy and Strategy for Science, Technology and Innovation
informed by the ambition set out here in Enterprise 2025.
24 See Action Plan for Jobs 2015, Annex 2 Strategic Ambitions, Examples of Impact Metrics and Action
Linkages
25 Ireland’s Competitive Scorecard 2015, National Competitiveness Council/DJEI

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Section A
Setting the context

3
The economic context
A challenging decade
The past decade spans a dramatic period for Ireland’s economy. It encompasses a time of high
growth driven by the construction boom, high levels of personal indebtedness and
consumption, followed by a deep recession that was triggered by a confluence of international
and national factors. It is not intended to dwell on the challenges that Ireland has faced (and
continues to face in some instances) as a result.
We know that the impact of the downturn was stark. The GDP growth rate in Ireland fell sharply
to minus 2.1 percent in 2008, with a further steep decline to minus 5.5 percent in 2009
26
. The
unemployment rate in Ireland peaked at 15 percent in Q1 2012
27
. In terms of jobs, 330,000 jobs
were lost in the period 2008-2012, down from a peak employment of 2.16 million.
A focus on reform and restoration
Ireland successfully exited the EU/IMF programme
28
in December 2013, having made significant
progress in restoring the stability of the public finances, restructured and ensured the
capitalisation of the banking sector, and carried through structural reforms to the Irish economy.
The government published the Medium Term Economic Strategy (MTES) in 2013 that set out an
overarching framework for social and economic policies being developed across Government
over the period 2014-2020. It set out commitments aimed at recovery with an ambitious aim to
reach full employment by 2020 - an ambition that anticipated having 2.1 million people in
employment by then.
Recovery in economic growth and job creation
Since publication of MTES, Ireland has continued to outperform its budgetary targets, and
stands to bring the budget deficit, which hit a peak of 11.5 percent in 2009, below the interim
Stability and Growth Pact target of 3 percent of GDP in the current financial year
29
.
While a modest recovery in economic activity had been underway since 2011, growth in 2014
was beyond what had been expected. Initially led by the exporting sectors, the recovery became
more broadly based in 2014, with domestic demand making a positive contribution to economic
growth for the first time since the crisis began. Ireland emerged as the fastest growing economy
in the Euro area, registering 5.2 percent GDP growth (6.9 percent GNP) in 2014. This compares
26 CSO, National Accounts (Quarterly)
27 CSO, Quarterly National Household Survey (QNHS)
28 EU/IMF Programme of Financial Support for Ireland, 16 December 2010 (available at
http://www.finance.gov.ie/sites/default/files/euimfrevised.pdf)
29 Budget 2016 has targeted a 2.1 percent deficit for 2015. Ireland's Stability Programme April 2015
Update - Restoration of order to the public finances has been supported by wide-ranging reforms to
the budgetary architecture post-2008, including introduction of medium term expenditure frameworks,
public spending codes, value for money policy reviews, performance budgeting, establishment of the
Irish Fiscal Advisory Council, and a new Budgetary Framework

4
with a 1.3 percent GDP average growth in the EU-28, and 0.9 percent for the Euro area
30
. Some
of this recovery is cyclical, reflecting the strong rebound from the crisis, but also owes much to
strong net exports. Combined with depreciation of the euro, Irish competitiveness has recovered
most of the deterioration recorded during the boom years, which facilitated a reallocation of
resources towards the tradable sectors of the economy.
A total of 126,000
31
jobs have been created since the implementation of the Action Plan for Jobs
(APJ) in 2012. The APJ process initiated in 2012 (and subsequent annual plans 2013-2015) has
served to ensure that all of Government is focused on the priority agenda to stimulate job
creation. Developed by DJEI and led by the Department of the Taoiseach, the APJ sets out a
suite of actions that will be delivered across government in a given year. A third of all jobs lost
during the crisis have now been regained.
In the 2015 APJ, the Government announced that it had brought forward its target of having 2.1
million in work to 2018, two years ahead of target
32
, and its target of creating 100,000 extra net
jobs is on track to be achieved one year earlier than originally planned
33
.
Economic growth forecasts
The growth forecasts outlined by the Department of Finance in Budget 2015 have been revised
upwards, initially by the Spring Economic Statement
34
, and again most recently by the Economic
and Fiscal Outlook, prepared in the context of Budget 2016 published in October of this year
35
.
According to the Economic and Fiscal Outlook, the level of GDP per person passed its pre-crisis
peak in the second quarter of 2015, with GNP per capita marginally behind. This provides strong
evidence of the sustained nature of the economic recovery currently underway and particularly
remarkable given the scale of the downturn. Export growth has been strong and the OECD and
IMF are projecting a continuation of relatively strong growth in Ireland’s main markets.
Significantly, the recovery in domestic demand has become more firmly established, with
personal consumer expenditure projected to increase by 3.5 percent in 2015 overall and the
same rate of growth predicted for 2016. Domestic demand is set to be the primary driver of
growth in 2016
36
.
Overall, GDP growth of 6.2 percent is now projected for 2015, while an increase of 4.3 percent is
expected for 2016.
The outlook for the Irish economy over the medium term is broadly positive with forecasts
assuming a potential growth rate averaging around 3.5 percent per annum over 2017 to 2021.
30 Eurostat, Real GDP growth rate – volume, see http://ec.europa.eu/eurostat/web/national-
accounts/data/main-tables
31 Quarterly National Household Survey Q2 2015 seasonally adjusted, CSO July 2015
32 See Action Plan for Jobs 2015
33 Spring Economic Statement, Department of Public Expenditure and Reform, Department of Finance
April 2015
34 Ibid
35 Economic and Fiscal Outlook, Department of Finance, October 2015, See
http://www.budget.gov.ie/Budgets/2016/2016.aspx
36 Ibid

5
A more even contribution from net exports and domestic activity is expected over the medium
term. These positive expectations for Irish growth are largely echoed, at least for 2015 and
2016, by the ESRI, Central Bank of Ireland, and the major international economic institutions.
The Economic and Fiscal Outlook forecasts the debt/GDP ratio to drop below 100 percent by the
end of 2015 in the context of the strengthened economic growth and improving fiscal position.
This improvement in the ratio is expected to continue over the forecast horizon
37
.
Strong growth in 2015 is forecast to increase the employment level by 53,000 (2.8 percent) over
2014 levels. An average unemployment rate of 9.5 percent is projected for the year, and if
present trends continue, the unemployment rate will likely move to 8.3 percent by the end of
2016
38
.
Over the second half of this decade, employment growth is expected to average around 1.8
percent per annum, with the result of having 2.1 million at work in 2018 (Table 1). Aggregate
labour supply is meanwhile expected to respond positively, driven by a resumption in positive
in-migration, together with a pick-up in participation rates
39
.
Table 1 Irish Growth forecasts, 2014-2021
Percentage change unless
otherwise stated
2014 2015 2016 2017 2018 2019 2020 2021
Real GDP 5.2 6.2 4.3 3.5 3.2 3.1 3.0 2.9
Real GNP 6.9 5.5 3.9 3.2 2.7 2.7 2.7 2.6
Employment 1.8 2.8 2.4 2.0 1.9 1.8 1.7 1.6
Unemployment (rate) 11.3 9.5 8.3 7.7 7.2 6.8 6.5 6.2
General government
balance (percent of GDP)
-4.1 -2.1 -1.2 -0.5 0.2 1.0 1.8 2.5
General government debt:
GDP ratio
107.5 97.0 92.8 90.3 86.7 83.5 79.8 75.7
Source: Short-term economic outlook and Economic and Fiscal Outlook, Department of Finance, 2015
This Enterprise 2025 strategy sees the potential to achieve a 6 percent unemployment rate at a
faster pace than that set out in the projections framed in the context of Budget 2016
40
(see
Section B, Vision, strategic objectives and potential).
37 Ibid
38 Ibid
39 Ibid
40 Short-term economic outlook, Presentation to the Oireachtas Committee on Finance, Public

6
Challenges and opportunities post-2014
While the short term economic outlook is promising, Ireland's recovery remains fragile - risks
and uncertainties remain. Any turbulence in world events which leads to lower than expected
growth will challenge the attainment of medium term fiscal targets, generate public expenditure
pressures, and impact on the public debt.
Improvements in competitiveness and productivity have been key to ensuring the turnaround in
the economy and the successful return to growth and employment in recent years. It is essential
that these improvements are not lost so that a solid base for sustainable growth in employment
and living standards over the medium term can be maintained.
Although the period of heightened austerity is now over, we need to ensure that future policies
remain sensible and focused on supporting sustainable enterprise growth. In consolidating the
public finance position, the Government has committed to minimising tax increases, and where
possible easing the tax burden, in the interests of boosting enterprise development, consumer
confidence and employment expansion. The fact remains that Ireland's public debt, while
declining, remains high. It is vulnerable to weak economic growth, especially weak external
demand.
Ireland must also contend with uncertainties surrounding the future course of the European
Union and the euro area, which are central to Irish economic and social development. While a
welcome development, the potential impact of the European Central Bank's Quantitative Easing
(QE) programme - launched in March 2015 to counter the threat of deflation and persistent
economic stagnation in the European economy by stimulating depressed aggregate demand -
remains unclear, especially with near zero interest rates. The continued EU membership of the
UK, a major trading and political partner for Ireland is also uncertain, with the UK government's
commitment to renegotiate the terms of its EU membership and hold a referendum on
continued membership by end-2017.
Conclusion
It is timely now as we emerge from one of the most difficult periods in Ireland’s economic
history that we set out the strategic ambition for Ireland’s future enterprise policy.
We need to ensure that we secure a new economy over the coming decade - one that is robust,
resilient and based on sound policy choices. We need now to reconsider how we measure
success – that we look beyond job numbers as the primary indicator - and that we put in place
policies that are robust and flexible and that underpin sustainable growth over the coming
decade in the context of intensified global competition and significant change.

7
Enterprise policy – a broad agenda
Introduction
In much of the literature and ongoing discourse in the EU and internationally, the term
‘industrial’ policy continues to be used. In Ireland, we have for over a decade used the term
‘enterprise’ policy to better reflect its current (and potentially future) policy mix to support
enterprise investment, jobs and growth.
Enterprise policy is any type of intervention or government policy that attempts to improve the
business environment or to alter the structure of economic activity toward sectors, technologies
or activities that are expected to offer better prospects for economic growth or societal welfare
than would occur in the absence of such intervention
41
.
This definition includes horizontal policies as well as more targeted approaches. It includes
policies that aim to improve the business environment. It uses the term economic activity that
encompasses sectors, technologies and value chain activities. This definition captures the
essence of Ireland’s current and future enterprise policy.
Making it Happen – Growing Enterprise for Ireland was developed by DJEI and Forfás in 2010 in
the context of the global and national economic recession post 2007 and is the most recent
comprehensive report on enterprise policy
42
. Ireland’s policies based on export-led growth,
enhancing framework conditions, coupled with selective sector specific policies and firm level
interventions that aim to stimulate additionality and (increasingly) behavioural change, have
served us well in terms of recovery post-recession.
Enterprise Policy 2025 reassesses our policy approaches in the context of global change and
their implications on enterprise over the coming decade. It highlights our commitment across
government to driving enterprise growth and job creation, acknowledging that enterprise policy
is a broad agenda. We need also to remain abreast of the EU policy context.
Our longer term outlook aims to deliver a policy regime that:
is robust and responsive to ongoing change and external influences over which we may
have no control; and
remains focused on those areas where we can make a difference to strengthen our
resilience in the face of such change.
41 In its paper Beyond Industrial Policy – Emerging Issues and New Trends, the OECD adapted a widely
cited Pack and Saggi (2006) definition. Adapted sections are included in italics. We have replaced the
term industrial with enterprise as being more reflective of the new economy
42 Making it Happen: Growing Enterprise for Ireland, Forfás Recommendations to Government, Forfás,
2010

8
The European Union policy context
As a Member State of the EU, Ireland’s enterprise policies are informed to a large extent by the
EU. The current growth strategy, Europe 2020, and research and innovation strategy, Horizon
2020, are particularly relevant in this regard although they relate to a time frame that is shorter
than for this enterprise policy statement. Nevertheless, many of the fundamentals will continue
to remain relevant over the next number of years.
Europe 2020 (launched in 2010) took a ten year perspective to deliver sustainable growth that is:
smart through more effective investments in education, research and innovation;
sustainable through decisive movement towards a low-carbon economy; and
inclusive with a strong emphasis on job creation and poverty reduction.
Under the ongoing mid-term review, Member States have been invited to debate the current
strategy with a view to identifying the elements which have not been successful, areas that can
be improved, and the main hurdles that remain
43
.
Within this context Horizon 2020
44
plays a pivotal role with the objective of stimulating
coordinated research (and its commercialisation) aimed at addressing major societal and/or
‘grand’ challenges such as climate change, sustainable transport, and food safety. The
contention is that a challenge-based approach will bring together resources and knowledge
across different fields, technologies and disciplines. Horizon 2020 places a focus on innovation-
related activities, such as piloting, demonstration, test-beds, and support for public procurement
and market uptake – translating research into new products, process and services and ultimately
into job creation.
The main tenets of the EU strategies remain valid from Ireland’s perspective: investments in
education, research and innovation will be crucial underpinnings of future growth, and
environmental considerations are increasingly embedded in not only what business does,
but how it does it.
The EU Competitiveness Council considers that there needs to be a more coherent and holistic
approach between industrial and other intertwining EU policies such as research and innovation,
competition, trade, energy, and environmental and climate policies – which should all contribute
to enhancing EU and national competitiveness
45
. The think small first principle remains an over-
riding consideration.
43 The Commission proposed five headline targets for the EU namely employment, R&D, Climate
change and energy, education and poverty and social exclusion – each of which are translated into
national targets
44 Horizon 2020 is the financial initiative aimed at securing Europe's global competitiveness and job
creation through investment in (coordinated) research aimed at addressing societal challenges
45 The Competitiveness and European Councils have been advocates for achieving greater coherence
between the EU level and Member State level as a broad objective of the new EU Industrial Policy. This
also implies a strengthening of the decision-making capabilities of the EU’s Competitiveness Council
and preparatory group, the Council’s High level Group on Competitiveness

9
There is a broad range of policies, strategies, directives and regulations at the EU level that are
important to Ireland’s enterprise policy development
46
. Other aspects of relevance include the
continuing focus on developing/strengthening the EU as a single market including the EU
Internal Market, the Services Directive, and the Digital Single Market.
The wider policy environment
Enterprise policy involves a broad spectrum of related and interconnected horizontal policies
aimed at ‘creating’ the environment that is conducive to business; it cannot and should not be
seen in isolation from other key and complementary policies.
The recent preliminary review of the APJ undertaken by the OECD describes the implementation
of the APJ as an important innovation in Irish governance. The OECD contends that
implementation could benefit from even deeper centre-of-Government-led horizontal policy
coordination between the APJ itself and key sector-based strategies so that opportunities for
policy synergies are fully exploited (e.g. on innovation, R&D support, support for
entrepreneurs/start-ups and higher education
47
). The development of Enterprise Policy 2025 has
involved close engagement with other Government Departments in order to realise a greater
degree of coordination in policy formulation than has been realised in the past.
Although not exhaustive, the following sets out a range of complementary policies that are
crucial to realising future job creation and growth that will be primarily driven by enterprises. In
some instances there are (not surprisingly) potentially divergent policy objectives. Nevertheless,
there is also sufficient basis and potential for more aligned approaches to achieving primary
policy objectives.
Science, technology and innovation policy Innovation plays a critical role in creating
competitive advantage, enhancing productivity and ultimately increasing profitability for
enterprises and has been a core plank of Enterprise Policy for the past number of decades.
Innovation is a broad and pervasive concept. Innovation includes research and technological
development, new product development, new processes, services, business models, revenue
models and organisational structures as well as governance and social innovation. From an
enterprise policy perspective, Ireland needs to ensure that investment in RD&I is leveraged to
stimulate economic growth. Competing priorities across Government Departments can and do
exist
48
. Nevertheless, we contend that there is significant potential to harness the capabilities of
enterprise to partner in addressing societal challenges and wider national policy objectives.
Education and skills policies The quality of our workforce is essential for all enterprises
operating across the economy. Today, the competition for talent is global and intense.
Education is broad ranging in its remit, involving broadly based impartation of knowledge and
46 For example, State Aid Guidelines, the upcoming review of the Small Business Act, Trade
negotiations, Horizon 2020 (RD&I), Smart Specialisation etc.
47 Ireland’s Action Plan for Jobs: A Preliminary Review, OECD, April 2014, p.29
48 For example the Department of Education and Skills, while sharing DJEI’s enterprise goals, also has a
remit which includes blue skies research and research for knowledge which may not have immediate
commercial application. Teagasc, the Health Research Board and the Environmental Protection Agency,
have remits that include research for policy, and research aimed at solving societal challenges such as
climate change, and public health

10
learning, skilling/training, further education, life-long learning etc., meeting the needs of
individuals from a young age, and including those in employment and the unemployed.
Enterprises are seeking individuals with higher levels of education in core domains (and in
particular science, technology, engineering and maths - STEM) as well as higher order skills (e.g.
problem solving, design thinking, entrepreneurial skills etc.). As the future way of working
evolves, this too will have implications for education and continuous learning. There can be
genuine challenges in aligning education philosophy and meeting the fast changing needs of
enterprise, and in facilitating a responsive system given the timelines involved in course design
and implementation
49
.
Regional development policies There is a strong interdependence between place-making (the
planning, development and creation of an attractive environment) and enterprise development.
Although regional policy is driven by the DECLG, there is a reliance on a number of other
government departments and semi-state bodies to align and implement specific investments
50
.
Very often the success of a region is interpreted (only) in terms of its attractiveness for FDI
rather than seeing the broader potential. Not all regions can or should be the same, as they
differ in terms of potential, critical mass, nature of sectors, available skills and innovative
capacity. In Ireland’s context, as a small economy, with constrained exchequer resources, place-
making policies will require both top down and bottom up approaches to realise the potential
of individual regions within a national context. Place-making policies, sectoral eco-system
development, clustering, and smart specialisation policies are relevant in this regard. A new
National Planning Framework (successor to the National Spatial Strategy) is currently being
developed together with Regional Spatial and Economic Strategies (RSES), and DJEI is finalising
Regional Action Plans.
Trade policies As a small open economy, our openness to trade and investment, and the
relationships that we establish with existing and potential trade partners are critical to enterprise
growth and economic performance. Trade and investment activity encompasses the export and
import of goods and services, and foreign direct investment (inward and outward). All of these
activities are governed to some extent by international trade agreements which aim for greater
trade liberalisation, regulatory convergence and greater economic integration. At the same time,
a variety of barriers exist that hinder international trade and investment between countries.
Although the EU is the competent authority involved in trade negotiations, it is crucial that
Ireland remains abreast of developments, of potential implications for sectors of interest, and is
poised to both influence and take advantage of new and/or changed trade agreements51
. The
Review of Trade, Tourism and Investment Strategy 2010-2015 and its predecessor
52
sets out the
Government’s overarching approach to Ireland’s trade and investment promotion activities, and
this strategy is due for renewal.
49 There has been ongoing discussion and collaboration to ensure that the next National Skills Strategy
is informed by this longer term enterprise policy
50 Including DJEI, DAFF, DTTAS, DAHG, DES, DSP, NewEra, Irish Water etc.
51 The negotiation of bilateral, plurilateral and multilateral (WTO) trade agreements is an exclusive EU
Commission competence under the TFEU (Article 207) which it undertakes on behalf of Member States.
Only the EU, and not individual Member States can legislate on trade matters and conclude
international trade agreements
52 Trading and Investing in the Smart Economy: A Strategy and Action Plan for Irish Trade, Tourism and
Investment to 2015, DJEI, 2010

11
Environmental policies Ireland is required to meet environmental targets and/or regulatory
standards set by the EU (e.g. in energy efficiency, reducing carbon emissions or acidification
precursors, etc.). As set out in the section on global drivers of change, it is clear that
environmental considerations have significant implications (and also present opportunities) for
enterprises. Nevertheless, there can be tensions related to increased short-to medium-term
costs associated with achieving environmental targets and/or meeting regulatory standards that
impact on Ireland's relative cost competitiveness. At the same time, environmental regulations
can drive innovation and create employment opportunities in the cleantech sector
53
.
Companies can reduce their own costs and increase efficiencies by undertaking environmental-
related investments, and can position themselves in the market as having a clean, green image.
Competing priorities also exist in the areas of agriculture/food production and biomass. For
example, Ireland has committed to increasing agri-food exports by 85 percent via its Food Wise
2025 Strategy, but also has to curb emissions from the agricultural sector.
It is important that Ireland's enterprise policy over the period to 2025 and beyond demonstrates
a responsible approach to environmentally sustainable growth and that there is a national
commitment to minimising the potential impact on competitiveness. This will include taking
policy steps that will realise medium to longer term benefits that outweigh risk of temporary
losses in competitiveness in the shorter term.
Regulation policies Effective economic regulation is central to economic competitiveness. A
robust regulatory environment generates security and stability for business, while also
protecting the public good. Much of Ireland's regulatory regime is driven by the EU, for example
in terms of employment law, health and safety, environmental regulations. Regulations are a
binding legislative act which must be applied in its entirety across the EU. Ensuring that Ireland
has a regulatory environment that is fit for purpose over the coming decade is crucial. This will
require effective regulatory impact assessments, embedding think small first at the
design/implementation stage of the regulatory process, and removing any (potential) barriers to
innovation in what has become an extremely fast paced and increasingly complex environment.
Ensuring minimisation of administrative bureaucracy, consistency, transparency and efficient
customer services are crucial to delivering the certainty that can often influence an enterprise's
investment decision.
A broad range of other policies that are important for enterprise policy include tax and fiscal
policies, investment in productive infrastructures, labour market policies, and policies that
facilitate and support the emergence of innovative start-ups, for companies growing to scale
and for the attraction of foreign direct investment (FDI). Competition policy should continue
to focus on ensuring that there is a level playing field in which enterprises can operate, thereby
assisting cost competitiveness, helping to improve choice and quality, encouraging innovation
and supporting economic growth.
The inter-connectedness of policies … the challenges
DJEI (though its offices and agencies) provides a range of services and supports to enterprises
including the Companies Registration Office, NSAI, Patents Office, NERA and others, as well as
through the development agencies Enterprise Ireland, IDA Ireland and SFI. DJEI also has a
53 Such as energy efficiency and renewables, waste, water and environmental consultancy services

12
coordination role for the LEOs (via Enterprise Ireland) and has direct responsibility for the
development of key aspects such as competition, labour market, trade and science, technology
and innovation policies.
Although DJEI is the principal governmental advocate for the enterprise sector, many other
government departments have a role to play in delivering on complementary actions to
enhance innovation, productivity and cost competitiveness and to support the development of a
robust enterprise mix.
This analysis serves to reinforce
the importance of the inter-
connectedness of policies -
acknowledging that in some
instances, the objectives of the
policies may sometimes be (or
appear to be) in conflict with the
needs of enterprise. The tensions
arising are particularly pertinent
when operating in an
environment of constrained
resources. Nevertheless, an
enhanced understanding of
where and how the policy
objectives overlap and converge
can lead to more coordinated
policy development in the first
instance and in more effective
implementation.
New thinking in enterprise policy
Systems approach and a different role for government
Over time, the rationale for enterprise policy interventions has moved from a traditional
approach based largely on product market interventions (production subsidies, State ownership,
tariff protection), through to market failure-correcting taxes and subsidies operating mainly on
factor markets (R&D incentives, training subsidies, help with access to finance).
Today, there is an increasing focus on interventions that help build systems, create networks,
address coordination failures, develop institutions and align strategic priorities
54
. This has been
termed a systems approach to enterprise policy. Evolving thinking in enterprise policy sees the
role for the State as a facilitator, coordinator, promoter and informer, in addition to investor. The
goal of this systems approach is to develop ways for government and enterprise to work
together to set strategic priorities, deal with coordination problems, allow for experimentation,
avoid capture by vested interests and improve innovation and productivity. An essential
54 Beyond Industrial Policy: Emerging Issues and New Trends, Warwick, K. I, OECD STI Policy Papers,
No. 2, 2013; Enterprise policy evaluation: Is there a ‘new’ way of doing it?, Lenihan, H. in Evaluation and
Program Planning, 34 (4), 323-332, 2011

13
government role is to engage in dialogue with business to ensure the most efficient allocation
of resources for enterprise support. Where there are multiple aspects to the challenge
55
,
enterprise policy needs to mobilise industry or agencies of the State that already are set, or have
the potential, to jointly explore and experiment with business in order to figure out how to make
things work and to test and build ideas that have scale.
International examples of this new systems approach are not necessarily new to Ireland's
enterprise policy landscape. Nevertheless, there is certainly potential to place greater emphasis
on policy initiatives that connect and leverage the entire system in a way that will deliver greater
economic impact than might otherwise be realised. Areas of interest include:
facilitating clustering activities of scale and international visibility
56
- involving a genuine
interaction amongst enterprises and between enterprises and higher education and
research institutes as distinct from co-location;
using public procurement as a tool for fostering innovation as a demand side initiative.
Four levels of public procurement can be distinguished: incorporating innovation criteria
in tender specifications; creating a signalling effect as a lead user to influence the
diffusion of innovation; pre-commercial strategic procurement through SBIR type
initiatives; and the commercialisation of products to meet a defined (public) user need;
and
a Grand Challenge approach as envisaged in Horizon 2020, where government can play a
role in creating a market for technology to address a time-bound need to meet a societal
challenge. Through investments in RD&I and by engaging in collaborative approaches,
enterprise can work with the Government to deliver innovative products, processes and
services to address national grand challenges, such as population ageing, health, smart
cities and the environment.
Smart specialisation and the new enterprise policy agenda
Smart specialisation is about prioritising and channelling resources towards those RD&I
investments that have the potentially highest impact on the national and/or regional economy.
At the heart of smart specialisation is the concept of entrepreneurial discovery and entry. The
process of smart specialisation aims ultimately to realise a structural evolution of an economy as
distinct from a 'simple' technological innovation. Structural evolution involves, for example, the
transition and/or modernisation of an often traditional sector through adapting a general
purpose technology to produce a significant impact on the efficiency and quality of the sector,
or diversification that involves potential synergies which are likely to materialise between an
existing activity and a new one. The main goals of smart specialisation involve facilitating the
emergence and early growth of new activities which are potentially rich in innovation and spill
overs; diversifying the national and/or regional systems; and generating critical mass, critical
networks and critical clusters.
55 NESC cites the examples of developing and Irish waste and agricultural anaerobic digestion industry.
Aspects to the challenge include gate charges for waste, energy tariffs, planning, needs of end users in
heating and transport, infrastructure etc. See also EPA policy discussion paper 2005 on this topic
http://www.dcenr.gov.ie/NR/rdonlyres/287C17F6-13D2-48B9-882C-2060512A573E/0/EPAappendix.pdf
56 The Cluster Initiative Greenbook, Sölvell, Ö.,Lindqvist, G. and Ketels, C.,(1st Ed.), Stockholm, Ivory
Tower, 2003

14
Ireland's Research Prioritisation Exercise sets out the primary areas of focus that inform Ireland's
ongoing investments in building RD&I capacity and capability, focused on areas that are of
relevance to Ireland's current and future enterprise potential.
The experimental nature of policy development and the need for evaluation
The role of evaluations becomes even more important in this increasingly complex policy
environment that involves a degree of experimental development. It is a reality that not all
investments in new activities will pay off. Nevertheless effective evaluations can ensure that the
support of a particular line of capabilities formation will not be discontinued too early nor
continued so long that subsidies are wasted on non-viable projects. Recent evaluations
undertaken by DJEI have demonstrated an advanced understanding of the potential greater
impact that can be achieved by taking a systems approach to bundling and/or sequencing
policy interventions at the level of the enterprise. Our enterprise policies and the policy system
will continue to be enhanced and informed by evidence based evaluations involving a
continuous feed-back loop through from ex-ante to ex-post evaluations.
Whole of Government – DJEI as the principal advocate
In conclusion, the Government's focus on sustainable job creation and growth does not fall
solely within the remit of DJEI. A whole of government commitment is required, building on the
success of the APJ process. The APJ was stimulated in response to a deep crisis, and it is
important that the progress made is not diminished as we return to a more stable economic
environment.
We need now to build on Ireland’s track record and on the cross government focus on
implementation stimulated through the Action Plan for Jobs process to deeply embed a systems
approach to developing and implementing enterprise policy over the next decade. We need to
further advance our understanding of sector specific needs in a fast paced global environment
so that we develop cohesive effective horizontal and selective enterprise policies that are
implemented by a truly agile, responsive government.
As the principal advocate for enterprise, DJEI can play an even stronger role over the next
decade in working closely with business, and in driving the enterprise development agenda
within the broader complex public policy context.

15
Global trends and implications for policy
Introduction
It is without question that over the period to 2025 we can expect considerable change: in the
environment that businesses operate; how businesses themselves will operate; and in the
products and services they generate.
It has been extremely challenging to consider the longer term perspective when faced with the
crisis that we experienced since 2007. It is both timely and necessary that as a small open
economy dependent on global markets, we consider the broader global context in which our
enterprises are likely to be competing over the next decade and beyond.
Global drivers of change
The main global drivers of change work separately and in combination to produce new
challenges and opportunities in economy and society. Many of these are well known, although
their implications for business have become more evident in recent years. The key drivers
include:
Globalisation: Globalisation is now a given but nevertheless remains an important factor
in driving change. We have seen how the contagion effect and interconnectedness of
global capital relationships turned apparently domestic banking crises into a global
financial crisis. Emerging markets are asserting themselves in the global economy as
markets in their own right, as sources of innovation and of global capital flows and there
is progressive spatial disaggregation of value chains within ever more complex corporate
global structures.
Demographics: Demographic change manifests in different ways in different parts of the
world, including evidence of a growing divide between countries with youthful and aging
populations, global skills shortages, expanded middle classes in developing economies,
and challenges facing the more mature workforces in terms of reskilling around new
technologies and ways of working.
Global economic uncertainty/public debt: In the aftermath of the recent global financial
crisis, austere fiscal policies and making choices about capital spending continue to affect
the capacity of many countries to respond to major social, economic and environmental
challenges, with knock-on consequences for businesses. Some countries have fared better
than others and it remains to be seen how this may translate into new global economic
influences and/or a rebalancing of global economic power
57
.
Geo-political volatility: Ostensibly local issues can have much broader ramifications
extending into the economic relationships between nation states, and on a wider
geographic scale in the form of economic sanctions. Along with the potential for tragic
loss of human life, geo-political conflict also has the potential to disrupt economic
57 http://www.globalissues.org/article/768/global-financial-crisis#Asiaandthefinancialcrisis

16
development and established economic relationships and is an ever-present threat in the
world.
Technological advances: Such advances have a unique role in their potential to transform
life, business and the global economy
58
. Wave after wave of technological advances
create novel opportunities for the creation of new products and services, make others
obsolete, and have enabled the transformation of business models, organisational
structures, manufacturing processes and value chains, and have brought about a more
interconnected world.
Individual empowerment: Largely rooted in mass adoption of new technological
advances, better health, and wider provision and adoption of education globally, the so-
called ‘rise of the individual’ is recognised as a significant driver of change in the global
economy and society
59
. The empowered and tech savvy individual is manifest in the
growing middle class consumption base globally, rising expectations in emerging
economies, and transformation of the workplace.
Climate change: These forces continue to be one of the most significant and challenging
issues facing the world. Climate will test the resilience of natural and built systems
globally, with food production and ecosystems being particularly vulnerable.
Environmental-related rules and regulations can be a driver of innovation in the longer
term, but they also place significant cost and administrative burdens on individual firms,
particularly those in manufacturing
60
. Increasingly, the more informed consumer is also
making purchasing decisions on the basis of environmental considerations.
Water, energy, food nexus: The demand for water, energy and food resources (the WEF
nexus) is anticipated to increase at a rapid rate over coming decades, with the
consequences of climate change factors also expected to add to the problem
61
. There are
challenges that require consideration of all three elements when assessing consequences
and planning for investments, policies and actions
62
.
Emerging trends
The global drivers above influence each other and combine to initiate continuous waves of
change in our economy and society generally. We focus on eight emerging global trends
followed by their implications for policy:
58 Disruptive technologies: Advances that will transform life, business and the global economy,
McKinsey & Co, 2013
59 Future State 2030: The global megatrends shaping governments, KPMG, 2014
60 Global Manufacturing Competitiveness Index, Deloitte, 2010; Making it in Ireland: Manufacturing
2020, Forfás, 2013
61 The Water–Energy–Food Security Nexus: Towards a practical planning and decision-support
framework for landscape investment and risk management, International Institute for Sustainable
Development, February 2013
62 The World Economic Forum brought the issue of risk correlation between the three WEF elements to
full international political attention at the Davos Summit through their Global Risks 2011 report

17
Technology disruptors;
Global value networks (GVNs);
Shifting consumption patterns;
Redefinition of the workplace;
Workforce transitioning;
Shifting global economic power structures;
Urbanisation; and
Increasing demand for resources.
Technology disruptors
There is probably no area more dynamic or influential as technology. It is also unpredictable,
and while we may be aware now of emergent technologies that have the potential to transform
and disrupt established norms within the timeframe of EP2025, more will emerge that are not
currently known about. Twelve emerging/developing technologies have been identified that are
destined to drive substantial economic impact and disruption by 2025 (Table 2).
Table 2 Technology disruptors
Mobile internet Next generation genomics
Automation of knowledge work Energy storage
Internet of Things 3D printing
Cloud technology Advanced materials
Advanced robotics Advanced oil and gas discovery
Autonomous/near autonomous vehicles Renewable energy
Source: Disruptive technologies: Advances that will transform life, business and the global economy,
McKinsey & Co, 2013 – See Appendix II for a more detailed table containing an overview of impacts
of these disruptive technologies
While many of these technologies are already known about to some extent, it is their wider
adoption that will have the disruptive impact over coming years. What is obvious across many of
the technologies listed is that digitisation continues apace, and is having an impact across all
sectors of activity without exception.
The EU has identified the successful deployment of Key Enabling Technologies (KETs)
63
by
enterprise as a key factor in strengthening Europe's competitiveness. KETs are embedded at the
63 Including nanotechnologies; photonics; advanced materials; biotechnology; and advanced
manufacturing and processing

18
core of most advanced products. Ireland's National Research Prioritisation Exercise
64
is aligned
with KETs through the 14 Priority Areas
65
.
Global value networks
The global value network (GVN) captures the progressive disaggregation and increased
complexity of more traditional value chains. It is also a ‘whole system’ view that takes into
account the broader enterprise ecosystem from which firms leverage value, such as research
institutions, infrastructure, universities, regulatory agencies, venture capital, government and
policy environment including taxation etc.
66
. The dynamic nature of GVNs does not always
result in fragmentation and dispersion of activities. For example the phenomena of ‘re-shoring’
and ‘near-shoring’ of activities has taken place in the context of the need to be more responsive
to local customer needs, or the need for certain activities to be more closely coupled
67
.
Considerations about environmental sustainability will feature more strongly in strategic
footprint configuration over coming years.
Shifting consumption patterns
Consumption patterns globally are shifting in a number of respects. Demographic changes and
shifting economic power structures have given rise to rapid growth of the middle classes in
emerging economies
68
. The expansion of e-commerce and e-tailing
69
globally has brought the
global marketplace to any individual consumer with an internet connection, however remote.
The growth of e-tailing poses issues for town and city development and planning where the
need for physical storefronts give way to increased demand for warehousing and other logistics.
Shifting consumer patterns and behaviours are impacting the world of manufacturing
particularly in more developed economies, as consumer preferences become more diverse and
individuals seek customised solutions specific to their needs
70
. Consumers no longer have a
passive relationship with the manufacturer in the consumption of the product and play a highly
central role in product and service innovation
71
.
Growing awareness about climate change and the environment has also influenced consumer
preferences and behaviours. Increasingly, the more informed consumer is making purchasing
64 The Report of the Research Prioritisation Steering Group, DJEI, Forfás, 2011 also represents Ireland's
Smart Specialisation Strategy for Research and Innovation
65 Along with underpinning science and technology platforms which include, inter alia,
nanotechnology, microelectronics, advanced materials, photonics and biotechnology
66 Configuring Global Value Networks within Industrial Ecosystems, Srai, J.S., Christododoulou, P. and T.
Harrington, in Capturing Value from Global Networks: strategic approaches to configuring international
production, supply and service operations, Srai & Christodoulou, IFM, University of Cambridge, 2014
67 Ibid
68 The middle class will account for 52 percent of global population in 2020, while 65 percent of these
will come from Africa, China and India. Throwing Light on the Future: Mega Trends that will Shape the
World, Sarwant Singh, Frost & Sullivan, 2011
69 Defined as consumer facing e-commerce transactions (on-line shopping) – see China’s e-tail
revolution: online shopping as a catalyst for growth, McKinsey Global Institute, March 2013
70 See Making it in Ireland: Manufacturing 2020, Forfás, 2013
71 Exploring the Financial Consequences of the Servitization of Manufacturing, Neely, A.D. 2008

19
decisions on the basis of considerations such as air-miles, embedded energy, recyclability, waste
and packaging materials.
Redefinition of the workplace
Despite the radical changes that have occurred in most people’s personal lives due to
technological advances the workplace itself has been remarkably static in relative terms
72
.
However, powerful global forces in combination are initiating change in the way people will
work over coming decades, including: enabling technologies, shifts in global economic power,
resource scarcity, demographic shifts and the rise of individualism. In broad terms, workplaces
of the future will be less centralised, more mobile and more flexible than before, including
increased prevalence of home working and teleworking, characteristics more often associated
with the start-up and freelance economy
73
. The design of workplaces has become more
important. Some have referred to the ‘death of the office’ as we know it
74
.
Increasingly, employees’ priorities and preferences are dictating what the future workplace will
look like, particularly as technology is enabling a variety of flexible working arrangements and
the war for talent intensifies
75
. In the current period of high unemployment and challenging
economic conditions the phenomenon of the ‘zero hours contract’ may be more widely
deployed. While this allows a high degree of flexibility it may be considered exploitative for
individuals seeking regular employment and associated entitlements, predictability and job
security
76
.
Advances in technology
77
are continuing to drive further automation of tasks in more
knowledge intensive areas, opening up possibilities for considerable change in how knowledge
work is organised and performed, with some types of jobs becoming fully automated.
Workforce transitioning
While Ireland is somewhat out of kilter with its European neighbours
78
and has a younger age
profile, CSO projections show that demographic ageing will be a strong feature of Ireland’s
population change over the coming years. Overall, older age dependency (the proportion of
over 65s relative to persons of working age 15-64) will increase from 17.3 percent in 2011 to
72 A revolution is happening in offices everywhere, Groth, A. and M. Nisen, in The Future of the
Workplace, Business Insider, Feb 7th, 2013
73 Ibid
74 Ibid
75 Tracking global trends: how six key developments are shaping the business world; Ernst & Young,
2011
76 Zero hours contracts: what are they?, Inman, Phillip,
http://www.theguardian.com/money/2013/jul/30/zero-hours-contracts-explained
77 Including artificial intelligence, machine learning, advanced robotics, natural user interfaces (e.g.
voice recognition) and sophisticated analytics, see Disruptive technologies: Advances that will transform
life, business and the global economy, McKinsey & Co, 2013
78 Although most advanced in Europe and North America, population ageing is occurring, or will soon
begin, in all the major areas of the world. Globally, the share of older people (aged 60 years or older)
increased from 9 per cent in 1994 to 12 per cent in 2014, and is expected to reach 21 per cent by 2050,
Concise Report on the World Population Situation in 2014, Department of Economic and Social Affairs
Population Division, United Nations, New York, 2014

20
between 25.5 percent and 27.8 percent in 2026. In 2011, the older 50 years+ cohort made up
23.4 percent of the labour force and is projected to increase to 30.3 percent by 2026
79
.
There are significant generational differences within the labour force globally, with the so-called
‘millennial’ tech savvy generation carrying very different norms and expectations about work
and the workplace from their older colleagues. ‘Gen Y’ will form 75 percent of the global
workforce by 2025 and only 11 percent of them define having a lot of money as a definition of
success
80
. Differential rates of economic growth, technology adoption and demographic ageing
are fuelling a decline in the availability of skilled workers globally. The global ‘war for talent’ is
growing increasingly acute.
Shifting economic power structures
Across many different indicators, including demographics, FDI flows, urbanisation, economic
growth etc., emerging economies are asserting themselves globally and have attained greater
power to influence world economic policy
81
.
It is anticipated that over coming years, 70 percent of world economic growth will emanate from
emerging markets, with China and India accounting for 40 percent of that growth
82
. Already,
developing economies have overtaken developed economies in terms of global FDI inflows and
they are increasingly a source of FDI
83
. In 2014 the value of cross-border M&A purchases
increased by 19 percent, largely owing to increased acquisitions by transnational corporations
(TNCs) from developing and transition economies
84
.
Emerging markets are increasingly a source of disruptive innovation often driven by the need to
address customers with limited means
85
. Because of their relatively stronger position, banking
sectors and institutions of emerging markets – particularly those of China, India and Brazil are
expected to increase their presence on the global scene in coming years
86
.
Overall, the interconnectedness of the global economy continues to increase with growing
international trade and capital flows
87
. Trade liberalisation is an ongoing process
88
. A potential
79 A scenario of more pronounced negative net migration would accentuate this trend Population and
Labour Force Projections 2016-2046, Central Statistics Office, April 2013
80 Source: Brian Solis’ Future of Business, 2013 cited in 99 Amazing Facts on the Future of Business,
SAP, http://www.forbes.com/sites/sap/2013/10/08/99-amazing-facts-on-the-future-of-business/
81 For example, since 2010, emerging economies gained a greater voice through an increased share in
voting rights in the IMF with China becoming the 3rd biggest IMF member; Tracking global trends: how
six key developments are shaping the business world; Ernst & Young, 2011
82 Ibid
83 Global Investment Trends Monitor, No. 15, UNCTAD, 2014
2011
86 Ibid
88 Including, for example negotiations between the US and the EU on a transatlantic trade and
investment partnership (TTIP) or the potential emergence of ‘ASEAN+6’ an integrated market of 16
countries in the Asia-Pacific region ‘Talks on ASEAN+6 trade bloc to kick off in May’, L.Yulisman, The
Jakarta Post, Jakarta Business, 3/1/13

21
downside is the challenge posed by greater connection to risks beyond national boundaries. The
need for increased levels of cooperation is a key policy imperative internationally.
Urbanisation
Urbanisation of the global population is continuing apace to the extent that 60 percent of the
world’s population will live in cities by 2030, up from 50 percent in 2013
89
. Megacities, those
with a population of 10 million and over, will increase from 20 today to 37 in 2025
90
. Most
urban growth will occur in developing countries. The rapid growth of cities presents challenges
for policy makers around the globe to manage that growth sustainably and ensure adequate
access to housing, water and energy for citizens.
Cities are major sources and destinations for investment, talent, knowledge and innovation.
Increasingly, the locus of competition for FDI is between global cities rather than countries
91
.
The phenomenon of the ‘tech hub’ has become well established and cities internationally are
vying for the attention of fast growing young firms, entrepreneurs and talent. And it is not just
about the fast growing young firms, since well-established MNCs are drawn to technology hot-
spots to access talent and the ideas emerging from innovative start-ups.
It is also the case that size alone does not necessarily determine a city’s growth potential
92
.
Many cities are seeking to derive place competitiveness benefits by demonstrating smart
characteristics. Over 40 global cities will be smart cities in 2020
93
. While the objectives are to
achieve environmental, economic and social sustainability through systematic integration of ICT
in their planning, design, operations and management for the benefit of the citizen, smart cities
are considered to boost the location’s attractiveness for people and businesses, especially those
who want to innovate.
Increasing demand for resources
Global demand for food, water, and energy is increasing with global population and economic
growth. In relation to energy, surging demand, international climate change agreements, energy
prices, energy security concerns and scarcity of natural resources will see governments and
companies seeking to further diversify their energy portfolio mix and continue to invest in clean
energy innovation, deployment and adoption
94
.
The prospect of increasingly scarce resources has the potential to alter global power
relationships as well as generate geo-political exploitation and conflict and requires a joined up
global response as well as responsible actions by individual nation states.
90 Ibid
91 Out of 11,952 destination cities for FDI projects globally, 20 of them accounted for 18 percent of FDI
investment projects globally between 2003 and 2012. Cities are also a major source of FDI, with 20 out
of a total of 6,528 source cities accounting for nearly 30 percent of FDI projects globally. Based on FDI
Markets data – DKM analysis for Forfás, 2014
92 Hot spots: Benchmarking global city competitiveness, Economist Intelligence Unit, 2012
93 Throwing Light on the Future: Mega Trends that will Shape the World, Sarwant Singh, Frost &
Sullivan, 2011
2011

22
Companies large and small are responding and many now see it as a commercial opportunity to
build cleantech into their growth strategies and ‘greening’ existing products and services. Some
are moving into growth areas that are outside their traditional lines of business (e.g. Google and
Cisco have both entered the home energy management space)
95
.
Water is one of the most important resources in the operations of many manufacturing plants,
in particular for pharmaceutical and food companies. Water availability, and at a competitive
price, is one aspect; the quality of the water supply is crucial – particularly so for companies
involved in pharmaceuticals and food.
Implications for enterprise policy
This snapshot in time is the lens we have used to consider whether Ireland’s current enterprise
and related policies remain fit for purpose in a changing world, and whether different
approaches and/or emphases are necessary.
More detail is provided in the relevant sections of the report but at an overarching level, these
emerging trends globally have implications for how we approach:
Technological disruption and digitisation
The potentially disruptive nature of technologies that is facilitating: the emergence of new
areas for growth; a 'refreshing' of more mature sectors; the evolution of new ways of
doing business throughout the world, via global value networks and what that means for
our FDI proposition, for the potential for Irish owned enterprises to engage effectively,
and in the context of the rise in global trade in services; new ways of working (including
remote working); 'smart' city developments; and automation of knowledge work (that
presents both opportunity and challenges). The advances and pace of change within the
technology world will have a transformative impact on every aspect of enterprise and
society over the coming decade and we need to ensure that our enterprise (and
innovation) policies are fit for purpose. A policy priority needs also to be placed on
ensuring investment in future proofed high speed broadband infrastructures and on data
security and privacy.
The talent agenda
The war for talent and future ways of working has implications for Ireland’s education
system; for leadership and management capabilities; for continuous re-skilling and
upskilling to meet the pace of change; for the development of higher order skills; for
addressing the immediate challenges facing the more mature workforce and of the
demands of the 'm savvy' new entrants to the workplace; for new flexible modes of
employment; for the attractiveness of Ireland for mobile talent (to retain, attract and
attract back talent).
Trade and investment policies
Ireland’s approach to Trade negotiations, policies and strategies as well as policies
relating to investments (both inward and outwards) in an extremely uncertain
2011

23
environment requires a strategic and coordinated approach; strengthening our approach
to connecting our understanding of enterprise potential with geographic market
opportunities in an era of constrained resources; considerations relating to developing
our value proposition for investment and strengthening our business environment.
Place-making in a more competitive international context
The interconnectedness between place-making and meeting the needs of enterprise and
the implications for our regional and urban policies in the context of intensified
competition between cities for investment; the need to consider how Ireland (and its
regions) differentiates its proposition; what steps we can take for smart city development;
and the implications arising for town and city development in the context of the rise of e-
tailing.
Sustainability - a pervasive agenda
The green agenda and its pervasive implications in terms of: meeting EU targets;
challenges and opportunities in balancing cost competitiveness and investments in
alternative sources of energy; how Ireland manages its own WEF challenges and
considerations of the role it might play in the context of constrained global resources; and
the enterprise opportunities and potential for enhanced approaches to managing
environmental waste and carbon footprint.
An inter-connected world
How Ireland positions itself within an increasingly inter-connected world across a number
of dimensions including trade, investment, global business models, global value networks
(GVNs), collaborations, infrastructures etc., taking into account the inherent risks as well
as opportunities.
The one certainty when reviewing global trends is that change is constant and that the pace of
change is unprecedented. This requires that we put in place a more systematic approach to
horizon scanning and develop a strengthened anticipatory, responsive and robust policy system
that will facilitate sustainable growth over the period to 2025.

25
A review of Ireland’s enterprise performance
Background
The analysis undertaken to inform this strategy sought to determine how the enterprise base
has evolved over the past ten to twenty years
96
. In many cases the evidence points to the fact
that Ireland’s enterprise policy based on a model of export-led growth is broadly well placed -
we are by and large doing the right things. The review of enterprise performance, contextualised
within a period of volatility
97
, has served to identify aspects that warrant an increased policy
emphasis over the next decade.
The analysis was based on an economy wide assessment - however data has its limitations
98
. For
example, employment data can mask the fact that enterprises themselves have evolved in terms
of the nature and range of activities that they undertake in order to remain internationally
competitive. The analysis considers whole of economy enterprise and labour market activity and
draws primarily from CSO sources and complemented with data from DJEI AES and ABSEI
(specific to agency-supported enterprises).
We set out the key findings, highlight the challenges that remain and the policy implications.
Key findings - enterprise performance
There are tentative signs of recovery
99
…
Overall, employment stands at 1,958,700 (Q2 2015) – higher than a decade ago.
Employment has increased by 57,100 in the year to Q2 2015, and has increased by
126,000 since the implementation of the APJ process in 2012 across all sectors of the
economy and across all regions.
The unemployment rate has fallen and now stands at 9.8 percent (May 2015) down from
its peak of 15.1 percent in December 2011
100
.
There were approximately 185,500 active enterprises in Ireland in 2012 (the majority of
which at 98.4 percent employ less than 50 people). This represents a decline since 2006
when at the height of the boom there were 211,950 active enterprises recorded
101
.
Enterprise births have recovered since 2010, with a total of 12,551 enterprise births
recorded in 2012 (although they peaked at 16,696 in 2006 during the boom years)
102
.
96 Depending on data availability and quality
97 Set out in Section A – The economic context
98 Data is drawn from CSO (economy wide) and from DJEI’s Annual Employment Survey (AES) and
Annual Business Survey of Economic Impact (ABSEI) in respect of enterprise agency-supported
enterprises
99 A further number of quarterly reports are needed before we can fully establish the strength and
sustainability of an apparent recovery
100 CSO, QNHS, Q3 2011
101 CSO, Business Demography 2012 (latest available data)

26
Total exports from Ireland were €214.9 billion in 2014
103
. This was the highest that exports
have historically been and a 12.3 percent increase on 2013.
Exports in agency-supported enterprises were €143 billion in 2013, having recovered
since the recession and exceeding levels at the height of the economic boom.
In agency-supported enterprises, there has been a trend of positive growth in
employment since 2011 with 25,616 net new jobs created over the period 2012-2014.
Gross job losses are at their lowest level for more than a decade.
Although impacted by the recession, direct expenditure in the Irish economy reached a
record high of €44 billion in 2013 for both Irish and foreign owned firms
104
.
Agency-supported employment performance compared with economy wide employment performance
Employment growth in agency supported firms is generally behind the national average from 2001 to
2007, reflecting the very strong growth in the domestic sector over this period, in addition to the
challenging international trading conditions in the early part of the decade (Figure 1).
The employment impacts of the collapse in the economy are evident in 2008-2009 which saw employment
decline dramatically across Enterprise Ireland and IDA Ireland supported enterprises and the economy as a
whole.
Notably, in a reverse of the trend from 2001-2007, employment growth in the exporting sectors has been
more advanced than that of the wider economy since 2009, reflecting the greater resilience and
competitiveness of these entities and persisting structural issues in the domestic economy.
Figure 1 IDA Ireland, Enterprise Ireland and total economy employment growth 2001-14
Source: CSO QNHS, Forfás & DJEI Annual Employment Survey (various years)
102 Ibid
103 Balance of International Payments, 2015, CSO Statbank
104 Agency-supported enterprises, DJEI Annual Business Survey of Economic Impact, 2014
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Enterprise Ireland IDA Ireland Total Economy

27
Higher levels of productivity, growth in RD&I investment, and increased levels of export intensity
point to continuing improvements in capacity, capabilities and competitiveness at the level of the
enterprise:
Irish productivity levels improved considerably between 2008 and 2013 with average
annual growth of 2.6 percent in GDP terms (1.85 percent in GNP terms) – however much
of Ireland’s improved performance arose from changes in the composition of
employment in Ireland during the recession (including significant contraction of the
construction sector).
Business investment in RD&I, in value terms, was sustained during the recessionary period
with expenditure remaining relatively static between 2009-2011. More recently however,
expenditure has increased from €1.86 billion in 2011 to €2.02 billion in 2013. There are
also a greater number of entities now engaging in RD&I, with a strong positive trend
evident since 2007 (although more so amongst the Irish owned cohort – Figure 2)
105
.
Figure 2 Number of R&D active firms by ownership, 2003 - 2013
Source: Forfás BERD surveys 2003 and 2005 & CSO BERD, Statbank 2007-2013
Of the total business investment in RD&I, 58 percent (or €1.17 million) was invested by
services sector enterprises in 2013. Investment in R&D by services firms has continued to
increase in value terms over since 2009.
Export intensity in Irish owned enterprises has increased from levels of 37 percent of total
sales in 2003 to 51 percent in 2014
106
.
Ireland has the highest proportion of 30-34 year olds with tertiary educational attainment
at 52.6 percent, compared to the EU 28 average of 36.8 percent
107
.
105 Forfás BERD surveys 2003 and 2005 & CSO Statbank 2007-2013 (latest available data)
106 DJEI Annual Business Survey of Economic Impact and Annual Business Review, Enterprise Ireland,
April 2015
107 http://ec.europa.eu/europe2020/pdf/themes/28_tertiary_education_02.pdf
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2003 2005 2007 2009 2011 2013
No.offirms
Year
All firms Irish firms Non-Irish firms

28
The occupational profile continues to demonstrate a shift toward higher skills levels.
Ireland’s entrepreneurs are more likely to have higher levels of education relative to
EU/OECD comparators.
… and there are indications that a policy focus on scaling is yielding results
An analysis of the Enterprise Ireland cohort of companies indicates that out of a population of
2,900 companies, 18.4 percent had turnover in excess of €10 million in 2013 when compared
with 14.4 percent in 2010
108
. An additional 22 enterprises now record turnover in excess of €50
million over the same period. This analysis does not take account of any large scale enterprises
that may have been acquired by foreign owned enterprises (and transferred to the IDA Ireland
portfolio).
Irish owned enterprises are increasingly mobile (and are likely to be over the coming decade).
Analysis of a sample of firms engaging in outward direct investment (ODI) shows increases in
not only foreign sales and employment but also positive impacts on the operations based here.
Figure 3 Merchandise and services exports, €m (left hand axis) and total agency
employment (right hand axis), 1998-2013/4
Source: Balance of International Payments, CSO Statbank, various years (BPM5 series) for exports, and
DJEI Annual Business Survey of Economic Impact, various years for agency employment
The contribution of services to economic growth continues…
The growth in services continues apace and the trend in increasing contribution from
services activities to value added, exports and employment remains in evidence (Figure 3);
Services now contributes a total of 75 percent
109
to employment (total economy and
including public services), and 54 percent
110
to total exports;
108 The scaling analysis was dependent on data availability and was undertaken over different time
periods to account for the volatility over the past decade. Therefore the results are indicative only
109 CSO, QNHS Q2 2015
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
AgencyEmployment
€m
Merchandise Services Total Agency Employment

29
Nevertheless, manufacturing continues to play a key role…
At the same time, industry
111
has broadly held its ground in terms of contribution to value
added in the past 5 years and should remain a core plank of enterprise policy over the
coming decade.
Increasing sectoral concentration ….
As regards goods and services combined over a 10 year time frame (acknowledging that the
data comes from different primary sources
112
) there are some notable shifts in Ireland’s
exporting base. Based on CSO data:
Three sectors - chemicals, computer services and business services now account for 66
percent of total exports in 2013.
Chemicals continue to contribute the highest proportion to exports in 2013 (at 29
percent).
There is a dramatic shift in the proportion of computer services exports contributing to
total exports, rising from 11 percent in 2003 to 22 percent in 2013.
Business services have also increased from six percent in 2003 to 15 percent of total
exports in 2013, reflecting the rise in internationally traded services.
Machinery and transport equipment has decreased from 20 percent in 2003 to six percent
of total exports in 2013, reflecting in the main, the decline in computer manufacturing.
Tourism plays an important role in Ireland’s economy and is estimated to have
contributed over €3 billion in foreign earnings in 2013. Tourism was badly hit by global
events and the economic downturn and although foreign earnings are almost the same as
in 2003, its contribution to exports overall has declined from 3 percent in 2003 to two
percent in 2013.
This data should be considered together with employment and value added data (Figure 4) – as
sectors contribute differently to the economy – illustrated for the agency supported client
cohort below. In addition, the apparently 'concentrated' sectors are internally diverse and new
opportunities for growth will arise in a number of ways (see Section D – Strengthening resilience
in the enterprise mix).
110 CSO Balance of International Payments, BPM5 series, 2013
111 Industry includes other activities as well as manufacturing, including mining and quarrying, energy,
water and waste. Manufacturing contributes circa 90 percent to employment in industry
112 Due to changes relating to the roll out of BPM6 methodology by the CSO in the Balance of
Payments series from 2012 onwards, directly comparative statistics for services exports are only
available until 2013

30
Figure 4 Distribution of employment, exports and value add, agency client cohort 2013
Source: DJEI Annual Business Survey of Economic Impact, 2014
... as well as geographic market concentrations…
In terms of destination of goods exports from Ireland, the EU (excluding Great Britain and
Northern Ireland) is the largest market served with €35.5 billion in exports in 2014
113
.
Enterprise Ireland supported enterprises export almost 37 percent of goods and services
to the UK market. There has been an increase in both value and percentage terms of
exports to Asian markets. In percentage terms, exports to Asia increased from six percent
in 2010 to 7.5 percent in 2014
114
.
In terms of FDI, almost 70 percent of the total employed directly in agency-supported
foreign owned entities here arise from US owned MNCs, and the US remains a key source
of investment. Ireland's performance in a European context is relatively weak in terms of
share of outward projects from Japan, China and India where there has been a substantial
volume of FDI projects over the 2008-2012 period
115
.
The public sector…. A significant contributor to employment
The public sector contributes 26 percent to employment (and 15.5 percent to GVA)
116
. An
efficient and productive public sector is important from an enterprise perspective –
particularly when involved in providing business relevant services directly or indirectly
113 External Trade - value of merchandise exports, CSO Statbank
114 Annual Business Review, Enterprise Ireland, April 2015. By way of comparison, about 14 percent of
exports from Finland go to Asia (2012), see Macro Imbalances, Finland 2013, European Economy,
Occasional Papers, April 2013
115 Policy Statement on Foreign Direct Investment in Ireland, DJEI, July 2014
116 Latest available data. GVA relates primarily to salaries and wages as the public sector is a non-
trading sector. Public sector employment and GVA was derived by summing NACE Codes O-Q
15%
8% 10%
8% 24% 22%
6%
6% 10%
8%
6%
7%
22% 6%
8%
26% 47% 34%
13%
3%
8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Employment Exports Value Added
Other Business Services
ICT Services
Other
Manufacturing/Construction/Energy
Medical Device Manufacturing
Computer, Electronic & Optical
Products
Chemicals
Food, Drink & Tobacco

31
(e.g. through associated offices such as Companies Registration Office) and/or through
the implementation of fit for purpose regulation
117
.
Although considerable challenges remain…
Despite positive progress, many challenges remain. A small number of ‘new’ structural aspects
have been highlighted that warrant consideration from a policy perspective:
The apparent sectoral/geographic market concentrations in the export oriented base
provides some cause for concern and raises the question as to the extent to which we
may be vulnerable to external sector specific shocks.
Some regions have been more negatively impacted by the recession in terms of the
decline in number of active enterprises (more than 20 percent in some counties) and
employment.
Ireland’s enterprise structure is such that the contribution of modern manufacturing and
internationally tradable services is large when compared internationally; Actual
productivity levels in particular sectors and activities is in some cases masked by the
(predominantly) foreign owned large scale entities.
A constantly changing and intensely competitive dynamic….
There are circa 2,200 foreign owned entities based here primarily serving the domestic
market, involved in activities such as retail, business services, accommodation/hospitality,
telecoms, etc. Irish owned locally trading entities are facing international competition on
their doorstep.
Ireland’s early stage entrepreneurs are involved to a greater extent in consumer services
sectors relative to OECD or EU28 averages, and a lower proportion expect to have
customers outside the country.
In terms of RD&I, the analysis shows that:
Irish-owned enterprises are somewhat more likely to be involved in basic/applied
research relative to foreign owned enterprise (although collaboration is less pervasive
than desired).
The majority of total BERD is accounted for by foreign owned entities with approximately
half of foreign-owned firms based in Ireland being R&D active.
Although progress has been made, there remains considerable scope to increase the
number of enterprises engaging with and the level of engagements with research
institutes.
Employment growth is benefiting those with higher education
Much of the employment uplift has benefited the 35-54 year cohorts and those with third
level qualifications – the younger generation has been disproportionately impacted by
the downturn, raising concerns with regard to youth unemployment.
117 There is a strong focus on enhancing efficiencies and productivity in the Government’s Public
Service Reform programme led by the Department of Public Expenditure and Reform (DPER)

32
A high degree of labour market transitions in certain occupations raise concerns that
short term contract work is increasingly becoming the norm in certain sectors which may
impact on some people’s ability to regain full access to the labour market.
Yet, there are skills shortages
118
even in this period of high unemployment
Skills shortages arise where there are not sufficient numbers of suitably qualified and/or
experienced people available. Although relatively low in some sectors and occupations,
they do need to be addressed
119
.
The collapse of construction post 2007 has longer term repercussions
The impacts of the housing collapse are far reaching. In employment terms, construction
grew to 270,000 or 13 percent of total employment, more than twice that of many other
developed economies. Employment fell back to 96,000 or five percent in 2013 and in 2015
stood at 125,900 or 6.4 percent of total employment
120
. While there is spare capacity
within the construction sector at present and cyclical factors will address some of the
overhang, it is most unlikely to return to the heights experienced at the peak in 2007. This
has significant consequences for addressing unemployment and redirecting skills to other
areas of the economy
121
.
Implications for enterprise policy
The analysis has pitched up a number of areas that warrant a policy focus over the next decade.
These, together with the analysis of global trends, have served to inform and focus the
development of our enterprise policy to 2025.
Changing enterprise structure
The increasing role of services (and digitisation) has implications in terms of employment, value
added, productivity, innovation and exports; of direct economy expenditures and multiplier
effects); of new opportunity areas for growth; and of the ongoing transformational change
required at the level of the firm. At the same time, retaining a strong base of manufacturing
capability is crucial if we are to embed resilience and to continue to attract investments in
RD&I
122
. A continued focus on transformational change at the level of the firm is crucial to
deepen resilience and to strengthen adaptability in an uncertain and fast changing environment.
118 ‘Shortage’ refers only to a situation where the supply of skills or labour from within the Irish labour
force does not meet demand (not necessarily imply a shortage in European Economic Area (EEA) level)
119 The Expert Group on Future Skills Needs (EGFSN) reviews sector specific skills needs and has
identified shortages in science, engineering, ICT, business and financial (incl. multilingual capabilities),
construction crafts and professionals, toolmakers, welders, healthcare and sales/customer services
120 CSO, Quarterly National Household Survey, Q2 2015, CSO Statbank
121 See also Government Statement on Construction, July 2013, and Ireland’s Construction Sector:
Outlook and Strategic Plan to 2015, Forfás July 2013
122 Evidence points to the increasing desire by organisations to co-locate RD&I activities close to
production; Making it in Ireland, Manufacturing 2020, Forfás, 2012

33
The nature of and connections with Global Value Networks (GVNs) is not yet well understood in
terms of services activities
123
and what this might mean in terms of facilitating collaborations
and connections between Irish owned and foreign owned entities. Our policies also need to
consider the extent to which newly globalising MNCs from emerging economies offer potential
for SMEs to link into their (nascent) GVNs as they look to access strategic assets/resources and
embrace a broad range of approaches to making investments
124
.
Addressing regional challenge and potential
Enterprise policy over the next decade needs to cater to the differing needs across regions to
optimise potential for growth, taking into account different industry structures/profiles, stages
of development and location specific strengths and weaknesses. The development of the
Regional Action Plans will deliver the bottom up analysis required to strengthen our
understanding of potential and to energise commitment to take action (nationally, regionally
and locally).
Increasing sectoral and market concentrations …. or toward smart specialisation?
The concentrations, both in terms of export markets and sectors, may leave us somewhat
vulnerable to external shocks. At the same time, the concept of smart specialisation is key in
terms of building and sustaining comparative advantage. Our policies need to manage a
balance between specialisation (which, depending on how this is interpreted could translate into
overreliance on specific technologies/sectors and therefore increase vulnerability) and diversity
(which can offer a certain degree of resilience).
Continuing to build contributions from Irish owned enterprises
We need to consider how (and if) policies can influence the sectors/activities that entrepreneurs
engage in from the outset given the current emphasis on consumer services and locally trading
activities - focusing on driving innovation and productivity from the outset, realising the
potential to export and our ambition to extend survival rates
125
.
In terms of domestically trading enterprises (including sectors such as retail, construction,
business services) well designed and considered enterprise policies could facilitate these
companies to compete effectively e.g. through a step change in the use of ecommerce,
enhanced productivity, innovation etc.
126
.
A strengthened and targeted approach to facilitate Irish owned enterprise to grow to scale is
required, taking into account specific barriers along the company lifecycle, ambition and
readiness of mid-sized companies, growth strategies that may include ODI, potential for
clustering, and effective use and sequencing of direct interventions.
123 Although there is considerable analysis undertaken internationally to understand the evolution of
GVNs in terms of manufacturing activities, there is relatively little available in the context of services.
See Section C - Connectedness
124 Including greenfield, partnerships, joint ventures, acquisitions, mergers etc.
125 Note also the recent launch of the National Policy Statement on Entrepreneurship in Ireland, DJEI,
September 2014
126 Taking into account rationale for government intervention, additionality and displacement effects

34
Foreign owned entities… the potential for more to invest in RD&I?
More effective policies and approaches to leveraging investment from foreign owned
enterprises that are not currently engaged in RD&I is required, particularly given the relatively
low engagement to date, the significant State investments in developing RD&I infrastructures,
the increasing potential for innovation in services and in advanced manufacturing.
Talent and skills mismatch
The availability of appropriate skills and talent comes to the fore in any discussions with
business - whether foreign or Irish owned. The development of a new National Skills Strategy is
crucial in this regard - and ensuring that it is informed by this Enterprise Policy 2025. Continued
and effective engagement between industry and higher education institutes (HEIs) is crucial to
manage the demand and supply and how this might be impacted by changing sectoral
demands and increasing automation, as are focused policies on attracting mobile talent.
Conclusion
The collective intelligence derived from the analysis of global trends and of the performance of
Ireland’s enterprise over the past decade provides the backdrop against which we have
developed Ireland's enterprise policy to 2025. It combines a longer term external perspective
with a critical analysis of Ireland's potential.
The challenge is for us to stretch our thinking, to be ambitious, and yet to remain grounded in
reality. A policy that aims to set the strategic direction over the next decade cannot (and should
not) be prescriptive - but it does set the framework and the informed basis that allows us to
continuously anticipate and respond effectively.

IN
N
O
VATIVE
AGILE
CO
N
N
ECTED
Section B
Vision, strategic objectives
and potential

37
A vision for Ireland's enterprise potential
Introduction
A competitive enterprise base drives productivity growth, innovation and investment and
creates jobs, delivering higher standards of living for all. Through exchequer returns, enterprises
contribute to the provision of essential public services including infrastructures, healthcare and
education. Enterprises also contribute to enhanced quality of life and the attractiveness of our
towns and cities by providing quality retail outlets, restaurants, professional and personal
services and by engaging in collaborative regionally based initiatives. In addition, innovative
enterprises can contribute to realising national policy priorities in areas such as smart
infrastructures, healthy ageing, food security and a sustainable environment to deliver better
outcomes for our citizens.
Global competition for investment and talent has intensified, and our Irish owned enterprises
need to win sales in overseas markets if we are to attain our ambition for growth. Global trends
demonstrate that enterprises need to be attuned to the opportunities and challenges as
business models are disrupted, as global value networks become more complex, as ways of
working are shifting and ‘new’ sectors and activities emerge. Change is the only constant and
relative competitiveness is a moving target.
Ireland’s economy is at an inflection point…
We are right to acknowledge the considerable progress that has been made since 2011, and
that we are experiencing a return to growth following a period of deep recession. We have a
strong basis from which to grow, and we have significant potential for growth in both
manufacturing and services activities. But we cannot and should not underestimate the genuine
and considerable challenges facing us as we look out over the next decade:
Global competition for investment and talent has intensified as we aim to be recognised
internationally as innovative and entrepreneurial;
New technologies are disrupting industry norms and enabling transformational change.
We want to ensure that our enterprises are well placed to take advantage of such
opportunity;
Relative competitiveness is a moving target and we want to be placed in the top rankings;
We have had higher levels of emigration and a higher level of unemployment than is
acceptable; and
A range of structural issues in our economy and enterprise base remain that need to be
addressed.
We have developed Enterprise 2025, reflecting on the global environment and putting in place
new approaches to ensure that our policies across government remain fit for purpose in a
changing world. Our policies will continue to be anticipatory and responsive and informed by
analysis and evaluation.

38
Enterprise policy to 2025 – a systems approach
Internationally, enterprise policy is evolving toward a ‘systems’ approach, with the role of
Government acting as a facilitator, coordinator and market creator in addition to an investor
127
.
Governments in other countries are increasingly engaging in creating networks, enabling cluster
development, addressing coordination failures, and aligning strategic priorities through effective
and ongoing dialogue with enterprise. A systems approach recognises that enterprise can play a
constructive role in addressing broader policy objectives through innovation and partnership -
so called ‘grand challenges’, including for example sustainable energy, healthy ageing, smart
cities etc. This evolution in enterprise policy internationally has informed our own policy
approach.
Enterprise policy is broad reaching and requires a whole of government commitment. Although
DJEI is the principal governmental advocate for the enterprise sector, many other government
departments play a crucial role in delivering on complementary policy actions to provide an
environment that is conducive to job creation and supports the development of a competitive
and sustainable enterprise mix
128
.
Our vision for enterprise to 2025
Our successful enterprises will be competitive, productive and globally connected, enabled by our
entrepreneurial and innovative culture that is embodied in people, place,
the policy system and government
where
Enterprise is valued for creating quality jobs and for driving sustainable growth
and where
Enterprises play a crucial role in addressing grand challenges including through partnerships in
research and innovation
delivering higher standards of living for all
127 See Beyond Industrial Policy: Emerging Issues and New Trends, Warwick, K. I, OECD STI Policy
Papers, No. 2, 2013; and Enterprise policy evaluation: Is there a ‘new’ way of doing it?, Lenihan, H.,
Evaluation and Program Planning, 34 (4), 323-332, 2011
128 A number of policies and strategies are currently being developed or have recently been completed
that are directly pertinent, including for example: the forthcoming National Skills Strategy; Strategy for
Science, Technology and Innovation; Trade, Tourism and Investment Strategy; and National Planning
Framework; Food Wise 2025; Construction 2020; Harnessing Our Ocean Wealth; People, Place and
Policy: Growing Tourism to 2025; and IFS 2020
Ireland - the best place to succeed in business
delivering

39
Our ambition
Driving export-led growth – delivering sustainable employment
For Ireland as a small open economy, sustainable long term growth is dependent on continued
success in international markets. Our policy focus is predicated upon growth fuelled by foreign
earnings derived from exports in the first instance as distinct from being driven primarily by
domestic consumption, which we know is an unsustainable growth model.
Our ambition is to:
achieve the potential for growth in Irish owned manufacturing and services exports by
between 6 and 8 percent annually to 2020;
realise increased export intensity of Irish owned firms to between 55 and 60 percent; and
support geographic market diversification (including to high growth emerging markets)
so that Irish owned exports to non-UK markets increase by 50 percent; and
attract and grow export oriented foreign direct investment.
An export led strategy is not just about exporters. In addition to generating greater wealth than
would be possible through only domestically traded activities, there is a substantial ripple effect
in terms of job creation across the entire economy and an increase in technology adoption,
innovation, standards and best practice overall.
Stretching our employment ambitions
We are ambitious. We can achieve full employment that is sustainable and resilient over the
longer term by taking the actions set out in Enterprise 2025.
Our ambition is to:
reach 2.180 million people in employment and an unemployment rate of 6 percent by
2020; and to
sustain full employment over the decade to 2025.
The potential to reach 2.180 million in employment by 2020 is based on the premise of export-
led growth and would see an additional 266,000 people at work from a 2014 base
129
. We see
the potential to achieve a 6 percent unemployment rate at a faster pace than that set out in the
projections prepared in the context of Budget 2016 that forecast a 6.5 percent unemployment
rate by 2020
130
. We are aware that this will be challenging and that we have no control over
global demand and other external factors. We can strongly influence our chances of success by
focusing on supporting the productive sector, enhancing our relative competitiveness,
leveraging existing comparative advantage in key sectors, addressing structural issues in the
economy, improving productivity and our capacity to innovate.
Our enterprise development agencies, IDA Ireland and Enterprise Ireland play a key role in
providing direct supports and services to export oriented enterprises. They will contribute circa
140,000 jobs (i.e. 75,000 direct jobs that will stimulate an additional 65,000 jobs indirectly) to the
129 Annual average employment over four calendar quarters, 2014
130 Short-term economic outlook, Presentation to the Oireachtas Committee on Finance, Public

40
potential private sector employment growth to the period 2020. There is potential for a further
30,000 tourism related jobs
131
.
We will continuously monitor our employment growth patterns in terms of an export/non-
export ‘balance’ and avoid the mistakes of the past.
Our policies will facilitate the creation of quality employment, taking into account the multi-
dimensional aspects that define quality including: ensuring opportunities for advancement that
involves workplace learning and development; ensuring that people are educated and trained to
meet the needs of industry; recognising the opportunities presented by entrepreneurship as an
alternative career path; and ensuring a system that facilitates flexibility without exploitation.
Enterprise 2025 envisages the creation of a range of career opportunities across a broad
spectrum of skills and across manufacturing and services activities.
We will ensure that individuals are trained in relevant skills and competences to enhance their
prospects for employment and that meet the needs of enterprise in a changing environment.
Looking out over the next decade, a return to sustainable economic growth and job creation will
likely lessen the unemployment challenge considerably, although unemployment remains at an
unacceptably high level at present. The activation initiatives as set out in Pathways to Work 2015
remain relevant and aim to enhance peoples’ prospects for employment. Although the demand
for these initiatives over the coming years will decline as more employment opportunities come
on stream, a more intensified engagement may be required with the reducing cohort of
unemployed to achieve our ambition for full employment.
Investing for competitive advantage
We will realise a step-change in the performance of our enterprises and the growth potential of
our economy by focusing our capital investments to support the productive sector across a
range of key areas.
In the long run productivity growth is essential to improving living standards. Many of the
resources that enterprises draw on to maximise productive capability come from the
surrounding environment, including for example, a sound macroeconomic environment, the
education and skills base of the labour force, transport and communications networks, science
and technology know-how, competition and regulation policies, finance etc. It is important that
increases in labour costs are accompanied by productivity improvements in the coming years.
Our ambition is to:
restore our competitiveness to rank in the top three of the most competitive small
countries in the world;
realise productivity growth across the economy to levels ranking amongst the top five EU
countries averaging 2.0 to 2.5 percent per annum over the long term; and
includes an overall target of 50,000 additional jobs in the tourism sector by 2025 - the data set out here
has been interpolated to align with overall employment potential to the period to 2020

41
contribute to the restoration of living standards to pre-recession levels through our
enterprise policies and maintain an above average position relative to the EU-19 average
over the period to 2025.
We will take a whole of enterprise approach, leveraging the potential in all sectors of our
economy. This will strengthen our resilience in today’s global environment where the pace of
change has accelerated and where competition for investment and mobile talent has intensified.
We will focus our efforts to achieve a step change in enterprise performance in terms of
productivity, the capacity to innovate and to grow to scale.
We will build competitive advantage and differentiate what Ireland has to offer in terms of
Talent, Place-making, Innovativeness and Connectedness.
We will not realise our ambition unless we have the fundamentals working effectively: finance
for growth; a competitive tax environment; relative cost competitiveness; and quality
infrastructures. Without the business environment basics the impact of other interventions will
be compromised.
Enterprises playing their part
Our strategies, policies and interventions work best when they are informed by the needs of
business and when industry engages effectively and with commitment. We need enterprises to
play their part by: engaging with the education and training sector; acting as champions in their
own locale; providing opportunities for students with structured industry placements; and
participating in apprenticeship programmes.
This heightened level of collaboration across enterprise and the broad government system is a
challenging but essential element in achieving the ambition set out in Enterprise 2025.
Our strategy - differentiators
Developing and attracting talent for the 21
st
century
We will develop, nurture and attract world class talent. Our ambition is to offer the skills,
creativity and adaptability required in the 21st century workplace. We will:
have a closer level of engagement between our education system and enterprise than
ever before, and demonstrate the agility required in today’s dynamic environment;
place a greater emphasis on leadership and management development – equipping more
of our people with the ability and ambition to start, innovate and grow businesses; and
continuously anticipate, identify and address critical skills gaps needed to deliver on our
ambition for self-sustaining clusters.
Optimising regional potential - place-making
We will develop attractive places to invest, live and work throughout Ireland and to optimise the
potential of our regions. We will:
stimulate job creation throughout Ireland so that unemployment in each region is within
one percent of the State average;

42
build on distinctive regional strengths and assets
132
, celebrating difference and realising
potential for job creation, informed by our Regional Action Plans;
develop competitive, dynamic, sustainable and globally connected city regions;
stimulate locally based enterprise initiatives and sector (and cross-sector) clustering
activities to drive greater growth through collaborative actions; and
make strategic infrastructure investments.
Embedding innovativeness in our enterprises and systems
We will be internationally renowned as being innovative in what we do and in how we do it,
across all aspects of the business, including for example, business models, consumer
engagement, channels to market, organisation structures, and modes of collaboration. We will
strengthen our innovation system and will leverage our investments in RD&I to deliver impact.
Our ambition is that our companies will derive competitive advantage through innovation. We
will:
maintain our focus on building excellence in scientific research in areas where we can
develop leadership positions;
strengthen the connections between researchers and enterprise through focused
investment and supports on nearer to market infrastructures;
build the innovation, design and problem solving capabilities of our enterprises so that
innovativeness is embedded in ‘how we do things’;
ensure that our regulatory system is pro-innovation and supportive of new and emerging
areas of opportunity without compromising the protective role that it plays; and
set out grand challenges and will partner with enterprises and the research community to
deliver innovative solutions that address issues of national priority.
Being connected – internationally, nationally and regionally
An open economy relies on effective connections. We will build connections regionally,
nationally and internationally through business, people and the research system. We will:
roll out a new approach for a National Clustering initiative in key sectors of strength that
has visibility and stature in an international context;
sustain our leadership position in the digital economy underpinned by a robust and well
balanced regime and advanced technology infrastructures; and
build our trade and investment footprint globally to realise greater opportunities arising
from high growth markets, for sustainable export growth, investment and tourism.
132 Distinctive regional strengths and assets encompass a broad range of factors, including for
example, the enterprise mix, physical and digital infrastructures, access to skills, education and research
and the dynamic of a location enriched by national heritage and culture

43
Our strategy - resilience
Building resilience in our sectoral mix
We will tailor our policies in a way that will strengthen our resilience across a range of
manufacturing and services sectors and activities. We will demonstrate the agility needed to
respond to the accelerated pace of change as sectors evolve and new opportunities arise. We
will:
take a portfolio approach to realising the potential across the economy in a sustainable
and balanced way so that we do not become overly reliant on any one sector or activity;
identify emerging areas of opportunity with effective horizon scanning and foresight;
implement a systematic approach to sector ecosystem development to capture new
opportunities in the context of an internationally competitive environment; and
leverage our distinctive enterprise base that includes innovative Irish and foreign owned
enterprises through from start-ups to large scale and multinational entities.
Achieving a step change in enterprise performance
We will work with companies to realise a transformative step change in their performance and
to embed a culture of innovation and continuous change. We will:
stimulate a flourishing of entrepreneurship across all sectors and throughout the regions;
work with ambitious companies to achieve a significant step up in their potential to
scale and to grow on international markets;
assist locally trading and employment intensive enterprises to improve competitiveness;
attract, transform and sustain FDI that will add value to our economic fabric and will
enable access to global value networks for our Irish owned enterprises;
achieve a significant uplift in enterprises investing in RD&I – more enterprises and
greater levels of investment - delivering innovative products and services; and
stimulate greater collaboration between foreign and Irish owned enterprises and
between enterprises, HEIs and the research base to develop critical mass in key sectors
and clusters of sustainable competitive advantage.
See Box 1 for a quantitative overview of performance potential.
Our strategy – excelling in getting the basics right
Finance for growth
Our ambition is to establish a comprehensive and competitive funding environment to support
our enterprises through from pre start-up to maturity, so that no viable business opportunity
will falter due to lack of access to appropriate funding. We aim to ensure that cost of finance is
aligned with our European competitors, and moves to the euro average rate and to stimulate

44
increased business investment levels. Building on progress made, including for example the
establishment of ISIF and SBCI
133
and the ongoing work of the SME State Bodies Group, we will:
drive competition in the lending market (including non-bank sources of funding) and will
work with financial institutions to facilitate the provision of a wide range of products and
services to support our enterprises ambitions; and will
strengthen the capabilities of Irish owned enterprises in terms of the strategic use of
funding options for growth.
A growth friendly tax regime
We will continue to deliver an internationally competitive and reputable tax environment that
provides certainty, stability and predictability; that facilitates business decision making; and that
supports productive investment, internationalisation and entrepreneurship. We will:
maintain a competitive environment in Ireland for internationally mobile investment built
around a corporation tax rate of 12.5 percent;
leverage taxation policy to stimulate entrepreneurship, innovation, enterprise
development and growth; and will
support Ireland’s attractiveness for the talent our enterprises need.
Sustaining relative cost competitiveness
We will aggressively and systematically address domestically influenced cost factors that impact
on our relative competitiveness and business input costs so that Irish based enterprises can
compete effectively in an international context and that Ireland can continue to attract mobile
investment. We will:
take the actions necessary in the areas that are within our control to influence: in energy;
waste; property; and business regulatory costs; and will
build competitive markets, removing barriers to entry and ensuring a level playing field.
Investing in quality physical infrastructures
Our ambition is to ensure that Ireland boasts high quality economic infrastructures that facilitate
the mobility of people, goods and services – regionally, nationally and internationally - and that
meet the future needs of our enterprise base. We will:
prioritise investments in economic infrastructures, informed by the future needs of an
evolving enterprise base; and will
ensure that our regulatory environment facilitates an increase in private sector investment
and ultimately delivers more cost effective higher quality services to business users.
Measuring success
Measurement itself is complex and no one measure shows the complete picture. At the same
time, it is important that we focus on a number of overarching metrics complemented by firm
level performance metrics to assess economic and enterprise performance. The Action Plan for
Jobs 2015 has placed a heightened focus on impact and outcomes arising from the broad range
133 ISIF – Ireland Strategic Investment Fund; SBCI – Strategic Banking Corporation of Ireland

45
of actions it sets out
134
. The National Competitiveness Council (NCC) undertakes a
comprehensive analysis and benchmarking of Ireland’s business environment against
international comparators on an annual basis
135
across a range of competitiveness indicators,
broadening analysis to encompass for example the environment for entrepreneurship and
clustering.
There are many factors that impact upon an individual firm’s performance, and therefore upon
the aggregate of enterprise performance and its contribution to Ireland’s future economic
growth. As a small open economy, global factors are outside of our control. Nevertheless we
need to have visibility on whether or not the actions being taken by government and its
agencies to support the development of enterprises and actions taken by enterprises
themselves are making a difference.
Appendix I sets out the suite of metrics by which we will measure success, both in terms of
overarching national outcomes and at the level of the enterprise. They are informed by existing
strategies including the Spring Economic Statement, EU2020 strategy, agency strategies and
international norms (where applicable). The metrics set out a baseline (most recent)
performance and future potential to 2020. Additional relevant metrics will be set out in the
forthcoming National Skills Strategy and the forthcoming Strategy for Science, Technology and
Innovation, informed by the ambition set out here in Enterprise 2025.
134 See Action Plan for Jobs 2015, Annex 2 Strategic Ambitions, Examples of Impact Metrics and Action
Linkages
135 Ireland’s Competitive Scorecard 2015, National Competitiveness Council/DJEI

46
Box 1 A whole of enterprise approach – realising potential
Our strategic actions will focus on realising the potential of the whole of enterprise to contribute effectively to
Ireland’s future economic growth by transforming operations, enhancing productivity and embedding
innovativeness. By 2020 we will:
Develop Irish owned enterprises to scale:
Increase by one third the number of enterprises with greater than €3 million and greater than €20
million sales currently – and see a significant step change in the numbers of enterprises with sales of
€100 million from 54 to 90.
Have 1,000 companies investing > €100,000 per annum, and 220 investing > €1 m, in RD&I.
Realise annual export growth in the region of 6 to 8 percent and increase the export intensity to
between 55 and 60 percent, from 51 percent today.
Drive entrepreneurship:
Grow the number of start-ups by 25 percent to almost 16,000 per annum by 2020.
Increase the 5 year survival rate by 25 percent.
Improve competitiveness:
Double firm level investment in training and upskilling for employees.
Compete effectively to grow, expand and sustain FDI:
Increase direct net employment by 42,000 and win an additional 1,080 projects, investing in regions
throughout Ireland (extrapolated to 2020 from IDA Ireland’s ambitious strategy to 2019).
Win €3.6 bn in RD&I investments and have 145 more foreign owned entities engaged in RD&I.
Stimulate greater collaboration between foreign and Irish owned enterprises and between enterprises,
HEIs and the research base:
Increase the number of enterprise collaborations with the research community supported by SFI and
Enterprise Ireland and including IDA Ireland.
Increase sourcing of goods and services by export oriented enterprises by 25 percent to reach at least
€36 billion by 2020.
Coordinate the development of clustering activities of scale focused on clear objectives and with
international visibility, and including collaborative responses to grand challenges.
Identify and stimulate regionally based activities that will harness the full potential of the regions to
create employment
136
.
136 As set out in the Regional Action Plans for Jobs (forthcoming), DJEI

IN
N
O
VATIVE
AGILE
CO
N
N
ECTED
Section C
Differentiators

49
Talent
Introduction
The competition for talent has become global, and talent itself has become increasingly mobile.
Skills are the global currency of 21st century economies and many countries are placing a major
focus on talent development and investment in education and training in the context of global
skills shortages and changing demands
137
. Allied with this, how people work and how
enterprises configure their human resources and workplaces is undergoing significant change
and is expected to continue to do so over the period to 2025.
Ireland's talent has a strong reputation internationally, particularly our can-do mind-set that has
led to successful entrepreneurship, growing indigenous multinational enterprises, and continued
attractiveness for foreign direct investment
138
. Effective policymaking in the past has played no
small part in differentiating Ireland's talent pool in an international context today, with the
significant step change in investment in education in the 1960s making a major contribution.
Significant reforms that are ongoing in the education and training sector at the present time will
continue to ensure that we have a dynamic, responsive and high quality system.
The ambition set out in Section B of the report is based on an expectation of future demand
arising across different sectors. It is highly dependent on favourable external conditions, for
example, in key trading partners but also, critically, on an appropriate labour market supply and
with skills relevant to demand. In this context, fulfilling our future potential growth will likely
depend significantly on supply-side factors such as the relevance, quantity and quality of skills
from the education system, on migration of skilled people back to Ireland that left in the
recession, and on a continuing focus on lifelong learning and upskilling within the existing
workforce.
Nurturing the talent pool in Ireland has education as a core driver, but it is not the only
dimension. It is about developing, attracting and retaining talent in a highly competitive global
environment. It is also about ensuring that the quality of the working life for individuals can be
protected and enhanced, and that work pays for all. The Government's Action Plan for Jobs 2015
has set out a National Talent Drive as a disruptive reform139
. This is not a one-off yearlong effort
but will be a sustained and elevated focus on ensuring that how we nurture our talent and build
our capabilities truly differentiates Ireland in an international context.
To support the enterprise development vision and objectives over the coming decade to 2025
we set out here a comprehensive policy approach encompassing the need to attract, retain and
develop our talent, and to ensure we have productive, creative and rewarding workplaces. A new
National Skills Strategy (NSS) will be a key vehicle through which the appropriate actions will be
realised. Effective delivery will involve a whole of Government effort alongside stakeholders,
137 http://skills.oecd.org/
138 Ireland is currently ranked 12th out of 124 countries globally in the overall Human Capital Index for
2015 which ranks countries in terms of their learning (enrolment, quality, attainment) and employment
(participation, skills, vulnerability), The Human Capital Report 2015, World Economic Forum in
collaboration with Mercer, 2015
139 Action Plan for Jobs 2015, Government of Ireland, 2015

50
including employers, the broad education sector, planners of the built environment and public
realm, as well as engagement by individuals.
The dramatic changes we continue to see in society generally through technological disruption,
increased global connectedness, demographic shifts, and increased focus on the environment
are also manifest in the world of work globally. The impetus for change may emerge from
individual preferences or from company leadership, or both.
Organisational and workplace transformation may arise through the re-configuration of
operational structures to accommodate distributed teams, partnering, flexible working; human
resource development initiatives; corporate social responsibility (CSR) strategies; workplace
productivity initiatives; and workplace design etc. More empowered individuals are also seeking
more bespoke working arrangements and career pathways.
Research undertaken by PWC has identified a range of new and emerging characteristics across
a diversity of company forms in a global context
140
. The analysis shows that companies will
evolve and respond differently depending on their scale, corporate culture and core principles. It
is not a ‘one size fits all’ and the reality is that companies will likely adopt a combination of
approaches to achieve certain outcomes. A common denominator and challenge for most
companies is maintaining a competitive edge in sourcing and retaining the right talent. This
increasingly involves balancing evolving company requirements with evolving individual needs.
Some of the emerging characteristics within firms globally identified in the PWC analysis include:
maximum operational flexibility, lean staffing models, flexible working;
use of telepresence and virtual solutions, including home working and teleworking;
diversity and work-life balance becoming sources of competitive advantage;
more intrusive monitoring and screening of individual performance;
driving and supporting idea generation – seeding venture funds, incubators etc.;
recruitment as a sourcing and contract management function;
individuals identifying with a particular skill/professional network rather than with a single
company; and
elevation of a broader set of company objectives: environmental, health & well-being,
professional development, community engagement.
Another aspect of future workplaces will be the emergence of new types of jobs or occupations.
Analysis undertaken by Forbes highlights 10 jobs that didn’t exist a decade ago, including for
example; ‘social media manager’, ‘chief listening officer’, ‘user experience design’ and
‘sustainability expert’
141
.
140 The Future of Work – A Journey to 2022, PwC, 2014, www.pwc.com/humancapital
141 10 Jobs That Didn’t Exist 10 Years Ago, Casserly, M., Forbes, 2012, available at
http://www.forbes.com/sites/meghancasserly/2012/05/11/10-jobs-that-didnt-exist-10-years-ago/

51
From the individual’s perspective two competing tendencies are observable in relation to new
ways of working. On the one hand, there have never been so many different types of work,
professions, entrepreneurial and flexible working options available; while on the other, never
before have workers experienced as much insecurity about work and the value of their
(permanent) jobs
142
.
The individual of course is playing a key role in driving change. For many, concerns about
working values, ethics and the need to create meaning
are shifting to the centre, and seen as more important
than the working environment, working time, function,
activity and/or even salary. In this context, CVs may be
less ‘linear’, positions in companies may change and
the notion of employees wishing to climb down as
well as up the career ladder can be a real possibility
143
.
The shift in emphasis from work as something an
individual does rather than the place they go to offers
new possibilities for regional and more remote
communities.
There are also ramifications for how individuals learn
and shape their career pathways in response to the
opportunities available, which in turn will make new
demands on how education and learning are delivered
within and outside the workplace. The traditional view of the third level degree as the optimal
route to a job/career will in time give way to a more diverse set of pathways that involve more
fragmented but continued engagement with the education system throughout an individual's
career as individuals self-regulate their own professional development.
In summary, just as companies are evolving and responding differentially, individual employees
have varied expectations and desires for their working lives. A variety of working cultures exist in
reality, and sometimes within the same company. This can lead to confusion and occasional
conflict, depending on the company’s overriding culture and operational configuration, which
may also be in flux.
Key policy considerations for Ireland
Enterprise policy has an important role in ensuring that businesses of all sizes and individuals
can capture the benefits from new ways of working and workplace innovation. Equally, the
policy system must ensure that the quality of working life for the individual is enhanced and
protected. Some debate remains as to the benefits or otherwise of certain emerging workplace
configurations and new forms of work. What is becoming increasingly evident is that the policy
frameworks surrounding the workplace, working patterns and modes of learning are being
challenged by the pace of change.
The sections following and the strategic actions arising are informed by some of the key
changes afoot in the world of work. Analysis undertaken for Enterprise Policy 2025 also points to
142 Future Jobs: How We Will Work in the Europe of the Future – working world 2020 a qualitative
study of trends in cooperation with the Zukunftsinstitut [Future Institute], Adecco Group, 2010
143 Ibid
“More and more people are attracted
by the ‘entrepreneur of life’ concept,
actively controlling one’s own work
biography and assuming personal
responsibility. Many employees are
not put off by a future without a
traditional full-time job, and even
relish the thought. The underlying
attraction is freedom and individuality”
Future Jobs: How We Will Work in
the Europe of the Future, Adecco
Group, 2010

52
a dearth of evidence based research in this area that could better inform future policies in
education, industrial relations, employment regulation and workplace innovation. Research
undertaken for the National Centre for Partnership and Performance by the ESRI (National
Workplace Surveys, 2009) published in 2010 provides some indications of a changing
environment
144
; however the survey results have dated considerably given the pace of change. A
study into the prevalence and impact of low and zero hours contracts has been commissioned
by Minister Nash and will report later in 2015. A more comprehensive analysis and ongoing data
collection is required however.
Develop new partnership approaches at enterprise level, based on industrial
relations that encourage participative approaches to securing the sustainability
of the business and that provides for continuous learning and upskilling for
workers to respond to the competitive demands to increase productivity and
adaptability.
DJEI, DES
Ensure that in the context of future ways of working our employment legislation
and labour relations architecture remains fit for purpose and is grounded on
evidence-based research and data collection on new forms of work, workplace
innovation, workplace learning etc., and takes account of the impacts on
individuals and enterprises and of the policy implications arising.
DJEI
Skills development - meeting enterprise needs
The availability of the right skills is a key enabler of enterprise performance and growth. There
has been significant continuing reform in the education and training sector in recent years which
is aimed at ensuring the availability of high quality skills at all levels and enhanced employability
of individuals. Stronger alignment has been achieved between mainstream education and the
skills needs of the Irish economy informed by ongoing research and monitoring by the Expert
Group on Future Skill Needs (EGFSN) and implementation of initiatives such as the ICT Skills
Action Plan. Between 2008 and 2013, there has been a 50 percent increase in annual graduate
output on ICT programmes from the higher education system and the initiative is aimed at
achieving an ambitious target of meeting 74 percent of demand through domestic supply by
2018.
A key principle over the coming years that will guide further reforms in the context of the
forthcoming NSS will be a deeper level of engagement between the education and training
system and employers at a national and regional level
145
. In the context of a rapidly changing
world of work this is has never been as important. Critical aspects of this engagement include:
employer input to the development of education and training provision; creating sufficient and
144 The Changing Workplace: A Survey of Employees Views and Experiences, ESRI in conjunction with
National Centre for Partnership and Performance, 2010
145 See also Section C – Differentiators: Innovativeness, under enterprise objectives and challenges,
which highlights in particular the importance of collaboration between the higher education system and
enterprises in fostering innovativeness within enterprise, including increased mobility of personnel
between industry and academia

53
sustainable work placement opportunities; and the development of apprenticeships and
traineeships in new economic sectors.
Work readiness for a changing environment
Although education and training delivers many learning outcomes, a key concern for the
enterprise sector is the 'work readiness' of individuals who emerge from education and training
at whatever level. There are two ever changing dimensions to this concept. The first relates to
the core technical business or vocational competencies and qualifications acquired for the
occupation. The second dimension is less easy to define yet is equally as important in the
evolving world of work. It relates to what the Higher Education Strategy refers to as a 'deeper
and broader disciplinary foundation'
146
, typically a variety of higher order skills that can meet
and engage with an evolving work context
147
.
The National Employer Survey
148
explored employer levels of satisfaction with various attributes
of recently recruited graduates in 2014. In general there was a high level of satisfaction amongst
employers (particularly larger and/or foreign owned respondent employers) across a range of
personal and workplace attributes of their graduate employees. A number of areas emerged
with relatively lower levels of satisfaction however, including: foreign language capability,
entrepreneurial skills and business acumen/awareness. Effective written communication and
working effectively on their own also exhibited relatively lower levels of overall satisfaction than
areas such as verbal communication and level of technical knowledge which emerged with very
high levels of satisfaction amongst employers
149
.
Employers also pointed to skills required in their organisations that they considered were not
adequately provided for through the education system, including soft skills transferrable to the
working environment, practical workplace experience, problem solving, analytical skills and data
analysis, entrepreneurial spirit, foreign language proficiency and good presentation skills
150
.
The work places of the future will be different to today and the following aspects will set new
challenges and opportunities for individuals over the course of their career development
pathways, requiring a broad range of technical and non-technical competences including those
already flagged by employers above. Our analysis of future ways of working has highlighted the
following areas in particular:
Digitisation: A previous chapter has highlighted the pervasive impact of digitisation in the
economy and society and how ICT continues to transform work processes, operational
structures (e.g. distributed teams) and forms of work. It is also transforming the world of
learning where for example MOOCs (Massive Open Online Courses) have gained traction.
Digital competence (incl. media and information literacy) is becoming firmly established
146 National Strategy for Higher Education: Report of the Strategy Group, 2011
147 Such as such as flexibility, entrepreneurship, willingness and ability to adapt, problem solving,
analytical skills, conflict management, interrelation skills
148 The National Employer Survey: employers’ views on Irish further and higher education and training
outcomes, commissioned by the Higher Education Authority, SOLAS and Quality and Qualifications
Ireland, was published in May 2015
149 Ibid
150 Ibid p34

54
as a key transversal competence and needs to be an essential element in learning through
from schools to adult learning.
Higher order skills: Increasingly employees need to present an extended set of
competencies in addition to core technical qualifications. So-called ‘meta-qualifications’
or ‘higher-order’ skills such as flexibility, entrepreneurship, willingness and ability to
adapt, problem solving, conflict management, interrelation skills and others will be key
requirements for occupations across all skill levels
151
. This has significant implications for
teaching and learning within the educational system
152
and underlines the importance of
ongoing curriculum reform in Ireland (for example the Junior Cycle Framework)
153
.
Workplace learning: Maintaining a competitive edge in the world of business requires
agility and responsiveness and capacity to innovate. There is increased expectation for
individual employees to contribute to this in a win-win context. Engagement with
workplace innovation and transformational change initiatives
154
involves a necessary re-
engagement with learning for many employees in a context of mutual trust with
employers. There is a need for increased investment by employers in training following
the significant cutbacks during the recession.
Emerging forms of work, including portfolio working (contract based, multiple clients),
casual and low hours contracts, distributed ICT based mobile working, see more and more
individuals gaining employment outside the formality of a traditional workplace and
potentially outside of previously available HR and training supports, self-managing a
diverse career portfolio. Judicious and timely engagement with education and upskilling
opportunities will be critical for career advancement. Individuals need to be equipped
with the wherewithal to re-engage regularly with education and training, while education
provision will need to be positioned to deliver across a variety of modes of learning and
at flexible times throughout the calendar (as opposed to the academic year).
Exploiting alternative career and education pathways: Many alternative pathways exist
for people to progress through education and through their careers. Such flexibility is
becoming increasingly important to provide the skills for a diverse and productive
enterprise base and for individuals to progress in their chosen careers. It is important that
attitudes and perceptions change that value one path over another, and equally it is
critical that there are clear and consistent routes of access, progression and transfer
between various elements of the education system (including second level,
apprenticeships, further education and training, third level and continuous professional
development (CPD).
151 Future Jobs: How We Will Work in the Europe of the Future – working world 2020 a qualitative
study of trends in cooperation with the Zukunftsinstitut [Future Institute], Adecco Group, 2010
152 Analysing and Designing Learning Environments for the 21st Century, Dumont, H. and Instance,
2010 in Dumont, H., Instance, D. and Benavides, F. , The Nature of Learning: Using Research to Inspire
Practice, OECD, Paris, 2010 p. 20
153 Advancing learning, assessment and evaluation in Irish second-level schools, Hislop, Dr. Harold,
Chief Inspector, Department of Education and Skills; address to Association of Community and
Comprehensive Schools Annual Convention, 2015
154 For example Lean

55
Leadership and management capability: New forms of work organisation often across
international boundaries, greater levels of individual empowerment and expectation, the
constant need for innovation, and other changes demand high levels of management
competence for which many even experienced managers are ill-equipped. Re-
engagement with relevant training and education will be crucial to maintain business
performance, facilitated by enhanced access to CPD provision.
Hollowing out: Technological change and progressive digitisation in particular is a
powerful enabler of new ways of working and more flexible work practices. It is also
contributing to other changes in the world of work. Significant job polarisation, or a
'hollowing out', is now in evidence in advanced economies, where technology and
computing power has replaced routine tasks that are easily programmable
155
. The jobs
affected are more likely to exist in the middle of the job distribution
156
and present a
considerable challenge to the individuals affected who may become unemployed, and or
require reskilling or upskilling.
Progress is being made in a number of these areas through the implementation of the Strategy
for Higher Education and the Further Education and Training Strategy, new apprenticeships and
traineeships, and continued reforms at primary and secondary level. These include:
the development of a Digital Strategy for Schools
157
;
reform of the Junior Certificate;
the forthcoming Foreign Languages Strategy; and
the National Forum for Teaching and Learning
158
.
The forthcoming NSS provides an opportunity for a consistent and integrated approach overall
that will better prepare individuals for new dynamics in the world of work. It is also the case that
enterprise has a responsibility to provide on-the-job training for new entrants at all skills levels
and can play a stronger role in the development of skills and competences for the evolving
workplace.
155 In Ireland, the hollowing out phenomenon was somewhat masked through the boom years, where
construction activity in particular drove employment and wage increases for those in middle paying
occupations. However, the advent of the recession has revealed the longer-term underlying polarising
trend, see The Irish labour market since the recession: lifting the veil on long term trends, Rory O’Farrell,
NERI WP 2013/No 11
156 Hollowing out and the future of the labour market, BIS Research Paper Number 134, October 2013
157 Digital Strategy for Schools 2015-2020: enhancing teaching, learning and assessment, Department
of Education and Skills, October 2015
158 See the Forum's recent publication, Roadmap for Enhancement in a Digital World, 2015-2017,
National Forum for Teaching and Learning in Higher Education, 2015

56
Enterprise and education engagement
The necessity for ongoing engagement between the education system and the enterprise sector
is recognised across the different segments of Ireland's education system and the enterprise
sector itself
159
. This is reflected in the Strategy for Higher Education, the Further Education and
Training Strategy, Quality and Qualifications Ireland (QQI), and the establishment of the
Apprenticeship Council. Both the QQI and the HEA have developed strategies for enterprise
engagement, which involves substantial input and collaboration with enterprise, the enterprise
development agencies and others across a wide range of areas. The Department of Education
and Skills operates an employer engagement forum.
In addition to the above, the Department of Education and Skills is currently in the process of
rolling out further education and higher education Regional Skills Fora where the objective is to
foster better engagement between education and training providers (universities, Institutes of
Technology, Education and Training Boards, and Skillnets) and employers, and including other
regional stakeholders in building skills within the regions. The Fora will provide a structure for
employers and the further education and training and higher education systems to work
together with other local stakeholders and will help employers better understand and access the
full range of services available across the education and training system and from other public
bodies. It will provide a mechanism where employers can have a greater input into the planning,
development and delivery of existing and new programmes and propose revisions that address
their skills needs. It is also envisaged that the new regional fora will enhance links between the
education providers and inform national funding decisions.
It is apparent that there are a number of simultaneous initiatives in progress in relation to
education and enterprise engagement which is an important step forward in this regard. Further
work needs to be done to address engagement at 2nd level to enhance the quality and skill
level of students entering 3rd level, particularly in STEM, digital learning and practical IT skills
development. The forthcoming preparation of the NSS presents an opportunity to take an
overarching view of different approaches emerging and to set out a clear programme of action
over the coming years.
Skills in high demand
A number of areas of skills demand have been articulated by industry across all sectors which
have been captured in various EGFSN reports. These include;
high level ICT skills;
data analytics/Data savvy skills;
skills for international trade - including foreign languages and international sales;
entrepreneurial skills; and
skills for creativity and design.
159 Employers have signalled that they could do more in this regard, through for example, constructive
feedback on graduates to HEIs, upskilling career guidance, secondment of lecturers to industry, up-skill
lecturers with live working experience, practical components to courses etc. The National Employer
Survey: employers’ views on Irish further and higher education and training outcomes, commissioned
by the Higher Education Authority, SOLAS and Quality and Qualifications Ireland, 2015

57
Cross-enterprise skills particularly in the areas of entrepreneurship, creativity and design will
need increased attention as embedded elements within existing and emerging education
programmes.
The Government's ICT Action Plan launched in 2012 and renewed in 2014 to cover the period to
2018 is aimed at ensuring that employers will be able to source their high level ICT skills needs
in Ireland, through a mixture of domestic supply and skilled inward migration (both from within
the EU and through the employment permit system) with a target 74 percent national supply by
2018
160
. Significant progress has been made based on this focused and collaborative approach.
Targeted upskilling also forms a key part of the education and training system’s response to ICT
skills needs. A key goal is to enhance awareness of ICT careers to prospective students.
Elsewhere, specific shortages arise at a sectoral and occupational level and the EGFSN continues
to monitor these emerging the skills gaps. This involves in-depth consultation with enterprise
and education and training providers, and combined with economic data and national trends
and projections, a modelling exercise is conducted to estimate the future skills demand. As
Ireland emerges from the recession, shortages are increasing in a greater number of
occupations and sectors, e.g. chemical and biological scientists, biochemists, biotechnology
technicians, production and process engineering, product development and design engineering,
chemical engineering, risk and compliance skills in the business and financial sectors, quantity
surveyors and building information modelling skills in construction, and welders and tool-
making skills in the craft occupations. These are skills that are critical to the development of a
company or sector and may be quite small in quantity.
Significant replacement demand arises in employment intensive sectors across manufacturing
and locally traded services that can experience high employee turnover, such as hospitality,
retail and transport and logistics. These will require responses from the FET and HE systems and
enterprises, and need to be continually monitored161
.
The education system as a whole contributes to the pipeline of skills development across the
continuum from primary through to third level and beyond.
Workplace learning
In addition to ensuring further alignment of skills needs between the education system and
enterprise, there will be a continuing emphasis on lifelong learning and upskilling within the
workforce.
As pointed to previously, employees in all jobs will increasingly be required to acquire a range of
generic and transferable skills including people-related and conceptual/thinking skills. There is
an on-going shift from routine intensive work to 'creative-intensive' work, with a requirement for
flexibility, continuous learning, and individual initiative and judgement.
By international standards, Ireland ranks relatively low with regard to participation in lifelong
learning
162
. In 2014, according to Eurostat labour force survey data, the lifelong learning
160 Other initiatives such as Enterprise Ireland’s ‘IT’s happening here’ website are have a role to play;
www.itshappeninghere.ie
161 Other issues such as salary rates, terms and conditions, and career pathways, which may contribute
to high levels of turnover in these sectors will require a response from enterprise
162 Lifelong learning refers to persons aged 25 to 64 who stated that they received education or
training in the four weeks preceding the survey.

58
participation rate in Ireland was 6.7 percent compared to 10.7 percent in the EU-28 and 15.8
percent in the UK and far behind leading countries such as Demark (31.7 percent), Sweden (28.9
percent) and Finland (25.1 percent). It is also the case that those participating in Ireland are
predominantly in employment and have higher levels of education
163
.
Expenditure by employers on training has remained relatively static over the years. Amongst
Agency-supported firms, expenditure on training as a percentage of sales accounted for one
percent in 2013 and has not increased beyond a peak of 1.3 percent in 2000
164
.
Participation in education and training has an unambiguously positive impact on earnings for
employees, firms and the economy in general. There are challenges in incentivising increases in
investment and participation in workplace learning. For many small firms in particular, there is
heightened risk that the benefits of training expenditure may not accrue to the employer as
employees may leave after the training has taken place. This is especially pertinent in sectors
with high levels of employee turnover. In addition, low skilled and older workers are less likely to
receive upskilling from their employers, yet this cohort is perhaps the most vulnerable to
ongoing changes within the workplace. The State also clearly has an interest in upskilling those
in employment as the economic costs of losing people from the workforce exceed that of
keeping them in employment.
Although the ongoing policy focus in terms of education and training for those in the labour
market has understandably been on the unemployed, as employment begins to recover in the
economy it is important not to lose sight of how to support re-skilling and upskilling of those
within the workforce in order to assist the sustainability of the recovery. Encouraging employers
to engage in National Framework of Qualifications (NFQ) accredited programmes where
possible when investing in education and training can help employees gain nationally
recognised, competency-based qualifications. In addition, the State could have a role in
facilitating wider use of Recognition of Prior Learning (RPL) so that employees can attach formal
educational value to their life and work experience. This may be particularly useful for older
workers with low levels of formal educational attainment. The action in the Further Education
and Training Strategy 2014-2019 to develop and roll out an employee development strategy (to
be implemented in 2016) is to be welcomed. It is important that the forthcoming NSS maintains
workplace learning as a key policy focus for the future and considers means by which increased
investment and participation in workplace learning can be achieved.
Campus-based delivery continues to the dominant mode of education delivery which brings
with it a certain level of inflexibility, particularly for working individuals. Consideration must also
be given to greater deployment of different modes of education delivery including fully on-line
learning, particularly for taught masters or shorter CPD programmes offered by universities or
professional bodies. Issues such as accreditation and recognition will need to be addressed.
163 Analysis shows that of the 181,000 that engaged in lifelong learning in Q4 2014, those participating
were more likely to be in employment (57 percent were in employment) and more likely to be higher
skilled (60 percent had third level education or above, 32 percent PLC/Leaving Certificate and just 6
percent of those participating had lower secondary education and below), Lifelong Learning among
Adults in Ireland, Q4 2014, April 2015
164 DJEI Annual Business Survey of Economic Impact (ABSEI), various years

59
Education and training for the 21st century
Develop a National Skills Strategy to ensure alignment between the future skills
needs of the workplace and the education system, so that individuals
progressing from our education and training systems are equipped to adapt to
the work environment of the future, taking into consideration the following areas
in particular:
higher order skills, attuned to the increased need for strategic and
creative capabilities, and project and risk management capabilities
to manage in uncertain and more complex working environments;
integration and clear career progression through the education and
training system - promoting alternative pathways and recognition of
prior learning and experience so as to progress along the
qualifications ladder; and
developing alternative modes of delivery including online offerings,
an integrated digital-enabled system, and a wider range of
accreditation of learning in particular for the workplace setting.
DES
Double investment and participation in workplace learning and development by
enterprises over the period to 2020.
DJEI, DES,
Agencies
Launch regional skills fora being developed under the DES, to facilitate employer
engagement with the education and training system at all levels to enable local
delivery of skills needs identified in the regional context.
DES
Strengthen the mechanisms and metrics for ensuring delivery on the skills needs
identified at sectoral and occupational level through the Expert Group on Future
Skills Needs and SOLAS and develop further the communications mechanisms
between the EGFSN and higher education and further education and training
institutions to respond to identified shortages.
DJEI, DES
Develop the new apprenticeship system on an ongoing basis to cover the broad
range of skills needed for the economy to ensure the system is resourced to
adapt to the changing needs of the workplace and employers over the coming
decade.
DES
Leadership and management development
Research undertaken by the Management Development Council (MDC) demonstrated that
enterprise performance improves as a result of participation in management development
primarily through the adoption of more efficient management practices, both in terms of time
savings, as well as efficiency gains achieved through the diffusion of better practice and
increased levels of innovation throughout all levels of a firm
165
. There is a heightened focus on
165 Management Matters in Northern Ireland and the Republic of Ireland, McKinsey & Co. and Forfás,
2009

60
the importance of leadership and management in the context of increasing complexity within
the work environment, including for example; how businesses are structured across international
boundaries; more empowered and internationally mobile individuals seeking bespoke working
arrangements; the innovation imperative; and the necessity to transform and change whole
organisations in response to shifting business conditions and strategy.
Highly proficient leadership, with ambition, vision and strong management teams, is
fundamental if a firm is to identify and anticipate changing market dynamics and to fully
understand its customer base.
Evidence from evaluations of capability and management development programmes for
agency-supported companies undertaken by DJEI found not only positive impact in relation to
sales and employment growth by firms participating in management development programmes
but also significant behavioural impacts with regard to raising the strategic ambition of the
enterprise, increased resilience and ability to weather the recession. Firms also reported
significant benefits from participation such as peer learning.
Some progress has been made recently with regard to measures aiming to increase
participation in management development. For example, the ManagementWorks Skillnet was
established under the Government’s Action Plan for Jobs 2012 and provides a range of
programmes targeted at SMEs. In addition, Enterprise Ireland has also extended and refined its
management development offerings available to its client base, particularly with regard to its
longer-form leadership programmes. Local Enterprise Offices also offer a six to nine month
Accelerate management development programme covering a variety of management modules,
coupled with mentoring support.
Given the demonstrated correlation between management development and bottom line
performance, a step-change drive to increase participation in management development needs
to be a primary focus of support for enterprise.
Deliver a demonstrable uplift in leadership and management capability across
the enterprise base
Achieve a demonstrable uplift in business leadership skills to drive innovation
and internationalisation across a broader cohort of enterprises, and in
management capability across the enterprise base, so that all firms have the
potential to achieve a one-step-up to higher business performance and growth,
using the most appropriate intervention to deliver to the specific needs of the
enterprise, scale and stage of development.
DJEI, DES, EI,
IDA, LEOs
Attracting and retaining talent
Developing our own talent will always provide the vast bulk of our skills requirements and it is
critical that there is sustained focus in this area. However, the reality is that there will be a
requirement for enterprises in Ireland to source talent from overseas. Globalised companies
expect to draw from a global talent pool. There will be many and varied instances of this, for
example; to address specific technical capability gaps; to get a new investment project up and
running; to bring specific partners on board a start-up venture or research and development
initiative. Some of these individuals will play a key role in the growth and development of
enterprises in Ireland, leading teams of graduates and those with less experience that go on to

61
provide employment opportunities for others, and/or building capability in our innovation
system. There is also a considerable benefit to be gained from attracting overseas entrepreneurs
to grow their start-ups from Ireland.
We need also to be cognisant that global competition for talent means that we also risk losing
talent to other countries. Some of this is inevitable, but as has been previously demonstrated,
sometimes sees the returned emigrant bringing back new skills and capabilities to the Irish
economy. We also risk losing immigrants who have taken the important steps on their career or
education ladder in Ireland some of whom could and would like to contribute more in Ireland.
Ensuring that Ireland has an adequate supply of talent to meet the needs of all firms involves
ensuring that Ireland is attractive place to live, to be educated, to achieve scientific excellence
and to develop a business. We need to consider that attracting a key individual from abroad and
ensuring that talent is retained in Ireland also involves broader quality of life considerations,
including access to quality education provision, leisure and recreational facilities, costs of living
etc. There is already free movement of people within the European Economic Area; for areas
outside of this, a robust and efficient permit and visa system is an important factor in ensuring
access to required talent
166
.
In addition, quality, affordable and accessible childcare is important to facilitate labour market
participation, particularly among mothers. The report of the IDC working group convened by
the Department of Children and Youth Affairs is directly relevant that sets out policy options and
recommendations that are currently being considered by government167
.
In Section C – Differentiators: Place making - we outline the criticality of creating places that are
attractive for people to live and work and for businesses to invest. The further development of
our national innovation system is also discussed in Section C – Differentiators: Innovativeness.
The new Strategy for Science, Technology and Innovation will have a key role to play in
reinforcing the supply of highly skilled individuals with research and technical competence and
the development and management of researcher careers in Ireland.
Section E – Excelling in getting the basics right: Taxation policy - highlights aspects of our
personal taxation system and the tax treatment and incentives around entrepreneurship that can
be a game-changer for individuals considering alternative locations for career progression or
growing their start-up companies.
Employment permits
A targeted and user friendly Employment Permit system which complements the initiatives
underway in the Education and Training sectors is an important lever in addressing skills gaps
and ensuring that talent is attracted to Ireland from non-EEA sources. Ireland operates a
managed employment permits regime for the hiring of non-EEA nationals in response to
employer demands, when specific skills prove difficult to source within the EEA. The Irish permits
166 The European Economic Area (EEA) is a single market that provides for the free movement of
persons, goods, services and capital through three of the four Member States of the European Free
Trade Association (EFTA) – Iceland, Liechtenstein and Norway – and all 28 Member States of the
European Union (EU)
167 Report of the Inter-Departmental Working Group – Future Investment in Childcare in Ireland,
Options and Recommendations for Government, Department of Children and Youth Affairs, July 2015

62
system focuses on key sectors and skills shortages, especially where there is potential for jobs
growth and such hiring makes a positive net contribution to the Irish economy
168
. The
identification of occupations and areas of skills shortages draws on research and data published
by the EGFSN and the National Skills Database managed by SOLAS.
The Employment Permits (Amendment) Act 2014, which commenced in October 2014,
introduced nine new categories of employment permit, as well as making a range of other
changes to develop the effectiveness of the employment permits regime. There is a focus in the
new Act on the particular needs of start-up companies, which are provided with a range of
waivers to some of the rules normally applying to permit applicants. Measures are also being
taken to streamline application processes across employment permits and visas, including the
development of an online system and introduction of a 'Trusted Partner' registration scheme
DJEI is committed to address skills deficits in Ireland’s ICT capacity in particular; including
issuance of circa 2,000 permits per annum in ICT occupations in critically short supply.
All employees in Ireland, including holders of employment permits, are protected by a suite of
employment rights, and the potential for exploitation or fraud, risks inherent in any migration
programme, is closely monitored.
Effective employment regulation and ensuring work pays
A well-functioning, robust and proportionate regulatory environment is a fundamental part of
Ireland’s competitive offering and this extends into the area of employment regulation. The key
objective in a successful employment regulatory framework is striking the right balance between
protecting the quality of the working life for individual workers while at the same time ensuring
optimum labour market responsiveness and flexibility, the fruits of which can create a virtuous
cycle for both employers and workers.
In the case of employment, the regulatory functions are discharged by specialist bodies with
expertise in their respective fields. These bodies are established as Offices and Agencies of the
Department, and include the National Employment Rights Authority (NERA), the Employment
Appeals Tribunal (EAT), the Labour Relations Commission (LRC), the Labour Court, the Equality
Tribunal, and the Health and Safety Authority (HSA).
Industrial relations and employment rights legislation
Industrial relations
Good workplace relations are a cornerstone of productive, innovative and growing enterprises.
The system of industrial relations in Ireland is essentially voluntarist in nature with the terms and
conditions of employment of workers being determined in the main by a process of voluntary
negotiation and agreement without the direct intervention of the State. In general, Irish law
does not try to impose a solution on parties to an industrial relations dispute, but rather is
168 The permits system is oriented by a Highly Skilled Eligible Occupations and Ineligible Occupations
for an Employment Permit list, which is regularly reviewed in line with analysis undertaken by the
EGFSN and SOLAS. It incorporates a Labour Market Needs Test and a requirement that any employer
availing of the system must be employing at least 50 percent EEA nationals before a permit may be
granted.

63
designed to help support the parties in resolving their differences. The State takes a supportive
role, by providing a framework and institutions through which good industrial relations can
prosper, rather than an interventionist one.
This system has been effective in ensuring that workers interests are protected while also
allowing employers respond quickly to changing economic and market circumstances.
The Workplace Relations Act has reformed significantly the State’s workplace relations structures
and procedures. This is intended to:
deliver a world-class workplace relations service which is simple to use, independent,
effective, impartial and cost-effective;
provide for workable means of redress and enforcement within a reasonable period; and
reduce costs significantly.
The reforms are underpinned by a core two-tier structure, comprising a new single body of first
instance, the Workplace Relations Commission, and a separate appeals body, which is an
expanded Labour Court. From an employer and worker perspective the reforms have simplified
the structure considerably and will reduce administrative, legal and the opportunity costs
involved in progressing industrial relations or employment rights matters.
Registered employment agreements/sectoral employment orders
2015 has seen the reintroduction of a mechanism for the registration of employment
agreements (REAs) between an employer or employers and trade unions. These REAs will govern
remuneration and conditions of employment agreed in individual enterprises. A new statutory
framework for establishing minimum rates of remuneration as well as terms and conditions of
employment for a specified type, class or group of workers, across a sector is also being
introduced. This is particularly important in the context of transnational provision of services and
promoting harmonious relations between workers and employers.
Bothe employers and workers see strong value in both these frameworks as they provide
certainty around wage costs, wage earnings and industrial peace for the period covered by the
Agreement or Order as the case may be.
Employment rights
High standards of employment rights help to contribute to an environment which encourages
sustainable economic growth and the creation of sustainable quality jobs. In the context of the
economic crisis, the Government has sought to ensure that there is no diminution of the high
standards of employment rights provided for in our existing body of labour law and continued
its focus on enhancing the existing body of employment rights. A well-resourced and proactive
labour inspectorate is in place, which plays a critical role in disseminating information to
employers and employees alike and also in ensuring compliance with employment rights
legislation. This latter role is critically important in ensuring a level playing field and protecting
responsible and compliant enterprises from any unscrupulous employers that might wish to
undercut legitimate businesses through unfair competition.
A key strategic goal will be continuing to strike the right balance between the need to ensure
that regulation of employment rights in the workplace is sufficiently flexible and adaptable to
the needs of enterprise and the broader economy, while maintaining and enhancing where
possible the security that employees seek in their terms and conditions of employment. This
goal arises at EU level as well as at the national level.

64
Transformation in the workplace and new ways of working will present new challenges over the
medium term, including the use of atypical forms of employment contracts, such as zero and
low hours contracts, the emergence of flexible 'self-employed' arrangements in particular
sectors and the need for review of key elements of EU employment law to take account of
rapidly changing developments in work organisation and society.
As part of its response, DJEI has commissioned the University of Limerick to conduct a study into
the prevalence of zero and low hours contracts and their impact on employees, to enable the
Minister to make any evidence-based policy recommendations to Government which are
considered necessary on foot of the study.
A key challenge will be to monitor developments in a perpetually changing world of work to
ensure that workers continue to be adequately protected as employment relationships evolve,
while also ensuring our business models can adapt to change and remain competitive.
The Low Pay Commission
The recently established Low Pay Commission, on an annual basis, examines and makes
recommendations to the Minister of the day on the national minimum wage, with a view to
securing that the national minimum wage, where adjusted, is adjusted incrementally having had
regard to changes in earnings, productivity, overall competitiveness and the likely impact any
adjustment will have on employment and unemployment levels.
In discharging its functions, the Commission is required to ensure that any advice or
recommendations it makes to Government is evidence-based; utilising agreed data, carrying out
research and consultations with employers, workers and their representatives, and taking written
and oral evidence from a wide range of organisations.
Health and safety in the workplace
Good health and safety practice makes good business sense, aids competitiveness, improves
relations with workers and is in fact, central to successful enterprise. Many businesses in Ireland,
both indigenous and multinational, are placing best practice in health and safety at the centre of
their enterprise strategy. The Health and Safety Authority continuously seeks to identify new
technologies, industries and ways of working so as to effectively address emerging risks in Irish
workplaces. The HSA’s well-targeted and risk-based regulatory activities are consistent with the
Government’s commitment to reduce the regulatory and administrative burden on business.
Ensure the Workplace Relations Commission can respond to the changing needs
of the workplace, employees and employers over the next decade.
A continued focus on:
ensuring that the statutory wage setting mechanisms remain
responsive, flexible, fair, and fit for purpose; and
engaging proactively with EU initiatives and EU employment law to
ensure that the EU legislative framework takes account of changes
in work organisation and the evolving needs of the Irish economy.
Review and update employment legislation and ensure it is fit for purpose for the
coming decades.
DJEI

65
The key challenge of stimulating employment growth in the wake of the recession has been
accompanied by another, that of ensuring that as many as possible of the emerging job
opportunities are filled by people from the Live Register. Recent figures relating to employment
and unemployment are indicating significant improvement, with the unemployment rate
showing consistent downward movement and the number of people who have been on the Live
Register for more than one year is continuing to fall
169
.
Looking out over the coming decade, a return to sustainable economic growth and job creation
will lessen the unemployment challenge considerably. There is no room for complacency
however. Unemployment still remains at an unacceptably high level. Furthermore, the
experience of past recessions shows that young unemployed people and people who are long-
term unemployed can find it harder than others to gain employment
170
. At individual level, long
spells of unemployment can affect employability through loss of workplace skills, confidence
and motivation, potentially making it more difficult for some people to re-enter the market.
Other challenges are also emerging, such as the potential for increased 'hollowing out' of the
labour market, particularly as more routine tasks are automated and certain skill sets are no
longer in demand. There is evidence of a skills mismatch in the Irish context in relation to the
proportion of the workforce that are tertiary educated and the proportion of the employment
that is highly skilled (an over education tendency in Ireland’s case)
171
.
A major issue as the economy has entered recovery has been that many unemployed workers,
particularly those who are long-term unemployed (LTU), are not adequately equipped to work in
those sectors most likely to experience employment growth. Skills can become less relevant or
obsolete the longer people remain unemployed and people can fall out of the labour market
completely
172
.
The Government launched Pathways to Work (PTW) in 2012, a four-year strategy designed to
reverse the dramatic rise in the numbers of unemployed jobseekers on the Live Register. PTW
represented a comprehensive reform of the State's approach to helping unemployed jobseekers
return to work. Some of the key interventions in PTW have been focused around enhancing the
employability of individuals, and bringing people closer to the labour market and its specific
requirements - through programmes such as Momentum, Springboard (now in its fifth
iteration), and JobBridge. The development of protocols between the Department of Social
Protection (DSP), DJEI, IDA Ireland, Enterprise Ireland and the Local Enterprise Offices (LEOs)
have also served to maximise the recruitment of appropriately skilled persons from the Live
Register by enterprise agency client companies.
169 The number of long term claimants (1yr+) on the Live Register in April 2015 was 158,488. There
was an overall annual decrease of 19,737 (-11.1%) in the number of long term claimants, CSO Statistical
Release, 29th April 2015
170 Pathways to Work 2015, Government of Ireland, 2015
171 The Human Capital Report 2015, World Economic Forum in collaboration with Mercer, 2015
172 The European Commission has noted that the slack ratio (the number of jobseekers divided by the
number of employed people at a given level of skills) is much higher in Ireland for those with low levels
of educational attainment than for those with higher levels of attainment. See European Commission,
Reindustrialising Europe: Member States Competitiveness Report 2014, September 2014

66
Early intervention through the education system, such as DEIS (Delivering Equality of
Opportunity in Schools) will continue to play an important role in reducing the risk of
unemployment and long-term unemployment amongst children growing up in disadvantaged
communities.
Under the latest revision of PTW, there is an increased focus on the long-term unemployed and
youth unemployed. Amongst the targets in PTW 2015 are to move a further 15,000 LTU to
employment by end of 2015. The plan also envisages making a range of SOLAS, ETB Further
Education and Training and Higher Education programmes available to meet the needs of the
LTU, making 57,000 places available across these providers.
The further education and training (FET) sector will continue to have a key role in addressing
unemployment and ensuring individuals transition from education to employment. Although
specifically developed in the context of the unemployment crisis, there are aspects of the
Momentum programme that could be mainstreamed within the FET system, for example: the
focus on areas of future skills demand; the link with employers; work placements; availability of
shorter term programmes and stackable credits.
A greater focus on workforce development and upskilling generally will be a key requirement
over coming years. Again there is an opportunity now to look at best practice aspects of recent
labour activation measures. For example, the Springboard model of increased flexibility of
engagement could be adopted more widely in the context of continuous professional
development and life-long learning173
.
Mainstream best practice from focused labour market activation programmes
within the further education and training and higher education system such as
Springboard and Momentum to provide skills in demand by employers, improve
transitions from education to employment, and reduce the risk of
unemployment.
DES, DSP
173 To be considered eligible for approval, Springboard+ courses must seek to address an identified
current or future skills need and include a precise labour market rationale

67
Place-making
Introduction
Place-making is the process of creating quality places that people want to live, work, play and
learn in
174
- that is, creating a strong sense of place. It is a multi-faceted approach to the
planning, design and management of public spaces. Place-making capitalises on a local
community's assets, inspiration, and potential. It involves the full range of actors and
contributors ranging from local authorities and urban planners, architects and engineers,
businesses, infrastructure agencies, transport operators and the construction sector, to create
conducive and attractive locations for investment and for people to live and work.
There is a strong interdependence between the planning, development and creation of an
attractive environment and enterprise development. Companies are attracted to invest in
locations where they can access skills, where people will want to live and work and where the
surrounding infrastructures are supportive of business (including, for example, transport and
broadband networks; education and training facilities etc.).
Establishing a strong sense of place contributes to the attractiveness factors for
entrepreneurship, for business investment, for foreign direct investment (FDI), for talent and for
tourism
175
.
Regions throughout Ireland have an important role to play in achieving national economic
recovery and growth. Our aim over the next decade is that the enterprise development potential
of each region will be realised, building on distinctive strengths, assets and attractiveness
factors, that include natural heritage and culture as well as the quality of the regional business
ecosystem.
This chapter sets out:
a brief overview of regional policy in Ireland;
regional employment trends;
place-making in Ireland's regions - overarching considerations;
realising regional potential - harnessing regional difference; and
developing city regions throughout Ireland.
174 Definition of Place-making: Four Different Types, Mark A Wyckoff, FAICP, MSU Land Policy
Institute, 2014
175 Refer also to People, Place and Policy: Growing Tourism to 2015, Department of Transport, Tourism
and Sport, 2015

68
Regional policy in Ireland
Responsibility for regional development governance lies with the Department of Environment,
Community and Local Government (DECLG). Since 2002, the National Spatial Strategy (NSS) has
set the strategic context for spatial planning in Ireland by regional authorities in their Regional
Planning Guidelines
176
(RPGs) roles, for planning authorities in their statutory planning functions,
as well as influencing the National Development Plan (NDP) investment in transport, housing,
water services and communications infrastructure. The NSS set out a blueprint for the co-
ordinated development of nine gateway cities and towns and nine hub towns, together with
complementary policies to activate the potential for lasting economic development in their
hinterlands and wider regions.
Under the Local Government Reform Act 2014, new regional governance structures have been
put in place. The NSS itself will be replaced by a National Planning Framework (NPF) to set out
the overarching framework that will inform the strategic investments needed in order to realise
the potential for growth throughout Ireland. Three Regional Assemblies have been established
and the previous Regional Authority structure discontinued. The three Regional Assemblies are
charged with developing Regional Spatial and Economic Strategies (RSES) for their territories,
incorporating effective urban place-making and design. The RSESs will be informed by research
and analysis undertaken at sub-regional level (Strategic Planning Areas)
177
, with the future
potential of enterprise in these areas throughout Ireland (and the identification of enterprise
needs) playing a key role.
The formulation of RSES is an important element of the stronger role of local government in
economic development under the local government reform programme
178
and given statutory
effect through the Local Government Reform Act 2014. That role will be supported by the
participation of relevant agencies.
At local level, Local Economic and Community Plans are also being developed which will provide
a framework for the performance of a stronger and clearer economic development role by the
local authorities. The establishment of the Local Enterprise Offices (LEOs) is key in this regard.
The LEOs aim to capitalise on the economic potential of local strengths and assets, through
collaboration with relevant agencies. Regional economic priorities will, in future, be informed by
the overarching RSESs.
The fundamental concepts contained within the original NSS around prioritisation, critical mass
and delivering on the potential of a region remain valid today.
176 The current Regional Planning Guidelines run for the period to 2020 and include an economic
development dimension as well as spatial planning. The economic development elements were
informed by the Regional Competitiveness Agendas for each NUTs III region published by Forfás,
December 2009
177 Titled Strategic Planning Areas in the Regional Assemblies Establishment Order 2014, these
approximate to the NUTS III – the 8 areas are the Border and West (in the Northern and Western
region); South East, South West and Mid-West (in the Southern Region); and Eastern, Midland and
Dublin in the Eastern and Midland Region
178 Action programme for Effective Local Government, Putting People First, Department of the
Environment, Community and Local Government, October 2012

69
Given its strong interdependence with enterprise development, DJEI and its agencies will
continue to inform and influence the planning, development and creation of an attractive
environment. Over the past number of years there has been a greater degree of collaboration
between DECLG (particularly the Planning and Local Government sections) and DJEI in terms of
sharing of knowledge and expertise in the development of regionally based plans. This ongoing
interaction will remain crucial as the RSESs are progressed, as will engaging with a wider
community of sectoral expertise within sectoral agencies including tourism, film, food, forestry
and marine. The forthcoming Regional Action Plans for Jobs developed by DJEI and its agencies
and Enterprise 2025 will form crucial inputs to the RSESs.. In addition, the enhanced approaches
to sectoral ecosystem development at the national level and strengthened clustering proposed
in this strategy will have a spatial dimension that should also inform the RSESs.
Regional employment trends
During the recessionary period, employment losses were experienced across all regions (we use
the term regions in this section to reflect NUTs III as distinct from the more recently defined
Strategic Planning Areas in the Regional Assemblies Establishment Order in 2014 drawing from
data available through CSO). National employment declined between Q2 2008 and Q2 2012, a
decline of 14.5 percent.
The impact of the downturn in employment post 2008 was felt to varying degrees across
regions. Employment losses ranged from 11.9 percent in the Mid-East, to as high as 19.8 percent
in the Border and 18.1 percent in the South-East region. The reality is that most (if not all)
regions outside of the greater Dublin area had developed a heavy reliance on construction and
retail sectors over the boom period. The unsustainable employment growth that was largely
based on these sectors served to exacerbate a structural imbalance in the enterprise mix.
Table 3 Regional employment Q2 2007 to Q2 2015 (thousands)
2007Q2 2008Q2 2009Q2 2010Q2 2011Q2 2012Q2 2013Q2 2014Q2 2015Q2
Border 221.8 217.8 196.8 190.1 187.1 174.6 183.1 185.0 193.1
Midlands 124.0 121.3 110.7 105.2 108.4 105.2 109.7 113.5 116.0
West 202.7 207.4 195.2 184.3 179.0 179.5 183.7 178.3 183.3
Dublin 629.4 637.7 586.7 562.1 555.2 547.4 555.1 576.4 591.8
Mid-East 250.6 252.9 232.9 228.1 223.7 222.7 219.0 228.5 232.7
Mid-West 175.0 174.2 158.1 151.2 156.7 150.1 150.9 148.0 152.3
South East 224.2 227.0 204.0 190.9 184.5 186.0 187.7 198.5 206.6
South West 308.5 309.1 289.7 281.6 266.6 270.7 280.7 273.3 283.0
State 2,136.1 2,147.3 1,974.0 1,893.6 1,861.3 1,836.2 1,869.9 1,901.6 1,958.7
Source: CSO, QNHS (Statbank, various years)

70
As we return to economic recovery the evidence indicates that all regions have benefited from
the more recent return to job creation. Of the 122,500 total increase in employment over the
period Q2 2012 to Q2 2015, Dublin has accounted for the majority share 44,400 (36 percent).
The South East accounted for 20,600 (16.8 percent) followed by the Border at 15.1 percent and
the South-West at 10 percent, and all regions have seen an employment uplift (Table 3).
Nevertheless, the regional proportionate spread has not altered significantly over the period
2008 to 2015 when total employment stood at 2,147,300 and 1,958,700 respectively (Figure 5).
Figure 5 Regional employment as a proportion of total employment 2007 and 2015
Source: CSO, QNHS
Place-making in Ireland's regions - overarching considerations
The enterprise structure differs across regions (based on NUTS III areas) in terms of sectoral and
occupational profiles. National policies need to be attuned to the differences in a region's
competitiveness, and the implementation of national policies needs to have regard to a region's
distinctive characteristics. DJEI, together with its enterprise development agencies, has
progressed a highly collaborative process, working at the regional level, to develop 'bottom up'
Regional Action Plans for eight areas. The Plans harness the strengths, assets and champions
within the regions to identify what makes (or can make) the region distinctive and to set out
actions that will be driven locally and regionally to make a difference
179
.
This top down/bottom up approach is extremely important if we are to optimise the potential of
the regions over the coming decade. It is a balance that should facilitate the differences, while
avoiding 'territorial', insular or competing agendas that would not serve the country well in an
international context. There are a few overarching considerations in that regard:
179 Those published to date include Midlands, South West and South East and all are available at
https://www.djei.ie/en/Publications/
10.1 9.9
5.6 5.9
9.7 9.4
29.7 30.2
11.8 11.9
8.1 7.8
10.6 10.5
14.4 14.4
0
10
20
30
40
50
60
70
80
90
100
2008Q2 2015Q2
%
South-West
South-East
Mid-West
Mid-East
Dublin
West
Midland
Border

71
The concept of 'balanced' regional development has been traditionally construed as a
redistribution of economic activity and population to achieve economic 'equalisation'
across the country. A more contemporary understanding is where regions are enabled to
realise their potential as contributors to economic recovery and growth, and thereby
reduce regional disparities.
As a small country, we need to be aware that the strategic planning areas are not
necessarily viable economic entities in their own right and should not be seen in isolation
from each other despite the application of necessary administrative boundaries. Effective
leadership is crucial to develop the underlying resources and potential within regions into
employment opportunities and economic growth.
Strategic investments within the overarching national context, and actions focused on
maximising the competitive advantages and potential of each of the regions are key to
ensuring each region can contribute to, and participate in Ireland’s future national
growth, and sustain a higher standard of living. Capital investments need to be prioritised
to underpin the development and growth of Ireland's productive sectors and place-
making objectives and all possible funding options should be considered
180
.
Regional growth centres remain key to the development of the regions – and it is crucial
that they are well connected with their hinterlands, facilitating mobility of people, goods
and data. Although it did not proceed due to financial constraints, the Gateway
Innovation Fund initiated in 2010 had already stimulated the leadership and collaboration
needed to develop ‘Place’ and vibrant city-region areas.
State Aid restrictions for supporting large entities in particular mean that we need to
ensure that regional disparities are redressed through place-making investment
181
.
As the country turns tentatively towards economic recovery and growth, concerns about
levels of unemployment in some areas throughout the country are being voiced, along
with the expectation that FDI can and should play a role in the solution:
While FDI has a role to play in regional economic development (and IDA Ireland has
clearly set out its objectives for attracting investment to areas outside of the Dublin
and Cork urban centres in its recently published strategy for the period to 2019
182
) it
cannot of itself be the regional economic development strategy
183
.
180 The Department of Public Expenditure and Reform has recently published Building on Recovery:
Infrastructure and Capital Investment 2016-2021 which sets out capital expenditure priorities for the
period to 2021 (September, 2015)
181 Under the revised Regional Aid Guidelines to cover the period 2014-2020, Ireland maintains
regional aid qualification for areas accounting for 50 percent of the country’s population, and including
some specific locations within non qualifying areas. Aid intensity has been retained at the same level,
including 10 percent for large enterprises
182 Winning: Foreign Direct Investment 2015-2019, IDA Ireland, 2015
183 In past decades, there was a very strong association between regional employment creation and
FDI. During the 1970s and 1980s foreign multinational subsidiaries, mainly in manufacturing, were
successfully attracted to a widely dispersed set of regional locations, with some of them continuing to
operate from these locations to the present time. Today the picture is considerably different

72
The geographical pattern of investment (with reference to employment in agency-
supported foreign owned entities) varies by sector, with manufacturing employment still
maintaining a more dispersed regional spread to that of services (refer to Maps 1-3)
184
.
New investments and re-investments in regional locations today demonstrate that there
is a viable value proposition for a non-city location, given the right conditions, and these
encompass a range of factors, from the availability of suitable property and development
lands, to quality of life factors that help to attract and retain talent.
Sustainable economic growth and employment creation will come from a broad base of
possible activities; it is critical that potential is recognised and supported across a range of
possible sources both indigenous and from overseas.
184 See Appendix IV for additional maps

73
Map 1 Distribution of all agency supported companies in 2014, classified by employment
size

74
Map 2 Distribution of all agency supported manufacturing companies in 2014, classified by
employment size

75
Map 3 Distribution of all agency supported services companies in 2014, classified by
employment size

76
Realising potential - harnessing regional difference
Regions (NUTS III areas) throughout Ireland are different in terms of potential, critical mass,
stage of development, nature of sectors, skills profile, innovative capacity, natural resources,
cultural and/or heritage assets etc. Such potential needs to take into account a whole of
enterprise approach - including sectors and activities that may not 'sit' within agency portfolios.
Each region faces challenges that are specific to it, and that require appropriate responses
depending on its needs. Fundamental to place-making is identifying the potential growth
sectors in a region and exploiting these opportunities by marshalling private and state interests
towards creating places that will stimulate clustering and attract investment.
As stated above, DJEI has worked with a range of key stakeholders to develop distinctive Action
Plans for the eight NUTS III areas (Action Plan for Jobs – Regional). These Action Plans will drive
collaborative action to focus the range of public bodies, agencies and the private sectors on a
clear agenda to drive entrepreneurship, company development and investment in these areas
over the coming years. We have drawn from the analysis undertaken to inform these plans to
provide a snap-shot of the characteristics of the regions.
The West comprises the counties of Galway, Mayo and Roscommon and has a total population
of 437,100, or 9.5 percent of the State total
185
. The region is the most sparsely populated of all
regions in Ireland - although this is largely because of its rugged landscape. It is rich with natural
resources and habitat, which combined with the benefits of dynamic urban locations and sense
of place, provides an attractive environment for enterprise investment, for tourism development
and from a lifestyle choice perspective
186
. The area has had strong economic performance, and
Galway city is recognised as a vibrant and cultural urban centre. The West benefits from the high
visibility Wild Atlantic Way tourism strategy; its strong and diverse enterprise base
187
; and
research and HEIs infrastructures
188
, which offer a host of opportunities for growth.
Nevertheless, there are constraints that, if not addressed, are likely to hinder the realisation of
the region's full potential (including, for example, higher youth unemployment, infrastructure
deficits, lack of suitable office space in urban areas, and a 'mis-match' of supply/demand in
housing throughout the region). A review by an independent statutory committee is currently
underway in relation to local government arrangements in Galway city and county (the largest
urban and county areas respectively in the West).
The Border NUTS III area which has a population of 503,900 or 10.9 percent of the State total
189
is an amalgam of six counties which are situated along the border with Northern Ireland -
namely Donegal, Sligo, Leitrim, Cavan, Monaghan and Louth. The configuration of the Border
region and its physical geography sets it apart from the other NUTS III areas. It incorporates
three independent urban areas - Sligo, Letterkenny-Derry and Dundalk-Newry. Although for
many years the unstable political situation in Northern Ireland has hindered optimum economic
performance in the area, more recent developments and investments have seeded the basis for
185 Annual Population Estimates, CSO Statbank
186 Westport - Best place to live in Ireland (Irish Times Award 2013); Erris - Best Place in Ireland to go
Wild (Irish Times Award 2014)
187 Including medical technologies, ICT, creative sector (including film and digital media) artisan and
organic foods etc.
188 Including for example Insight, Curam, Ryan Institute, NUIG and GMIT

77
change and future growth. The challenges remain significant, but there is potential to continue
to deliver on strategic infrastructure priorities relating to both North and South of the border, to
access EU and cross border development funds for investment, and (through the Action Plan for
Jobs process) develop and deliver on a coherent approach to enterprise development
190
,
leveraging cross border networks where relevant.
The Midlands NUTs III area has a population of 290,600 or 6.3 percent of the State total
191
,
making it the smallest in terms of population of the eight NUTs III areas. It comprises counties
Longford, Westmeath, Offaly and Laois. The polycentric Gateway as envisaged in the NSS
requires strong linkages between Athlone, Mullingar and Tullamore, although the concept is not
as developed as might have been originally envisaged. The Midlands central location and close
proximity to Dublin give the region a natural advantage in terms of inter-regional and
international accessibility. Due to its higher dependence on construction during the boom
period, the negative implications are still evident in that the Midlands has the highest
unemployment rate of all NUTS III areas (at 12.4 percent Q1 2015). However, it should be noted
that this has fallen from a peak of 19.5 percent at Q3 2011, and that the Midlands has benefitted
from the overall national increase in employment since then. The region has a relatively high
proportion of employment in manufacturing, in public sector administrative services (including
healthcare) and in commercial state companies (Bord na Mona and Coillte) that may present a
distinctive base of capabilities to tap into new and emerging growth areas (e.g. materials for
advanced manufacturing, renewables, eHealth/independent living).
The South-West NUTS III area encompasses counties Cork and Kerry and has a population of
673,400 or 14.6 percent of the State total192
. There is a contrast between the metropolitan area
of Cork, the wider Cork County and Kerry in terms of GVA performance
193
and the nature of
enterprise - however the combination of a strong city region and distinctive natural landscape
delivers a compelling proposition for business, talent and lifestyle. The region has a dynamic and
broad enterprise sector with a predominance in pharmaceuticals, ICT, food (including functional
foods) and tourism, with significant potential in medical devices and internationally traded
services (including an emergent payments sector)
194
. It also boasts a number of high visibility
research centres of scale
195
, with strong connections to enterprises in the region and
internationally. It also has a number of strong business networks, highly innovative enterprises,
an entrepreneurial culture, and a demonstrated ability to work collaboratively to harness central
funding for the benefit of the entire region. Nevertheless, there remains significant scope to
better connect the individual assets that are in place across the region to develop a compelling
proposition and to accelerate growth potential. There is also an independent review currently
underway of the local government arrangements in Cork.
190 A novel approach will be required, given the administrative construct of the region that does not
align with functional areas of activity and potential
193 This is influenced by the presence of a number of foreign owned entities involved in high value
added pharmaceuticals
194 Employment in Enterprise Ireland supported international services and financial services enterprises
grew by 52.4 percent and 25.6 percent respectively over the period 2011-2014, DJEI Annual
Employment Survey
195 Including for example Tyndall, Food for Health Ireland, IMERC etc.

78
The Mid-West comprises counties Limerick, Clare and the former North Tipperary and has a
total population of 378,200 or 8.2 percent of the State total
196
. The region has a strong history of
progressive thinking in terms of infrastructural and place-making initiatives such as Plassey
Technology Park and the Shannon Free Zone. Its growth potential, however, had been
somewhat hampered by administrative structures that compromised a strategic approach to the
development of Limerick City and its environs. The changes made to administrative structures
involving the merger of Limerick City and County Council and investments in urban
regeneration
197
aim to redress this issue. There is a strong base of sectors/activities, higher
education institutes (HEIs), and research institutes that provide an excellent platform for growth
- and given that one of the primary constraints has been addressed, we can anticipate that this
growth will be accelerated so that the region can fully leverage its assets and potential.
The South-East NUTS III area has a total population of 504,800 or 11 percent of the State total,
and comprises counties Carlow, Kilkenny, and the former South Tipperary
198
, Waterford and
Wexford. The area has a distinctive settlement pattern with five relatively large centres of
population. In reality the northern parts of the region are more naturally drawn toward Dublin.
Strategic assets include the IDA Ireland investment in its utility intensive site in Belview, the
Telecommunications Software and Systems Group (TSSG) research centre at Waterford Institute
of Technology (that is now seeking to exploit the regional potential for agri-tech), a strong
manufacturing and services base, emerging potential in e-games, a design hub in Kilkenny and
distinctive tourist attractions. There are challenges facing the region, not least because of the
fact that the administrative construct does not align with functional clusters of activity, although
local government arrangements have been strengthened by the recent mergers of local
authority structures in counties Tipperary and Waterford. The DJEI Regional Action Plan for the
South-East aims to bring a coordinated approach to harness the distinctive diversity and
pockets of competitive dynamics within the region and to forging mutually beneficial
connections with neighbouring areas.
Dublin and the Mid-East (the East)
199
With well over one-third of Ireland’s population (1,821,500
or 39.6 percent of the State total
200
) the East region, comprising counties Dublin, Wicklow,
Meath and Kildare, is the most populous and densely populated region in Ireland. Overall, the
pattern of population growth and settlement strongly reflects the influence of Dublin City far
beyond its administrative boundaries and underlines the need for coordination of planning
policies region-wide, including a focus on achieving higher residential densities to counter
urban sprawl. In terms of economic activity, the most prominent sectors in employment terms
are the public sector, the financial services sector and the retail trade sector. The ICT services
sector has seen considerable absolute growth over the last decade. With its young
201
, multi-
197 In 2013 the Government announced a €253 million investment over a 10 year period
198 The NUTs III area is subject to review. For the purpose of the formulation of RSESs it is envisaged
that Regional Assembly members for Tipperary will participate in both the Mid-East and South East
Strategic Planning Areas Committees
199 The ‘East’ is an amalgam of the two NUTs III regions: Dublin (i.e. County Dublin) and the Mid-East
(Meath, Kildare and Wicklow)
201 The age profile of the East region is different to that of others particularly in terms of the larger
proportion in the more economically active and demographically significant 25-44 age group

79
cultural and diverse population profile, the Dublin area boasts a dynamic, vibrant
entrepreneurial and hi-tech environment that is attractive for business start-ups, for FDI and for
talent.
Table 4 Four types of place-making - examples
The problem The solution The payoffs
Standard place-making
Communities are not effectively
using public spaces to create
vital, vibrant and liveable
communities that people want
to live, work, play and learn in
Broad public and stakeholder
engagement in revitalising, reusing
and creating public spaces using
short and long term techniques
rooted in social engagement and
new urbanist design principles
More quality places with quality
activities and a strong sense of
place. More vital, vibrant and
liveable public spaces,
communities and regions that
residents, businesses and visitors
care deeply about
Strategic place-making
Communities are not
competitive in attracting and
retaining workers
Revitalisation that increases
housing and transportation
choices, and urban amenities to
attract talented workers
Faster gains in liveability,
population, diversity, jobs,
income and educational
attainment than by standard
place-making
Creative place-making
Cities and towns confront
structural changes and
residential uprooting
Revitalisation by creative initiatives
that animate places and spark
economic development
Gains in liveability, diversity, jobs
and income. Innovative products
and services for the cultural
sectors
Tactical place-making
Many physical improvements
are expensive and policymakers
are understandably reluctant to
commit resources due to
uncertain risks
Test various solutions using low
cost proxies to gauge effectiveness
and public support
The public and policymakers can
actually see the result and degree
of support for various options
before committing permanent
resources
Source: Definition of Place-making: Four Different Types, Mark A Wyckoff, FAICP, MSU Land Policy
Institute
The Regional Action Plans for Jobs will set out ‘bottom-up’ actions that can be driven by the
regional actors. These actions will be aligned with national enterprise objectives and will be
strengthened by cross regional collaboration and adapted to regional circumstance, to deliver
on the potential that we have for growth throughout the country. The Minister for Jobs,
Enterprise and Innovation announced a €250 million fund to drive enterprise development
across the country, including investments in advance property solutions and competitive

80
initiatives to stimulate collaboration in the areas of entrepreneurship, innovation, enterprise
infrastructure and job creation. The different types of place-making that are situation specific as
set out (Table 4) can inform region specific approaches.
Focus on outcomes - not activity
There are likely to be a number of similar 'horizontal' challenges (that have a regional
perspective) and it is important that a coordinated approach is taken to addressing them -
including for example Skills and Innovation. With the intensified focus on regional development,
it is important that we do not inadvertently create 'consultation' fatigue, and/or duplicate
efforts, and/or see an increase in extensive 'activity' that is neither sustained or delivering
outcomes.
In addition to the Action Plan for Jobs process, there are a number of initiatives either underway
or due to start:
the establishment by Department of Education and Science of regionally based fora,
involving education and training providers as well as industry to drive and realise a
structured and systematic approach to identifying and delivering to skills needs (including
likely future enterprise requirements determined by the evolution of sectors/activities);
a pilot initiative being run by Enterprise Ireland focused on strengthening the interactive
role of the HEIs within regions as a 'meeting place' and encompassing innovation, skills,
networking, access to facilities etc.; and
the development of (statutorily based) RSESs by the Regional Assemblies that envisages
the establishment of Economic Fora at NUTS III level, involving consultation and the
development of inputs incorporating both economic and planning dimensions.
Given the interplay between the needs of enterprise and 'place-making' /spatial planning, we
aim to deliver a coordinated and structured approach between DJEI and DECLG, and involving
well managed engagement with other stakeholders, bodies and agencies as required.
Developing city regions throughout Ireland
Urban areas will play a key role in realising the potential of our regions throughout Ireland. The
city region concept acknowledges that an urban growth centre has an impact much broader
than its administrative boundaries and impacts on the economic potential of its wider
hinterland. The development of the NPF and RSESs (informed by the Regional Action Plans and
Enterprise 2025) will take account of the role that regional growth centres can play in Ireland’s
future economic development and of the strategic investments needed to realise their full
potential. A city’s competitiveness relies on a range of factors, including its business and
regulatory environment, the quality of human capital, its quality of life and quality of the public
realm; factors that not only help a city sustain a high economic growth rate, but also create a
stable and harmonious business and social environment. Cities provide a diverse marketplace
where supply and demand can meet, and the buzz of cities gives dynamism to business. There
are a number of interesting trends in evidence globally that warrant consideration in this regard.

81
The emergence of tech hubs
Tech companies in particular want to be part of the buzz of the city centre. These companies are
increasingly owned by ‘Generation Y’
202
founders (and their employees), who want to live and
work in the city and want to work flexibly where there is good connectivity and an environment
supporting collaboration. Although Silicon Valley remains by far the number one tech
ecosystem in the world, in recent years a number of cities have started to evolve their own tech
ecosystems.
The phenomenon of the Tech Hub is primarily organic and self-driven; but can be encouraged
by governments and City Authorities in partnership with the private sector, to build momentum
and competitive advantage in terms of their city’s attractiveness to internationally mobile
entrepreneurs and early stage companies, emerging 'home grown' start-ups, and venture
capital.
The smart city concept
Many cities are seeking to derive place competitiveness benefits by demonstrating ‘smart’
characteristics. Although there is no single definition, at its simplest, the concept envisages a
smart city as one that has digital technology embedded across all city functions.
While the objectives are to achieve
environmental, economic and social
sustainability through systematic
integration of ICT in their planning,
design, operations and management for
the benefit of the citizen, smart cities
boost the location’s attractiveness for
people and businesses, especially those
who want to innovate203
.
From Ireland’s perspective, the smart city
concept plays to our strengths in ICT and
our small scale, and in this respect could
constitute an opportunity to develop a
differentiated offering, to attract mobile
talent, entrepreneurship, FDI, and to
stimulate innovation across all enterprise.
The proposed grand challenges approach
in Section C - Innovativeness is pertinent.
202 The age group born after 1980
203 Examples of smart city initiatives include: Amsterdam Smart City (ASC); Barcelona (e.g. Open Data
BCN); Copenhagen (first carbon neutral city ambition); and Esbjerg, Denmark (Next Step City)
http://www.forbes.com/sites/sarwantsingh/2014/06/19/smart-cities-
a-1-5-trillion-market-opportunity/

82
A continuing focus on developing the Dublin city region
As we rightly seek to optimise the potential for job creation throughout the country, we need
also to remain aware that the international visibility and reputation of our capital city is crucial
for the continued attraction of FDI, entrepreneurship, tourism and talent.
The research shows that a growing share of investment is locating in or around metropolitan
areas in order to take advantage of place-specific advantages
204
. London was the top
destination for FDI projects worldwide in 2012, 2013 and 2014. Other top performers include
Paris, Singapore, Amsterdam, Shanghai, Chicago, Dubai and Bangkok. Dublin was ranked 12
th
in
the world in 2014 down from 7
th
2013
205
. Dublin is one of only six EU cities in the top 20 on this
ranking. Today cities are competing with cities for investment.
Over time, the attractiveness of Dublin has emerged as a key determinant in Ireland’s overall FDI
performance. The dynamic Dublin city region is particularly important as a host for fast growing
emerging companies and for internationally traded services activities, and will likely continue to
attract proportionally more new investments than the rest of the country. Dublin, as Ireland’s
main national access point is a key attractiveness factor for any ultimate location in Ireland (and
as cited above, IDA Ireland has a strong regional focus incorporated into its recently published
strategy).
Relative to other city regions in Europe and elsewhere, Dublin is small. But its relative size has
proven to be one of its distinct advantages and a differentiating aspect internationally. Dublin
has become a magnet for fast growing young internationally mobile companies, entrepreneurs
and talent, drawn to a city that can provide a unique business and living experience. There is a
strong organic dimension to this – in that it has not been overly planned.
The degree to which it is connected with other cities internationally is also an important factor –
‘while cities may be competing at a national level, internationally they appear to be getting
closer’
206
. For the future, due attention and planning is essential to sustain the dynamic which
has grown in recent years.
Realising the potential of our regions
Develop and publish the National Planning Framework (the successor to the
National Spatial Strategy) to set out the spatial forward planning framework and
overarching principles, including a clear urban policy that reinforces the
importance of Dublin as our Capital city and of other city regions throughout the
country, and that informs strategic national investments (with regional impact)
and priorities over the coming decade.
DECLG
Roll out the Action Plan for Jobs at regional level (NUTS III areas). DJEI
204 Global Location Trends, IBM Global Business Services, 2013, 2015
205 Global Location Trends, IBM Global Business Services, 2015
206 The Wealth Report 2013, commentary by Prof. Peter Taylor, Knight Frank, 2013

83
Support the development of regional collaborative initiatives among private and
public sector actors in the regions that promote innovation and productivity
growth through competitive funding calls over the period to 2020. It is envisaged
that the funding calls will attract some matching funding from other regional or
private sources. The three funding areas include:
€5 million focused on community driven enterprise initiatives;
€5 million focused on providing additional funding to LEOs on foot
of innovative proposals specific to their region; and
€40 million to support significant projects to improve or leverage
identified enterprise capability in the region.
Competitive calls for proposals will be informed by the Regional APJs, with the
first tranche of the regional fund launched in 2015 to stimulate collaborative
action and novel approaches to harness regional assets with a view to realising
potential and accelerating growth.
DJEI/EI
Develop the Regional Spatial and Economic Strategies (RSES) led by DECLG, in
conjunction with the Regional Authorities, DJEI and others, with a strong focus
on creating competitive regions in which enterprise and entrepreneurship can
succeed. The RSESs will provide an overarching framework for the creation of
new places with attractive characteristics and infrastructures to stimulate
enterprise investment and to realise economic potential.
DJEI, DECLG
Formulate and implement Local Economic and Community Plans to maximize the
potential of local areas and guide local authority action to contribute to the
collaborative development of strong regional economic growth centres.
Local
Authorities
Strengthen the role that HEIs will play within their regions for a strengthened and
richer industry liaison system to stimulate greater engagement with enterprise
(and SMEs in particular) across a broad agenda including innovation, knowledge
sharing and dissemination, peer networking and entrepreneurship with the aim
of accelerating enterprise growth.
DES, DJEI,
HEA, EI, IDA
Prioritise place-specific infrastructure deficits that are impacting negatively on
the attractiveness of our city regions for enterprise investment. This will include
orienting the Public Capital Programme toward investments that support
business needs and targeting European investment/development funding over
the 2015-2025 period.
DPER,
DTTAS,
DECLG, DJEI
Roll out a 5-year €150 million capital investment programme to help attract
more foreign investment and jobs into each region. This programme will include
investments over the coming years in building advanced manufacturing and
office facilities in Sligo, Tralee, Castlebar, Galway, Dundalk, Limerick, Athlone,
Carlow and Waterford.
IDA

85
Innovativeness
Introduction
Successful enterprises are those that innovate. Innovation enables enterprises to differentiate
their product and services offerings, to develop new ways of reaching customers and markets, to
disrupt existing business and revenue models, and to improve processes, systems and
organisational structures. Innovation plays a crucial role in creating competitive advantage,
enhancing productivity, and ultimately increasing profitability so that enterprise can
continuously reinvest in its future. The sources of innovation are broad, involving not only the
R&D laboratory and/or HEIs (or technology push) but also the customer, markets, suppliers,
competitors and partners.
Since the early 2000s, the State significantly increased its investments to develop Ireland's R&D
infrastructures and capabilities - an essential investment for a developed open economy. Today
there is a greater number of enterprises investing in RD&I - although there is considerably more
to be achieved. We need to ensure that the State's investment is leveraged and to realise the
desired uplift across Ireland's enterprise base to deliver economic impact and wider societal
benefits. We also need to consider the evolution of Ireland's national innovation system in the
context of increasing contribution to economic growth arising from services activities.
The ability to innovate is now essential for all enterprises, regardless of sector, nature of activity
or scale and regardless of whether exporting or locally trading. It is a policy imperative that we
stimulate more enterprises to engage in RD&I. Looking across the entire spectrum of the
enterprise base in Ireland this will require that, at a minimum, an enterprise builds capabilities
and engages in networks to take advantage of technological advances and of R&D that is
undertaken elsewhere in order to adapt to their own circumstance to innovate and improve
competitiveness.
It is people who innovate, who have ideas, who build relationships. Our ability to develop,
nurture, retain and attract talent is directly relevant and is set out in detail in Section N.
Developing and strengthening our enterprise base also requires increased mobility and
engagement between people involved in the research and business communities.
This section considers innovation (and innovativeness) in the round and identifies the actions
necessary to ensure that we attain our ambition to be the best country in which to succeed in
business.
This chapter sets out:
Ireland’s national innovation system – an overview;
the international context;
strengthening Ireland’s systems approach;
the enterprise objectives and challenges; and
innovativeness – a mind-set, a culture and way of working.

86
Ireland’s national innovation system – an overview
The focus in this chapter is on how we can strengthen enterprise RD&I performance as a key
component of a dynamic and impactful innovation ecosystem. There is a strong inter-
connectedness between science, technology and innovation policy and enterprise policy and
both of these strategies have been developed in concert
207
.
Although there is no single definition of a national innovation system (NIS), the concept rests on
the premise that innovation and technical progress are the result of a complex set of
relationships among actors producing, distributing and applying various kinds of knowledge
208
.
The actors involve enterprises, universities, public research institutes
209
and interactions include
joint research, personnel exchanges, cross-patenting, use of facilities etc. The innovative
performance (or 'innovativeness') of a country depends to a large extent on how these actors
relate to each other as part of a collective system of knowledge creation and use.
Ireland's innovation system is maturing. We need to acknowledge the considerable progress
that we have made over the past decade in particular, while at the same time focusing our
efforts on addressing constraints to realising our ambition.
Significant increases in Government investment
Investment in RD&I in Ireland has significantly increased since the early 2000s. We have seen a
doubling of gross investments to €2.76 billion in 2013
210
. Government expenditure, aimed at
strengthening Ireland's R&D capabilities and infrastructures rose from €727 million in 2005 and
peaked at €930 million in 2008
211
. This investment has since fallen and is expected to reach
€735 million in 2015 - back to levels of a decade ago, which may now have implications for our
ambition for enterprise development over the coming decade
212
. The intensity of this
investment is low by comparison with selected comparator countries (less than half that of
Denmark (1.01 percent) and Finland (0.94) percent)) and below the EU average of 0.63 percent
(GBAORD as a percentage of GNP for Ireland was 0.45 percent in 2014).
Within this, Higher Education expenditure on R&D (HERD) increased in absolute terms over the
last decade from €238 million in 2000 to €708 million in 2010. HERD has, however, fallen to an
estimated €640 million in 2012
213
. HERD, as a percentage of GNP, at 0.45 percent, is at the same
level as EU27 average and above the OECD average of 0.43 but still lags behind leading small
innovative economies such as Denmark (0.95 percent).
Nevertheless, this investment in building a science and technology base is delivering results.
Ireland is in the top 20 countries ranked by citations per thousand population and indications
207 This chapter of Enterprise Policy 2025 has been informed by the development of the successor to
Ireland's Strategy for Science, Technology and Innovation. The new SSTI covers a broader agenda in
more detail and will be finalised by end 2015
208 National Innovation Systems, OECD, 1997
209 Defined as the Triple Helix Model
210 Includes investments by government and by business
211 Government budget appropriations or outlays on R&D (GBAORD), State Investment in Research
and Development, DJEI (forthcoming)
212 State Investment in Research and Development, DJEI (forthcoming)
213 Survey of Research & Development in the Higher Education Sector, 2012/2013, July 2015, DJEI

87
show that Ireland’s scientific research is of leading international quality in a number of niche
areas, such as immunology, and molecular genetics and genomics
214
. This investment has also
played a key role in developing and supplying the talent needed by our increasingly innovative
enterprises:
researchers active in the higher education sector almost trebled from 2,148 FTEs in 2000
to 6,002 FTEs in 2012
215
;
PhD graduates from the university sector increased from 774 in 2005 to 1,749 in 2014
216
;
and
employment in RD&I jobs has increased significantly in the last 20 years. Total R&D
personnel, for example, more than doubled between 1997 (10,826) and 2012 (22,501).
We now have a number of internationally visible national research centres based in universities,
supported through SFI’s Centres and Spokes programme, that are focused on longer-term user-
oriented research and that undertake research in partnership with enterprises and foster
medium to long-term strategic collaborations
217
. These SFI investments play a key role in terms
of attracting mobile high-quality researchers to Ireland and help to sell the concept of Ireland as
a destination for R&D. SFI works in partnership with IDA Ireland to stimulate investment from
major technology-based multi-nationals to establish R&D facilities here.
Our Technology Centres have been jointly funded by Enterprise Ireland and IDA Ireland and
undertake R&D that has been defined by industry. The enterprise development agencies
facilitate companies to collaborate and to identify the industry problems and areas which can be
addressed through the Technology Centres.
Ireland also has a range of policy measures in place to stimulate collaboration between
academic research and enterprise and to directly support enterprise RD&I activities. These
include, for example innovation vouchers, innovation partnerships, commercialisation, as well as
direct supports for in-firm R&D. The enterprise development agencies provided €149 million to
support in-company R&D in 2013 - and this investment leverages an estimated circa €400
million of private investment
218
. In addition, Ireland introduced an R&D tax credit in 2004
219
and
is currently assessing the most appropriate instrument to support IP creation and exploitation.
Focusing State investment
It is crucial that our State investments are sustained and focused, so that we can develop
scientific excellence, international visibility and critical mass in areas of research where Irish
214 As measured by citations per paper
215 Survey of Research & Development in the Higher Education Sector, 2012/2013, DJEI
216 Higher Education Authority, http://www.hea.ie
217 Evaluation of Enterprise Supports for Research, Development and Innovation, Forfás, April 2013
218 Based on IDA Ireland and Enterprise Ireland annual reports - this equates to amounts drawn down
by enterprises during that year and should be regarded as indicative only. The leveraging estimate has
been informed by Evaluation of Enterprise Supports for Research and Development and Innovation,
Forfás, 2013
219 The Forfás evaluations evidenced that the R&D direct supports provided by the agencies took
account of the availability of the R&D tax credit and that the grant intensities reduced following the
introduction of the credit

88
enterprise can compete and Irish society can benefit. A country of Ireland’s size can realistically
only excel in a limited number of fields of research. The Research Prioritisation Steering Group
220
set out fourteen priority areas across six themes to inform the focus on Government investment
in order to accelerate and maximise returns and the majority of State funding is now targeted at
these areas.
Knowledge transfer infrastructures
Ireland's technology transfer infrastructures have been considerably enhanced through
Enterprise Ireland's Transfer Technology Strengthening Initiative (TTSI)
221
. During the first eight
years of the TTSI programme (2007-end 2014) new inventions disclosed and licences signed
have greatly increased. Patent applications have reached a steady state and spin-outs have
increased from a negligible base (Figure 6).
A review undertaken at the end of 2014
222
cited the speed of evolution of the technology
transfer infrastructure in Ireland and the novel approach to scaling through the creation of
consortia
223
. The Review recommended that the State commit to sustain funding for knowledge
transfer infrastructures and that monitoring and evaluation of performance be extended to
cover outcomes as well as outputs (e.g. sustainability of spinouts, company use of licensed
technology). It also concluded that bureaucracy needs to be further reduced in terms of
empowering their TTOs to make and execute on commercial decisions, accepting that a degree
of risk-taking is necessary if innovation from HEI research is to flourish.
Figure 6 Performance under the Transfer Technology Strengthening Initiative (TTSI)
2007-2014
Source: Knowledge Transfer Ireland
220 The Report of the Research Prioritisation Group, DJEI, Forfás, 2012
221 Enterprise Ireland committed €52.8 million in funding to the TTSI over a 9 year period from 2007-
2016 aimed at increasing the level and quality of IP captured by the HEIs and transferred out to industry
222 A Review of the Performance of the Irish Technology Transfer System 2007-2012, Enterprise Ireland
(complemented by an independent study commissioned by EI from Frontline), May 2014
223 Where the larger HEIs share resources and best practice with smaller Institutes of Technology
0
50
100
150
200
250
300
350
400
450
500
2007 2008 2009 2010 2011 2012 2013 2014
No.
IDFs LOAs Spin-outs Patents filed

89
A National IP Protocol was launched in June 2012 which sets out a framework to articulate the
rules of engagement for collaborative research between Research Performing Organisations
(RPOs) and industry. The Protocol was intended as a living document and a review of the IP
Protocol was undertaken in 2015, which is currently under consideration.
A key recommendation in the Protocol was the establishment of Knowledge Transfer
Ireland (KTI)
224
which happened in 2013. KTI acts as a central point of reference for business-
research partnership and commercialisation. Its objective is to maximise the flow of technology,
ideas and expertise into companies swiftly and easily to drive innovation in products and
services for economic and social benefit. KTI works with business, investors, universities,
Institutes of Technology, State research organisations, research funders and government
agencies to deliver on its objectives.
Business expenditure on R&D in Ireland
Enterprises that perform research, development and innovation make a major contribution to
overall wealth and job creation compared with enterprises that do not perform RD&I
225
. The
Forfás evaluations of RD&I supports also indicates that R&D active enterprises were more
resilient over the recessionary period and/or had the ability to rebound faster than a comparator
group of non R&D active enterprises.
R&D investment by enterprises in Ireland has grown substantially in recent decades. We've
witnessed growth in numbers of R&D performing enterprises, as well as an increase in scale of
investment:
1,979 enterprises were R&D active in 2013, an increase of 76 percent since 2003
226
;
business expenditure on R&D (BERD) rose from 0.93 percent of GNP in 2003 to an
estimated 1.39 percent of GNP in 2013. Nevertheless, this performance still lags behind
that of leading small innovative economies;
R&D expenditure in the business sector in largely concentrated in experimental
development accounting for 64 percent of BERD. Experimental development is closer to
market, drawing on existing knowledge to develop new, or substantially improve
products, processes, systems and services;
foreign owned entities accounted for 65.2 percent of total R&D expenditure in 2013.
However, in 2013, only 20.5 percent of all enterprises engaged in R&D were foreign
owned firms; and
enterprises with greater than 50 employees (i.e. medium and large companies) accounted
for almost 78 percent of BERD at €1.57 billion in 2013
227
.
Stimulating capability and capacity across the enterprise base continues to present a challenge.
Based on the analysis of achievements of targets set in the Strategy for Science, Technology and
Innovation (2006-2013), progress toward meeting the science and technology targets has been
224 KTI is located in Enterprise Ireland and funded by Enterprise Ireland with co-financing from the Irish
Universities Association (IUA)
226 Forfás BERD surveys 2003 and 2005 & CSO BERD, Statbank 2007-2013 (latest available data)
227 CSO BERD 2013-2014, Statbank

90
more rapid for the public-funded research system than that led by enterprises. In particular,
progress towards the targets set for the number of companies with minimum and significant
scale R&D, and expenditure by Irish and foreign owned companies has been slower than
envisaged. Specific challenges are set out in the section on enterprise objectives and challenges.
The emergence from the recessionary period presents an opportunity to more aggressively
support the transformational changes needed across a wider cohort of enterprises, and to
deepen the competences of those already R&D active. In this context, it is important to
understand the factors across the wider national innovation system that can influence R&D
engagement and the barriers at the level of the enterprise that might inhibit innovation
activities. Looking at Ireland's performance in comparison with high performing countries
provides valuable insights.
The international context
The annual EU Innovation Union Scoreboard
228
provides a comparative assessment of the
research and innovation performance of EU Member States. Innovation performance is assessed
across eight sub innovation dimensions as depicted in Figure 7.
Innovation leaders are those that have an innovation performance of more than 20 percent
above the EU average, and in 2014 were Denmark, Finland, Germany and Sweden.
Figure 7 Ireland’s innovation union scoreboard compared with EU 28
Source: Adapted from EU Innovation Scoreboard 2015
Ireland is described as an ‘Innovation follower’ amongst its EU27 peer group having an overall
innovation performance close to the average for the EU Member States, and we have seen
progress in terms of overall rankings from 10
th
ranking in 2013 (EU27) to 8
th
in 2015 (EU28)
229
.
228 Innovation Union Scoreboard 2014, Directorate-General for Enterprise and Industry, EC 2015
229 Innovation followers include Austria, Belgium, Estonia, France, Ireland, Luxembourg, UK and the
Netherlands - performing close to that of the EU27 average while Innovation Leaders including
0
0.2
0.4
0.6
0.8
1
Human Resources
Research Systems
Finance & support
Firm Investments
Linkages &
Entreprenuership
Intellectual Assets
Innovators
Economic effects
EU 28 Ireland

91
The analysis for Ireland indicates that the areas where Ireland scores less well when compared
with EU28 relate to Innovation Investments by firms, Intellectual Assets and Finance and Support
(that captures R&D expenditure in the public sector as a percentage of GDP). The relatively high
economic output effects reflects our foreign direct investment base - nevertheless, we are
aware that there remains significant potential to increase the numbers of foreign owned
enterprises that engage in innovation here. A deficiency in one or more of these dimensions will
have a detrimental impact regardless of the fact that the other factors are in place. The evidence
indicates that enterprises in countries that are innovation leaders benefit from operating within
a balanced innovation ecosystem, delivering higher overall economic impact.
While we need to focus on addressing these specific dimensions, what differentiates the
Innovation Leaders and Innovation Followers is the consistency of their performance across all
eight of the composite dimensions – as well as the strong interplay between them, pointing to
an effective ‘systems’ approach.
A systems approach
The ‘systems’ approach requires not only that the different dimensions as set out above are in
place, but also that there is a strong interplay between all of the elements and related actors.
Many advanced economies across the OECD are increasingly adopting a systems approach to
innovation
230
. Some of the defining aspects include the fact that:
innovation policy measures and strategy development are increasingly being recognised
as a cross-government agenda
231
;
procurement is a growing area of importance. Here, public policy has focused on
promoting RD&I in public purchasing decisions to support and encourage new innovative
goods and services and a number of jurisdictions have introduced Small Business
Innovation Research (SBIR) type initiatives
232
; and
addressing national strategic and societal issues is currently one of the most active policy
areas amongst comparator OECD countries. This 'grand challenge’ led approach accords
Denmark, Finland, Germany and Sweden have innovation performances more than 20 percent above
the EU average
230 Based on an analysis of OECD Science, Technology and Industry (STI) Outlook 2014 - the countries
included in this analysis were Sweden, Denmark, Finland, Netherlands, Belgium, Israel and New Zealand
231 In Sweden the recent national innovation strategy (2012) was based on a cross-ministerial process.
Finland’s strategy recognises the inter-linkages and responsibilities of all the public organisations
involved in innovation policymaking and implementation. The development of Ireland's SSTI
(forthcoming) involved an Interdepartmental Committee in its formulation, and will require continued
coordination across Government Departments in its implementation
232 The US introduced an SBIR type initiative in 1982, UK in 2001 (re-launched in 2009), Northern
Ireland (2013), Wales (2013) and Scotland (2015). Other examples include Japan and the Netherlands.
SBIR involves the purchase of research by a Government entity which is undertaken with the objective
of stimulating innovation that the contracting authority or some other party may benefit from at a later
stage when goods or services not currently available are developed from the outcomes of the research

92
with EU's Horizon 2020
233
and necessitates a more progressive and coordinated approach
across government
234
.
In terms of a challenge based approach, the contention is that a focus on specific grand
challenges will bring together resources and knowledge across different fields, technologies and
disciplines. Government can play a key partnership role by establishing the mechanisms to
stimulate enterprise engagement in addressing ‘grand challenges’ with the ultimate objective of
enhancing standards of living for all, facilitating enterprise growth and creating jobs. Through
investments in RD&I and by engaging in collaborative approaches, enterprise can deliver
innovative products, processes and services to address national policy objectives in areas such
as environmental sustainability, improved healthcare, smart ageing, transport and smart city
infrastructures etc. Horizon 2020 places a focus on innovation-related activities, such as
piloting, demonstration, test-beds, and support for public procurement and market uptake –
translating research into new products, process and services and ultimately into job creation.
Grand challenges - strengthening Ireland's systems approach
In terms of the comparative performance of our national innovation system, we need to improve
in relation to innovation investments by enterprise, finance and support for RD&I and
intellectual asset creation in order to realise greater impact. We need also to strive toward a fully
functioning systems approach through the alignment of purpose, strategy development and
implementation across government departments, optimising state resources and realising
synergies
235
.
Our aim is to strengthen our overall national innovation system, and to bring innovative
approaches to bear in doing so – acknowledging the strong partnership role between
government and enterprise (and including research institutes and HEIs) that could deliver
greater outcomes overall.
A partnership approach between Ireland’s foreign direct investment base, Irish owned
enterprises and the research community is already seeding platforms for innovation – but these
need to be scaled to deliver greater economic impact. We now have the potential to develop a
differentiated systems approach with investment focused on translation, applications
development and pre-commercial deployment of innovative solutions.
In this context, government can play a key role in stimulating opportunities for innovation with
enterprise through its public procurement practices or by taking a ‘grand challenge’ or national
priority approach to ‘creating’ markets, test bed infrastructures etc. The EU’s Horizon 2020
(Framework Programme for Research and Innovation 2014-2020) highlights the role of research
in addressing societal (grand) challenges – identifying this as one of its three core themes or
233 Horizon 2020 is the EU’s financial initiative aimed at securing Europe's global competitiveness and
job creation through investment in coordinated research aimed at addressing societal challenges
234 A number of approaches are evident in the comparator countries including the Netherlands Top
Sectors programme, the UK's Innovation Platform model, Denmark's Inno+, and Sweden's Strategic
Innovation Areas
235 Technology Ireland (led by DJEI) has played a key role in driving the science, technology and
innovation agenda, delivering a cohesive approach across the enterprise development agencies (IDA, EI
and SFI) and the higher education institutes

93
pillars: excellent science, industrial leadership and societal challenges. Such a challenge-centric
environment will open new possibilities to establish Ireland as a preferred source of, and base
for, intellectual value, talent and innovation and to deliver more impactful economic, societal
and sustainable outcomes.
Public procurement provides an opportunity to create a marketplace for enterprises to win
contracts with innovative approaches which can serve as commercial reference points for
competing in overseas markets. Ireland first launched its Small Business Innovation Research
(SBIR)
236
initiative in 2014. The SBIR operates under EU Pre-commercial procurement rules and
facilitates both the public sector (in terms of finding innovative solutions to address specified
objectives) and the enterprise in terms of providing a lead customer and accelerating
technology commercialisation. The Action Plan for Jobs 2015 has set out an action to expand
SBIRs to two new contracting authorities - an action that is assigned to Enterprise Ireland to
deliver, but which (in reality) requires commitment from other public sector bodies. It is our role
in government to promote the use of SBIR where relevant in our procurement practices and that
of our associated agencies, authorities and/or bodies.
In Ireland’s context a ‘grand challenge’ approach could be introduced to address national
priority areas including for example, sustainable agri-food, healthy ageing, smart cities etc. The
ambition will be a shared common objective of government, higher education and public
research, industry, and the investment community, focused on projects of scale and significance
in a global context that excite and attract leading talent nationally and internationally. Such an
approach will require considerable change across government, a degree of managed risk taking,
and a strengthened awareness of the opportunities and benefits arising from services and
business process innovation (in particular). Nevertheless, such an approach can be informed by
international experience and/or pockets of existing activity already underway here. The grand
challenge approach is also being considered as part of the forthcoming new Strategy for
Science, Technology and Innovation.
The principles for defining the specific initiative would have regard to: Ireland’s national policy
priorities, focused on areas where we can leverage existing research and enterprise strengths
that can differentiate Ireland and raise our profile internationally; and facilitating cluster
development of scale involving cross sectoral collaboration and inter-firm relationships
(including both Irish and foreign owned, large and small scale entities). The National Clustering
Initiative detailed in the next Chapter would provide a vehicle through which the grand
challenge approach can be progressed237
.
The overarching outcome would deliver benefits for:
government - in terms of efficiencies, better utilisation of resources, better outcomes and
realisation of objectives and longer term sustainability;
enterprises - in terms of market testing and validation for products, services and
solutions; access to GVNs for Irish owned enterprises; reference/demonstration sites for
236 Launched by SEAI in collaboration with ESB Innovation and Enterprise Ireland, to develop a smart
technology solution for charging Electric Vehicles (EVs) in shared access parking areas
http://www.seai.ie/SBIR#sthash.ysZqhfdA.dpuf
237 See also ‘Clusters and clustering activities’ - Section C - Connectedness

94
when selling into international markets and enhanced collaboration; international visibility
and strong demonstrator effect for the attraction of talent and FDI;
society - in terms of e.g. better healthcare and health outcomes, improved transport
management and a better quality of life and living environment; and
the economy – in terms of job creation, exports and economic growth.
Overall, the outcomes from a challenge-centric approach has the potential to put Ireland on the
pathway to offering viable innovations to solve problems of global significance in a world that is
highly connected, and with increasing demands on areas such as sustainable health, food and
energy.
We need to further stimulate investments in RD&I activities, and acknowledge that a range of
approaches and initiatives will be required to address a number of identified challenges in that
regard. The next sub-section sets out our objectives and the attendant challenges that we aim
to address in order to stimulate a truly innovative enterprise base.
The enterprise objectives and challenges
Our ambition by 2020 is to:
win €3.6 billion in RD&I investments and have 145 (44 percent) more foreign owned
entities engaged in RD&I activities
238
;
have over 1,000 Irish owned companies investing over €100,000 per annum in RD&I; and
220 investing over €1 million;
increase the proportion of SMEs introducing product or process innovations (as a
percentage of all SMEs), from 35 percent to 45 percent; and
increase the number of research collaborations between enterprise and HEIs/Public
Research Organisations by 25 percent, focusing on the quantity, quality and impact of
these research collaborations.
Increasing the number of innovation performers in the foreign owned sector
The foreign owned multinational sector in Ireland accounts for the largest proportion of overall
BERD in Ireland and we boast one of the largest proportions of BERD arising from multinational
companies amongst all OECD countries. This is testament to the success of IDA Ireland and
other agencies in securing innovation-focused inward investment.
Nevertheless the majority of multinationals based here do not (formally) undertake RD&I
activities in Ireland. In its recently published strategy, IDA Ireland has set out the objective to
achieve greater R&D investment by their client companies. They have set out an ambitious
target to win a cumulative €3 billion in RD&I and to encourage an additional 120 entities to
engage in R&D over the period to end 2019. Today foreign owned (agency supported) entities
invest €1.4 billion annually in RD&I.
238 This is IDA Ireland’s current target to 2019 (€3 billion) set out in Winning: Foreign Direct Investment
2015-2019, IDA Ireland. 2015, extrapolated to 2020, bringing the ambition to €3.6 billion

95
There are challenges in realising this ambition, not least because the decision-making powers
with respect to RD&I are, for the most part, controlled outside of Ireland. Multinationals are
likely to have pre-existing/incumbent R&D sites and other sites acting as internal competitors
for future investment.
In this context the Ireland proposition needs to be compelling, and aspects such as international
rankings, international visibility of scientific and technological excellence, and the availability of
talent are critical if we are even to be considered as a possible location of choice for RD&I
investment.
Broadening and deepening the RD&I activity in Irish owned enterprises
Despite the fact that there has been an increase in the number of enterprises engaging in RD&I,
the reality remains that there is a high proportion of Irish owned enterprises across the economy
that do not undertake any RD&I activities. Even in cases of those that are engaged, the levels of
investment in innovation remain low.
A study undertaken by the OECD highlighted that the innovation activities undertaken by Irish
owned enterprises tend to be focused on wider innovation - aimed at improving management
and business strategy changes - and/or on innovations that are 'new to the firm' as distinct from
'new to the market'
239
. This is not to dismiss the fact that a proportion of Irish owned enterprises
are highly innovative and have secured leadership positions in the markets they serve. However,
it does highlight both the challenge and the opportunity we have to stimulate greater
investment in technological innovation that leads to the development of new products,
processes and services that will deliver greater economic impact. A high proportion of Irish
owned enterprises are small, and the challenges facing them are similar to those found in other
countries
240
– namely the lack of capacity to innovate and to absorb innovations.
Absorptive capacity is defined as the ability of an organisation to identify, value, assimilate and
apply new knowledge
241
. Absorptive capacity is cumulative in that experience and prior
knowledge within an organisation enables them to be more receptive to adding new
understandings and new ideas. Building this capacity within small enterprises can pose a real
challenge and may be considered somewhat of a 'chicken and egg' situation. This is discussed in
greater detail below.
Other constraints to engaging in RD&I may relate to access to finance
242
, lack of awareness of
what supports are available, and/or of the role that established research institutes can play. For
example, the Gateway network is of direct relevance to enterprises focused on applied R&D and
a recent review has seen a significant increase in the use of this resource by enterprises since the
programme was launched in 2013 and promoted effectively since then. Despite some progress
being made, there is still evidence of the considerable challenge faced in stimulating increased
interaction and collaboration between SMEs and the range of research infrastructures available
throughout the country (see below).
239 Policy Questionnaires on Science, Technology and Industry Outlook 2014 (various country
responses) OECD, 2014
240 Ibid
241 Cohen and Levinthal (1990) pioneered the concept of absorptive capacity
242 See also Section E on Funding Environment

96
We need also to ensure that our R&D tax credit regime is continually assessed to ensure it is
internationally competitive, is understood by Irish companies and is supportive of innovation in
new areas of activity (including for example, services, workplace and collaboration). The
application of the R&D credit needs also to account for the different innovation processes
involved in these newer areas and the supporting documentation that may be retained by the
enterprise.
Strengthening collaboration
Strengthening collaborative links between enterprises and between enterprises and the HE
sector remains a challenge for Ireland in support of enterprise innovation. Although some
progress has been made over the past decade, the specific challenge for Irish owned enterprises
in particular is linked to the issue of absorptive capacity as discussed above.
Limited pre-existing R&D activity and capability may result in a lack of awareness of who to
collaborate with (so-called ‘know–who’), as well as a lack of confidence and expertise to
undertake and make sense of RD&I results (so-called ‘know-how’). This challenge is potentially
more acute for smaller Irish owned companies who lack financial resources to employ specialist
staff
243
.
HEIs themselves have a critical role to play within their regional environs, positioning themselves
as a 'magnet' or centre that facilitates networking, idea generation and information sharing;
stimulating local innovation networks; up-skilling employees in companies in their locale; and
making facilities available for enterprises to undertake RD&I. There are a number of initiatives
underway that are set out in the previous section (place-making) that should go some way to
address the challenges for Irish owned enterprises who want to innovate.
In relation to foreign owned entities, the evidence also shows relatively low numbers reporting
links to the higher education sector
244
. The collaborative RD&I challenges relate to a number of
factors such as the locus of control of their RD&I activities, the potential lack of a local remit to
engage in collaborative activities, the tensions that may present in relation to Intellectual
Property rights as well as the fact that the Ireland based entity can access RD&I expertise from
within their wider group of affiliates rather than seek external collaborators. The US
multinational cohort based here contend that for Ireland to attract substantial foreign R&D
investment it must further develop centres of scale, surrounded by an effective eco-system
focused on translation, application and enterprise development - stimulating linkages and
clustering activities of international visibility
245
. They also contend that the development of an
internationally significant 'challenge centric' flagship approach that addresses a national
challenge (with visible and measurable impact) and that draws from a range of disciplines would
be a key part of the type of compelling proposition now needed to differentiate Ireland as a
location of choice.
243 Knowledge Transfer Ireland provides a web portal through which enterprises can identify and link
with potential researchers of relevance to their needs, http://www.knowledgetransferireland.com/
244 Haugh, D. (2013) From Bricks to Brains: Increasing the contribution of knowledge-based capital to
growth in Ireland, OECD Economics Department Working Papers No. 1094. http://www.oecdilibrary.org
245 Based on the submission received from American Chamber of Commerce Ireland in response to the
DEJI Consultation with Regard to the Formulation of a Successor to the Strategy for Science,
Technology and Innovation

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The supply side in Ireland also presents challenges for the strengthening of RD&I collaborations
and knowledge transfer. A recent review undertaken by DJEI concluded that although there has
been considerable progress made in terms of developing Ireland's RD&I infrastructures, there is
currently unmet demand for research services especially in upper-middle and high Technology
Readiness Levels
246
(TRL) areas. Market-focused RD&I services such as consultancy, contract
research (for example, for testing and certification) and short-term applied contract research
(including demonstration) is not provided on a significant scale to industry by the existing
research centres
247
.
It is estimated that currently Irish based companies spend about 37 percent of their outsourced
RD&I outside Ireland
248
. At the same time, Irish research centres attract relatively little
investment from abroad, creating an RD&I trade deficit for Ireland. If Ireland is to boast an
internationally competitive research ecosystem, and to realise the policy objective to stimulate
increased RD&I activity by enterprises based here, we need to build capacity in these areas while
sustaining existing levels of investment in building our scientific excellence. Addressing this issue
is key if we aim to considerably strengthen our capacity for collaborative research, to leverage
state investment in scientific excellence and to accelerate economic impact. This could be
achieved (to some extent) by evolving and strengthening the existing research centre base.
A changing enterprise structure - innovation in services and business processes
Manufacturing and the making of things will remain a fundamental component of Ireland's
enterprise policy. Manufacturing is a key driver of innovation, provides a strong base for
attracting more foreign direct investments in RD&I activities, and is core to the provision of
customer centric solutions
249
. That said, the increasing contribution to economic growth from
services is likely to continue over the coming decade and we need to ensure that our policies
are attuned to the different characteristics of services activities.
Innovation in Services and Business Processes (ISBP) is one of the national priorities identified in
Ireland’s National Research Prioritisation Exercise. It is absolutely critical that our policies adapt
to facilitate and stimulate innovation in services. Services innovation is difficult to define largely
because of its intangible nature - broadly speaking service innovation is new or significantly
improved service concept that is taken into practice. A service innovation includes replicable
elements that can be identified and systematically reproduced in other cases or environments.
Service innovations include, for example, new solutions in the customer interface, new
distribution methods, novel application of technology in the service process, new forms of
operation with the supply chain or new ways to organise and manage services
250
. Service
246 Technology Readiness Levels are a measure of the maturity or proximity to market of a technology.
Lower TRLs (1-3) include demonstration of basic principles through to proof of concept. Medium TRLs
(4-7) span technology validation and prototype demonstration and higher TRLs (8-9) refer to pre
commercial deployment up to market introduction
247 Only businesses in the sectors served by Tyndall, NIBRT and Teagasc have access to such services,
this issue was also highlighted in Making it in Ireland, Manufacturing 2020, Forfás, 2013
248 The spend by Irish-based enterprises on outsourced RDI is estimated at €765 million in 2013
249 See also, Making it in Ireland, Manufacturing 2020, Forfás, 2013
250 Tekes: Finnish Funding Agency for Technology and Innovation

98
innovations encompass non-technological elements and generally require structural change
involving new technological, human or organisational capabilities of the service organisation
251
.
The process for innovation in services differs in a number of respects from research typically
carried out in HEIs, although innovation in services might draw from relevant research
undertaken by them. For example, the timescale for research is much shorter, end users
(customers) are typically centrally engaged in a more iterative process, and the research is
multidisciplinary in nature. Services innovation draws from research in a broad range of
disciplines, including for example behavioural analysis, ethnography, artificial intelligence, data
analytics as well as sensor and information and communications technologies.
Innovation in services and business processes can have a transformative impact and not only for
businesses - delivering increased value added and competitiveness for business, tangible
economic impact, increased efficiencies and reduced costs for public services, and wider societal
benefits (e.g. improved healthcare services and outcomes).
Internationally, policy for this type of innovation is still very much an evolving area. There is a
wide variety of government approaches and initiatives in terms of scope, policy priorities,
available resources, the stakeholders engaged, as well as the mechanisms and instruments used.
Because of the multi-disciplinary, iterative approach involved in the process, a ‘grand’ challenge
approach may be the most appropriate to deliver high visibility demonstrators with potentially
high impact that will be realised across the economy. Additional (and complementary) action
should focus at directly supporting enterprises to engage in services innovation by putting in
place an initiative that caters to the different approaches/concepts inherent in service
innovation. Enterprise Ireland has recently introduced a pilot initiative in this context252
, and we
will maintain a watching brief on the initiatives being delivered by other innovation leading
countries and to assess their relevance to Ireland's context.
Ensuring availability of talent
We have identified talent as one of the key areas in which Ireland can differentiate its economy
over the coming decade. We will place an emphasis on developing, attracting and retaining the
people that are core to delivering on our enterprise policy ambitions – underpinned by
innovation and productivity (Refer to section C – Differentiators: Talent).
It is people who innovate. It is people who drive excellence in scientific research. Our
investments in building Ireland’s research capacity over the past decades has been delivering
the talent required by the research community and innovative enterprises today and includes:
the Programme for Research in Third Level Institutions (PRTLI) which involves investment in
infrastructures and human capital aimed at strengthening national research capabilities; SFI
investments that deliver 4
th
level graduates and highly skilled researchers
253
; and the Irish
Research Council that funds early stage career researchers across all disciplines.
251 Service Innovation, Performance and Policy: A Review, van Ark, B. and den Hertog, P., Ministry of
Economic Affairs, 2003
252 Business Innovation initiative
253 SFI delivers a range of programmes including investments in National Research Centres (Hub and
Spoke model) and those aimed at developing early and mid-career researchers incl. Starting
Investigator Research Grant (SIRG), Career Development Awards (CDA) & President’s Young Researcher
Award (PIYRA)

99
The National Strategy for Higher Education to 2030 reaffirmed the fundamental importance of
excellent teaching, quality in research and knowledge transfer and effective engagement
between higher education and society
254
. Over the coming decade, we need to ensure that we
provide a sustainable supply of researchers to meet the future needs of industry and to continue
to deliver excellence in the research community. While the evidence shows that there has been
in increase in the numbers of researchers working in Irish and foreign owned enterprises here in
Ireland
255
, there has been a decline in the numbers of PhDs coming through the system. Our
new Strategy for Science, Technology and Innovation will consider the actions necessary to
redress this issue taking into account the ambition set out in this Enterprise Policy 2025.
In addition to developing our own people, we also need to continue to attract talent to Ireland,
and particularly in areas that align with our national priorities for enterprise development, and
where we can build international visibility and scale in our research base.
Intellectual property
Internationally, recent studies show that 39 percent of total economic activity and 26 percent of
employment in the EU is generated by Intellectual Property (IP) intensive sectors, and jobs in
these sectors enjoy a wage premium, with 40 percent higher remuneration compared to non-IP
intensive sectors
256
. The growing significance of IP is reflected in the more multi-faceted uses of
IP for business purpose. The use of patents has extended from the traditional 'insurance
premium' to cover income generation (out-licencing), marketing functions, enabling
collaborations (e.g. open innovation) and attracting investors. IP instruments include patents,
trademarks, copyrights, industrial design and trade secrets. IP management and exploitation has
become a decisive success factor for business in many innovative sectors.
A recent analysis of IP activity in enterprises in Ireland indicates that
257
:
activity in formal and registered IP is low in Ireland relative to selected comparator
countries - although economic structure is a factor. Trade marks appear to be well utilised
among Irish based firms operating in national and international markets and the gap
between the Innovation Leaders and Ireland is much narrower in this respect than it is for
patents and industrial design rights;
for IP active firms, both formal and informal IPRs are of importance across the key sectors
in Ireland. Formal, unregistered IP such as copyright and trade secrets are employed
across a number of sectors, and informal, unregistered mechanisms such as complexity of
design and lead time advantage are regarded as important by many IP active enterprises;
254 See also The Higher Education System Performance Framework 2014-2016, Department of
Education and Science, that includes the system objective to: maintain an open and excellent public
research system focused on the Government’s priority areas and the achievement of other societal
objectives and to maximise research collaborations and knowledge exchange between and among
public and private sector research actors
255 The number of research personnel working in Irish and foreign owned firms in Ireland in 2013 was
24,785, compared with 13,950 in 2007, BERD 2014-2014, CSO Statbank
256 Intellectual Property Rights Intensive Industries in the European Union: Industry Level Analysis
Report, September 2013, A joint project between the European Patent Office and the Office for
Harmonisation in the Internal Market
257 Enhancing the IP Activities in the Firm Base in Ireland, An independent report by Technopolis for
the Department of Jobs, Enterprise and Innovation, June 2015

100
barriers to engagement in IPR use vary according to firm size and age, and are also
influenced by sector and ownership. For example, for micro and small firms cost is
perceived (at least) to be high, and these firms struggle with the internal capacity to
manage IP. More mature firms can consider the pursuit of IP as too complicated.
The findings indicate that there is scope to improve IPR usage in firms in Ireland, and that there
is most scope to help Irish owned enterprises to do more with IPR. In particular, there is a need
to support the development and improvement of IP management capability across the
enterprise base. The focus should be on both quality and quantity of IP and on all forms of IPR,
from formal to informal and registered to unregistered. We will also place a focus on steadily
increasing the usage of IPR in innovation active internationally trading enterprises with a view to
deriving more economic value from knowledge generation.
Enhancing innovation in enterprise
Bring forward a successor to the Strategy for Science, Technology and
Innovation, which will underpin the development of Ireland as an innovation
economy, built on excellence in strategic areas of research, on market-driven
translation into commercial opportunities of the technology and research
capabilities and on entrepreneurship. Key elements of innovation policy over
the coming decade will include:
building on existing research capacity and infrastructure, ensuring
that a broad base of support is in place across the full continuum
of research and including at the higher (closer to market)
Technology Readiness Levels;
exploring the options for a cross government ‘grand challenges’
approach that ‘creates’ a market for innovative products and
services and addresses specific national priorities;
using the State’s circa €8.5 billion procurement budget to stimulate
innovation in SMEs to develop solutions to meet the needs of the
public sector including through rolling-out further Small Business
Innovation research (SBIR) initiatives;
ensuring that Ireland’s Intellectual Property (IP) framework remains
fit for purpose and stimulating an increase in activity by enterprises
across all forms of IP;
promoting innovation in services and business processing with
measures tailored to the unique characteristics of this activity;
ensuring supply of researchers and human capital to underpin an
innovative enterprise sector; and
promoting greater collaboration between enterprise and HEIs
including increased mobility between industry and academia.
DJEI
Establish appropriate governance and institutional arrangements to facilitate a
cross government approach to implementation of the SSTI so as to create a
dynamic, cohesive and well-functioning national innovation eco-system that
delivers economic and societal impact and outcomes.
DJEI

101
Achieve a 30 percent increase in the number of Irish and foreign owned
enterprises with innovation activities of scale, and broaden the base of RD&I
activity in Irish based enterprises generally.
EI, IDA, LEOs
Monitor our R&D Tax credit offering to ensure it has an appropriate impact on
R&D activity in enterprise, is internationally competitive, is attuned to evolving
enterprise sectors and activities, is not overly complex or administratively
burdensome on business and to ensure clarity and consistency for enterprise.
DoF
Drive participation in EU and international research programmes in areas of
relevance and impact to the economy and enterprise base so that we achieve
the ambitious target of €1.25bn for Horizon 2020, led by the national support
network based in Enterprise Ireland.
Deliver the ex-post evaluation of the FP7 programme and ex-ante evaluation of
Horizon2020 so that we take the necessary and appropriate actions to maximise
potential and impact towards the target of €1.25bn drawdown by 2020.
DJEI/EI
Innovativeness – a mind-set, a culture and way of working
The concept of innovativeness envisages a pervasive innovation, implemented by routine across
operations, involving a high degree of entrepreneurialism amongst the management team and
extending across the workforce as a whole. At the level of the enterprise this innovativeness is
demonstrated through certain characteristics
258
. These include strong leadership that is market
focused, open to new ideas and demonstrates the ability to forge strong client relationships.
Continuous learning is embedded within the organisation, fostering capabilities to spot and
respond to opportunity. There is openness to new ideas from wherever they stem within the
firm. Understanding customer needs, managing this relationship and strengthening the
feedback loop into research and development will become increasingly important as companies
seek to deliver customised, innovative products and services at ever shortening lead time and at
the highest quality levels in an intensively competitive environment. In the manufacturing
context, for example, the required responsiveness to deliver tailored solutions specific to
customer needs will have implications for work practices and internal processes (involving for
example, innovation in agile processes, lean principles and workplace innovation). The ability to
collaborate is also relevant - and not only between enterprise and research institute, but also
between enterprises.
These characteristics point to a particular culture or mind-set that is embedded throughout the
enterprise. A policy focus on stimulating this mind-set change is pertinent if we wish to make a
step change in the ability to innovate and to building absorptive capacity within the smaller
enterprise (an absorptive capacity which cannot 'sit' with one person only).
There are a number of relevant aspects pertaining to building absorptive capacity, including:
258 See for example: Making it in Ireland, Manufacturing 2020, Forfás, 2013; Innovation in Agency
Supported High Growth Firms, Forfás, 2013; The Report of the High Level Group on Manufacturing,
DJEI, 2008

102
management capabilities - including the ability to identify new areas of opportunity that
requires an openness to exploring networks, building relationships and accessing external
capacities through scanning and collaborating;
employees’ level of education - the more education and training an employee receives,
the higher his or her individual ability to assimilate and use new knowledge will be. Small
enterprises can benefit from having well-educated technicians, engineers and specialists
to access knowledge from outside their boundaries
259
- or a gatekeeper whose role it is to
screen the environment for knowledge and transforming the relevant knowledge so that
it can be understood by other employees
260
; and
a learning culture within the organisation - organisations that create an open
environment for continuous learning stimulate the continuum through from searching for
new ideas through to recognising those that might lead to the creation of new products,
processes or services. This gaining of continuous knowledge has a positive feedback
cycle as it builds the capacities and capabilities for future innovation activity.
Absorptive capacity, once recognised and established as a system, promotes the search for new
knowledge that greatly increases the capacity to make the necessary new connections for
innovation to happen. We need to recognise and acknowledge that different companies are at
different stages of the process of building absorptive capacity and that a broader change
agenda within the workplace can start to foster creative thinking and we need to tailor our
policy responses accordingly. This cultural shift is also directly relevant to the future ways of
working as set out in Section C – Talent).
Changing a culture within a well-established enterprise is much easier said than done.
Nevertheless there are frameworks, approaches and interventions available that will support this
desired uplift in entrepreneurial and innovative attitude and openness to change in the first
instance, which should go some way to initiating improved absorptive capacity.
Embracing cultural change in the enterprise
Lean principles as an enabler
Although not generally 'positioned' within the context of innovation, the adoption of Lean
principles is fundamentally about a change in culture and of ways of working. Over the past
number of years, Enterprise Ireland and more recently IDA Ireland introduced supports for
companies to enhance productivity, improve competitiveness and realise transformational
change based primarily on Lean principles261
.
Often Lean initiatives are interpreted as (only) about cutting costs or eliminating waste and as
(only) being of relevance to manufacturing activities. However, an enhanced understanding is
developing of the pervasive nature and end-to-end business implications of these initiatives that
259 External Linkages and Innovation in Small and Medium-sized Enterprises, Rothwell R. & Dodgson
M. in R&D Management, 21, 125-137, 1991
260 Aborptive Capacity – One Size Fits All? A Firm Level Analysis fo Absorptive Capacity for Different
Kinds of Knowledge, Tobias Schmidt, Discussion Paper No 05-72 , Centre for European Economic
Research
261 Enterprise Ireland's Lean Business Offer is tailored so that it can cater to the needs of enterprises
depending on size and stage of engagement with Lean. Other systems such as Six Sigma are also
mechanisms that help to reduce variability and enhance productivity and competitiveness overall

103
require change management expertise to harness people's commitment, attitude and
capabilities. A successful transition to Lean principles is not a 'project' based initiative per se, but
harnesses the creativity and problem solving capabilities of an empowered workforce. In short,
it fundamentally changes the way of doing things
262
. This cultural shift, openness to learning,
emphasis on an empowered workforce with enhanced capabilities in problem solving and
applying creativity to do so establishes an environment for increased innovation.
There is emerging evidence of increasing peer-to-peer learning across companies, sectors and
ownership. This type of engagement allows for 'hand-in-the wound' information sharing across
all levels of the enterprise and is also one of the more powerful tools for stimulating interest
across a wider cohort of enterprises.
In the context of a changing enterprise structure, we need to consider how principles such as
Lean, Six Sigma etc., can be adopted in or adapted to the service environment. Lean isn’t about
manufacturing. It is about standardising work processes to make problems visible and
developing employees' critical thinking ability. Progress is being made by Enterprise Ireland in
terms of engaging services based companies in its Lean programmes, with examples of
operational improvements being made by the early adopters in services and software
companies.
Initiatives are delivered by the enterprise development agencies, the LEOs and Skillnets tailored
to meet the needs of their specific cohort. The IMDA has recently introduced a Lean initiative
that also combines a mentoring element so that a company that has already embarked on a
Lean journey can actively share its experiences and work with the mentee to 'smooth' the
pathway. Sharing of best practice amongst the agencies, industry associations and providers
should continue, with each working in concert and collectively to raise awareness, to develop
and disseminate case studies and to maintain abreast of developments internationally.
Getting companies started - innovation vouchers
The national policy objective is to stimulate greater engagement by a broader cohort of
enterprises and the introduction of the Innovation Vouchers has proved to be delivering
tangible results. Over 1,600 small businesses engaged in the scheme over the period 2007-2012
that encouraged them to take the first steps in innovation activities. The programme was
designed to encourage a transfer of knowledge between the research institutes and the small
business community. An evaluation of the programme undertaken during 2012 indicated that
the programme was successful in establishing new relationships between business and
academia - 61 percent of projects occurred where there had been no pre-existing
relationship263
. This stimulus plays a key role in raising awareness of the benefits of innovation
and of where to source relevant external expertise.
The policy imperative is to stimulate more enterprises to engage in RD&I - and ever more so as
our enterprises face intense international competition, including those companies that continue
to trade on the domestic market and those that remain small by choice. We know that R&D
may not be a realistic proposition for all when we look across the entire economy. Nevertheless,
262 This finding was reported by 50 percent of survey respondents, with an additional 34 percent
indicating that they are 'well on their way to establishing a culture of change' and the remaining 16
percent were 'at the beginning of the journey of culture change'; Evaluations of Agency Supported
Business Development Programmes, Forfás, 2015

104
it is vital that at a minimum, an enterprise builds capabilities and networks to take advantage of
R&D undertaken elsewhere. We need to support enterprises in adapting technological advances
to their own circumstances to innovate and improve competitiveness. In some instances,
companies coming together and pooling innovation vouchers to meet a common need would
be a realistic proposition (e.g. retailers seeking to trade on line).
It is important to note that the issue of access to skills - both in terms of skills amongst staff or
access to external expertise - was cited as a key issue to realising commercial benefits
264
.
Building capabilities in leadership and skills for innovation
Highly proficient leadership, with ambition, vision and strong management teams is critical for
establishing the environment that facilitates an innovative culture. Enterprises that have
engaged in management development and/or mentoring programmes tend to outperform
those that have not. There is now a broad range of options available for enterprises, through
from more intense leadership programmes, to more light touch mentor services and/or peer-to-
peer networks that can assist the CEO and owner/manager at every stage of the company
lifecycle
265
. We need to continue to place a strong policy emphasis on management
development across the enterprise base, and tailored to the scale and stage of the development
of the enterprise.
More specifically in relation to building innovation capabilities, design thinking is a process that
has been integrated more fully into innovation policies in other countries
266
. Design is what links
creativity and innovation
267
- design makes ideas tangible. Designers don't just think and then
translate those thoughts into tangible form, they actually think through making things.
The premise of design thinking is that by understanding the tools and methods that designers
use to tackle problems, ideate, and create solutions that organisations will be better able take
innovation to a higher level. Design thinking begins with an open approach to the people, the
problem and the possibilities involved in creating innovative solutions – see design maturity
ladder Figure 8. Where design is made integral to a company's business strategy it has been
shown to consistently yield long term success. For example, researchers tracking the
performance of the US stock market demonstrated that, over a ten year period, design driven
companies outperformed the rest of the S&P index by 228 percent
268
.
264 The primary issue was cited as access to finance
265 Including for example, Enterprise Ireland, LEOs, Skillnets and various mentor and/or start-up
initiatives
266 Examples include Denmark, New Zealand, UK, Norway, Belgium as well as Ireland Source: Design
Driven Innovation: Why it matters for SME Competitiveness, Northern and Western Regional Assembly,
The Circa Group Europe
267 Cox Review UK, 2005, http://webarchive.nationalarchives.gov.uk/+/http:/www.hm-
treasury.gov.uk/coxreview_index.htm
268 DMI Design Value Index, Design Management Institute 2013, http//:www.dmi.org

105
Figure 8 The design maturity ladder
Source: Danish Design Centre
To date, Ireland's focus on design thinking has been relatively limited - although more recently
Enterprise Ireland (in partnership with the IMI) has launched its Innovation4Growth
programme. Design thinking is at the core of the programme. The programme is practical and
involves peer-to-peer and business coaching support to help implement innovation practices,
processes and culture within the company. The Centre for Design Innovation, based in Sligo
Institute of Technology provides design-driven innovation services to both the public and
private sector, including through the Innovation Voucher Scheme
269
. It is proposed that a
review of this programme be undertaken on completion (post December 2016) to assess its
effectiveness and to consider if and how the concept of design thinking can be more widely
promoted. The proposed strategy for the Design Sector will also include a focus on design-
driven innovation.
Mobility between research community and enterprise
There is also the potential to stimulate greater strategic mobility between the research
community and enterprise (and vice versa). SFI's Industry Fellowship programme facilitates the
bi-directional movement of academic and industry researchers. It aims to stimulate excellence
through knowledge transfer and training, thereby building critical mass in areas of strategic
importance for Ireland and enabling economic and societal challenges to be tackled. The Irish
Research Council's Employment Based Postgraduate Programme provides funding for
companies to employ high-calibre researchers to work onsite with them on product, service or
process innovations
270
. Other initiatives such as Enterprise Ireland Graduates for International
Growth provide an excellent bridge between academia and industry.
269 A mentor-led programme Innovation by Design was piloted over a two year period to 2008
managed through the Centre for Design Innovation - recommendations made at the time for a follow-
on programme to be developed has not materialised to date. Source: Design Driven Innovation: Why it
matters for SME Competitiveness, Northern and Western Regional Assembly, The Circa Group Europe
270 To be eligible for this programme a business should have the facilities to conduct the research and
can provide mentorship to the researcher

106
There is the potential to consider how we might best support building absorptive capacity
within smaller scale Irish owned enterprises that are at the start of their RD&I journey. There are
examples internationally of such initiatives, for example only recently (in 2015) Sweden launched
its programme to support personal mobility between academia and industry. The programme
acknowledges the inhibiting factors are generally related to conditions of employment and
views regarding what types of qualifications and experience are considered valuable in academia
and industry. In this programme, the parties themselves can determine the most appropriate
practical arrangements regarding the conditions of employment (e.g. sabbatical/fixed term
contract/ etc.). Concepts such as the Engineering Doctorate in which a company sponsors an
employee to undertaken taught business and technical courses over four years are worth
investigating further in this regard
271
.
The HEI and enterprise relationship - building connections locally and regionally
The HEIs can play a much wider and proactive role in connecting with industry in their locale
apart from RD&I collaboration. Relationships between industry and HEIs are fostered over a
period of time, and may start small and across a much broader agenda. Some HEIs are more
proactive than others, and in some cases the former industry liaison role has been supplanted
by the technology liaison office, thereby 'narrowing' the potential. Having a 'go to' liaison office
serves not only as a valuable information point but could also develop local and regional
'meeting place' activities - involving discussion fora on thematic areas such as skills supply-
demand, sharing of best practice, raising awareness of what's available, exchanging ideas, idea-
generation, showcasing, careers options etc. The DES is currently developing an initiative to
establish regional skills fora aimed at fostering better engagement between DES providers,
employers and other regional stakeholders in building the skills of their regions
272
. Enterprise
Ireland is also piloting a new 'meeting place' concept and approach in a small number of
regions.
Starting relationships across a broader agenda and cultivating them over time leads to other
forms of partnership, awareness raising and a building of trust and addressing the 'know how'
barrier that often presents for small enterprises in particular.
A pro-innovation supportive environment
A pro-innovation regulatory environment
The role of regulation in innovation is complex - it can either act as a barrier by creating
additional costs
273
or as a promoter/demander of innovation through creating incentives and
setting standards that lead to the production of improved products and services
274
. This might
include, for example, environmental or safety standards that stimulate innovation in new
products (e.g. for the construction sector in terms of materials and 'smart' buildings, for
manufacturing in terms of materials, energy usage and emissions). The challenge for
government is to make regulation increasingly pro-innovation without compromising the
271 https;//www.tu9.de/tu9/en/1495/php. Postgraduate education programme sponsored by Britain’s
Engineering and Physical Sciences Research Council (EPSRC)
272 This is set out in more detail in the Place-making chapter within Section C - Differentiators
273 Costs of regulation are discussed in Section E in the Cost Competitiveness chapter
274 Innovation Nation, UK Department for Innovation, Universities and Skills, 2008

107
protective role that it plays. These challenges are evident with the emergence of new and
emerging sectors, activities and business models - for example, new financial products (e.g.
fintech), combination products (e.g. ICT and med tech and/or pharma), or the sharing economy.
The Government White Paper Regulating Better
275
set out the six guiding principles of good
regulation, namely: necessity; effectiveness; proportionality; transparency; accountability and
consistency. The White Paper introduces the notion of performance based regulation by which
the policy-goal or end is stressed rather than the means - thereby allowing the possibility of
novel rather than prescribed solutions
276
. This concept is particularly pertinent (although not
solely) in the context of SBIR and proposed ‘grand challenge’ initiatives. The Statement of
Economic Regulation 2013
277
reviewed these principles and set out the actions required to apply
them in practice.
Standards and innovation
The setting of standards and/or their application plays an important role in the context of
innovation. In the past number of years the role of standardisation as a bridge between research
activities and the market has been increasingly recognised, both by EU institutions and by R&D
stakeholders
278
. Standards create a common framework for innovation and establish the ‘rules
of the game’ by defining common vocabularies, by establishing the essential characteristics of a
product or service, and by identifying the best practice within the ecosystems. They also provide
a basis for the integration of technologies into complex, innovative systems and solutions, and
assist in ensuring interoperability. The translation of research results into new standards (e.g.
terminology in a new area, new measurement methods, application of new technologies,
organisation of innovative services, good practices etc.) can facilitate the innovation uptake on
the market. Essentially standards allow faster uptake of innovative solutions and enhance the
economic value of research and innovation projects.
The National Standards Body in Ireland (NSAI) is an important element of Ireland’s overall
innovation and enterprise ecosystem and is Ireland’s gateway to standard development. As a
member of the European and international Standard Development Organisations (SDO)
279
, NSAI
has access to the current state of the art with respect to standard development. NSAI
formulates standards through consultation with various interested consumer, environmental,
industry and government parties. For the enterprise itself, participating in standards
development alongside other stakeholders provides a tremendous opportunity in that it
increases awareness, provides network opportunities as well as the potential for scientific or
commercial collaboration. Companies can participate on a voluntary basis (through NSAI) as a
member of a Standards Consultative Committee or international Committee, or by commenting
on National and International Consultation drafts through Your Standards, Your Say
280
.
275 Regulating Better, A Government White Paper setting out Six Principles of Better Regulation,
Department of the Taoiseach, 2004
276 Ibid
277 Regulating for a Better Future, A Government Policy Statement on Sectoral Policy Regulation,
Department of the Taoiseach, 2013
278 For example, standardisation is identified in the proposal for Horizon 2020 as one of the measures
which will support the market take-up of innovation
279 Such as CEN, CENELEC, ETSI, ISO, IEC etc.
280 http://www.nsai.ie

108
NSAI also provides advice and supports to industry and research groups through its Standards
Education and Promotion Team. It is important too, that our students are exposed to the
importance of standards and standardisation during their education rather than when they enter
the workforce – so that they have the knowledge, skills and competence to search for, identify
and use those standards that are applicable to them (in their area of study, research or
employment). In this regard, NSAI provides guest lectures to HEIs around the country as part
of a national programme to provide information on how to search for and identify Standards,
and on the breadth of standards which apply in their respective fields.
Competition policy
Effective competition is a key driver of innovation, productivity and long term growth in
business. In a dynamic market-place the threat of entry and the possibility of failure are strong
drivers of competition for enterprises. Incumbents will either adapt or fail. Competition
stimulates innovation as enterprises invest in the development of new products, processes or
services. Competition also promotes diffusion of technology as enterprises seek to improve
productivity by adopting processes or products which may have been developed by market
leaders. Ireland’s openness to international competition provides that stimulus for many of our
enterprises. We need also to ensure that our competition policies drive competition across all
market sectors of the economy, as enterprises that operate in activities that are sheltered from
competition have little incentive to invest in new technologies or to innovate and improve
productivity performance. Section E chapter on Cost Competitiveness sets out the strategic
policy action required.
Facilitating a culture of innovativeness across all of enterprise
Develop new approaches appropriate to the scale and capability of the firm to
boost the absorptive capacity of the enterprise base and to stimulate a shift in
culture and mind-set including:
the introduction of Lean principles and approaches to problem
solving and including manufacturing and services activities;
broadening the reach of programmes catering to management
development for the innovative enterprise; and
stimulating cross industry-research community mobility through for
example, secondments and placements.
EI, LEOs, IDA
EI, LEOs
EI, IDA
Ensure our regulatory environment remains sufficiently agile in an increasingly
disruptive innovative environment to accommodate sectoral development and
emerging areas of potential.
Various
Strengthen the role of NSAI as a crucial element of Ireland’s sectoral and
innovation ecosystem, by promoting the benefits of standards to the widest
cross section of industry and ensuring that its focus is aligned with Enterprise
Policy 2025 and informed by the future needs of enterprise.
Raise awareness of the importance of standards in the context of RD&I and
encourage more companies to participate in the standards setting process.
DJEI, NSAI
NSAI, EI

109
Connectedness
Introduction
Connections within the business world have become increasingly complex and global, enabled
by digital communications technologies, ease of travel, trade liberalisation; they are also
increasingly necessary in the quest for competitive advantage and critical mass. As a small open
economy, and with a far reaching diaspora throughout the world, Ireland has a strong
awareness and experience of connectivity beyond our shores. We rely on our ability to connect
in a range of contexts for economic development and growth - through business networks,
trade and investment relationships, partnering, sourcing of talent, collaborative innovation etc.
The application of digital technologies such as data analytics, embedded sensors, social
networks internet of things etc. has facilitated any time any place access to vast amounts of
information and intelligence that connect businesses to customers/customer feedback, facilitate
new ways of working (workplace without boundaries), and transform how businesses structure
their operational footprint globally through global value networks (GVNs)
281
. The march of
technology and its wider adoption will see a progressively smarter and connected world over
coming decades and increasingly more businesses deriving competitive advantage from these
evolving applications.
We have seen how the contagion effect and interconnectedness of global capital relationships
turned apparently domestic banking crises into a global financial crisis. The ‘emerging markets’
are asserting themselves in the global economy as markets in their own right, as sources of
innovation, and sources of global capital flows and making their presence felt in the global
economy. There is much commentary on the next tier of emerging markets (including Mexico,
Argentina, Indonesia, Nigeria, Turkey, Thailand, Philippines, Vietnam etc.)
282
.
Trade liberalisation has grown over the past 20 years, such as the commencement of
negotiations between the US and the EU on a transatlantic trade and investment partnership
(TTIP) or the potential emergence of ‘ASEAN+6’ an integrated regional market of 16 countries in
the Asia-Pacific region
283
. Developments such as these create more trade opportunities, but also
bring in to sharp relief the reality of intensifying global competition. While trade liberalisation
has advanced globally, unintended consequences have also emerged, for example, increased
technical barriers to trade. It is also the case that the EU’s deep and comprehensive agreements
are provoking reactions from civil society.
281 Global value networks, also referred to as global value chains is a concept used to describe how
businesses structure their corporate footprint globally, through spatial disaggregation of their value
chains to take advantage of location specific advantages, e.g. market access, expertise, cost base etc.
282 See for example The Global 20: Twenty huge trends that will define the world for decades; Business
Insider, http://businessinsider.com/business-insider-global-20-2014-2014-1?op=1, and Throwing Light
on the Future: Mega Trends that will Shape the World, Sarwant Singh, Frost & Sullivan, 2011
283 Also known as the Regional Comprehensive Economic Partnership (RCEP). It includes the
Association of South East Asian Nations (ASEAN) plus Australia, Japan, New Zealand, South Korea,
China, India, ‘Talks on ASEAN+6 trade bloc to kick off in May’, L. Yulisman, The Jakarta Post, Jakarta
Business, 3/1/13

110
And just as there are increasingly far reaching relationships spatially across the globe, there is
also a continuing propensity for firms and other related actors to co-locate and to form
mutually supportive relationships in clusters, based on sub-supply relationships, dynamic labour
pools, innovation partnering, informal networks, joint ventures and marketing initiatives.
This focus on connectedness examines how enterprise policy can help Irish based businesses to
leverage the advantages of an increasingly connected global economy to best effect for
employment creation and economic growth, focusing on our trade and investment strategy, the
potential offered by increased digitisation, the implications of GVNs, and increasing importance
of inter-firm and other broader ecosystem relationships in more localised settings as well as
internationally.
Ireland's trade imperative
Ireland's openness to trade and investment, and the relationships that we establish and build
with existing and potential trade partners are critical to enterprise growth and economic
performance. Trade and investment activity encompasses the export and import of goods and
services, and various modes of foreign direct investment (FDI) flows (inward and outward). These
headings belie what is an increasingly complex set of activities and international relationships
284
.
These activities are variously governed by international trade and investment agreements on a
bilateral, plurilateral or multilateral basis which aim for greater trade liberalisation, regulatory
convergence and greater economic integration. At the same time, a variety of barriers continue
to exist and new ones emerge that hinder international trade and investment between countries.
As a member state of the EU, the framework for Ireland’s global trade access is set down by the
EU
285
. For this reason, our relations with the EU and other Member States within the EU are of
critical importance as the trade agenda is drafted and negotiated.
There are many factors that influence trade and investment performance in a global context,
and over the period to 2025, these will continue to include: continued trade and investment
liberalisation, the emergence of regional trading blocs, the growth and increasing global impact
of emerging economies, and unpredictable changes in the geopolitical landscape (such as a
possible British exit from the EU, international political unrest etc.).
The Review of Trade, Tourism and Investment Strategy 2010-2015 (TTIS) and the original
strategy
286
set out the Government’s overarching approach to Ireland’s trade and investment
promotion activities and a policy agenda in relation to the underpinning enablers including: firm
level capabilities; business environment factors; and trade and investment agreements. The
284 For example, trade in services involves cross-border supply, consumption abroad, commercial
presence, and presence of a natural person (the four modes); while inward and outward foreign direct
investment encompasses greenfield investment, M&As, joint ventures, and investment of sovereign
wealth funds abroad
285 The negotiation of bilateral, plurilateral and multilateral trade and investment agreements is an
exclusive EU Commission competence under the Lisbon TFEU (Article 207) which it undertakes on behalf
of Member States. In other words, only the EU, and not individual Member States can legislate on trade
matters and conclude international trade agreements
286 Trading and Investing in the Smart Economy: A Strategy and Action Plan for Irish Trade, Tourism
and Investment to 2015, DJEI, 2010

111
following paragraphs outline Ireland’s recent trade and investment performance and global
developments with a medium to longer term view which are of relevance in the context of
framing the next TTIS
287
.
The global context for trade and investment
A fundamental factor in our trade and investment performance and the success of our strategies
over the coming decade will be the external environment, including the economic performance
of our main trading partners and broad global trading conditions. And while this is the case, it
has also become more difficult to predict how Irish exports will respond to broad changes to
global demand. Factors such as the considerable growth in services exports within our trade
portfolio and also Ireland’s high degree of participation in complex global value chains (see
below) has contributed to a more a-cyclical relationship between our export trade performance
and global demand generally
288
.
World trade
World trade in 2014 is estimated by the WTO at US$23.3 trillion
289
. While the level of trade
remains above pre-crisis levels, growth has slowed considerably since 2011. The massive
collapse in world trade in 2009 saw a sharp recovery in 2010 and 2011 with growth rates of
nearly 20 percent in both of these years, followed by a relative levelling off in 2012 to just one
percent and three percent growth in 2013. In 2014 growth remained sluggish with world
merchandise trade stagnating (rising by less than one percent) and services growing somewhat
stronger, increasing by 4 percent. According to WTO analysis, trade expansion globally will no
longer far outstrip overall economic growth as has been the general pattern for decades.
The WTO is forecasting a slightly better performance for world merchandise trade in 2015 and
2016 (expressed in volume percentage terms) with merchandise trade globally growing by 3.3
percent in 2015 and 4.0 percent in 2016 (compared with 2.8 percent in 2013). Risks to these
forecasts are mostly on the downside, with continued uncertainty around the global economic
recovery.
Global FDI
Global FDI has expanded dramatically in value terms over the past two decades, albeit with two
major interruptions coinciding with the dot com collapse in the early 2000s and more recently
with the impact of the international recession. The expectation from commentators globally is
that there will be further FDI growth over coming years as MNCs regain confidence and turn
record levels of cash holdings to strategic investments290
. Recent data relating to global FDI
continues to show a volatile picture however, as global uncertainty continues.
287 The focus here will be on trade and investment promotion and international trade relationships.
Policy priorities relating to firm level capabilities and the business environment in Ireland are covered in
more detail elsewhere in this document, e.g. Section C – Differentiators; Section E – Excelling in getting
the basics right
288 The Changing Nature of Irish Exports: Context, Causes and Consequences, Central Bank of Ireland,
Quarterly Bulletin 02/ April 15
289 Trade Statistics and Outlook: WTO Press Release 14th April 2015

112
In 2014, global FDI inflows declined by eight percent, having exhibited an increase of almost
three percent in 2013 over 2012 levels
291
. Flows to the European Union have dropped from
highs of $701 billion in 2000 and over $850 billion in 2007 to $235 billion in 2013 although have
grown again in 2014 by 13 percent to $267 billion
292
, countering the overall global performance.
Inflows to developing countries have remained resilient and in 2014 accounted for 56 percent of
global FDI flows, reaching in excess of $700 billion, the highest level on record. Developing Asia
has been the main driver of this sustained growth in FDI flows to the developing economies.
Analysis of mobile greenfield investment projects, i.e. those that are most actively competed for
by governments and investment promotion agencies (IPAs) globally, shows a gradual and
sustained downward trend since 2010 in both project numbers and the associated employment
generated
293
.
The geographical distribution of FDI mobile projects has seen considerable change in recent
years with Asia in particular rising to prominence and continuing to increase its share of mobile
investment activity (rising from 31 percent in 2011 to 35 percent in 2013). Europe grew its share
of investments to 29 percent in 2013 (having dropped back to 25 percent in 2012), perhaps
signalling return of confidence among corporate investors in relation to European economic
conditions. Performance is mixed amongst European countries however. IBM data indicates that
several countries in the Western Balkans (including Serbia, Macedonia and Bosnia-Herzegovina)
are beginning to establish themselves as the next wave of preferred locations for companies
looking for lower cost alternatives and talent pools as alternatives to the more established
Central Europe
294
.
Looking out over the decade to 2025, Ireland’s prospects for FDI will play out in an increasingly
competitive environment for a reducing pool of mobile projects (at least in the short-term,
based on recent trends). Ireland’s recent strong performance in terms of new name and
expansion FDI is particularly remarkable against this backdrop. An important consideration in
relation to FDI is that international capital flows and investment can take many forms depending
on the context and motivations behind investment decisions by individual firms. Increasingly,
the motives for FDI are based on seeking strategic assets and capabilities which brings mergers
and acquisitions (M&A) and various forms of partnering very much into the frame alongside
more traditional greenfield FDI projects. Cross-border M&A activity grew by 19 percent in 2014
compared with three percent growth in global greenfield FDI
295
.
World tourism
Tourism performance globally tracks economic conditions generally. The number of
international tourists exceeded 1 billion for the first time in 2012 and has increased by 4.3
percent in 2014, reaching a total of 1.13 billion
296
. The numbers are expected to increase at a
moderate rate to reach 1.8 billion by 2030
297
. Major emerging tourism economies, particularly
291 Ibid
292 Ibid
293 Global location Trends: 2014 annual report, IBM Corporation, 2014
294 Ibid
296 Tourism Highlights 2015 Edition, UNWTO, 2015
297 Tourism Towards 2030: Global Overview, World Tourism Organisation (UNWTO), 2011

113
Asia and the Pacific, are experiencing rapid tourism growth, outperforming OECD and global
averages and changing the structure of the global tourism market. Between 2010 and 2030,
tourist arrivals in emerging destinations (+4.4 percent a year) are expected to increase at twice
the rate of those in advanced economies. Nevertheless, Europe is still expected to lead in terms
of international arrivals received per 100 population in the period to 2030. The mix of highly
attractive tourism destinations, high tolerance and stable political climate give Europe an
unparalleled advantage in the world tourism market. Asia and the Pacific is expected to be the
outbound region that grows most over the period.
The UNWTO predicts that international tourist arrivals to Northern European countries
(including Ireland) will grow by an average of 1.8 percent per year from 2010 to 2030. However,
the Government’s Tourism Policy Statement People, Place and Policy: Growing Tourism to 2025
includes a more ambitious target to grow overseas visit numbers from 7.6 million in 2014 to 10
million in 2025 (a 2.53 percent per annum rate of growth).
International trade liberalisation
Trade liberalisation continues apace globally. A feature of more recent trade and investment
negotiations and agreements involving the EU is that they are now typically broad in scope,
involving not just the removal of import tariffs but also seek to address a complex array of trade
related issues, including regulatory barriers, intellectual property rights, government
procurement, the protection of innovation, sustainable development (including decent work,
labour standards and environmental protection) etc.298
.
Investment is now part of the EU’s Common Commercial Policy and an EU comprehensive
investment policy is being introduced progressively. Existing bilateral investment agreements
(also known as Bilateral Investment Treaties or BITs) between individual Member States and
third countries will be replaced over time by EU-wide agreements
299
. The aim is to support legal
certainty and transparency in international investments and to assure investors that they are
able to operate in an open, properly and fairly regulated business environment, both within and
across a host country’s borders. The proposed policy does not intend to replace the investment
promotion efforts of Member States
300
.
The EU-Canada trade and investment agreement is the first occasion where EU-wide rules on
investment were negotiated as part of a broad trade agreement. Negotiations on individual
standalone investment agreements are also feasible, as in the case of China and Myanmar
(ongoing). The EU also actively participates in work on international investment conducted in
international fora such as OECD, UNCTAD, WTO, G7 and IMF. Economic Partnership Agreements
(EPAs) with African countries can form the basis of more comprehensive trade agreements as
trade relations deepen with the continent.
Following recently agreed EU free trade agreements (FTAs) with Korea, Singapore and Canada,
as we look out to 2025 there are several significant FTAs and investment agreement
negotiations that are expected to advance over the decade; these include:
298 Trade, Growth and World Affairs: Trade Policy as a Core Component of the EU’s 2020 Strategy,
COM (2010) 612
299 Towards a Comprehensive European International Investment Policy, COM (2010) 343 Final, July
2010, Brussels. Ireland is the only EU member state that does not have BITs in place with third countries
300 Ibid

114
United States – Transatlantic Trade & Investment Partnership (TTIP)
Japan – Free Trade and Investment Agreement
India – Free Trade and Investment Agreement
Mercosur (Argentina, Brazil, Paraguay, Uruguay, Venezuela)
ASEAN
301
– FTAs with Singapore
302
, Malaysia, Vietnam
303
, Thailand
China – Comprehensive Investment Agreement
Mexico – Free Trade Agreement
Russia – Update to existing Partnership & Cooperation Agreement including trade and
investment provisions (stalled).
The EU is also involved in major plurilateral negotiations such as the Trade in Services
Agreement (TiSA) and the Environmental Goods Agreement (EGA). TiSA aims to open up
markets and improve rules in areas such as licensing, financial services, telecoms, e-commerce,
maritime transport, and professionals moving abroad temporarily to provide services
304
. The
EGA negotiations are aimed at liberalising trade in environmental goods with discussions
focused on reducing tariffs
305
. The EU is also participant to the International Technology
Agreement (ITA) represents about 97 per cent of world trade in information technology
products. The ITA provides for the now 80 participants to completely eliminate duties on IT
products covered by the Agreement. Developing country participants have been granted
extended periods for some products.
Besides the European agenda in relation to FTAs and other trade and investment negotiations,
there is a broader global dynamic of emerging trade relationships conducted increasingly on a
regional basis. According to the OECD, more than 250 Regional Trade Agreements (RTAs) that
have been notified to the WTO are in force and over 30 are under negotiation
306
. These RTAs
will result in strengthened trade relationships amongst the members and can be a stepping
stone to further development of multilateral trade more broadly. They signal the emergence of
strengthening regional forces in world trade and investment that present opportunities for
Europe and Ireland, but also increased competitive challenges.
301 A regional ASEAN agreement is the ultimate objective and should be achievable in the forthcoming
creation of the ASEAN Economic Community
302 FTA negotiations have been completed, need formal approval by EU Commission and then agreed
by Council of Ministers before ratification by the European Parliament
303 EU-Vietnam FTA negotiations are moving into a 13th round as of June 2015
304 TiSA is based on the WTO's General Agreement on Trade in Services (GATS), which involves all WTO
members. The key provisions of the GATS – scope, definitions, market access, national treatment and
exemptions – are also found in TiSA
305 Total global trade in environmental goods reached roughly US$995 billion in 2012, with tariffs on
some products as high as 35 percent
306 It is estimated that there are at least 100 other active RTAs that have not been notified to the WTO
and remain largely outside the purview of monitoring efforts, Deep Provisions in Regional Trade
Agreements: How Multilateral-friendly?: An Overview of OECD Findings, Lejárraga, I. (2014), OECD
Trade Policy Papers, No. 168, OECD Publishing. http://dx.doi.org/10.1787/5jxvgfn4bjf0-en

115
Ireland's recent trade performance
At a broad level Ireland's trade and investment strategy to date seeks to grow exports and
foreign earnings by value and related employment and maximise levels of inward investment
and related employment and other spinoffs. It also seeks to build resilience in markets and
sectors. There is a heavier emphasis on realising the potential of the indigenous cohort in terms
of exports and foreign earnings since most inward investors are already well established
exporters. Market diversity is an important policy consideration for both cohorts but in different
ways; it is important that we are not over reliant on certain FDI source markets, while we also
need to encourage Irish owned firms to diversify their market footprint to build resilience.
The Review of Trade, Tourism and Investment Strategy set some high level performance targets
out to 2015 – employment creation, growth in exports, diversification of export markets, growth
of tourism numbers and revenue, inward investment and revenue growth from the international
education sector (see Appendix V). In the face of difficult global market conditions, Ireland’s
overall trade performance has remained largely positive since the recession
307
.
Exports - broad trends
Ireland has had been successful in expanding its share of the world’s services market in recent
years, reaching 2.7 percent in 2013, up from 1.1 percent in 2000. However, Ireland’s share of the
merchandise and total world markets has declined since their 2002 peak of 1.4 percent. In 2013
Ireland’s market share stood at 0.6 percent and 1.02 percent of merchandise and world trade
respectively
308
.
Total exports from Ireland were a combined €214.9 billion in 2014
309
; the highest exports have
been historically. Over the period of the TTI Strategy from 2009 to the end of 2014, Enterprise
Ireland clients’ exports have increased by 44 percent, already exceeding the target of 33 percent
set out. This represents a continuous year-on-year increase since 2009 and is expected to
continue
310
.
The ABSEI survey allows a distinction to be made between exports from agency-supported
foreign and Irish owned companies. Both cohorts have exhibited strong growth in exports in
recent years (Figure 9). The vast majority of exports by value are generated by foreign owned
firms (87 percent in 2014), although the overall total is boosted by high value inputs sourced
abroad, and there is also a considerable amount of movement of goods and services between
foreign owned affiliates
311
. For this reason it is unhelpful to draw direct comparisons on
performance between the two cohorts in actual value terms.
307 Looking the enterprise base in its entirety, a relatively small number of Irish based firms actually
participate in international trade. The 4,000 agency-supported firms represent just over 2 percent of
190,000 Irish based firms but contributed almost 75 percent to total exports from the State in 2013
308 WTO, http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=IE&Language=E
309 Balance of International Payments, CSO Statbank
310 Driving Enterprise, Delivering Jobs: Strategy to 2016, Enterprise Ireland, 2015
311 For example, in exports overall, CSO Trade Statistics show that non-agricultural materials for further
production accounted for 49 percent of goods imports, which signal a significant reliance on the import
content in the output of industry

116
Figure 9 Value of total exports from agency assisted companies, 2004-2014
Source: DJEI Annual Business Survey of Economic Impact (various years) – 2014 data is preliminary
In relation to the employment performance of exporting companies, IDA is on track to exceed
the target of gross 75,000 jobs by 2015 while Enterprise Ireland will exceed the target of 60,000
gross new jobs by 2016, as per the targets set out in the Review of the TTI.
Export market diversity
The process of transformation of Ireland’s trade, tourism and investment footprint is a long-term
process. Ireland’s strategy is and continues to be that of a portfolio approach which ensures
resilience over the longer-term, accommodating both high growth and low growth scenarios
across a range of target markets. The importance of market diversification has been brought
into sharp relief in the context of currently low economic growth forecasts for the Eurozone and
the possibility of a British exit from the EU following the expected referendum in the UK in 2017.
The objective in future years will be to continue to increase our exports to current main markets
(such as the UK) while also increasing the share of our exports to newer markets.
Overall, amongst agency assisted firms, the share of total exports going to the UK stayed
relatively stable between 2010 and 2013 but in a context of a substantial growth in value terms
over the period. The principal change has been a growing share of exports going to mainland
Europe from 45.4 percent in 2012 to 48.3 percent in 2013.
Focusing on exports from Enterprise Ireland client companies (Figure 10), the data shows that
progress has been made to the end of 2014. Dependency on the UK market amongst EI clients
has lessened due to growth in other markets, particularly the newer markets in Asia and the Rest
of the World. Exports to the UK have continued to increase in value terms.
More detailed analysis shows that excellent progress has been made in relation to the Asia
Pacific region where exports have increased by 79.6 percent from €783 million in 2009312
to €1.4
billion in 2014
313
.
312 Enterprise Ireland Annual Report and Accounts 2009
313 Annual Business Review 2014, Enterprise Ireland (April 2015)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
€m
Foreign owned
Irish owned
All firms

117
Figure 10 Destination of exports (Enterprise Ireland) - 2009 to 2014
Source: DJEI Annual Business Survey of Economic Impact (special calculations) Note: 2014 data
represent preliminary results.
Increased diversification amongst Enterprise Ireland client company export destinations varies
across manufacturing and services firms with manufacturing exports shifting towards Asia and
the Rest of the World, while for services firms the orientation is towards North America and the
Rest of the World. Both Service and Manufacturing firm’s exports have shown a clear reduction
in dependency on the UK market. While the proportion of exports to non UK and EU markets
has exceeded 10 percent for services firms, manufacturing firms exports to these destinations
although growing, remains below 10 percent (Appendix VI).
Recent analysis suggests that approximately half of all Enterprise Ireland supported exporting
companies export to three countries or less (49.3 percent in 2014). However, the data also shows
a growing number of EI supported exporters are exporting to more than five countries over the
period 2009 to 2014 - an indication of a strengthening resilience in market diversity terms. In
2014, 41.8 percent of EI assisted exporting firms exported to more than five countries compared
to 33 percent in 2009
314
(Appendix VI).
Sectoral diversity of exports
At a sectoral level, Ireland's exports overall are diverse but there are a small number of dominant
sectors within goods and services exports. Much of this is due to the dominance of foreign
owned entities in certain sectors. Over time, exports have become more concentrated in certain
sectors and there has been a decisive shift towards services in the composition of our exports
overall. As discussed in Section A, some notable shifts have occurred in Ireland’s exporting base,
including the expanded proportion accounted for by computer services and business services
generally; and the reduced contribution made by machinery and transport equipment.
The pattern is somewhat different across foreign and Irish owned enterprises. Amongst foreign
firms in 2013, the top exporting sectors in manufacturing are chemicals (54 percent), computer,
314 This data reflects only actual respondents to Enterprise Ireland’s Annual Business Report Survey
(2014 is preliminary data)
0 10 20 30 40 50
UK
Rest of Europe
North America
Asia
Rest of World
%
2014
2013
2012
2011
2010
2009

118
electrical and optical (14 percent) and medical devices (14 percent); amongst services the top
exporting sectors are computer programming (56 percent), computer consultancy (26 percent)
and Other IT related services (18 percent). For Irish owned enterprises, the food sector
dominates manufacturing exports (57 percent), with the remainder spread amongst a range of
other sectors. On the services side, Irish owned company exports are again more broadly
dispersed but with larger concentrations in business services (42 percent) and computer
consultancy (24 percent)
315
.
It is difficult at this level of analysis to draw any conclusions about over-reliance. Data and NACE
codes say little about the actual activities being undertaken within individual firms. Analyses
elsewhere have explored concentration and diversity in terms of 'economic complexity'
316
which
takes into account diversity at a much deeper level (capabilities rather than sectors). It is also
important to note that any assessment of trade performance also needs to account for the
linkages between exporting firms within the domestic economy which can be more broadly
based than the export data appear to suggest. Exports by themselves do not reflect the full
impact of these firms activities in the economy.
Concentration in the base of agency assisted exporting firms
In 2009, the top 1 percent of agency assisted exporters exported 68.5 percent of agency assisted
exports by value. Since then, there has been a small increase in this concentration. In 2013, the
top 1 percent of agency assisted exporters exported 70.1 percent of all agency assisted exports.
As for 2009, there were no Irish owned firms in the top 1 percent of agency assisted exporters in
2013 (95 percent were IDA supported foreign owned companies and the remaining five percent
were EI supported foreign firms (e.g. food sector). However, of the top 10 percent of exporters
almost one third were Irish owned firms.
Investment performance – foreign direct investment
In terms of FDI, IDA will exceed its target of 780 investments by the end of 2015 as set out in the
Review of the TTI Strategy and has also achieved its target in relation to investments from high
growth and emerging economies in 2014 (i.e. 20 percent of new greenfield investments)
317
.
Ireland continues to punch above its weight, attracting more investment per capita than most
other developed countries. In 2013 Ireland was ranked 10th in terms of the value of FDI inflows
globally, ahead of countries such as Germany, Spain and the Netherlands
318
. Ranked by number
of direct FDI jobs created per million inhabitants, Ireland ranked 4th in 2014 (3rd in 2013)
319
.
Ireland has also maintained top position in 2014 in terms of countries ranked by the average job
value associated with inward investment projects for the fourth year running
320
.
315 DJEI Annual Business Survey of Economic Impact (special calculations, unpublished data), 2013
316 The Network Structure of Economic Output, Hausmann, R. and Hidalgo, C.A., Journal of Economic
Growth, Springer, vol. 16(4), pages 309-342, December 2011
317 The investments spanned an array of markets: India (5), Australia (3), Russia (2), China (2), South
Africa (1). Singapore (1), Japan (1), Brazil (1) and Israel (1)
318 Global Investment Trends Monitor, No. 15, UNCTAD, 28 Jan 2014
319 Global Location Trends, IBM Global Business Services Executive Report, 2015
320 Ibid

119
FDI source market diversity
At the same time, FDI arising from US owned MNCs now account for over two-thirds of the total
employed directly in agency-supported foreign owned firms here
321
. While maintaining this level
of performance remains of crucial strategic importance, Ireland will need to continue to build
diversity across a range of source markets. Ireland’s performance in a European context is
relatively weak in terms of share of outward projects from Japan, South Korea, China and India
where there has been a substantial volume of FDI projects over the 2008-2012 period
322
.
FDI sectors and activities
Analysis undertaken to inform DJEI's Policy Statement on Foreign Direct Investment in
Ireland
323
shows that Ireland has continued to win investment and maintain a strong market
share in Europe in a number of sectors and activities including: shared services, life sciences, ICT
semiconductors and software, international financial services, and content and consumer
business services. These investments include activities across the value chain, including
headquarters, shared services/global business centres, customer contact/technical support,
research and development. More recently, a focus on emerging businesses has yielded results.
The analysis also pointed to areas where Ireland could potentially secure increased levels of FDI:
the food and drink sector, clean technology, and to a lesser degree, manufacturing related
investments in machinery/equipment/tooling and plastics/materials.
Outward direct investment (ODI) – various modes
In addition to exporting from Ireland, Irish owned businesses are increasingly adopting a range
of growth/internationalisation strategies, including greenfield investment, M&A, joint ventures
(JV) and other modes. Latest data shows that 261,428 people were engaged in Irish owned
foreign affiliates overseas in 2013 and generated turnover of €91.2 billion
324
. The UK and US
combined accounted for 57.8 percent of total employment and 65.8 percent of total turnover in
Irish affiliates abroad. Almost two thirds of those engaged were involved in services activities. In
relation to Ireland’s stock of overseas direct investment, the trend over the past decade has
been sustained growth, with a dramatic acceleration during the 2008-2010 period, and strong
growth again from 2012 to 2013. A similar trend is visible in the direct investment income flow
data over the same period
325
.
The economic impact of this activity in Ireland is difficult to measure given the dearth of data
available. Official statistics on overseas direct investment stock does not discriminate between
that of foreign owned entities such as headquarter operations that are domiciled in Ireland and
Irish owned firms, including non-agency supported enterprises, who have extended their
international reach through ODI. An examination of just over 150 firms in the DJEI Annual
321 Includes all agency supported US companies located in Ireland (IDA Ireland, Enterprise Ireland and
Údarás na Gaeltachta supported companies)
322 Forfás analysis for DJEI, 2014
323 Policy Statement on Foreign Direct Investment in Ireland, Department of Jobs, Enterprise and
Innovation, 2014
324 Outward Foreign Affiliates Statistics, CSO Statistical Release, 1
st
September 2015
325 Foreign Direct Investment, CSO Statistical Release, 12 February, 2015

120
Business Survey of Economic Impact provides some evidence that employment and sales gains
overseas have not been at the expense of jobs and sales at home
326
.
Over the period to 2025 and beyond it is anticipated that Irish owned firms will continue to seek
to grow their overseas footprint and sales through outward investment activity. The challenge
from a policy perspective is to ensure that economic impact for Ireland is optimised.
Tourism
Tourism activity has stabilised and is in recovery following a period of sharp decline since 2008.
There were 7.6 million overseas visits to Ireland in 2014, an increase of 8.9 percent on 2013
327
.
Revenue from overseas visitors (excluding fares) increased by 11.8 percent during 2013, and by
8.7 percent during 2014 (with values of €3.3 billion and €3.5 billion respectively), and are
therefore on course to meet and probably exceed TTI Strategy targets by the end of 2015.
Outside of the main source markets which account for just under a quarter of overseas
trips
328
Australia and New Zealand have grown visits year on year from 2011-2014. These source
markets generate the highest average spend per trip (in 2014). Other countries beyond Europe,
US and Australia & New Zealand also deliver a higher average spend per trip, second only to
Australia and New Zealand.
A key message in the Government’s recently launched Tourism Policy Statement
329
is the
importance of maximising tourism revenue from tourism activity. Given the more lucrative
spend by visitors outside of Europe a shift in the share of source markets could have a very
positive revenue impact. Currently, non-European source markets account for almost 40 percent
of revenue having delivered just over 23 percent of the total visitor trips. Rising disposable
incomes, improved travel facilitation and an easing of restrictions on foreign travel for residents
of emerging overseas tourism markets in Asia provide new opportunities for growth.
According to the Tourism Policy Statement, Tourism Ireland’s marketing of Ireland as a visitor
destination will be evidence based and targeted at a range of geographical and segmental
markets with the highest revenue growth potential, and the evidence for these decisions will be
shared with industry partners. The Policy Statement endorses an integrated model of consumer
segmentation, experience based overseas tourism marketing, and visitor proposition
development in order to increase Ireland’s competitiveness as a destination.
Renewing Ireland's trade & investment strategy
The Export Trade Council (ETC), chaired by the Minister for Foreign Affairs and Trade, oversees
implementation of the current TTI Strategy and works to strengthen cooperation and
coordination across all government departments and State agencies involved in the promotion
and development of trade, tourism, investment and international education.
326 Data in relation to internationally based activities of Irish owned companies contained in the DJEI
Annual Business Survey of Economic Impact is limited and the response rate is relatively low
327 Tourism and Travel Annual Series, CSO Statbank
328 Great Britain (3,164 visits) US & Canada (1,329k visits); Germany (557k visits), France (456k visits)
and Italy (258 visits)
2015

121
DJEI, as well as being the parent Department for Enterprise Ireland, IDA Ireland, and Science
Foundation Ireland, all of who are involved in the promotion of Ireland abroad, also has
responsibility for the regulatory aspects of trade, including Ireland's position in the context of
formal trade and investment agreement negotiations.
A new overarching Trade Tourism and Investment Strategy will be required as the current
strategy ends this year. In providing a clear articulation of where the focus of Ireland’s trade
activity will be in terms of sectors and overseas markets, the Strategy will facilitate a coherent in-
market approach across the State agencies and bodies involved in trade, tourism and
investment promotion. In framing the Strategy, an updated sectoral and market focus over
coming years for trade and investment promotion, based on the analysis of sectors set out in
this report, needs to be set out, along with Ireland’s priorities in relation to ongoing and future
trade and investment negotiations, and how Ireland can take advantage of concluded FTAs.
Trade and investment promotion
Trade and investment promotion activity including the promotion of Ireland from a tourism
perspective is undertaken by a range of Government actors, including Enterprise Ireland, IDA
Ireland, Science Foundation Ireland, Tourism Ireland, Bord Bia, Ireland’s Embassy Network
overseas, and their parent Departments (DJEI, DFAT, DAFM, DTTAS). Under the auspices of the
ETC, Local Market Teams comprising representatives of these actors and chaired by the relevant
Ambassador have been formed to ensure coordination of activities in-market. A Local Market
Plan (LMP) is devised on an annual basis and progress updates are provided to ETC.
The Review of Trade, Tourism and Investment Strategy (TTI) 2010-2015 segmented the 27
markets identified in the original Strategy, noting that priority markets and sectoral
opportunities would vary across the individual agencies and that their resources would be
allocated in accordance with their individual strategies. The segmentation defined markets that:
can continue to deliver in the short-term and for the foreseeable future; markets with a more
medium-term focus; and markets that may deliver over the longer-term but where immediate
sectoral opportunities already exist in some cases (Appendix V).
This market segmentation approach remains valid; however it is now timely that an updated
view on sectoral and market focus is formed for future years as part of a new TTI Strategy so
that coordination of promotional activities in-market can be further strengthened. Recently
developed agency strategies330
and those currently being developed should inform the new TTI,
and areas where cooperation will be undertaken need to be specified. It is also important that a
mechanism be devised to monitor trade and investment performance and the effectiveness of
the LMPs.
The Government’s FDI policy statement highlighted the importance of leveraging the collective
expertise and knowledge that is amassed in-market by the enterprise development and
promotional bodies
331
. A well-structured approach that garners, assimilates and disseminates
pertinent in-market intelligence across the agencies is required to help identify potential future
330 IDA Ireland (2019) and Enterprise Ireland (2017) have recently renewed their corporate strategies
and DTTAS has recently published a new Tourism Policy Statement (People, Place and Policy: Growing
Tourism to 2015, Department of Transport, Tourism and Sport, 2015). In addition, a review and update
of Food Harvest 2020 was launched in July 2015 (Food Wise 2025). Bord Bia’s strategy is due for
renewal and the International Education Strategy is currently under review
331 Policy Statement on Foreign Direct Investment in Ireland, DJEI, 2014

122
opportunities for Ireland and also to inform sectoral ecosystem development (see Section D -
sectoral potential).
The wider variety of modes of international expansion that will become more evident over
coming years (for example M&A) will have implications for how Ireland is presented as an
investment opportunity and how Irish firms are appropriately supported in their expansion
efforts overseas. It is important that the agencies activities in-market reflect a consistent
message aimed at delivering the optimal economic outcomes for Ireland. There is also a need
for enhanced metrics that capture the economic return to Ireland from a range of different
investment modes and modes of business expansion overseas through ODI.
Trade and investment agreements and trading practices – advancing Ireland’s position
DJEI is responsible for formulating, prioritising and advocating national policy (policy positions)
in relation to international trade and investment agreements and a range of other trade policy
related issues concerning such topics as regulatory convergence/recognition, tariffs and trade
liberalisation initiatives. Advancing Ireland’s interests in the context of negotiation of trade
agreements worldwide is done mainly through influencing at EU level.
Ireland’s export and investment performance, and the facilitation of imports, are dependent on
enhanced market access and regulatory cooperation globally. In any agreement there are
mutual interests involved and while Ireland would expect to gain positively from such
agreements new challenges may also arise for enterprises within a more open market context.
Articulating Ireland’s interests and influencing at EU level given the breadth of activity ongoing
is a challenge for a small country operating with constrained resources. It is important that our
focus is guided by our trade and investment priorities, and which are also informed by an
understanding of the key issues and barriers for Irish based firms already undertaking or seeking
to trade/invest in third countries. This involves direct consultation with industry and other
stakeholders as well as the operation of effective feedback mechanisms between
agencies/bodies and the embassy network in-market to DJEI. As the EU asserts its expanded
competence in the area of investment agreements it is important that any impacts to Ireland's
strategic interests are anticipated and communicated at EU level.
It is critically important that when agreements are reached, firms based in Ireland are poised to
take advantage of the new market opportunities arising. This requires early engagement
between DJEI and the enterprise agencies in relation to the evolving negotiations to identify the
potential opportunities and issues as they arise with respect to Irish based firms. It also requires
ongoing engagement with industry in relation to potential opportunities and challenges. For
example, the successful conclusion of the EU-Canada Comprehensive Economic and Trade
Agreement (CETA) presents an opportunity for Ireland to grow trade and investment links with
Canada over coming years. Promotion of the Agreement and new opportunities it presents is a
priority for the Agencies and the Embassy in 2015 as part of the Local Market Plan for Canada.
Renewal of the TTIS provides an opportunity to revisit our approach in this respect more
generally and to ensure that in anticipation of agreements yet to be finalised by the EU, a
sustained plan with assigned resources is developed on a cross Departmental and cross-agency
basis and is ready to operationalise once the agreement is in place.

123
Realising our ambition
Deliver on our trade, tourism and investment potential over the next five years,
to include:
growing the exports of Irish owned firms by 6-8 percent per
annum to 2020;
securing 900 new FDI project investments over the period to 2019
as set out in IDA strategy (2015);
increasing tourism revenue to €5 billion and overseas visitor
numbers to 10 million annually by 2025 as set out in the tourism
policy statement (2015);
broadening the geographic market focus of the Irish owned
enterprise base beyond UK markets to reach exports of between
€5 and €6 billion by 2020;
further diversifying Ireland’s export markets to the Eurozone and
high growth markets;
increasing the number of Irish owned firms that export to more
than one country;
increasing the export intensity of the indigenous firms to between
55 and 60 percent from just over 50 percent currently; and
further diversifying the sectoral profile of exports overall.
We will also implement:
a more structured approach to dissemination of in-market
intelligence garnered by the agencies and the embassy network
that maximises opportunities;
a beginning to end process to optimise Irish interests in
negotiation and implementation of EU trade and investment
agreements, in particular, the Transatlantic Trade and Investment
Partnership, China, Japan, India and ASEAN; and
six-monthly reviews of Ireland’s trade, tourism and investment
performance and of the operational effectiveness of Local Market
Plans.
DJEI, DTTAS &
relevant State
Agencies
EI, IDA, other
Agencies &
DFAT/embassy
network
DJEI &
relevant Depts
& Agencies
DFAT, DJEI &
relevant Depts
& Agencies
Bring forward a successor to the Trade, Tourism and Investment Strategy 2010-
2015 that incorporates the elements set out above.
DFAT, DJEI &
other Depts &
Agencies
Global value networks
Introduction
Facilitated by technological innovations in communications and transportation, the rapid
globalisation of economic activity sees a growing number of firms, countries and other

124
economic actors increasingly connected across international borders. The concept of the global
value chain (GVC) describes how different stages in the production process (in both
manufacturing and services) are located across different economies leveraging the most optimal
location factors appropriate to the activity or function. The more all-encompassing view of
global value networks (GVNs) or global production networks highlights the significance of inter-
firm, other relationships, as well as location specific ecosystem factors on the success of
individual elements of a global network
332
. This is an important consideration from a policy
perspective where an objective may exist to upgrade to higher value add activities within the
global value chain or global production network.
GVNs encompass all activities of firms' value chains, including production, distribution, sales and
marketing, R&D, innovation etc. with cost reduction but one factor driving the ultimate spatial
configuration that emerges through outsourcing and offshoring of activities and other modes of
transnational corporate expansion and functional disaggregation. The notion of fragmentation
of global production is not a new phenomenon as such, but it has been growing in importance.
It has attracted considerable attention internationally not only because of the implications for
the growth and development of individual firms, but also because of the implications arising for
the economic development of individual nation states.
From a nation state perspective, the emergence of GVNs shifts the analysis of a country's
competitiveness from sectors to activities
333
. In this context countries will be seen to specialise in
certain parts of the value chain as they pertain to a sector or a variety of sectors rather than
possessing an activity base that encompasses the full end to end production process. Enterprise
policy is now often seen to be guided by objectives to optimise the value captured from such
specialisation, and/or to seek to upgrade or diversify the profile of activities (i.e. targeting
activities engaged in different and more economically valuable parts of the value chain) that will
deliver greater economic returns and resilience.
For firms, the strategic design and management of GVNs can be a vital source of competitive
advantage
334
. For individual supplier and partner firms who specialise in certain activities,
accessing the GVNs associated with multinational corporations is a necessary path to business
development and growth.
Measuring the extent of GVNs
Two measures have been used to analyse the growth of GVNs globally
335
. A simple indicator is
that of trade in parts and components. Today, more than one quarter of world imports in
332 See for example, Global production networks and the analysis of economic development,
Henderson, J, Dicken, P, Hess, M, Coe, N and H Chung Yeung, in Review of International Political
Economy 9:3 August 2002: 436–464 who describe the GPN as a framework for understanding the
global, regional and local economic and social dimensions of the processes involved in many forms of
economic globalisation
333 International Comparative Evidence on Global Value Chains, de Backer, K. and Yamano, N., OECD
Science, Technology and Industry Working Papers 2012/03, OECD Publishing
334 Capturing Value from Global Networks: Strategic approaches to configuring international
production, supply and service operations, Singh Srai, J. & Christodoulou, P., Institute for
Manufacturing, University of Cambridge, 2014
335 While GVCs have been recognised for some time, measurement has been challenging. Traditional
trade statistics are not detailed enough. They were designed to capture trade flows in final products,

125
manufactured goods are represented by intermediate imports (parts and components), having
doubled in value terms over the decade to 2012
336
.
A more sophisticated measure is based on a recently constructed OECD dataset of trade in value
added (TiVA). From this data it is possible to generate a participation index that captures the
import content of exports (backward participation) and how much domestic value added is
embodied as intermediate inputs in third countries' gross exports (forward participation)
337
.
Participation in GVNs represents almost 49 percent of total gross exports globally (in 2009) and
has been on the increase
338
.
The analysis of GVNs directly challenges measures of competitiveness and economic
performance based on gross export figures since indicators based solely on export data of final
goods might misrepresent the real specialisation of countries
339
.
GVNs and services
Much of the attention and analysis of GVNs is focused on manufacturing. On one level, services
are less prone to vertical specialisation since face to face contact between the provider and the
consumer is often a requirement. However, digitisation has played a significant part in allowing
services to be separated from consumption and scaled up, creating final services with higher
value added, and digitally distributed to be consumed anywhere in the world
340
.
There has been little research to date on pure services value chains but they exist in a range of
sectors, including banking, tourism, IT, business processing, audio-visual, healthcare and
education
341
. In services, production activities have more importance and value compared to the
typical goods model that is often stylised as a 'smiley face', with the most value added in the
ends of the value chain where IP is created
342
. This is because the production of services is
intimately tied to the development, marketing and innovation activity - i.e. the concept of live
development
343
. For services value chains generally, critical considerations in their configuration
globally include liberalised ICT, telecommunications, electronic infrastructures and distribution
while nowadays most trade is of intermediate products and is more accurately measured in terms of
value added. Traditional gross measures of trade are flawed by double counting the value of
intermediate goods in international transactions, World Trade Report 2014,WTO, 2014
336 World Trade Report 2014,WTO, 2014
337 Ibid
338 Ibid - based on latest data available The GVC participation index is defined as the sum of the
foreign value added (FVA) embodied in a country's exports and the indirect value-added (IVA) exports
(i.e. value of inputs produced domestically that are used in other countries' exports) expressed as a
percentage of gross exports
339 International Comparative Evidence on Global Value Chains, de Backer, K. and Yamano, N., OECD
Science, Technology and Industry Working Papers 2012/03, OECD Publishing
340 Global Value Chains and Services - An Introduction, Kommerskollegium, National Board of Trade,
2013
341 Ibid
342 That is, R&D and innovation upstream and marketing, brand & logistics activities downstream
343 See by way of example: Minecraft Brick by Brick: A Case Study of a Global Services Value Chain,
Kommerskollegium, National Board of Trade, 2013

126
services. The facilitation of international payments is a crucial aspect, made possible by
liberalised financial services. Issues relating to data transfer and differences in intellectual
property protection are also extremely important
344
. The furtherance of international trade
liberalisation in services is an important enabler of services GVN expansion and an enabler of
participation in services GVNs.
Ireland's participation in GVNs
As a small open economy and one where foreign owned and export-oriented enterprises play a
relatively large role, GVNs are particularly relevant to enterprise development and policy.
A recent analysis of Ireland's exports by the Irish Economic Analysis Division in the Central Bank
of Ireland has highlighted the role of GVNs in the Irish context and considered some of the
implications of this from an economic development perspective
345
. As measured by the
participation index, Ireland has a very high level of participation in GVNs (in excess of 60 percent
in 2009). The CBI analysis also notes that in more recent years, the prevalence of Ireland as a net
contract manufacturing user has increased and that this was a dominant feature of Ireland's
export growth in 2014. Although relevant input-output data for 2014 will not be available for
some time, it is likely that this activity will contribute to a higher GVN participation index for
Ireland.
Ireland's high level of participation in GVNs has implications for the actual domestic value added
by firms in Ireland during the production process for final goods and services. The CBI analysis
finds that the percentage domestic value added (DVA) in total gross exports in Ireland is among
the lowest in a selected group of our trading partners
346
. Along with the significant growth in
services exports in Ireland the DVA embodied in gross exports of services in Ireland has fallen
from 81 percent in 1995 to 53 percent in 2009
347
. Within Ireland, foreign dominated sectors are
characterised by a high level of foreign services contribution to their goods exports - reflecting
issues such as royalties and patents as well as other factors.
Policy implications
As a small open economy Ireland's relatively high participation in GVNs will continue to be a
feature, and will likely grow in importance as more indigenous firms internationalise (creating
their own GVNs and participating in others. The challenge from a policy perspective is that we
derive maximum economic benefit for Ireland from this participation.
The role of FDI in the Irish economy sets us apart from some of our trading partners in terms of
the extent and nature of our GVN participation overall - characterised by exports with a
relatively high import content. We will continue to actively seek new investment and provide a
business ecosystem that attracts substantive employment creating economic activity to Ireland
344 Ibid
345 The Changing Nature of Irish Exports: Context, Causes and Consequences, Quarterly Bulletin
02/April 15, Central Bank of Ireland, Irish Economic Analysis Division (Byrne, S. and O'Brien, M.)
346 Ireland's DVA for 2009 was just under 60 percent, whereas in the UK for example it was over 80
percent. Ireland's DVA was particularly low for services relative to a selection of our trading partners -
just over 50 percent, compared with the UK, Germany, France, Italy, USA who all had DVA percentages
in excess of 90 percent

127
and our support frameworks will continue to incentivise substance, innovation and enhanced
capability
348
. The planned introduction of the 'knowledge development box' will be an important
element in attracting and underpinning higher value add activities in Ireland
349
.
Services are playing an increased role in the Irish economy in both employment and export
terms. As enablers of all global value chains and as global value chains in their own right, there
are a number of implications for Ireland:
The quality and cost of our infrastructures (especially telecoms infrastructures) and
services that support international business relationships and trade in services need to be
competitive in order to attract and maintain global business activities in Ireland
350
.
The data shows that while services activity and exports have grown substantially in
Ireland, there is a downward trend in domestic value add within the services export
portfolio overall
351
and within the foreign owned segment in particular. This underlines
the importance of further development of our innovation ecosystem, including our IP
regime.
The services sector is contributing significantly to the value added in Ireland's goods
exports, far in excess of the average contribution globally
352
. This reflects the importance
of royalties and patents, particularly (but not exclusively) in foreign owned manufacturing
activity such as pharmaceuticals. There is limited economic activity in Ireland associated
with this largely imported services component.
Ireland has emerged as a net contract manufacturing user, ostensibly a services import,
but due to accounting procedures relating to ultimate ownership the inputs and outputs
relating to the final product are also counted in our National Accounts as imports and
exports respectively. Contract manufacturing is a feature of international trade and Ireland
is engaged as a both a user and provider. The fact that Ireland is now a net user is likely
to have increased Ireland's GVC participation, with little associated substantive economic
benefit to Ireland. It is important that further analysis is undertaken to understand the
growing extent of this phenomenon and what it implies for the manufacturing sector and
real manufacturing output from Ireland.
The gains for firms and for countries from GVC participation can be increased through
upgrading of the activity base (climbing up the value ladder) towards activities with higher entry
barriers and less competition. This may be achieved through process improvements, product
upgrading or functional upgrading - including, for example, original design, branding and
marketing353
. Clustering dynamics (see below) are important for fostering functional upgrading
by helping enterprises, and particularly smaller enterprises, to overcome constraints by
348 See Section D - Role of the Agencies chapter
349 See Section E - Taxation Policies chapter
350 See Section E - Infrastructure Priorities and Cost Competitiveness chapters
351 Much of this is related to software and other ICT services (whose underlying intellectual property is
held outside of Ireland
353 The Rise of Global Value Chains, World Trade Report 2014

128
providing a wide network of suppliers, agents, specialised services, tacit knowledge and a pool
of skilled workers.
Participation in GVNs will be the route to growth and development of many indigenous firms
and emerging foreign owned business operating from Ireland; others will assume lead firm
positions in the creation and management of GVNs as Irish owned and/or based multinational
companies. Enterprise Ireland and IDA Ireland have worked together through the Global
Sourcing initiative to explore how the strong presence of foreign owned multinationals might be
better leveraged as a gateway to GVN opportunities for indigenous firms.
Emergent multinational enterprises are faced with the challenge of overcoming risk and building
resilient supply, ensuring knowledge integration across different sites and functions, developing
effective and environmentally sustainable 'last mile' logistics, and implementing successful M&A
to support growth and restructuring
354
. This requires strong management competences in terms
of business administration, including strategic human resource management
355
.
Deepening our connections with global value networks
Through the development agencies, strengthen Ireland’s engagement in GVNs,
leveraging our distinctive enterprise base of globally diverse foreign owned
multinationals and innovative Irish owned enterprises, in order to realise
accelerated growth, value add and economic impact.
Focus on opportunities to capture increased value to Ireland from services GVNs,
including the services component within manufacturing and contract
manufacturing services.
DJEI &
Enterprise
Agencies
Clusters and clustering activities
A broad definition of clustering explains it as firms and other actors who deliberately co-locate
within a recognisable geographical area and forge close linkages and working alliances to
improve their collective competitiveness
356
. In reality the evidence shows that clusters are
idiosyncratic and will vary in their configuration in terms of some or all of the following
elements: geographic concentration; the core and defining specialisation; the actors involved;
the dynamics and linkages that occur; critical mass, lifecycle and degree of innovation
357
.
Internationally, clustering is something that has been happening spontaneously over time and it
is taking place on an increasingly larger scale as technological and organisational advancements
permit. Today, clusters are widely accepted as an important factor for economic development
355 See Section C - Talent chapter (future ways of working)
356 The Cluster Policies Whitebook, Andersson, T. et al., International Organisation for Knowledge
Economy and Enterprise Development (IKED), VINNOVA and The Competitiveness Institute, 2004
357 Ibid

129
and research has shown that the State can have a very effective role in enhancing the scale and
competitiveness of clusters
358
.
The notion of spatial concentration is important and can be represented in the form of regional
or localised concentrations as well as broader industrial clusters at State or national level
359
.
Clusters are not confined in terms of their internal relationships either. As discussed above, the
growth of GVNs sees firms form dynamic, multidirectional, multi-layered networks both locally
and across the globe
360
. This does not negate the usefulness of the cluster concept in its
traditional sense. Rather, as we consider localised clustering in a national or regional context, the
broader reality of globalisation cannot be ignored. Clusters can actually be considered as local
nodes in global value chains.
Clustering in Ireland
Ireland’s landscape of clusters and clustering activity has emerged in a variety of ways and
continues to evolve. It is comprised of various models and initiatives, each of which experiences
different levels of collaboration, forms of composition, magnitude, scale and stage of maturity,
and sustainability:
The Enterprise Ireland Clustering Programme now in its second phase has encouraged the
further development of nascent clustering activity amongst firms.
The evolving National Research Centre and Spokes programme (funded by SFI in
partnership with industry) has over time built internationally competitive research focused
clusters involving academic research institutes and growing industry participation around
key research agendas of national strategic importance.
A number of industry led networks are pursuing developmental agendas for their
members, for example the Irish Medical Devices Association (IMDA) an IBEC sectoral
initiative, and the it@Cork European Tech Cluster which is ninety percent funded by its
constituent members.
The regional co-location of firms which is a clearly observable dynamic in sectors such as
Medical Devices, Pharmaceuticals, Consumer Internet/Digital Media and Financial Services
offers potential for greater levels of clustering activity. These concentrations of activity are
regularly referred to as clusters but there is scope for a greater degree of on the ground
collaboration and inter-firm and broader ecosystem relationships to develop.
IDA Ireland and Enterprise Ireland are jointly progressing a ‘Global Sourcing Initiative’ that
is focused on supporting the growth and internationalisation of Irish owned enterprises
and start-ups through their participation in GVNs (via foreign multinational companies
that have a presence in Ireland), as well as strengthening the business ecosystem in
Ireland.
358 The Cluster Initiative Greenbook, Sölvell, Ö.,Lindqvist, G. and Ketels, C., (1st Ed.), Stockholm, Ivory
Tower, 2003
359 Spatial Clustering, Local Accumulation of Knowledge and Firm Competitiveness, Malmberg, A.,
Sölvel, O. and Zander, I. (1996), in Geografiska Annaler 78B, 85-97
360 For example, Global Shift: Mapping the Changing Contours of the World Economy (6th edition) or
Global Production Networks and the Analysis of Economic Development, in Review of International
Political Economy, Henderson, J. et al, 2002

130
The organic development of clusters in the Irish context has been constrained somewhat by the
composition of the enterprise base - for instance, although a large number of major foreign
owned companies are present (which offers potential for inter-firm relationships), in many cases
the Irish subsidiary does not have global, regional or functional responsibility to make significant
locally based business relationships.
At best, clustering activity (as distinct from ‘just’ colocation) in Ireland can be described as
nascent relative to other developed economies which have also used clustering initiatives as an
effective policy tool for enterprise and economic development for many years. There has been
wide and varied interpretation of clusters and clustering in the Irish context: sectoral
concentrations have been described as clusters; strong R&D focused collaborative initiatives
that compare very favourably with some strong clusters in Europe are not recognised or
promoted as such; while regional clustering initiatives that have attracted significant amounts of
EU funding are not necessarily connected or aligned with national enterprise policy (and may
therefore dissipate after a relatively short period of time).
Developing a strengthened national policy approach to support clustering in Ireland
Clustering ideally happens organically but cluster enabling policies have been effective in
stimulating and encouraging greater levels of collaboration, with the aim of delivering greater
economic impact. Research carried out by DJEI has highlighted a number of success factors in
cluster building policy approaches internationally (Appendix VII).
There is already a considerable amount of clustering related activity in Ireland, both industry
driven and State supported, albeit with mixed results. These need to be accommodated and
nurtured in a strengthened overall approach.
A missing element in the Irish context however, with arguably the exception of the R&D focused
Research Centres initiative, is the long-term sustainability of the initiatives and progression to
enterprise clusters of scale and international visibility (reflective of the depth and extent of
collaborative activity and not necessarily number of participants361
). There is also a missed
opportunity for the State to leverage existing initiatives, either industry led or those that are
publicly funded to pursue key enterprise policy goals such as; increased
internationalisation/GVN participation; scaling; productivity enhancement etc.; channelling State
supports on a one to many basis; and providing a platform for deeper levels of collaboration
amongst firms.
In summary, the key objectives of a strengthened national policy approach would be to:
target the development of clusters on a larger scale than has been the case with other
initiatives heretofore;
seek to promote clusters which have the potential to achieve a substantial international
profile or develop a specific brand in the market;
361 It must be acknowledged that clustering in the Irish context is going to be on a smaller scale in
terms of participating firms and other actors given the relative size of the enterprise base compared
with some European counterparts – for example, the CAP Digital Cluster in Paris has over 900 members
currently

131
be rooted in an overarching framework of national enterprise policy goals with reference
to the policy priorities for sectoral cohorts
362
;
promote a common operational model guided by best international practice;
seek to build on existing nascent and strengthening clustering activity, building on
organic market dynamics, with the State as enabler; and
promote international connectivity of Irish clusters, exploiting opportunities on an all-
island basis
363
, and through cluster networks in an EU context in particular.
In terms of expected outcomes, the emerging clusters will be able to drive a number of key
activities and leverage a range of tools for the mutual benefit of constituent members and for
the economy more broadly, including: entering new overseas markets; audits of competitiveness
with counterparts overseas; driving a step change in enterprise productivity; undertaking
collaborative initiatives; and gaining access to global supply chains.
In order to enhance the prospects for successful implementation, it is proposed that a new
national policy approach to clustering be developed by DJEI and its agencies and trialled as a
demonstrator before rollout on a wider basis. The National Clustering Initiative demonstrator
will be adequately resourced from the outset and a full evaluation will be carried out on an ex
ante and ex post basis before the initiative is mainstreamed. The pilot initiative will of necessity
have to run for a period of time sufficient for impacts to accrue and meaningful lessons can be
gleaned so that decisions relating to the future direction of the initiative can be made. The
grand challenges concept outlined earlier (Section C – Differentiators: Innovativeness) which is
focused on nearer to market applied RD&I is of direct relevance and the National Clustering
Initiative could act as the vehicle through which this approach can be progressed.
Ongoing research on GVNs has confirmed the important role that the broader enterprise
ecosystem plays and including the potential to build networks between firms and a range of
external stakeholders both locally and globally (research, universities, government/policy
frameworks, regulatory bodies, funders, competitor firms etc.)364
. Other sections of this report
are therefore of direct relevance
365
.
362 The thematic focus and enterprise policy goals at a sectoral cohort level are outlined in Section D -
Strengthening resilience in the enterprise mix, in this report
363 Inter-trade Ireland has examined the potential for all-island clustering and a report is forthcoming
365 Section C - Innovativeness chapter, which includes the further development of collaborative
enterprise - research system engagement; Section C – Talent chapter, including industry engagement
with the education system; Section C - Place-making chapter; and Section D – Strengthening resilience
in the enterprise mix chapter (advancing our policy approach to sectoral development)

132
Sustained clustering activities of scale and with international visibility
Design a new approach for a National Clustering Initiative in the key sectors of
strength building on the existing initiatives through competitive calls that seed
cluster activities, to stimulate more extensive clustering on a sustained basis, at a
scale and depth that delivers to enterprise policy goals and has visibility and
stature in an international context.
DJEI &
Enterprise
Agencies
Digitisation
From Ireland's enterprise policy perspective there is a need to ensure that we continue to build a
business ecosystem that facilitates the growth of internationally competitive enterprises in a
rapidly changing digital environment globally. Enterprises in the digital era are encountering
disruptive change; the powerful fusion of creativity, technology and commerce; new ways of
working; the shift from traditional business ‘fundamentals’ for revolutionary alternatives; and
real prospects for rapid growth for some. In Ireland, as a small open economy with a young and
well educated workforce, the prospects for continued growth through digital enterprise are
strong. This requires a new way of thinking for enterprise policy.
Reaping the benefits of this transformation in terms of job creation and wealth generation will
require action across a broad range of areas, both in the Irish context and also internationally
through for example the EU’s Digital Agenda for Europe
366
.
Rapid technology innovation in digital technologies (including mobile, cloud, data analytics etc.,)
has enabled the transformation of business models, organisational structures, manufacturing
processes and value chains and continues to drive a more interconnected world. Digital
technologies also give rise to greater individual empowerment, itself a powerful driver of change
in society, the workplace and consumer behaviour. Digitisation is pervasive in its impact,
transforming all sectors of activity.
The broader application of digital technologies (e-business) within the business operations and
across goods and services value chains can have a transformative impact on productivity,
innovation and profitability. Digitisation can transform processes and products and achieve
greater efficiencies in a variety of business transactions (including purchasing, supply chain
management, stock control, marketing, customer relationship management etc.). As the
European Commission has noted, 'within less than a decade, most economic activity will depend
on digital ecosystems, integrating digital infrastructure, hardware and software, applications and
data'
367
.
Irish consumers spend around €70,000 per hour online. With up to 70 percent of Ireland's
annual online spend currently going overseas, efforts to enhance the engagement by Irish
business with online trading are a key jobs and economic imperative. Less than one in four small
366 The Digital Single Market Strategy is a key element. For the Digital Single Market rationale and
proposals, see A Digital Single Market Strategy for Europe, EC Com (2015) 192 Final, available at
http://ec.europa.eu/priorities/digital-single-market/docs/dsm-communication_en.pdf
367 Ibid

133
businesses in Ireland are selling to customers online
368
. Encouragingly, Irish based enterprises
have embraced online marketing through social networking websites. Ireland ranked second in
the EU-28 in 2014, in terms of social media use by enterprise to connect with customers (61 per
cent, compared to an EU-28 average of 36 per cent). This includes the likes of Facebook, Twitter
and YouTube
369
.
Engagement with the online economy as a channel to the consumer (e-commerce) has become
a vital component in the continued viability of businesses of all kinds and with the right skillsets
and business planning has the potential to maintain and grow employment in traditional sectors
such as retail. The rise in e-commerce has meant that domestic businesses face increasing
global competition, but also significant opportunities for growth.
Ireland’s research centres and technology centres can play a key role in driving forward digital
transformation with the Irish enterprise base and beyond, including Insight – the Big Data and
Analytics research centre; Connect, the centre for communications networking, services,
applications and technologies; and Adapt, the centre for digital content platform research.
Digitisation across the value chain (e-business)
For all sectors of activity, including manufacturing and services, advances in ICTs are driving
change, impacting on customer relationship management, supply chain management, business
and relationship management systems and service delivery. ICTs enable firms to reach
customers in new ways, to customise services and act more responsively to customer demands.
Within manufacturing for example, certain cohorts of enterprises are embracing new ‘smart’,
‘digital’ and ‘virtual’ models of manufacturing. For many others however these concepts seem
like a far too distant (and unrealistic) future. The fact is that the pervasive use of ICTs cannot be
ignored by any manufacturing firm in operation today - regardless of scale or ownership
370
. How
they apply will be different according to individual firms’ needs, strategies and contexts. For
example, the smaller firm supplying to a larger player may need to adopt technologies and/or
achieve certain standards if they are to remain a competitive supplier.
Recent CSO data shows some success in enhanced digital engagement; for example, Irish based
enterprises are purchasing more cloud computing services for file storage and email services, at
a rate above the EU-28 average in 2014, although others were dissuaded through insufficient
knowledge and cost.
There are a number of policy tools available to drive greater digital adoption, including
leadership and management development, lean business programmes and investment in
research and development and these will continue to be promoted through the enterprise
agencies.
The broader enabling environment for e-business is also critical and Ireland intends to make
further progress in order to deliver a world class digital ecosystem in Ireland. Availability of a
368 In 2014 49 percent of large enterprises had e-Commerce sales (44 percent of their total), medium
enterprises 43 percent (20 percent of their total), and small enterprises only 23 percent (15 percent of
their total), CSO Information Society Statistics - Enterprises 2014 , available at
http://www.cso.ie/en/releasesandpublications/er/iss/informationsocietystatistics-
enterprises2014/#.VV4aX9J0zcs)
369 Information Society Statistics - Enterprises 2014, CSO Statbank
370 Making it in Ireland: Manufacturing 2020, Forfás/DJEI, 2013

134
modern broadband infrastructure is intrinsic to realising the full potential of the new digital or
online economy
371
. Measures to enhance digital literacy, skills and inclusion are also important
(see Section C – Talent). The following aspects in particular require sustained attention over the
coming decade in what is an extremely fast moving digital environment that creates new
challenges and disruption on an ongoing basis.
e-Commerce
Consumers' ability to find goods, services and better value online has facilitated access to a
wider domestic and international customer base, particularly for SMEs, and scope for enhanced
productivity, innovation and competitiveness. One of the objectives of the Government's
National Digital Strategy (NDS)
372
launched in 2013 is to improve levels of engagement by Irish
SMEs with the online economy. The NDS identified a number of challenges that needed to be
addressed to help Irish businesses develop a meaningful online trading presence, including
awareness of its potential. On foot of this it launched a 'Winning with Web' Awareness scheme
to highlight the value for small business of trading on-line
373
.
A key initiative of the NDS, reflected in the Action Plan for Jobs, has been the Trading Online
Voucher scheme, operated by DCENR, DJEI, Enterprise Ireland and the LEOs
374
. Its objective is to
get 10,000 Irish businesses online for the first time and a further 2,000 more small businesses
trading online by the end of 2015.
Developments at a European level are important to enable greater levels of e-commerce
participation amongst businesses in Ireland. The cost of doing business across borders is high
and this is putting Europe at a competitive disadvantage when compared with the US and Asia.
The Digital Single Market (DSM) Strategy published in May 2015, aims for greater harmonisation
of online consumer and contract rules across the EU-28; bringing on-stream more efficient and
affordable parcel delivery; the tackling of geo-blocking, which segments markets for online
services along national borders; and reduction of VAT related burdens arising from different
regimes when selling across borders
375
.
DSM also aims to shape an environment in which digital networks and services can flourish,
through the encouragement of investment in broadband and online security infrastructure,
modernisation of existing telecoms and media rules, pan-European improvement of spectrum,
and the creation of a robust European data protection regime. The present fragmentation of the
EU's online economy discourages companies from cross-border trading and prevents
consumers from benefitting from the most competitive offers. The Commission claims the DSM
will help create €250 billion in additional GDP, hundreds of thousands of new jobs, and a vibrant
knowledge based society.
371 Section E – Excelling in getting the basics right
372 Doing More with Digital - National Digital Strategy for Ireland Phase 1- Digital Engagement July
2013
373 See Doing More with Digital - National Digital Strategy for Ireland Phase 1- Digital Engagement
July 2013, pp.16/17
374 For an outline of the scheme and its achievements to date, see Action Plan for Jobs 2015, p.58
375 A Digital Single Market Strategy for Europe, EC Com (2015) 192 Final, available at
http://ec.europa.eu/priorities/digital-single-market/docs/dsm-communication_en.pdf

135
Data protection and data security
A robust regime for protection of personal data is essential to instil public trust in online
products and services. It is also vital in helping grow Ireland's enterprise base in the area of big
data and data analytics. The establishment of a world class data protection regime is a key
objective of Government and has led to the appointment of a Minister of State for data
protection (in the Department of Justice and Equality) in the past year. A data protection
roadmap has been outlined, which explicitly targets an approach to data management and
protection that is 'best in class' internationally. This includes the strengthening of the Office of
the Irish Data Commissioner; and the creation of an interdepartmental committee to contribute
to a whole of Government perspective on data issues, and consult with business, public sector,
academic and civil society stakeholders
376
. As a key European hub for global digital and social
media activities, Ireland's reputation in data protection, privacy and security is an important
competitiveness factor in attracting mobile investment in this area.
Driven by the EU digital single market…
Data protection reform and the strengthening of privacy rights is also a central part of the DSM
proposals at EU level. A substantial data reform programme was launched in 2012 aimed at
updating Europe's existing data protection directive (through the General Data Protection
Regulation) for the digital age
377
. The aim of the reforms is to benefit enterprises and boost
growth, by offering customers assurances that personal data will be treated with care and
diligence.
The Commission is pushing for agreement between the European Council and Parliament on the
reform before the end of 2015, to help underpin the DSM
378
. Because Ireland plays host to
some of the world’s largest content and social media multinationals who serve the European
and global market, the developing agenda at EU level is of key importance.
An important strand of the reforms aims to simplify the data protection framework by
streamlining the 28 different data protection laws across the EU through creation of a 'One Stop
Shop', in which companies will have to deal with and be answerable to a single set of data
protection rules, through a single data protection authority. Co-operation between national
Data Protection Commissioners will be enhanced to ensure consistent application of rules across
the EU, faster decisions, one single interlocutor and less red tape, and ensuring legal certainty.
The one law and one authority approach will apply to businesses based both inside and outside
the EU, offering goods and services or monitoring citizens, and therefore create a level playing
376 http://www.merrionstreet.ie/en/News-
Room/Releases/Minister_Murphy_sets_out_Data_Protection_Roadmap_after_Cabinet_Decision.html
377 Safeguarding Privacy in a Connected World A European Data Protection Framework for the 21st
Century, European Commission, Brussels 25.1.2012 Com (2012) 9 final (also accessible at http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52012DC0009&from=en)
378 The reforms propose rights for individuals to be forgotten, to data portability, and to be informed
of personal data breaches by companies or organisations; greater accountability by companies in their
data processing, through statutory appointment of an independent data protection officer; making
privacy by design or default settings the norm in products and services from the earliest stage of
development; and equipping European regulators with strong enforcement powers, such as fining
companies who do not comply with EU rules by up to 2% of their global annual turnover.

136
field. Another aspect of the reforms already in implementation is the establishment of a
European Data Protection Board which will deal with appeals to rulings at the national level.
The EU DSM strategy also deals with data security, citing cyber threats i.e. data interception,
online payment fraud, identity theft, and trade secret theft, as negatively impacting on the
economy and society through disruption of services, violation of fundamental rights, and
undermining of citizens' trust in online activities
379
. The EU is currently legislating for the
Network and Information Security Directive, while its European Cybersecurity Strategy is
prioritising development of industrial and technological resources for cybersecurity.
Copyright
The development of social networking and media, and others channels of delivery for online
content, has led to expectations that consumers will be able to receive legitimate content
quickly, and be able to access that content from wherever they are. Against this backdrop, it is
critical that a proper balance is struck between the interests of creators through appropriate
protection and means of enforcement of IP rights, and access for users and consumers.
Copyright law has a major role in striking this balance and must grapple with the increasingly
iterative and interactive nature of innovation online.
Ireland is seeking to update its copyright law in the interests of lowering digital barriers to
innovation and provide greater support for growth in the digital industry. The recommendations
of an independent review committee, which reported in 2013, are currently being considered by
the Government
380
. The Committee has suggested reform in a number of areas to modernise
copyright law and develop an ecosystem that drives innovation in the online world. A number of
recommendations advocate the greater use of copyright exceptions and limitations to allow for
greater access to copyright works without affecting the issue of remunerating for the original
creators of content.
Modernisation of the European copyright framework is being promoted through the EU's
proposals for a Single Market for Intellectual Property
381
, and the DSM
382
. While the substantive
scope of copyright law has been largely harmonised, rights are still licenced on a national EU-28
basis i.e. limited on a geographical basis which does not make for a harmonised approach
throughout the EU marketplace. Under DSM, the Commission's proposals pledge to support
measures to make it simpler and more efficient to access copyright protected works or content
online, by tackling cross-border access to the protected content and its portability.
The DSM's copyright package aims to reduce difference between national copyright regimes
and is expected in late 2015. Timely transposition to Irish law of any policy directives arising will
be important.
379 A Digital Single Market Strategy for Europe, European Commission, Brussels 6.5.2015 Com (2015)
192 Final, pp.12/13
380 Modernising Copyright: The Report of the Copyright Review Committee, Dublin 2013
381 A Single Market for Intellectual Property Rights: Boosting creativity and innovation to provide
economic growth, high quality jobs and first class products and services in Europe, European
Commission, Brussels 24.5.2011, Com(2011) 287 final, pp.9-14
382 A Digital Single Market Strategy for Europe, European Commission, Brussels 6.5.2015 Com (2015)
192 Final, pp.6-8

137
Ensuring a digital friendly regime
Ensure that Ireland sustains its leadership position in providing an
internationally recognised robust and well balanced regime for the digital
economy that protects individual interests while facilitating enterprise
development and growth including, through:
updating our intellectual property legislation to ensure that it is
fit for purpose in the digital age;
close engagement with our EU partners in relation to the
advancement of the EU's Digital Single Market agenda in all of
its aspects;
ongoing and regular review of global and international
developments and timely policy responses if/as needed; and
the full implementation of Ireland's data protection roadmap,
and National Broadband Plan.
DJEI, DCENR,
DJE, DPC

IN
N
O
VATIVE
AGILE
CO
N
N
ECTED
Section D
Resilience

141
Strengthening resilience in the enterprise mix - a
sectoral perspective
In this section we set out our aim to strengthen resilience in the enterprise mix looking from the
perspective of sectors across the entire economy:
where will growth come from?;
a strengthened sectoral ecosystem development approach; and
a portfolio approach to sectoral 'cohorts'.
Introduction
We know that the Government does not create jobs. Ultimately it is people that generate ideas,
establish businesses, create opportunity and create jobs.
The most impactful role that Government plays is in providing a supportive business
environment so that all enterprise can establish, thrive and grow.
Nevertheless, while many horizontal policies are relevant to all enterprises in the economy (as
outlined in earlier sections of this report), a more in-depth understanding the challenges and
opportunities facing specific sectors is increasingly required of policy makers in the face of
intensified competition globally for investment.
Our analysis has demonstrated that certain sectors in the economy share similar characteristics
(such as export oriented, employment intensive etc.) and can be grouped accordingly. This
more in-depth understanding of sector specific needs allows us to:
take a more tailored approach to business ecosystem development in Ireland in terms of,
for example, education and skills, and RD&I infrastructures; and to
set out the most appropriate approach and emphasis in terms of direct enterprise level
interventions.
As set out in our vision, we will strengthen our resilience in the enterprise mix by taking a
portfolio approach to sectoral development: recognising the valuable and different
contributions that sectors and activities make to economic growth through exports, value-add,
direct economic expenditures and/or employment.
We can (and should) unashamedly seek to improve productivity and innovativeness across all of
enterprise.
We can (and should) unashamedly make choices about building on our comparative advantages
and about fully leveraging smart specialisation to deepen competences that will enable us to
grasp 'new' opportunities in adjacent areas.
The evolution of sectors - where opportunities will come from
Global drivers of change produce new challenges, new solutions and new opportunities on an
on-going basis. They collectively and individually have implications for how, what and where

142
companies across all sectors do business, organise themselves and their workforce. Successful
companies and sectors are those that focus on market opportunities, assess changing customer
needs, identify gaps in the market, and understand the competitor landscape and implications
of disruptive forces.
The headline employment potential set out earlier in Section B does not reflect the changing
dynamic within and across all sectors. It is not possible to be definitive about exactly where jobs
will come from in the future, what the 'new sectors' might be and/or how occupations
themselves might evolve. What is currently evident is the range of new areas of growth potential
(more often than not termed as new 'sectors') that are of relevance to Ireland's enterprise policy:
Global market segments create new areas of growth for a range of sectors…..
Aging populations, environmental concerns, increased affluence in emerging markets,
increasing digitisation and changing consumption behaviours are driving growth in
markets such as healthcare, wellness, food, green technologies as well as for more
customised products and services across a range of sectors.
'New' high growth global market segments such as healthy ageing, smart cities, smart
grids and sports nutrition present considerable opportunities. These end markets present
opportunities for a range of sectors including ICT, engineering, financial services,
healthcare services - and for enterprises to capture leadership positions either as
individual entities or through effective collaboration.
New sectoral opportunities will arise in a number of ways…
within existing broad sectors there is a range of sub-sectors and niche market
opportunities including for example: mobile applications, functional foods, digital games,
aviation leasing, diagnostic products – and this is a constantly evolving ‘space’.
as a business function (either as a shared services within a MNC or outsourced to an
external provider) including headquarters, customer technical support, clinical trial
management, sales lead generation, IP management, business process outsourcing.
as new global business models emerge (e-tailing, the sharing economy, freemium383
,
software as a service, blended education and learning services).
at the blurring edges of existing sectors as convergence continues apace (e.g.
nutraceuticals, combination health products, fintech, Internet of Things, etc.).
as a result of capturing adjacent possibilities (or diversification), drawing on core expertise
and capabilities to stimulate growth in new and emerging activities and enter new end
markets; for example, the transferability of capabilities and skills in textiles to composites
(materials)
384
.
383 Freemium involves offering content such as a digital game free of charge while charging a premium
for advanced features, functionality or related products and services
384 At the level of the enterprise, this might involve for example, a plastics firm diversifying from
servicing the automotive industry toward biomedical applications; or a firm with deep competence in
coiled spring manufacturing technologies diversifying from the construction sector to medical devices
see case study Shannon Coiled Springs outlined in Making it in Ireland, Manufacturing 2020, Forfás,
2012

143
through smart specialisation strategies that facilitate entrepreneurial discovery and the
emergence and early growth of new activities which are potentially rich in innovation and
spill overs
385
.
Pervasive and disruptive technologies and trends…
There are a number of technologies that are having a transformative impact across all
sectors - primarily (although not exclusively) ICTs/digitisation and sensor technologies).
The environmental agenda requires a response from all enterprises, and provides
opportunity for many in terms of technologies, services and solutions.
Appendix VIII sets out a brief overview of some of the emerging areas of opportunity and
demonstrates that many are an evolution of existing sectors and/or a combination of areas in
which we have capability and/or an end market that can be served by any number of sectors in
which we have strengths. The mosaic of evolving activities calls into question the usefulness of
the term ‘sector’. Moreover, traditional sector classifications and datasets are limited in reflecting
the true extent of diversity across activities and end-markets. Throughout this report we apply
the term sector as a ‘catch all’, aware of the breadth of activities that a so-called ‘sector’ may
represent. The next sub-sections set out:
the changing dynamic that will influence all sectors, activities and enterprises over the
coming decade;
advancing our approach to sectoral development; and
sectoral cohorts - characteristics and policy emphasis.
The changing dynamic - change is the only constant…
Because of the pervasive and fundamental impact that 'digitisation' and 'greening' will have on
all enterprises, it is crucial that Ireland's enterprise policy focuses on harnessing the potential of
cross cutting areas such as ICTs and clean technologies
386
. Increasingly we are aware of the
equally pervasive and value-adding potential from design.
The implications are likely to manifest in different ways, and perhaps over different time-frames,
depending on the sector in which an enterprise operates, the scale of the firm, and its own
strategic objectives - but it is reasonable to conclude that each and every enterprise will be
impacted to some extent over the coming decade.
385 Policy Brief No 8, Smart Specialisation and the New Industrial Policy Agenda, Dominique Foray, EC,
Innovation for Growth - i4g. Entrepreneurs are considered in the broadest sense to include innovative
enterprises, research leaders in HEIs, independent inventors and innovators. Smart specialisation
identifies priorities in terms of activities - based on the premise that the discovery process bridges
present with future strengths of the economy
386 ICT and Clean/Green Technologies are also defined as sectors in their own right, encompassing
enterprises that develop technologies and/or provide services and solutions. These are included in the
commentary below

144
Digitisation is a potentially disruptive force that is already impacting all businesses and has
been discussed in Section C – Connectedness. Digital connectedness, nationally and
internationally is a vital element underpinning enterprise growth to 2025.
The adoption of technologies can also fundamentally alter the delivery of public services -
enhance productivity and lower costs. If we take the concerted actions required in a deliberate
and targeted manner, we could genuinely realise an ambition to establish Ireland as a leading
edge digital location - a location that is known not only for the production of technologies, but
for the innovative use of technologies within our public sector that delivers a higher standard of
living for all and stimulates entrepreneurial endeavours.
It is important to acknowledge that the adoption of ICTs presents challenges too. The
automation of both manufacturing and services processes (including what may have been
previously deemed as knowledge intensive activities) will likely have an impact on employment
intensity of activities, on leadership capabilities and skills requirements and will fundamentally
change the nature of jobs and the workplace (refer to Section C – Talent, including future ways
of working).
The Government has established a High Level Group to assess actions required to ensure that
Ireland can take advantage of Big Data and the Internet of Things. We need to clearly set out
approaches to optimise the potential of these horizontal game changers.
Ireland a digital economy hot-spot within Europe
Ireland will achieve a leadership position as a digital ‘hot-spot’ in Europe in the
adoption and use of advanced ICTs across all aspects of the enterprise economy
and the public sector, including initiatives as part of EU's Digital Agenda for
Europe, and we will:
leverage on our core strengths in enterprise in ICTs (incl. supply
chain management; business process outsourcing; manufacturing
processes; data analytics; software development; etc.)
strengthen our ICT RD&I capabilities;
stimulate adoption of technologies across the enterprise base,
leveraging expertise within HEIs and public research institutes;
meet three quarters of demand for high level ICT skills through
domestic supply of graduates by 2018;
ensure a favourable regulatory, IP and data security environment;
ensure the availability of ubiquitous fast speed broadband by 2020;
and
use public and private partnerships with enterprise and the research
community to facilitate technology and market ‘test-bedding’ to
contribute to addressing grand challenges through innovative use of
ICTs to develop new products, services and solutions.
Whole of
Government

145
Green Technologies The environmental sustainability agenda presents both opportunity and
challenges for enterprises. The related EU Directives and regulations, diminishing natural
resources, rising energy costs, and changing consumer behaviours will drive significant growth
over the coming years
387
. The innovation and development of and/or adoption of green
technologies is relevant to all enterprises to ensure that they can remain internationally
competitive and meet changing demands from a number of perspectives.
For example, manufacturing enterprises are increasingly focused on product lifecycle
management, on environmental impacts throughout the production process (as distinct from
'end of pipe' pollution control) and are seeking to 'green' their products through the use of
novel, 'smart' and bio-materials. Energy management and efficiency, corporate social
responsibility, global travel, transport and logistics, and managing carbon footprint are
important considerations for all sectors and activities including data centre based services,
construction, retail, tourism etc.
Both clean and information & communications technologies area also defined as sectors in their
own right and have been included in the analysis in the next sub-section.
Taking policy actions to achieve our EU commitments and to leverage our
natural resources by 2030
We will build on our many advantages and will enhance our reputation
internationally as a sustainable and green economy, and will:
enhance our RD&I capabilities and stimulating start-ups and growth
in green/clean technology enterprises;
stimulate increased focus by enterprises on investing in improving
energy efficiencies and minimising waste (including through
initiatives such as Lean) and delivering on corporate social
responsibility objectives;
address barriers and ensure mechanisms to realise the potential
from investment in energy sourced from renewables are efficient
and effective;
implement Food Wise 2025, published in July 2015, with a strong
emphasis on environmental sustainability;
encourage sustainable approaches to spatial development and
planning; and
progress smart city-region initiatives (which also leverages ICT
capabilities).
Whole of
Government
387 Across solar photovoltaics, wind power and biofuels, it is estimated that the global market for these
sectors combined will expand from €248 billion in 2013 to almost $398 billion in 2013 (+61 percent),
Clean Energy Trends 2014, Clean Edge Inc, 2014. The EU Commission’s intention to publish a revised
package of Circular Economy measures before end 2015 which will aim to transform Europe into a more
competitive resource efficient economy is also directly relevant in terms of realising economic and
quality of life benefits for European citizens

146
Design There is an increasing policy focus, both internationally and in Ireland, on leveraging
design for economic growth. Recent research has recognised the importance of design in
innovation and national competitiveness. Design is by its very nature innovative - it involves
examining how things work and how they can be improved, a process that continually generates
new ideas and combinations. Design provides a proven competitive edge for businesses and is
relevant to all sectors of the economy (see also Section C Differentiators: Innovativeness). Design
for example, can create unique competitive advantages through the creation and strengthening
of identities and/or brands; allow for new product offerings based on user centric design; has
the potential to lower costs in production, assembly, transportation etc.
It is important that, in this Year of Design 2015, that we develop an evidence base around the
importance and role for design in enterprises across the economy and to identify any barriers
that may inhibit greater engagement in design. Already, ID2015 is driving momentum, including
the establishment of new design networks; the showcasing of new Irish designed products,
studios and companies at core events internationally, some 200 projects funded through Design
Innovation Fund, and extensive social media penetration
388
. These will demonstrate the potential
for increased collaboration with impact in-market, showing technical and design issues can be
solved in a collaborative way.
Leveraging the potential of design
Building on the Year of Design 2015, we will roll-out a strategy for increasing the
application of design across the enterprise sector, including initiatives to increase
the use of design-thinking and its application in, and potential to, stimulate
innovation within SMEs including manufacturing and services activities.
DJEI
Advancing our policy approach to sectoral development
Ireland's enterprise and related science, technology and innovation (STI) policy approach will
increasingly move toward a systems approach over the coming decade in line with new thinking
in enterprise policy internationally. We see the role of Government as a facilitator, coordinator,
networker, promoter and informer in addition to investor.
Our approach will be focused on coordination across relevant government departments;
strengthening institutional frameworks and structures; realising alignment of strategic priorities;
and on supporting the creation of networks and clusters. This is particularly relevant in building
dynamic and supportive ecosystems around our key sectors and activities as their particular
needs evolve and new opportunities emerge
389
.
388 See ID2015 Interim Report at http://www.irishdesign2015.ie/news/single/id2015-the-year-so-far
389 Ecosystem is the business environment within which enterprises operate. It includes the labour
market, higher education institutes and research centres, training providers, regulators, professional
services, transport, communications and utilities infrastructures, state agencies, funders etc. It also
includes other enterprises (competitors and/or sub-suppliers), and customers.

147
A strengthened approach to sectoral ecosystem development
The intensified global competitive environment and pace of change means that a location's
attractiveness for investment and business growth is strengthened when a Government
demonstrates an understanding of the current and future ecosystem needs of sectors and the
capacity to anticipate and respond - this extends well beyond an FDI agenda. The more we
identify/understand sector specific ecosystem aspects and take the necessary action to
accelerate growth (or remove barriers) – the more likely it is that the full potential of a sector will
be realised to deliver jobs & economic impact.
Although the enterprise development agencies work directly with companies in export oriented
sectors and activities, not all sectors of the economy fall within the remit of DJEI and/or of its
agencies. To date (and more so in recent years) it has been challenging for government
departments in the Irish context to maintain a development policy focus in a coordinated
manner on the agenda for individual sectors over a sustained period.
A strengthened approach in terms of an anticipatory and responsive policy system is needed to
see Ireland deliver on its ambition to maintain sustainable growth, to strengthen resilience and
to raise its profile as the best place to succeed in business. The overarching imperative is to
ensure that we continuously review Ireland's business environment and remain to the forefront
as a competitive place from which to succeed in business. Many of the business ecosystem
conditions are relevant to all - including, for example, infrastructures, fiscal policies and labour
market policies. The challenge over the next decade will be to strengthen our understanding of
sector- (or activity-) specific ecosystem needs in a fast paced and competitive environment.. This
involves putting in place a strengthened horizon scanning mechanism, building on the
individual Sector Briefs developed by DJEI and harnessing the in-market knowledge garnered on
an ongoing basis by the enterprise development agencies and embassy overseas networks.
There will also be certain circumstances which warrant an intensive or elevated sector specific
response from across Government at a point in time. The proposed approach aims to embed
strengthened operating principles through the establishment of Ecosystem Development Teams
(EDTs). Determining which sectors, activities or emerging market opportunities are of strategic
significance and require an elevated policy response will not be an exact science. The possible
motivation for initiating an elevated policy response would fall into one or more of three
categories as follows:
Scale of the opportunity – where there is substantial untapped potential that could be
harnessed by enterprise in Ireland. A strategic case would need to be established and
would incorporate a range of empirical metrics; for example: potential contribution to
GVA and employment and the potential scale of the export market; a significant output
multiplier effect or wider spill over effects.
An impending upheaval – from time to time, major exogenous shocks occur which can
have a material impact on business conditions within a sector. Such developments can
present challenges and opportunities that the policy system must be agile in responding
to; for example the ‘patent cliff’ in the pharmaceuticals industry or the reform of the CAP
(catalyst for the Food Wise 2025 process). Appropriate metrics in terms of potential
impact may also need to be examined.
A national imperative – where there is a need for concerted and decisive action where
the future health of a sector will have wider systemic consequences. Examples of this
include the construction or energy sectors, where continued health of the sector is

148
required for social and macroeconomic reasons and not simply the sector’s own
development and direct economic contribution.
It is anticipated that an EDT would be limited in size, have strong leadership, include high level
Government, industry and research community representation, with a clearly scoped Terms of
Reference, would engage in structured consultation, have a sunset clause and be adequately
resourced with a small core team involving a senior level 'business development manager'
390
. It
is intended that the number of EDTs in operation at any one time would be limited and set on a
rolling basis so as to ensure a rhythm of critical questioning
391
. Following the publication of this
enterprise policy, a mechanism would need to be implemented that facilitates a coordinated
response across Government to agree the establishment of an EDT in the first instance, and to
deliver on policy requirements to remove barriers and/or to put in place the necessary enablers
to accelerate growth.
The proposed establishment of EDTs is not intended to replace or supplant the ongoing
activities of enterprise development agencies and/or other government departments (e.g. The
Food Wise 2020 implementation process). It is however, intended to take a more structured
approach to the establishment of such Teams, and to ensure effective use of constrained
resources. Rather than spreading resources thinly to support a large number of groups, this
proposal allows for more limited, concerted and impactful engagement on a rolling basis.
Considering the options for all-island sectoral ecosystems
InterTradeIreland commissioned a study in 2014 to assess the areas of potential advantage that
could be realised by taking an all-island approach to sectoral ecosystem development
392
. The
findings indicated that the benefits of all-island interaction lie primarily in the areas of the
labour market, education and training, infrastructure provision, goods and services markets,
research, technology and innovation and financial markets. The degree to which the potential
benefits of the individual factors can be garnered is dependent on the degree and manner by
which all stakeholders within the ecosystem interact with each other.
Case studies were presented for the pharmaceutical, the medical devices and the ICT sectors. A
number of areas were presented as options for consideration by ITI. The report provides an
informed basis for engaging more deeply with relevant stakeholders
393
to provide a realistic
assessment of the specific policy and resource implications and actions required on both sides of
the Border to address barriers and to realise potential. Some options involve building on
relationships and connections that have already been made.
Without pre-empting which options may lead to greater engagement on an all-island basis, a
snap-shot of the areas of opportunity and strengthening include:
390 Examples of such approaches include the Top Teams approach in the Netherlands and the Matrix
approach in Northern Ireland
391 mirroring the international experience in the Netherlands and if we are to avoid a ‘group surge’
drawing on State resources
392 Mapping the Potential for All-Island Sectoral Ecosystems: A Summary Report, InterTradeIreland,
September 2015
393 Including DJEI and Department of Enterprise, Trade and Innovation, Northern Ireland, relevant
Departments of Education, skills and training providers, enterprise development agencies, Departments
of Health and respective agencies etc. The stakeholder engagement is particular to the specific option
set out

149
Pharmaceuticals:
coordination of research centres, institutes , education/training and networks; and
all-island interoperable clinical trials coordination network;
Medical devices sector:
increasing all-island cooperation in the health information sector;
enhancing coordination of training in medical device commercialisation; and
Software development:
developing an all-island internship scheme; and
increased research collaboration.
Notwithstanding the ongoing need for concerted efforts to realise the ambition set out in this
enterprise policy, it will be important to consider the areas in which effective engagement with
Northern Ireland will benefit both jurisdictions over the coming decade. Such engagement
should be considered in the context of EU initiatives
394
, reducing barriers to cross border trade
within the Single Market, and Ireland's enterprise and SSTI longer term policies.
New approach to sectoral ecosystem development to accelerate growth and
deliver greater economic impact
Implement a systematic approach to sector ecosystem development in the
context of intensified international competition, the pace of change, evolution of
sectors and emergence of new areas of opportunity to enhance economic
performance, impact and international reputation and visibility by:
developing Sector Briefs, and working closely with the enterprise
development agencies and other relevant government departments,
introduce a more systematic and comprehensive approach to
horizon scanning that will harness in-market and sectoral
knowledge. This strengthened horizon scanning will facilitate the
identification of emerging opportunity areas and or disruptive
trends, the early assessment of potential and whether or not there
are sector specific policy implications that necessitate a policy
response;
establishing sector specific Ecosystem Development Teams for
limited periods to progress key sectoral initiatives; and
introducing effective oversight to monitor sector development
across the economy and the emerging requirements for policy.
DJEI
Agencies,
Govt Depts,
Int’l
Networks
Driving all island approaches to sectoral development
Strengthen all-island approaches to sectoral ecosystem development as
appropriate and as opportunities arise to deliver greater economic opportunity
and potential for investment and job creation.
ITI (and
DJEI)
394 Including, for example Horizon 2020

150
Sectoral cohorts - characteristics and policy emphasis
We will take a portfolio approach to enterprise development over the next decade – embracing
all sectors of the economy and recognising that sectors contribute to economic growth in
different ways. An economy-wide sustainable and 'balanced' portfolio will serve to strengthen
resilience in the face of external shocks. The overarching policy focus is on ensuring that we
optimise the potential of the enterprise base - strengthening competitiveness, productivity and
innovation, to ensure a diverse and resilient portfolio of activity. A review of individual sectors
demonstrates that categories of sectors share broadly similar characteristics and business
needs
395
. We have categorised sectors within four broad cohorts (including both manufacturing
and services activities) – see Figure 11 and Table 5:
Transforming employment intensive sectors
Competitive other services and activities
Figure 11 Sectoral cohorts
395 Note that the term ‘sector’ is being applied here in a catch-all way and which facilitates
quantification, cognisant of the diversity within those named and also the blurred edges between them
(discussed earlier in this chapter)
Building
on
Strengths
Realising
un-tapped
potential
Competitive
other services
and activities
Transforming
employment
intensive sectors
CONVERGENCE
CONVERGENCE
CONVERGENCE
CONVERGENCE
ICT
Health lifesciences
International financial services
Agri-food
Internationally traded services
Engineering/
industrial products
Education services
Healthcare services
Creative industries & design
Green technologies &
environmental services
Marine & maritime
Professional services
Personal services
Business services
(locally traded)
Tourism & hospitality
Retail & wholesale
Construction
Transport, logistics &
distribution
Primary production
Other manufacturing/sub-supply

151
Table 5 Sectoral cohorts - brief overview and potential to 2020
396
ICT
Lifesciences
AgriFood
Internationally Traded Services
Internationally trading financial services
Engineering/industrial products
Primarily export oriented - contributing circa 81 percent
to total exports. These sectors reflect the bulk of the
enterprise agency client base. Includes both foreign and
Irish owned entities through from small to large scale
multinationals. Employs 283,100 directly with the
potential to grow to almost 345,000 by 2020.
Tourism
Retail & wholesale
Construction
Transport & logistics
Primary production
Other manufacturing/sub supply
These sectors are primarily locally trading (with the
exception of tourism that generates foreign earnings and
some ‘other manufacturing’). They contribute a
significant proportion to Ireland's total employment at
893,800 today. In the main they play a dual role in the
economy. High proportion of Irish owned, but with
increasing foreign owned presence (particularly
hospitality and retail). Includes companies through from
micro to large scale. There is potential to grow
employment to over 1 million in this cohort by 2020.
Realising untapped potential
Creative Industries
Green Technologies / environmental services
Marine and maritime
Education services
Healthcare services
Broadly defined sectors that incorporate a range of very
different sub-segments and cross a number of
government department areas of responsibility. Includes
creative industries, green technologies, environmental
services, and marine and maritime. Education and health
services present opportunity for private sector provision
and internationalisation. Generally small scale, Irish
owned and regionally dispersed. Employing 213,300
directly currently with the potential to employ a further
30,000 by 2020.
Other locally traded services and activities
Legal, accounting and other professional services
Business and consultancy services
Personal services
Primarily professional, business and personal services
trading locally. High proportion of micro enterprises with
some larger scale providers that deliver services
internationally and/or through global partnerships.
Considerable potential to enhance competitiveness,
which benefits other businesses and the overall economy.
Approximately 187,000 are employed today with the
potential to increase to almost 208,000 by 2020.
396 A bottom up analysis was undertaken by DEJI to better assess ‘where will jobs come from’ across
these cohorts informed by sectoral trends and export potential (as relevant) in the context of Medium
Term Economic Strategy and Spring Economic Statement. Cohorts based on DJEI analysis of relevant
NACE codes

152
The categorisations should be regarded as a snapshot in time. The convergence of formerly
discrete sectors as well as the increased potential for internationalisation point to an evolving
and dynamic landscape. The characteristics are informative (and not definitive) –
entrepreneurship can occur in any of these sectors or activities and small and micro enterprises
are in evidence on each of the cohorts.
Nevertheless, taking this portfolio approach and by analysing our enterprise structure in this
way, we can tailor sector specific policy responses accordingly - ensuring that we target our
constrained resources to optimise economic returns.
This cohort contributes the greatest proportion to Ireland's
exports, accounting for just over 81 percent of total exports
and valued at €168.6 billion - demonstrating Ireland's
comparative advantage. It employs 283,100 people
directly
397
, with a significant multiplier effect in terms of
indirect employment
398
. Both foreign and Irish owned
entities operate in these sectors.
These export intensive sectors are a strategic focus for both
IDA and Enterprise Ireland and will continue to play a
central role in driving Ireland's export growth over the next
decade, assuming a focus is maintained on their next stage
of development and on transformational change, and that
any underlying structural deficits are addressed.
The sectors in this cohort are RD&I intensive although some individual enterprises continue to
be involved in relatively low value added activities. The reality is that if Ireland is to sustain its
comparative advantage, these sectors and enterprises within them need to be highly productive
and innovative in order to compete effectively in overseas markets. Our analysis has shown that
in overall terms a relatively small number of foreign owned entities are responsible for a high
proportion of national business investment in R&D, indicating that further efforts are required to
redress this. Through its prioritisation exercise
399
, the State has oriented the greater proportion
of its investments in Ireland's RD&I infrastructures to address the current and future needs of
these sectors and it is crucial that this investment is leveraged through increased collaboration
between research institutes and both foreign owned and Irish owned enterprises.
Irish entities (with some exceptions) face challenges in terms of reaching scale, although this
points to potential, rather than a criticism of performance to date.
For foreign subsidiaries based in Ireland, their positioning within corporate global strategies is
crucial. This may involve garnering responsibility for specific product lines or territories,
benchmarking favourably against sister sites, and/or involve responsibility for centralised
397 DJEI analysis - based on most recent data available (see Appendix IX for further details and sources)
398 Estimated at approximately 1.9 for exporting sectors (Indecon analysis for DJEI, 2015)
399 The Report of the Research Prioritisation Group, DJEI/Forfás, 2012. Smart specialisation is about
prioritising and channelling resources towards those RD&I investments that have the potentially highest
impact on the national and/or regional economy.
ICT, hardware and software
Health life sciences
International financial services
Agri-food & fisheries
Internationally traded services
Engineering/Industrial products

153
functions such as supply chain management (SCM), customer support, RD&I and a broad range
of headquarter activities.
The enterprise development agencies provide direct financial
400
and advisory supports to
enterprises within these export intensive sectors
401
. The overarching aim is to stimulate
additional greenfield or expansion investment, and/or investments in transformational change
and development that would not otherwise occur in Ireland without such intervention
402
.
Supports are tailored to the specific needs of the enterprise, its strategic objective, maturity and
stage of development.
In order to realise future potential the following are particularly important and have been set
out in greater detail in earlier sections of the report
403
:
Enterprises need to continue to invest in RD&I in the context of intensified competition
and technological disruption. This can be facilitated by a targeted approach by the
agencies to deepen competences of those already investing and to stimulate investments
by (currently) non-R&D active entities. In this context, it is important that we deepen the
understanding of innovation in services and its potential, accompanied by the
development of appropriate initiatives to stimulate greater investment by enterprises in
business services RD&I; in development and/or adapting relevant technologies; and in
behavioural analysis.
There is a need for greater collaboration between enterprises and research institutes
including National Research Centres, Technology Centres as well as strengthened
capabilities within enterprises in IP protection and exploitation, and mobility of personnel
between the research community and enterprise.
Export oriented enterprises need to maintain an in-depth knowledge of end markets and
customer needs, coupled with the skills to identify and capture new opportunities. A
policy focus on developing international sales and marketing capabilities, together with
language skills and an understanding of different cultures and approaches to business is
an imperative in this regard.
We will continue to take a concerted effort to stimulate the scaling ambition of Irish
owned enterprises in a considered way that aims to optimise economic activity in Ireland.
We aim to facilitate enhanced approaches to clustering activities involving both foreign
and Irish owned entities and across sectors.
We will continue to focus on broadening the awareness of the benefits of embracing
principles for enhanced productivity404,
and in particular on stimulating engagement by
400 Operating within EU State aid guidelines, aimed at achieving additionality and addressing market
failure
401 The focus on export oriented activities minimises issues relating to displacement that might occur if
financial supports were available to all enterprises that operate on the domestic market
402 Or would not happen at the same pace and/or to the same scale
403 Section C - Innovativeness (incl. clustering) and Talent chapters
404 Including, for example LEAN, six sigma etc

154
mid-sized companies
405
, by services enterprises, and by mid-sized industrial engineering
entities within the IDA portfolio.
Risk management, regulatory compliance and adherence to high quality standards are
fundamental characteristics of these sectors. The development of skills and capabilities in
these areas is key so that Ireland continues to build on its effective track record to date
and international reputation. There are also likely to be new demands for enterprise-led
skills development as 'new' sectors and activities emerge (e.g. combination health
products, ePayments, renewables).
Deepening Ireland’s comparative advantage
Strengthen Ireland's comparative advantage by attracting new investments,
leveraging State investments in prioritised research areas, effecting continuous
transformational change and being open to new areas of opportunity arising
through convergence and adjacent possibilities. This involves both an
anticipatory and responsive approach in an intensely competitive and fast paced
global environment.
Coordinated action will also be required involving researchers and education and
training service providers.
The recommendations relating to an enhanced approach to sectoral ecosystem
development, trade, strengthened clustering initiatives, enhanced agency
collaboration, RD&I, and cross-sectoral/convergence initiatives are all directly
relevant. Business environment factors that enhance relative competitiveness with
other economies remain crucial to the continued success in these sectors.
DJEI,
Enterprise
agencies
There is nothing fundamentally new about the sectors captured in this cohort, although there is
evidence that there is considerable potential yet to be realised
406
. These dynamic sectors are
generally broad, encompassing a range of very different sub-sectors with very different needs -
and this complexity itself presents a challenge for policy
407
.
The range of activities involved spans the responsibilities of a number of government
departments that have mandates well beyond that of enterprise development. This cohort
therefore in general does not have full 'ownership' at a government department level to drive
the enterprise development agenda (noting that a strategy for marine/maritime is currently
being developed and led by Minister for Agriculture, Food and Fisheries). Enterprise level
405 Refer to www.djei.ie for the Evaluation of Enterprise Ireland’s Lean Business Offer 2009-2012, DJEI
2015
406 Some 'newer' market segments could also be captured in this cohort as untapped potential -
including for example, smart ageing, sport and nutrition - primarily because these market segments will
be addressed by a range of sectors across the economy and would involve a collaborative system of
engagement across government departments and agencies to realise their potential
407 For example, the marine sector relies on Ireland's seas and deals with many competing demands
involving shipping lanes, fishing rights, renewable energy sources, harbour development, tourism and
leisure needs. The creative sector encompasses digital media, fashion design, arts and crafts,
architecture and interior design, and the visual and performing arts

155
supports are disparate and involve a number of
different agencies (including e.g. SEAI, Irish Film Board,
Bord Iascaigh Mhara, as well as Enterprise Ireland and
IDA Ireland).
It is difficult to fully assess the scale of the opportunity,
or even to fully size the sector/activity today because
of data limitations. Nevertheless, global trends indicate
high growth in demand for products and services
delivered by enterprises involved in these sectors, and
there are new market opportunities in emerging and
developing economies. In education and healthcare
services, there is increasing evidence of private sector
provision
408
, in what has traditionally been the domain of the public sector. Education services
presents greater opportunity to trade internationally and/or to attract foreign earnings, and the
trend for healthcare services sees a shift toward a patient centric in community approach to
wellness and health management (as distinct from a hospital centric model) and the potential
for greater use of technologies (eHealth).
From a policy perspective it is important that there is strong and clearly designated 'ownership',
authority and responsibility at Department and Agency level to deliver a cohesive and
coordinated approach to develop the enterprise potential for sectors that cross areas of
responsibility. This aspect was highlighted in Making it Happen, 2010
409
. Some progress has
been made since then. Enterprise Ireland has been designated with responsibility for
international trade in education services. A strategy is currently being developed for marine and
maritime. Although progress has been made in the case of green technologies - with DCENR,
IDA Ireland, Enterprise Ireland, SEAI and SFI working collaboratively - the Action Plan for Jobs
2015 highlights the need for more concerted and coordinated efforts to deliver on the
enterprise potential for energy
410
.
Well-developed locally and regionally based initiatives could play a role here and the Regional
Action Plan for Jobs currently being developed have the potential to drive forward pilot projects
in the first instance, with clearly designated key performance indicators (KPIs). They can
facilitate 'storming, norming and forming' and building of trust that is required to underpin
sustainable clustering over the long term. The design of initiatives is important, ensuring that
objectives are clear, that there are benefits for enterprises, that risks of over-engineering are
addressed, and that there is realism about what outcomes can be achieved in an 18 month to
two year timeframe.
408 However, some private sector opportunities arise primarily as a result of outsourcing policies being
implemented by the public sector, and the public sector may be the only customer for a number of
firms
409 Although not within this cohort, the establishment of a High Level Group for Agri-Food and the
development and implementation of Harvest 2020 demonstrates what can be achieved through a well
championed and coordinated approach involving a range of government departments, bodies and
agencies
410 Identified as a ‘disruptive reform’ in Action Plan for Jobs 2015
Creative Industries & Design
Green Technologies & environmental
services
Marine & Maritime
Education Services
Healthcare Services
eHealth

156
Develop and deliver regionally based sectoral initiatives, including collaboration
across regional boundaries, taking advantage of the €100 million regional
collaborative fund launched by DJEI in 2015, aimed at bringing the key
stakeholders together to take the necessary action to deliver jobs and growth
based on harnessing regionally based assets.
The recommendations relating to addressing grand challenges are particularly
pertinent and require direct engagement by Departments of Health, Education,
Environment and others aimed at delivering increased efficiencies and outcomes
while providing opportunity for Irish based enterprises.
DJEI
Develop the full potential of the Marine economy through the implementation of
the Harnessing Our Ocean Wealth strategy.
Develop and implement strategies for new areas including eHealth, Healthcare
services, Creative Industries and Design.
DAFM
Various
The sectors in this cohort are relatively more employment
intensive and provide a significant contribution to
employment. Today they employ almost 894,000 people
directly, contributing 46 percent to total employment (or
approximately 56 percent of private sector employment),
across a range of occupational disciplines and
throughout the country.
The sectors in this category comprise both foreign and
Irish owned enterprises - a substantial proportion of
which includes small and micro enterprises. Although
there are enterprises within each sector that are involved
in exports, the vast majority trade primarily on the
domestic market (with the exception of tourism which generates foreign earnings generated
from overseas visitors). Increasingly enterprises within these sectors face international
competition on their doorstep as foreign owned entities invest here to serve the domestic
market
411
.
Our enterprise policies will aim to realise an uplift in productivity (for example through lean
initiatives and leadership development), the capacity to innovate and adopt/adapt
411 There are approximately 3,300 foreign owned firms based in Ireland employing approximately a
quarter of a million people. About 1,100 of these are supported by IDA Ireland, and the remainder
primarily service the domestic economy and are involved in activities that include retail and the
hospitality sector (as well as telecoms, natural resources etc.) Policy Statement on Foreign Direct
Investment in Ireland, July 2014, Department of Jobs, Enterprise and Innovation
Construction
Retail
Transport
Tourism & Hospitality
Other Manufacturing
Primary production (Agri)

157
technologies
412
within these (often termed traditional and/or mature sectors). The forces of
change are disruptive for enterprises in this cohort, offering considerable opportunity for growth
in ‘new’ activities and ways of doing business. The opportunities to internationalise are greater
than they might have been a decade ago. A number of these sectors and activities are also
subject to potential disruption arising from the sharing economy. As the sharing economy
expands from a consumer-to-consumer initiative to a business-to-consumer (B2C) and
business-to-business (B2B), new entrepreneurial opportunities as well as challenges to existing
businesses arise. There is potential for established enterprises to complement their existing
business models.
As well as providing direct employment opportunities, the sectors in this cohort play a key role
in the wider business and social environment. They provide a valuable wider contribution to
economic development - such that that their competitiveness is vital to enterprises in a range of
other sectors and activities.
Construction provides and maintains the physical infrastructures and buildings on which
every other industry and society depends. The construction sector forms a crucial part of
the business environment and is a critical competitiveness factor underpinning enterprise
investment and growth.
Retail provides a wide range of services and plays a key role in enhancing the dynamic of
towns and cities and quality of life throughout Ireland, and in contributing to Ireland's
overall attractiveness for investment and mobile talent.
Transport and logistics services are an essential part of the value chain for enterprises
that deliver goods either locally or internationally. Transport network services are crucial
to facilitate the efficient mobility of people throughout Ireland (to and from work, for
tourist activities, to access education & health services etc.) and internationally.
Tourism encompasses a range of activities across hospitality, retail, leisure and cultural
amenities, and Ireland's tourism offering may often be the first exposure an individual has
to the country. Tourism plays a key role therefore in how Ireland is perceived (including
standards, cost competitiveness, attitudes) and in promoting Ireland in overseas markets
(see also Section C – Connectedness).
Other Manufacturing involves those enterprises that primarily target local markets, as
well as those involved in sub-supply to other entities that are exporting. Competitive, high
quality and innovative sub-suppliers are a crucial element of Ireland's eco-system, and
they face intense competition from overseas players and imports. There is potential for a
number of entities in this segment to export and/or to connect into global supply chains
Primary production - agriculture is a key contributor to delivering on Ireland's ambitious
targets set out in Food Wise 2025 413
412 Many opportunities can be realised through the deployment, adoption and/or adaptation of
general purpose technologies that produce a significant impact on the efficiency and quality of an
existing (often traditional) sector - ref Policy Brief No 8 Smart Specialisation and the New Industrial
Policy Agenda, Dominique Foray, European Commission
413 413 Primary production is critical to achieve the ambition for Ireland’s agri-food sector – See also
Foodwise 2025, DAFM

158
Advances in technologies, consumer demands for traceability from farm to fork, and the
not inconsiderable environmental challenges enable and require significant
transformation farming and animal husbandry. A trusted food source will be a genuine
competitive advantage in the global context.
In order to drive competitiveness, enhance productivity and capacity for innovation, we will
deliver a small number of tailored interventions to small enterprises operating in these sectors
that continue to trade on the domestic market
414
.
Competitive locally trading professional, business and personal services
This cohort includes professional and business services (including legal, accountancy, IT, training,
and market research), medical and personal services (leisure, beauty) and others not already
captured in the above analysis.
Enterprises in this cohort include a high proportion of micro enterprises, and a relatively small
number of large enterprises (some of whom are part of an international professional network).
As with the cohort above, a small number of interventions are available to small enterprises
operating in this segment, focused on driving enhanced productivity, innovation and
competitiveness and with the ultimate aim of delivering sustainable employment.
This category plays a key role in terms of input costs for business, and the cost of living for
individuals. Competition policy is particularly relevant.
awareness raising.
DJEI &
relevant
actors
The greatest impact for the development of enterprises in this cohort will be achieved through
measures that enhance the overall business environment to improve productivity and costs and
these are discussed in Section E – Excelling in getting the basics right.
Convergence and adjacent possibilities
As set out above, there is an increasing and ever changing dynamic within and across sectors of
the economy. The pace of change has accelerated, and we are seeing an increased blurring at
the edges of what have been relatively discrete or siloed sectors. For example, combination
414 Enterprises that are exporting and/or have the potential to do so fall within the remit of Enterprise
Ireland. Direct financial supports for job creation are not available to domestically trading enterprises,
with the exception of start-ups involved in manufacturing or internationally trading activities

159
products 'cross' medical devices and pharmaceuticals sectors
415
; while nutraceuticals can be
categorised as a sub-segment of either food or pharmaceuticals and involves companies from
both industries. Convergence is primarily driven and enabled by advances in technologies and
results in potential in new products and services and the emergence of 'new' sectors and
activities. Policy aspects such as regulation, standards and IP are relevant in this regard.
The idea of adjacent possibilities started with evolutionary biologist Stuart Kauffman, which
holds that an idea will catch on, or be readily adopted, if it is 'sufficiently adjacent' (conceptually
or technically closely related) to existing ideas that currently dominate a given market. The core
of the idea is that people arrive at the best new ideas when they combine prior (adjacent) ideas
in new ways. An example might be the application of the knowledge, expertise and
competences in the textiles sector to the development of composites; or of glass extrusion to
photonics.
Opportunities arising from convergence and adjacent possibilities are pervasive and may come
from anywhere and impact on any of the sectors discussed here. The identification of emerging
areas of opportunity will be realised through more effective horizon scanning, facilitating cross
sector networks and/or events; and/or by establishing opportunities whereby enterprises can
collaborate to deliver on grand challenges (a selection of emerging areas of opportunity are
presented in Appendix VIII).
Recommendations relating to grand challenges (Section C – Differentiators: Innovativeness) and
an enhanced approach to sectoral ecosystem development (and specifically horizon scanning)
earlier in this chapter are relevant.
415 Combination healthcare products, for example, include novel drug-delivery systems such as
transdermal patches through to the more complex regenerative medicinal products and enterprises
involved in medical devices and pharmaceuticals sectors

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Strengthening resilience – enhancing overall
enterprise performance
Introduction
Ireland's enterprise structure is somewhat distinctive as a result of industrial policies that have
been in place since the late 50s that have involved the targeting of foreign direct investment
(FDI). The vast majority of enterprises within the economy are Irish owned, with most being
small and trading on the local market
416
. Approximately 5,800 Irish owned export oriented
enterprises are supported by Enterprise Ireland employing just over 180,000 directly
417
. Foreign
owned entities contribute the greater proportion to exports and to value add. It is estimated
that there are approximately 3,300 foreign owned entities based here, of which almost 1,200 are
supported by IDA Ireland employing 169,395
418
. Direct economy expenditure in terms of
materials and services by the agency supported exporting cohorts in 2013 were €13.2 billion for
Irish owned, and €15.6 billion for foreign owned
419
.
The current enterprise mix (in terms of ownership) can lead to suppositions that we are overly
reliant on 'transient' foreign investments and that our FDI policies may have in some way
hindered the growth of Irish owned enterprises. In fact, when 'comparing' data based on
ownership there can be a lack of recognition of the extent to which a number of our innovative
Irish owned enterprises have internationalised and are global leaders in their field. Strong
examples include Ryanair, Kerry Group, CRH, Paddy Power and Kingspan. CSO has only in
recent years started to collect data relating to Irish owned internationalised businesses. Latest
CSO data indicates that Irish owned entities employ circa 245,000 in overseas locations and
realise €75.9 billion in turnover. These companies play an important role in raising Ireland’s
profile internationally as a leading, innovative and entrepreneurial economy.
Earlier analysis set out in this report in Section A demonstrates the structural shift that has
happened within our Irish owned enterprise base. Ireland’s increased focus on stimulating
entrepreneurship and on attracting foreign entrepreneurs and innovative early stage businesses
to establish here forms an important element of the enterprise mix. It is also important to
acknowledge the significant role that our FDI policies have played over the past decades in
realising this transformation such that today, we can boast a much more globalised Irish
leadership with the capabilities to succeed and to achieve scale in international markets
420
.
It is this mix that makes Ireland unique - and it is this mix that can continue to drive sustainable
export growth and job creation and strengthen resilience.
416 98.4 percent of active enterprises in Ireland employ less than 50 people (2012), Business
Demography, CSO Statbank
417 Comprising 156,202 full-time and 23,870 part-time. Údarás na Gaeltachta supports a further c.1,200
firms, employing 6,270 full-time and 845 part-time, DJEI Annual Employment Survey, 2014
418 Comprising 151,747 full-time and 17,648 part-time. The balance has invested to serve the domestic
market
419 DJEI ABSEI, 2013 (latest available data)
420 Enterprise Ireland’s Leadership for Growth programme has proven to be very successful in terms of
driving ambition and international focus within Irish based management teams

162
Nevertheless, we face challenges as we enter the next decade to 2025. The following sub-
sections set out our policy approach to:
simulating greater levels of entrepreneurship and better survival rates;
enabling increased productivity and capacity to innovate in small, locally trading entities;
stimulating the potential to scale within Irish owned enterprises in a way that optimises
economic benefit for Ireland; and
continuing to attract (and retain) mobile FDI in the face of intensified international
competition.
It is evident from the commentary below that some aspects may beg questions of the current
policy distinctions based on ownership. For example enterprises can now internationalise at a
much earlier stage of their lifecycle - the 'born globals'. The attraction factors and supporting
environment required by them are largely the same regardless of whether they are home grown
or foreign owned. The scaling agenda for Irish owned enterprises is an ambition set in the
context of different modes of internationalisation. The complexity and inter-related,
multidimensional aspects of global value networks and ways of doing business require a
continuous reassessment of our policy approaches and agility in terms of policy responses.
Entrepreneurship - stimulating a pipeline for growth
New businesses are a critical element of any economy's growth and performance. New
businesses are the source of new ideas, new technologies, new and disruptive business models
and sectors. New businesses drive change, innovation and competitiveness. New businesses
create jobs.
It is people - entrepreneurs - who create new businesses. Entrepreneurship can be defined as an
individual's creative capacity to identify an opportunity and pursue it in order to produce new
value or economic success
421
. Entrepreneurship and new and sustainable business start-ups
thrive within a dynamic community of like-minded and supportive individuals.
Entrepreneurship is an integral part of Ireland's overall enterprise policy and a National Policy
Statement on Entrepreneurship in Ireland was published in 2014
422
. Entrepreneurship is key to
raising Ireland's reputation and profile internationally as the best place to succeed in business -
to succeed from the earliest stage of formation. The concept of entrepreneurial discovery is
fundamental to Ireland's smart specialisation strategy. Although we have set aside this section of
the report to place a spotlight on entrepreneurship, all other aspects of this report (talent,
innovativeness, connectedness, place-making, the funding environment) are directly relevant to
creating the right environment to stimulate more individuals to see starting a business as a
career option.
421 There is no clear consensus on whether the definition of entrepreneurship should include self-
employment and intrapreneurship (the creation of new corporate subsidiaries from within). This creates
difficulties in terms of measuring a country's entrepreneurial profile
422 This chapter draws from the National Policy Statement on Entrepreneurship in Ireland, 2014

163
Entrepreneurship in numbers
Historically, two thirds of new jobs in Ireland have been created by companies in their first five
years
423
.
Enterprise births in Ireland (a key indicator of entrepreneurship) amounted to 12,551 in 2012,
representing an increase of 6 percent over the previous year
424
. However, this had fallen from a
peak of 16,969 in 2006
425
just prior to the economic recession. The rate of early stage
entrepreneurs
426
increased to 269,000 in 2013 and Ireland's ranking against other countries has
greatly improved over a 10 year timeframe. Ireland is now ranked 11
th
among the OECD
countries, 9
th
of the EU-28 countries and 2
nd
of the EU-15 countries. However, although early
indications of recovery are characterised by high 'necessity driven'
427
entrepreneurship, there is
an encouraging upturn in the number of people indicating they want to start a business within
the next three years (up over 80 percent).
From a sectoral perspective, there appears to be a greater focus on consumer service sectors in
Ireland relative to the EU and OECD (55 percent in Ireland compared to 42 percent and 45
percent respectively). On the other hand EU/OECD has a relatively higher proportion of activity
in business services sectors (27-28 percent EU/OECD relative to Ireland's 21 percent). In terms
of educational attainment, our entrepreneurs are more likely to have higher levels of education
relative to EU/OCED comparators.
The route to starting a company can vary. Many entrepreneurs start their careers in
employment, others come from the research community, some may come from a business
background and take over the running of a family business, others may lead a management
buy-out (MBO), and others may start a business out of necessity (having been made redundant
for example). Research undertaken by Forfás on High Growth Firms (HGFs)
428
indicates a strong
correlation between high growth and the experience of a start-up team. This suggests that the
quality of the pipeline innovation-led HGFs could be enhanced by stimulating spinouts from
established businesses, start-ups amongst experienced professionals and serial
entrepreneurialism.
423 Research published by the Central Bank of Ireland in 2013 concludes that 67 percent of new job
creation comes from companies within their first five years. Research from the Kaufmann Institute in the
United States also indicates that new and young businesses are the primary drivers of net job creation
424 Business Demography, 2012, CSO Statbank (latest available data)
425 Business Demography, 2012, CSO Statbank (latest available data)
426 Total early stage entrepreneurs includes nascent entrepreneurs and new business owners. Nascent
entrepreneurs are those actively planning a new venture, Global Entrepreneurship Monitor Report
(GEM) for Ireland 2012
427 Necessity entrepreneurship refers to people seeking to start a business because they have reduced
alternative employment options
428 Innovation in Agency Supported High Growth Firms in Ireland, Forfás, 2013

164
Our ambition
429
Our ambition is to double the jobs impact of start-ups in our economy and to:
increase the number of start-ups by 25 percent - that is, we aim to see 3,000 more start-
ups being created each year;
increase the survival rate in the first five years by 25 percent;
improve the capacity of start-ups to grow to scale by 25 percent.
Our vision to be the best country in which to succeed in business means that we need to create
the business environment that facilitates and supports business through all phases of its
lifecycle. Our role is to remove any obstacles to starting a business, and to seek ways in which
we can minimise risks, redress any (mis)perceptions of failure within the entrepreneurial
community and ensure that starting a business is considered by many of our young people as a
valid career option.
We will focus on establishing a dynamic environment where like-minded people can collaborate,
network, co-work and have ready access to experienced mentors and/or other business people
that have already navigated the start-up years. We need to ensure a coordinated,
comprehensive and cohesive approach is taken to raise Ireland's profile internationally as a
vibrant hot spot for entrepreneurship and talent
430
.
It is worth reinforcing that the practical aspects of getting started are key for the individual
navigating his or her way through the early stages. There are a number of initiatives that have
been taken by successive governments to reduce barriers to entry for start-ups and to make the
first few years of business easier. These include, for example, the recently completed
consolidation and simplification of the Companies Act
431
, continued focus on streamlining and
reducing the costs of registering a business
432
, and the planned introduction of an integrated
licencing system. We will continue to reinforce the 'think small first' principle in terms of making
it easier for businesses to start and to navigate their way through the first years of trading.
We will continue to focus on attracting overseas entrepreneurs to Ireland - but we must also be
attuned to the fact that Irish entrepreneurs can (and some do) choose to locate in other
jurisdictions. The realities of business, proximity to markets and customers may drive these
decisions. Nevertheless, we need to ensure that we do not inadvertently disadvantage Ireland in
any location decisions being made. Nor can we assume that individuals will opt to start a
business (and create jobs for others) rather than become an employee. In this context we need
to review our competitiveness vis a vis other jurisdictions (and in particular our nearest trading
429 As set out in The National Policy Statement on Entrepreneurship in Ireland, 2014
430 Initiatives such as the Start-up Gathering http://startupireland.ie/, the Web Summit, Activating
Dublin etc., IT’s Happening Here portal are relevant in this regard
431 Note that the Companies Act has been significantly streamlined and amended. There is also
extensive work underway to develop and launch an integrated licensing application service
432 Over the past three years the Companies Registration Office (CRO) has reduce processing time by
three days and the cost of registration by one third due to augmenting its online business registration
facility. The CRO aims to reduce the average length of time required to register a new business to seven
days in 2015. In New Zealand the process takes only a half day, which highlights that there remains
room for further progress to be made

165
partners and competitors)
433
in aspects such as personal taxation, capital gains tax, share based
remuneration in private companies (See Section E – Excelling in getting the basics right:
Taxation). We have reviewed the take-up of existing initiatives and continuously seek to reduce
any complexities and/or administrative burdens (including the Start-up Company Relief
434
, the
Startup Refunds for Entrepreneurs
435
and the Employment and Investment Incentive Scheme
436
).
Establishing an environment to stimulate entrepreneurship will require concerted effort to
continuously assess and reassess what is working and what is not and to take the necessary
actions in a timely manner to redress barriers. We are not operating in a static environment. It is
important to note that a dynamic community is also an attractiveness factor for FDI and for
talent. It is important too, that we look internationally - that we benchmark ourselves against
the best in our aim to be the best.
In terms of direct supports Enterprise Ireland provides supports to early stage enterprises that
are exporting and/or have the potential to do so, and has a key focus on accelerating the
growth potential of high potential start-ups (HPSUs)
437
. The Local Enterprise Offices (LEOs)
provide financial supports to start-ups involved in manufacturing and internationally trading
services (employing less than ten people) and provide Start Your Own Business Courses and a
range of mentor and advisory services
438
. It is important to reflect that companies that engage
in management development and/or embrace mentoring are more likely to survive those critical
first five years
439
.
The range of actions set out in the National Policy Statement on Entrepreneurship in Ireland
published in 2014 is synopsised on the table below. They broadly align with the policy emphasis
set out in this Enterprise Policy 2025 - involving a focus on talent, innovativeness and
connectedness. The concept of place-making is implicit - given that the business environment
and location attractiveness factors will influence where an entrepreneur decides to establish a
business.
433 For example, in 2010, the UK Government published the Corporate Tax Roadmap which outlined a
plan to make the UK corporate tax system more competitive and has initiated a number of reforms that
has meant that Ireland’s relative positioning has disimproved
434 Provides relief from corporation tax for the first three years of trading
435 Formerly the Seed Capital Scheme SCS, and rebranded and launched 2015
436 The Department of Finance review of the tax environment for entrepreneurship (July 2015) is
pertinent in this regard
437 A HPSU is defined as: a start-up that is introducing a new or innovative product or service to
international markets; is involved in manufacturing or internationally traded services; is capable of
creating 10 jobs in Ireland and realising €1 million in sales within three to four years of starting up; is
led by an experienced management team; is headquartered and controlled in Ireland; and is less than
five years old from the date of the company’s registration
438 The LEOs are the first stop shop for small enterprises and provide a range of advisory supports and
information - see next chapter
439 Analysis undertaken by DJEI in support of its systems evaluations indicates that enterprises that
have received management development supports are more resilient and experience higher growth
rates than a comparator cohort of enterprises

166
Table 6 Synopsis of areas for action – The National Policy Statement on
Entrepreneurship in Ireland
Culture, human capital and education
Engaging the education system through from primary levels to
further education, to foster creativity, innovation and
entrepreneurial thinking, and to establish starting a business as
a valid career option
Harnessing the enthusiasm of successful entrepreneurs to
engender an ambition amongst pupils and students to start (and
grow) a business
Business environment and supports
Enhancing the business environment so that Ireland is
internationally recognised as one of the most attractive
environments for entrepreneurship in Europe (including aspects
such as company law, taxation, regulation and licensing)
Innovation
Maintaining a key focus on innovation as a central pillar of
enterprise development - investing in building capacity and
capability, enhancing infrastructures to support the
commercialisation of technologies and promoting Ireland as a
location of choice for international entrepreneurs
Access to finance
Ensuring that Ireland has a strong functioning funding
ecosystem that supports early stage companies, involving a
range of finance options and efficient and transparent processes
Raising awareness of what is available, attracting more angel
and international VC investors, and identifying new and
innovative sources of funding for entrepreneurs
Improving capabilities and skills of both enterprises and lenders
to develop and assess business proposals based on a strong
understanding of markets and sectors
Networks and mentoring
Developing world class entrepreneurial hubs, facilitating the
environment to stimulate networking and peer mentoring,
including for example developing co-working spaces and
accelerators, and leveraging the experience of successful
entrepreneurs
Celebrating and promoting our successes
Access to markets
Further developing local and international sourcing initiatives,
leveraging public sector procurement to provide market
opportunities to innovative enterprises, piloting an SBIR
programme, stimulating engagement in on-line trading and an
export focus from an early stage

167
Without delaying progress on already identified actions that need to be taken, we will deepen
our analysis and understanding of the factors that will have an impact, and we will benchmark
Ireland's entrepreneurship eco-system against international leading locations. Our analysis will
also be informed by systematic and structured dialogue with entrepreneurs and aspiring
entrepreneurs.
Strengthening our entrepreneurship ecosystem in an international context
Implement the National Entrepreneurship Strategy to achieve a 25 percent
increase in the rate of start-up, survival and scaling of new businesses in Ireland.
The National Competitiveness Council will monitor Ireland's entrepreneurship
ecosystem and assess national performance against international comparators
across a range of key indicators and report to the Minister for Jobs, Enterprise
and Innovation on an annual basis.
DJEI/Whole
of
Government
A focus on locally trading enterprises – enhancing competitiveness
Our ambition is to stimulate a greater number of start-ups, to stimulate more companies to
export and to enhance the survival rates overall. Many companies will continue to trade on the
domestic market and they play an important role in Ireland’s economy across a broad range of
sectors and activities (as set out in the previous chapter).
A business environment that is conducive to business start-up and growth is directly relevant to
small enterprises. One of our key principles is to think small first and a number of exemptions
and reduced reporting requirements are in place aimed at minimising administrative burden
440
.
The LEOs that operate throughout the regions in Ireland play a key role in as the first stop shop
for all small enterprises that trade locally. There are a number of existing initiatives that are
available to stimulate enhanced competitiveness at the level of the enterprise. The LEOs may
engage on a one-to-one, and/or one-to-many basis as appropriate and may act as a sign-
posting service in some instances
441
. Utilising a range of existing initiatives, the focus will be on
delivering additionality in terms of:
enhancing productivity - including the adoption and deployment of ICTs and Lean
principles - the LeanStart programme is particularly relevant in this regard;
raising awareness of, and promoting the use of trading on-line vouchers to stimulate
greater adoption of new channels to market;
stimulating first time engagement in innovation, promoting the use of innovation
vouchers to a broader range of sectors and small enterprises and brokering introductions
to the relevant Technology Transfer Office and/or Industry Liaison Officer in the locale.
The LEOs should also consider mechanisms for facilitating groups of companies to
identify common needs in this regard;
440 Including, for example, VAT registration thresholds and cash basis options, reduced filing
requirements in the updated Companies Act, Corporation Tax Relief for start-ups as well as competition
policies, labour market policies, Think Small First principles applied to RIAs etc.
441 It is not expected that each LEO will itself directly provide all of the supports, for example, LEOs can
redirect enterprises to Skillnets, to mentor services provided locally etc.

168
promoting greater use of the range of mentor services available and facilitating peer-to-
peer networks etc., aimed at raising the bar in terms of management capability and
awareness of the value of investing to enhance productivity and innovation; and/or
stimulating increased engagement in regionally delivered management development,
skills and training (including services delivered to networks of enterprises with common
needs by Skillnets) and including ICT literacy, financial awareness and language skills
(particularly for the tourism market).
The realisation of our ambition would likely require a proactive programme of activity over the
coming two years in particular to ‘pump prime’ the potential uplift in performance of enterprises
overall. However, it is difficult to assess the implications of such an approach on resources for
the LEOs (both financial and human resources). A pilot approach (similar to that suggested in
the Review of Mentor Services
442
) could be taken to determine the take up and resource
implications of a more proactive approach before introducing it more widely. It is also
proposed that a formal review of progress/resource requirements be undertaken by mid-2017.
awareness raising.
DJEI &
relevant
actors
Growing the contribution by Irish owned enterprises - building scale
and international visibility
Since the publication of Ahead of the Curve
443
there has been increased emphasis in Ireland's
enterprise policy in supporting Irish owned enterprises to reach scale, and this ambition was also
reflected in Making it Happen in 2010. The enterprise policy objective is to increase the
contribution of Irish owned enterprises to economic growth and to realise a greater balance in
Ireland's overall enterprise mix. This remains a valid objective today.
In order to achieve these aims, we need to see a greater number of our Irish owned enterprises
accelerate their potential to scale in international markets, to achieve leadership positions in
their served markets and to create jobs and deliver economic impact in Ireland.
442 The Review of Mentor Services in Ireland, Forfás, 2014 proposed that 2-3 LEOs would be identified
‘to pilot a more proactive approach to actively stimulate demand, raise awareness and address mind-set
issues with respect to mentoring. This will help to determine the level of unmet demand and evaluate
the potential economic benefits of a more proactive approach in the context of limited resources’.
443 Ahead of the Curve, Ireland's place in the Global Economy, Enterprise Strategy Group, 2004

169
This section sets out considerations at the level of the enterprise before turning to the
increasingly complex policy aspects.
Evidence of increased numbers of Irish owned companies reaching scale
Following on from the publication of Ahead of the Curve, Enterprise Ireland established a new
Division with responsibility to drive this scaling agenda.
Recent analysis of Enterprise Ireland’s portfolio
444
indicates that progress is being made in
relation to growing Irish owned companies to scale. It should be noted, however, that this
analysis is complicated by the fact that if a company has been acquired by a foreign owned
entity it transfers to IDA's client portfolio. Therefore some of our more successful Irish owned
enterprises are missing from such analysis, which means that 'achieving scale' is likely to be
understated. It is also the case that there will always be a number of HPSUs and Competitive
Start companies and new entrants to the Enterprise Ireland portfolios that are at the early stages
of potentially rapid growth.
Nevertheless, it was possible to undertake an assessment of Enterprise Ireland's portfolio of
companies taking snap-shots in time for periods 2004, 2007, 2010 and 2013
445
. The main
findings of the analysis indicates that from 2010 to 2013 there has been a positive shift in the
proportion of Enterprise Ireland client companies attaining higher levels of scale having reached
turnover levels of greater than €10m. Overall, the numbers of firms at the bands of €10-€20m,
€20-€50m and €50m plus are at historic highs over a 10 year period.
Notwithstanding this progress, the evidence points to a particular challenge in getting
companies to break the €5m turnover barrier, or indeed to grow beyond 50 employees
446
. The
proportion of companies with turnover levels at less than €5m remains high at approximately 70
percent of the total client base (although the analysis may also be complicated by the fact that
as 'new' companies enter the Enterprise Ireland portfolio, they are most likely to be in the lower
turnover bracket).
Complementary to this analysis, Forfás looked at the performance of High Growth Firms
(HGFs)
447
within the agency portfolios. HGFs are defined as those that experienced a 20 percent
annualised growth rate over the previous three years
448
. Although these firms represented
between 4.5 and 6.3 percent of the enterprise portfolio of the agencies
449
, they generated
444 Analysis of ABSEI data for the past decade undertaken by DJEI - note that there are data limitations.
Nevertheless, it was possible to provide indicative findings to confirm that progress on the scaling
agenda is being made. In terms of what is meant by scale, we use turnover as an indicative measure.
Companies reaching a turnover in excess of €5 million (and €10 million in the case of the food sector)
are deemed to have reached a reasonable scale - or at least scaling potential
445 Based on weighted or grossed up data and relates to approximately 2,500 to 2,900 enterprises over
the period, DJEI, ABSEI
446 €10m in the case of capital intensive Food companies
447 Innovation in Agency Supported High Growth Firms in Ireland, Forfás, 2013
448 OECD definition of High Growth Firms - An enterprise with average annualised growth greater than
twenty percent per annum, over a three year period, and with ten or more employees at the beginning
of the observation period. Growth is thus measured by the number of employees or by turnover. The
Forfás analysis focused primarily on employment growth
449 The analysis included enterprises employing more than 10 people, supported by IDA Ireland,
Enterprise Ireland and Údáras na Gaeltachta and Shannon Development

170
between 33 percent and 45 percent of new jobs. These findings are within OECD norms. The fact
is that HGFs are found across all sectors and at different stages of maturity/life-cycle and all size
of enterprise (although with the majority being small) - therefore the concept of HGFs it is not
'just' relating to start-ups, and points to the potential for scaling or high growth across the
entire portfolio.
The focus for intervention at the level of the enterprise - our ambition
The analysis has indicated that there appears to be a particular challenge for enterprises in
reaching the €3- €5m turnover 'barrier' (€10m for food companies) and a focus on companies
within this cohort is required. It is estimated that there is the potential for approximately 30
percent of these companies to scale above these turnover levels.
There is also a substantial opportunity to work with our mid-tier companies to stimulate a
significant step change in scale. We could see an uplift of 60 percent in the cohort of
companies with turnover levels of over €100m today
450
. This is a very ambitious assessment of
potential. There are considerable barriers to overcome and challenges facing the
owner/manager and, as discussed above, the enterprise itself may be acquired (which has an
impact on metrics). The emphasis is likely different depending on personal circumstance and
company strategy.
The challenges facing the enterprise (owner/manager)
The challenges facing enterprises on their scaling journey are multifaceted and particular to the
company - which also means that the supports and advisory services provided need to be
specific to the needs of the company at the particular stage of its scaling journey. The range of
challenges involve, for example: leadership capabilities and ambition; risk appetite; succession
planning (including in the case of family owned businesses); competence in sourcing strategic
funding options (including for example equity and quasi-equity) and in acquisition strategies;
tax implications; and personal circumstances. These present in different ways depending on the
company's strategy, organisational structure, market focus and business model.
Accepting that the needs of enterprises are different, the evidence indicates that leadership
ambition and competence are absolutely critical to a company's potential for sustainable
accelerated growth. A specific focus on leadership development, cascading to the wider
management development team is warranted in the first instance.
It is not intended to restrict any company (regardless of size or sector) from being supported by
the agencies to scale beyond their current level. Each business development plan is assessed in
its own right, and agency decisions are made on the basis of anticipated outcomes and
additionality arising from the provision of appropriate levels and types of support. However, a
specific focus is suggested on 'breaking the barrier' at the lower end of the spectrum on the one
hand, and on 'realising a step change' on the other.
The broader challenges….
In today's globalised environment the scaling agenda is not as simple as it might have been a
decade ago when highlighted in Ahead of the Curve. Global business models are becoming
increasingly complex and are fundamentally changing the stage at which companies become
global, and there are different ways in which companies internationalise. Over the next decade,
450 There are currently circa 55 companies in the Enterprise Ireland portfolio with turnover in excess of
€100 million and 225 with turnover in excess of €20 million (and less than €100 million)

171
it is also likely that scaling will no longer be a policy consideration 'just' from the perspective of
Irish owned enterprises, as IDA Ireland attracts companies at an earlier stage of their lifecycle.
Mobile business functions
In general, larger scale entities will seek out the most appropriate locations from which to
address markets, to access lower input costs and/or strategic assets. We are already seeing
evidence of disaggregated supply chains and functions and activities such as R&D becoming
mobile in some of our Irish owned enterprises. In these cases, Ireland is competing against other
locations to win such investment. Although the strategic control of the Irish owned enterprise is
likely to remain rooted here, decisions are made on the basis of business and strategic
objectives and on delivering shareholder value and we cannot assume that an Irish owned entity
will always chose to locate mobile investments in Ireland.
From a policy perspective, for these larger scale companies (which will likely be a relatively small
number of companies overall) our value proposition and negotiation becomes similar to that
used to influence FDI location investment decisions.
Outward direct investment
Many Irish owned companies establish and/or acquire operations in overseas markets in order
to access lower input costs, and/or to be closer to their primary customer (including in the case
of sub-supply) or to reduce time to market
451
. It is important to point out however, that such
strategic moves made by the Irish owned enterprise serve to enhance their competitiveness and
the evidence indicates that these companies also continue to grow employment at home.
Although we cannot (and should not) provide direct financial supports for job creation in other
jurisdictions, we need to acknowledge the business reality, and engage in strategic
conversations with companies that are at this stage of growth. Considerations such as
organisation structures (internationally), headquarter activities, locus of control, intellectual
property (IP) management and exploitation, RD&I and new product introduction etc., are
directly relevant to ensure that the economic return to Ireland is optimised and that the
enterprise is sustainable over the longer term. Supports can be provided to stimulate
investments in Ireland in strategic functions such as RD&I and shared services models and in
developing skills and capabilities in acquisitions/IP exploitation etc. Our relative cost
competitiveness is a key consideration in this regard.
Born globals and early stage internationalisation
Many technology and/or internet services enterprises are globally mobile at a relatively early
stage of their life-cycle and are, in effect, 'born global'
452
. While this offers a rich prospect for
attracting FDI, it can present a challenge as we seek to scale Irish owned companies from an
Irish base. This phenomenon is not necessarily new to Ireland. We know that many of our Irish
owned software and technology companies in particular seek to establish overseas to gain
access to end customers and/or to access a vibrant VC community and a dynamic
451 As set out in Section C – Connectedness chapter, our analysis indicates that there has been
considerable growth in ODI (outward direct investment) over the past decade. Latest CSO data for 2013
indicates that Irish owned entities employ circa 261,000 in overseas locations and realise €91 billion in
turnover (sales)
452 Born globals can reach international markets and operate initially with relatively small teams that
are scattered throughout the world - and connected through innovative use of technologies

172
entrepreneurial environment. However, as we look to the next decade, and as more companies
than ever are likely to be internationally mobile at a much earlier stage of their life-cycle, we
need to better understand the implications for our policy objectives to grow the contribution of
Irish owned enterprises to employment, exports and economic expenditures. In this context, our
business environment for entrepreneurs, technology infrastructures, access infrastructures, and
funding environment are all critical to ensure that we (at least) retain a piece of their global
footprint (and ideally their headquarters).
As IDA Ireland is now involved in attracting enterprises to invest in Ireland at an earlier stage in
their growth lifecycle, the proposition to attract such investment and the supports needed are
more akin to those offered by Enterprise Ireland. Such early stage investments will also likely
increase the overall risk profile of IDA Ireland's portfolio of companies. It is important that this is
an accepted part of our new approach and that, while every effort will be made to support the
accelerated growth of these earlier stage enterprises on Ireland's shores, there are likely to be
failures. For IDA Ireland a concerted focus on assisting these potentially high growth companies
to scale quickly in a sustainable way will be required.
Trade sales and the IPO alternative….
Technology rich and innovative enterprises tend to be ripe targets for acquisitions and/or
mergers. Larger scale enterprises can benefit significantly from acquiring 'de-risked' disruptive
technology and new business model ventures driven by entrepreneurs453
. Over the past number
of years, there have been a number of acquisitions of Irish owned enterprises
454
. Although
Ireland is a relatively small target market for cross-border M&A activity today, there is a
likelihood of more activity here in the context of increased European based cross border M&A
deals
455
and the mode of investment generally taken by 'newly active' emerging economies in
FDI. From a policy perspective, it is important that there is structured engagement between the
enterprise development agencies as and when such activity comes to light within their portfolio
of companies.
In addition, a relatively small proportion of supported enterprises have had an initial public
offering (IPO). In the context of the scaling agenda, we need also to deepen our understanding
of owner/manager motivations for opting to sell and to facilitate informed discussions on the
range of alternative options for growth (including profitability and reinvestment, equity/quasi-
equity, IPO, alternative sources of funding, joint ventures, partnering, acquisitions, etc.).
Measuring and celebrating success
The approach taken currently to reporting on the performance of our (agency supported) Irish
owned enterprises is focused on a number of key output measures including (gross and net)
exports and (gross and net) job creation in Ireland. It is only in more recent years that any focus
453 In the case of pharma companies, for example, the past number of years has seen significant M&A
activity as they sought to complement their portfolio with more innovative bio-pharma products
454 On average is estimated that 15 agency supported Irish owned enterprises have been acquired by
foreign owned companies over the period 2006-2011, peaking in 2007 and 2008
455 M&A activity in Ireland in 2013 was dominated by loan book sales, private equity and deals in
financial services, pharma, biotech, energy and technology. The outlook for M&A activity in Ireland for
2014 and beyond is for increased levels of M&A activity based on global trends in M&A and renewed
confidence in the Irish business environment. Source: Mergers and Acquisitions, Grant Thornton,
November 2013

173
has been given to international sales/turnover (i.e. sales completed in overseas markets) and to
employment created in overseas markets
456
. From the perspective of demonstrating the
economic impact resulting from State investment, this is understandable. Nevertheless, from the
perspective of fully reporting on the scale (and international reach) of our Irish owned
enterprises, it falls considerably short. There is limited data available to increase our full
understanding of the economic benefits arising to Ireland from ODI (e.g. in terms of repatriated
profits).
Other factors include the fact that any reporting on scaling of Irish owned enterprises and
relevant trend analysis is negatively impacted if/when an Irish owned enterprise is acquired by a
foreign owned entity (may also involve a transfer of the company from the Enterprise Ireland
portfolio into IDA Ireland's portfolio, which can result in an 'under-reporting' of Enterprise
Ireland activity).
It is important too that we reflect the wider benefits arising when our Irish owned enterprises
reach scale and/or achieve leadership positions in particular markets. An Irish owned enterprise
that gains international visibility serves to raise the profile of Ireland as a good place from which
to succeed in business - as a source of innovative, technology rich enterprises and as a source of
entrepreneurial talent. A successful Irish owned enterprise serves as a demonstrator to budding
entrepreneurs and to other businesses of what is possible (and often the owner/manager is
willing to share experiences and help to short circuit the market entry journey for others).
This Enterprise Policy 2025 sets out a suite of measure(s) of Irish owned company performance,
and we will keep under review what the most appropriate (and informative) measures should be
over the coming decade (see Section F). We will (across Government), together with our
agencies457
, continue to promote the successes of Irish based entrepreneurs internationally.
In conclusion
It is increasingly apparent that the scaling agenda involves multi-dimensional considerations. It
is a complex area involving not only the ambition and/or risk appetite of the enterprise owner
(and possible interventions to address market failures in this regard) but a much broader
agenda that involves born globals, modes of internationalisation, global value networks and our
focus (to date) on growth in exports as a key metric. The reality is that a proportion of the scale
that can be realised by Irish owned enterprises will likely happen outside of Ireland.
It is also apparent that there is an even greater role for increased collaboration and cohesion
with the enterprise development agencies (and others). The actions set out in Section C –
Connectedness in relation to trade and investment are directly relevant, as is the proposed suite
of metrics set out in Section B to assess economic outcomes and enterprise performance.
456 Since 2010 CSO has collated data on the overseas activities of Irish affiliates and other relevant
statistics, however the datasets are not linked currently which limits their usefulness. There is very
limited and incomplete data available from the DJEI ABSEI in relation to ODI – see Section F
457 Since the publication of Making it Happen in 2010, Enterprise Ireland has considerably refreshed its
web-site and profiles a number of Irish owned company success stories. There is potential for these to
also be reflected more extensively in IDA commentary and promotion

174
Growing our Irish owned enterprises to scale
Support a greater number of Irish owned enterprises to grow to scale at an
accelerated rate, beyond their current turnover levels. This will require a tailoring
of interventions to meet the specific needs of the scaling enterprise, with the
objective of delivering to Ireland's enterprise policy objectives to grow exports and
employment.
EI
Other factors are directly relevant as set out in this report, including access to
finance, strategic use of funding options, leadership capabilities, and strengthening
our understanding of modes of entry to international markets.
FDI - delivering economic impact in a changing global environment
Foreign Direct Investment (FDI) has been a key contributor to Ireland's economic development
and growth for a number of decades. Ireland continues to punch above its weight, attracting
more investment per capita than most other developed countries. In 2013 Ireland was ranked
10
th
in terms of FDI project inflows globally, ahead of countries such as Germany, Spain and the
Netherlands
458
. Ireland was one of the few countries that experienced an increase in FDI flows in
2012. Ireland's strong performance is also reflected in its top five ranking in Europe for projects
won in a number of sectors and activities including pharmaceuticals, biotechnology, medical
devices, software/IT services, semiconductors, shared services and contact centres.
Although Ireland has performed well over the past decades, we cannot be complacent. A
number of countries operate quite aggressive FDI policies and strategies, with attractive
offerings on property, tax, visas and other incentives. In this context, Ireland's relative cost
competitiveness, corporate tax rate and available direct firm level financial supports remain
critically important. However, in reality they are merely the table stakes and will be insufficient to
substantially differentiate Ireland's offering for FDI over the next decade.
DJEI developed and published its Policy Statement on Foreign Direct Investment in Ireland in July
2014. The following draws from the relevant research, analysis, findings and policy actions, and
data has been updated where relevant.
Delivering economic benefit
Today, FDI employs over 250,000 people directly, including foreign owned enterprises that have
invested in Ireland to serve the domestic market
459
. Agency supported foreign owned entities
directly employed 160,768 people full-time in 2014 and a further 138,260 people indirectly
460
.
They contributed 72 percent to total corporation tax revenues in 2012, spent €15.6 billion on
materials and services sourced in Ireland (in 2013), and invested just over €1.3 billion in R&D
458 Global Investment Trends Monitor, No 15, 28 Jan 2014, UNCTAD
459 Business in Ireland 2012, CSO
460 A further 18,616 are employed on a part-time basis. The employment figures here refer to all
agency supported foreign firms, including clients of IDA Ireland as well as a small number of Enterprise
Ireland and Údarás na Gaeltachta client companies

175
(equating to 64 percent of all business expenditure in R&D
461
) in 2014. Nevertheless, despite
this performance, there are some challenges. In terms of R&D, although foreign owned entities
contribute the higher proportion toward BERD, there is a relatively small proportion of entities
engaged in R&D activities.
Foreign owned entities also contribute in terms of knowledge transfer, enhanced productivity,
higher order skills and management capability and provide a platform for entrepreneurship.
In 2014 of 197 investments overall, 55 percent of investments emanated from foreign owned
entities already established here. While this points to the importance of continuing aftercare, it
also highlights the continuing importance of raising Ireland's profile and offering in global
locations where we are less well known. In terms of source markets, 49 percent of investments
operating in Ireland as of 2014 are from the US and employ 69 percent of the total employed in
foreign owned companies
462
. This level of reliance on the US as a source market underlines its
strategic importance to Ireland. It also suggests that more can be achieved in other markets,
especially in emerging markets. In addition, a relatively high sectoral concentration, while
strengthening Ireland's comparative advantage in a number of areas, means that we need to
continuously be alert to how these sectors are evolving and to seek out new areas of
opportunity.
Our ambition
Our overall objective is to have 2,180,000 million people in employment by 2020. FDI has an
important role to play in delivering on this ambition, but it will be challenging in the context of
the uncertain external environment and intensified global competition. Sustaining the levels of
growth delivered by agency supported foreign owned companies over the past three years will
require that Ireland delivers on the actions set out here. IDA Ireland's recently published
strategy targets the delivery of an additional 35,000 net jobs by 2019 which aligns with the
DJEI’s FDI policy statement
463
. Related indirect employment would deliver an additional 28,350
jobs approximately
464
. This ambition also places a focus on sustaining jobs, so a continued focus
on transformation of existing activities and capturing reinvestments is a critical element of
Ireland's FDI policy
465
. Enterprise Ireland is responsible for the attraction of FDI in food and for
working with foreign owned food entities as they develop their activities in Ireland.
Job creation remains high on the Government's agenda as we exit from a particularly
challenging period of an economic downturn. Nevertheless, it is important to acknowledge that
jobs are but one aspect of the range of benefits that FDI can bring, and that the policy focus on
ensuring sustainable growth involves a wider perspective. Our ambition is that FDI will:
461 R&D expenditure figures are based on a survey that includes both agency and non-agency
supported enterprises; Business Expenditure on Research and Development (BERD) 2013/2014. The
2014 figures are estimates; CSO, 2015
462 DJEI Annual Employment Survey 2014 (DJEI calculations)
463 The Policy Statement on Foreign Direct Investment in Ireland asserted that, taking into account the
Winning Abroad initiative, IDA Ireland can attract (and sustain) investments that will deliver between
42,000-45,000 direct net jobs in total over the period 2015-2020. IDA Ireland's strategy was informed
by, and developed in the context of the FDI Policy Statement
464 Based on a multiplier of 1.81 (DJEI calculations)
465 The rate of job losses in foreign owned entities has seen a year on year decline since 2009, DJEI
Annual Employment Survey 2014

176
contribute to enhanced productivity and value add;
develop capabilities and critical mass in sectors and will introduce new types of activity;
enhance Ireland's innovative capabilities with a greater number of foreign owned
enterprises across all sectors and activities engaging in RD&I;
contribute through direct economy expenditures to indirect job creation in the domestic
economy;
enable access to global value chains for Irish owned companies; and
optimise the potential contribution of FDI to regional economic development as part of
cohesive regional spatial and economic strategies.
Inward investment can continue to make a substantial contribution to Ireland's future growth if
we continue to create the right environment that anticipates and meets the needs of today's
globalised businesses. The global trends set out earlier in this strategy demonstrate that we are
operating in a constantly changing and intensely competitive environment. In this context, we
cannot assume that investment will 'just happen' or that what we have to offer today will be
continue to offer a compelling proposition over the next few years.
A changing environment globally for FDI
We are now operating in an environment where global competition for the attraction of FDI has
intensified. There are new players coming into the picture that provide a competitive location of
choice for potential investors. In 2013 FDI inflows to developing economies was valued in excess
of €700 billion, the highest level ever recorded and accounting for 56 percent of global FDI flows
in 2014
466
. These developing economies are also a source for mobile investment for which
Ireland can compete. There remains considerable uncertainty in the global environment overall
with continuing volatility in FDI flows, and flows into Europe and the EU have reduced
substantially.
In this ever more competitive global economy, the motives for FDI are increasingly based on
strategic asset seeking - such as technologies, customers and talent. This has led to increased
instance of other modes of investment that include mergers and acquisitions (M&A) and
partnerships with research and HEIs.
As alluded to above, a pervasive trend globally is the accelerating young economy dynamic.
Companies are mobile at a much earlier stage in their lifecycle and need multi-territory presence
for growth. IDA Ireland has expanded its focus to attract early stage high growth companies to
invest in Ireland as they seek to address European (and other international) markets. This
expanded role has implications for IDA's marketing proposition, and the need for access to a
broader array of supports - more akin to those offered by Enterprise Ireland. The phenomenon
of the dynamic Tech Hub is also relevant - not only from the perspective of attracting early
stage companies, but also in terms of attracting mobile entrepreneurs (the role of Enterprise
Ireland).
In terms of sectors, change is the constant theme as highlighted in the previous chapter -
creating both challenges and opportunities for attracting FDI over the coming decade.
Availability of talent features strongly in location selection, and the role of cities is becoming
466 Global Investment Trends Monitor, No. 18, UNCTAD, 29 January 2015

177
increasingly evident. These factors are considered in greater detail in the earlier Section on
Differentiators (including the chapters on Talent and Place-making).
Our national Policy Statement on Foreign Direct Investment in Ireland
467
has set out a range of
actions, distinguishing between enhancing the Ireland 'product', and the role of IDA as Ireland's
investment promotion agency. A synopsis of the actions/focus is set out in Table 7 overleaf.
These actions align with the policy emphasis set out here - namely talent, innovativeness, place-
making and connectedness - and are focused on those aspects that will attract mobile
investments that will contribute to our objectives for sustainable growth. The FDI Policy
Statement acknowledges that we need to maintain our efforts in addressing the table stakes
468
,
including relative cost competitiveness, our fiscal regime, and investment in national and
regional infrastructures.
Attracting, expanding and sustaining Foreign Direct Investment
Implement the Policy Statement on Foreign Direct Investment in Ireland, and
deliver on the IDA strategy
469
to attract and sustain investments that contribute
to our national enterprise policy objectives.
DJEI/ IDA/EI
467 DJEI, 2014
468 The term ‘table-stakes’ refers to the minimum prerequisites to attract FDI
469 Winning - Foreign Direct Investment 2015-2019, IDA Ireland, 2015

178
Table 7 Synopsis of areas for action – Policy Statement on Foreign Direct Investment
in Ireland
Strategic focus Areas for action
Building on
strengths and
positioning for
new opportunities
Continued focus on company transformation and enhanced levels of cross-agency
information and market intelligence sharing so that opportunities within and across
these sectors are identified at an early stage
Target increased levels of food and beverage investment
470
Build globally competitive clusters and ecosystems for key sectors
Source markets
Strengthening the relationship with the US and diversifying Ireland's FDI portfolio
esp. opportunities in emerging markets
471
Positioning Ireland as a leading European location for start-ups and fast growing
businesses
Nurturing key
differentiators
Talent: Develop and implement a National Talent Drive : involving a focus on
human capital development and on broader factors that will attract and retain
mobile talent
Place-making: Continue to develop credible propositions for our city regions,
leveraging regionally based assets and potential (the Regional Action Plans are
pertinent - see Section C - Place making)
Further enhance the Dublin City Region - as a place to live, invest, grow a business
and nurture innovation.
Connected world leading research: Reinforce Ireland's profile in terms of
enterprise-aligned scientific excellence with impact (in line with the Research
Prioritisation Exercise) and include ambitious targets to grow a defined number of
national research centres that will conduct world leading research of relevance to
key growth sectors in Ireland.
Business
environment
Attain a top 5 international competitiveness ranking
472
;
Prioritise capital investments to underpin the development and growth of Ireland's
productive sectors;
Maintain a competitive corporate tax regime that rewards productive investment;
Work with market players to provide attractive property solutions.
470 Enterprise Ireland is responsible for the attraction of FDI in food and working with food companies
as they develop their activities in Ireland
471 Based on the tiered approach set out in the Review of the Trade, Tourism and Investment Strategy
2010-2015
472 In Enterprise 2025 we have set out the ambition to achieve a top three ranking amongst the most
competitive small countries in the world

179
Leveraging our distinctive enterprise base
Our policy emphasis on connectedness requires that we place increased emphasis on realising
the benefits from our distinctive enterprise dynamic that boasts leading edge global players and
technology and innovation rich agile enterprises. At a minimum a deeper coordination between
the agencies is now needed than has been pursued over the past number of years.
There is a need for enhanced coordination in the following areas:
Attracting overseas mobile entrepreneurs and early stage companies
From an enterprise policy perspective in terms of entrepreneurship, start-ups and early stage
companies, ownership is much less of a differentiator than might have been the case heretofore.
Enterprise Ireland has responsibility for the attraction of mobile entrepreneurs to Ireland, and
IDA Ireland for the attraction of companies that are at an early stage of internationalisation. It is
likely that each agency can benefit from the knowledge and experience of the other. The
broader suite of Enterprise Ireland internationalisation supports, accelerator programmes, and
the VC funding environment are particularly relevant to the specific needs of the early stage
foreign owned endeavours being targeted by IDA Ireland. We need to build on the current
coordinated approaches in place to ensure that we are making optimal use of the respective
strengths and offerings of the enterprise agencies and that separate responsibilities do not
inadvertently result in a fragmented marketing message or fragmented support infrastructures.
Delivering a coordinated approach to attracting mobile entrepreneurs and
emerging companies
Establish Ireland as a leading Start-up location for internationally mobile
entrepreneurs through developing and promoting the Ireland value proposition
that packages the elements to position Ireland as a leading European location for
start-ups and fast growing businesses including: the funding environment; IP
framework; structured access to Enterprise Ireland's overseas network and its
market-led innovation programmes in commercialisation, technology
development and diffusion and in internationalisation, marketing and leadership;
an enhanced visa regime and extension of the tech visa to other areas of unmet
demand in high skilled areas; and place and quality of life attributes etc.
DJEI/ EI/
IDA and DJE
Inter-firm relationships & clustering
As noted above, in the changing global dynamic of global value networks, enterprises engage
with each other in a number of ways, including sourcing, partnerships (e.g. joint ventures),
equity, patronage and collaboration (e.g. RD&I) and corporate venturing. There is likely to be
greater M&A activity in Ireland, and Irish owned enterprises will internationalise in a variety of
different ways. There is further potential for Ireland to leverage the fact that many leading edge
global foreign transnational corporations are established here (accepting that the decision
making and control is not necessarily vested in the operation here) to stimulate greater
collaborations, partnerships and inter-firm relationships. There are inherent risks involved,
particularly with regard to the potential acquisition of our technology rich enterprises. We will
remain attuned to what is a reality of the business world, enhance our understanding of the
motivations of our Irish owned enterprises and ensure that the guiding principle in any policy

180
action should be aimed at securing the optimum economic return for Ireland's future economic
growth.
The need for a heightened policy approach to facilitating clustering activity has been
highlighted in the chapter on Connectedness (Section C). Such initiatives require commitment
from the agencies (including IDA Ireland, Enterprise Ireland, and Science Foundation Ireland) as
well as the Higher Education Institutes, Research Institutes, Technology Centres and other key
stakeholders in order to fully realise the benefits that can arise from genuine engagement
between enterprises of differing scale and ownership and between enterprises and research
institutes.
Strengthening collaboration
Throughout this report, we have set out instances whereby greater collaboration between
foreign and Irish owned enterprises and between enterprises, HEIs and the research base can be
fostered. These are summarised below. We will:
increase the number of enterprise collaborations with the research community supported
by SFI and Enterprise Ireland and including IDA Ireland;
increase sourcing of domestically produced goods and services by export oriented
enterprises by 25 percent to reach at least €36 billion by 2020, which will, in turn, support
job creation in the wider economy;
stimulate increased engagement by enterprises with HEIs in regionally based skills fora;
drive the implementation of a national step change in competitiveness that includes a
focus on productivity, innovation, collaborating to compete and internationalisation and
including peer-to-peer best practice sharing and networks
473
;
collaborate and coordinate activities in-market, including engagement with the embassy
network through local market development teams;
coordinate the development of clustering activities of scale focused on clear objectives
and with international visibility, and including collaborative enterprise responses to grand
challenge approaches;
deliver a coordinated approach to attracting mobile entrepreneurs and emerging
companies; and
identify and stimulate regionally based activities that will harness the full potential of the
regions to create employment
474
.
We will make optimal use of the respective strengths and offerings of the enterprise agencies
and will deliver a coherent and cohesive enterprise support framework. The agencies will define
appropriate targets and metrics to drive and monitor progress across the range of collaborative
activities both in terms of level of activity and value/impact.
473 Refer also to Making it in Ireland, Manufacturing 2020, Forfás, 2013
474 As set out in the Regional Action Plans for Jobs (forthcoming), DJEI

181
Concluding remarks
Changing external forces and the increasing interconnectedness in a globalised environment
may require that we revisit our policy approach in the coming years. Distinctions based on
ownership are becoming increasingly blurred. Aspects such as lifecycle stage and/or scale may
be more informative in terms of our policy emphases. The agencies (and DJEI) will need to
continuously review the focus, emphasis, primary responsibilities and areas that necessitate
complementary and/or collaborative action.
Policy responsiveness and effective execution will make a real difference to Ireland's ambition to
be the best place in which to succeed in business.

183
The role of the agencies - supporting transformation
and resilience
Introduction
We are aware that the most impactful role for the State is to continue to enhance the business
environment that encourages investment, entrepreneurship and growth. Nevertheless, the
enterprise development agencies and the Local Enterprise Offices (LEOs) play a crucial role in
delivering on enterprise policy objectives – in stimulating increased investments and delivering
sustainable growth at the level of the enterprise and through focused investments in enhancing
the business ecosystem.
Direct financial interventions to support capacity building (in terms of capital and employment)
are primarily targeted at those companies that are exporting and/or have the potential to do so.
This will remain as a key principle of our enterprise policy over the coming decade
475
. The
emphasis of our policy interventions are increasingly focused on building capability within
enterprises - to enhance leadership skills, productivity and the potential to innovate in order to
deliver on our objectives for sustainable job creation and growth over the longer term (and
which are aligned with EU policy objectives).
Focused investments are made by the agencies to strengthen the RD&I infrastructures
(including national research centres, technology centres and gateway centres) and to enhance
the VC funding environment.
Our policy over the next decade aims to strengthen a systems approach in terms of how we
engage with enterprise and optimise the use of available supports to deliver greater economic
impacts.
The enterprise development agencies
There are a number of agencies that provide supports to enterprises, aimed at stimulating
increased economic activity. These include IDA Ireland, Enterprise Ireland and Science
Foundation Ireland that operate under the auspices of DJEI. In addition the Local Enterprise
Offices (LEOs) (formerly the County Enterprise Boards) operate as the first stop shop for all small
enterprises. The LEOs which have been integrated to Local Authorities now operate under the
Department of Environment and Local Government although Enterprise Ireland continues to
provide the overarching strategic policy direction and coordination services.
….and others….
Other bodies and agencies provide supports including for example Teagasc (primary
production), Bord Bia (coordinated marketing of food products), the Irish Film Board (the film
industry), Údarás na Gaeltachta and the Western Development Commission (both regionally
focused), Sustainable Energy Authority of Ireland and the LEADER programme (focused on rural
development). This is not an exhaustive listing, and serves to highlight the somewhat complex
environment, from the perspective of the enterprise, that exists today. Each body has a
475 The State plays a key role

184
particular mandate, and we need to ensure a cohesive, seamless and integrated delivery system
and to caution against the potential for 'mission creep'
476
.
The following focuses primarily on the agencies that fall under the auspices of DJEI and the LEOs
as the primary enterprise development agencies and offices.
While the enterprise development agencies and offices deliver to the overarching goal of
enterprise and employment growth, they each have distinct mandates and client portfolio.
Enterprise Ireland is responsible for the development and growth of Irish owned enterprises in
world markets and works in partnership with Irish owned enterprises to help them start, grow,
innovate and win export sales on global markets
477
. Enterprise Ireland supports a company
throughout its lifecycle - through from start-up to scaling. The agency adopts a holistic,
developmental approach and supports are tailored to address the needs of the enterprise
depending on its stage of development. In this context the suite of supports it offers is broad,
spanning leadership, management development and training, internationalisation, productivity,
RD&I, capital investment and access to finance. The agency has also played a key role in
strengthening Ireland's VC environment. Enterprise Ireland’s remit also extends to
commercialisation of state funded research and to stimulating RD&I collaboration between
companies, both foreign and Irish-owned, and with research institutes. It is also responsible for
the attraction to Ireland of inward investment from foreign-owned food and beverage
companies.
IDA Ireland’s objective is to partner with potential and existing clients to help them establish or
expand their operations in Ireland. IDA Ireland operates in an environment of intense
competition with other countries and Investment Promotion Agencies. The mobile investment
generally involves one or more business functions and seldom involves a fully vertically
integrated operation with end-to-end responsibility and activities across the supply chain. IDA
Ireland’s transformational agenda aims to help foreign owned entities already based in Ireland
to continuously reposition themselves to remain strategically important to the parent entity.
The primary financial supports used to support this agenda include RD&I research, development
and innovation, as well as training, capital and environmental supports478
.
Science Foundation Ireland (SFI) has a specific mandate as the national foundation for
investment in scientific and engineering research. It invests in academic researchers and
research teams who are most likely to generate new knowledge, leading edge technologies and
competitive enterprises in the fields of science, technology, engineering and maths (STEM). SFI
has supported the establishment of a number of National Research Centres, aligned with the
research priority areas set out in Ireland's research prioritisation exercise and smart
specialisation strategy. SFI also promotes an awareness and understanding of the value of STEM
to society and to the growth of the economy. SFI plays a key role in advancing collaborative
476 For example, with Enterprise Ireland and Bord Bia in supporting food companies, with the
enterprise development agencies and SEAI in terms of environmental supports, and with the LEOs and
LEADER that have a regional (rural) focus
477 Enterprise Ireland also provides supports to foreign owned food and beverage enterprises and
other enterprises engaged in the development of Ireland’s natural resources
478 More recently the IDA is working with Enterprise Ireland, to develop an initiative to stimulate the
adoption of Lean principles aimed at addressing the needs of a cohort of its client base and in response
to Making it in Ireland, Manufacturing 2020, Forfás 2012

185
efforts among education, government, and enterprise and in enhancing Ireland's attractiveness
for overseas investment.
LEOs provide a first stop shop for small enterprises. Financial supports are provided to start-ups
(those employing less than 10 people) involved in manufacturing or internationally trading
services, and a range of interventions including start-your-own business, mentor services etc.,
are more widely available. LEOs provide access to a range of supports to small entrepreneurs
(i.e. employing less than 50) either directly or by way of signposting to relevant providers. Such
supports include innovation vouchers, online trading vouchers, lean start and management
development supports.
Enterprise supports
State financial supports aim to stimulate additional economic activity - in the form of new
business investments and/or through the transformation of existing companies to accelerate
growth in exports and job creation. There is a suite of interventions available through the
agencies aimed at stimulating increased and sustainable economic activity (Figure 12).
Figure 12 Financial supports available from the enterprise development agencies –
delivering outcomes and impact
Source: DJEI
The agency programmes operate within EU State Aid guidelines
479
which set parameters for the
grant intensities permitted. For example, the regional aid guidelines (RAGs) have a direct
479 The primary State aid categories relevant to enterprise supports relate to entrepreneurship, SMEs,
research development & innovation, training, employment and risk capital, most of which fall under the
Export and
Employment
GrowthTransforming existing companies:
Value added
RD&I intensity
Survival rates
Productivity
Transforming existing companies:
Increasing economic activity
New business investments
Start-ups
Greenfield
Expansions
Agencies financial supports
Start-up and entrepreneurship
Capital and employment grants
RD&I
Management and skills
development
Mentoring
Internationalisation
Productivity

186
bearing on the provision of supports to incentivise employment creation in disadvantaged
regions
480
. Modifications to the RAGs over recent years have effectively limited the use of capital
and employment grants for large companies.
State aid refers to forms of public assistance using taxpayer funded resources, given to
undertakings on a discretionary basis, with the potential to distort competition and affect trade
between Member States of the European Union. Although state aid is banned because of its
anti-competitive effects, categories of schemes are approved because their positive effects are
considered to outweigh their negative impact. State aid rules can apply to grants, loans, tax
breaks and/or the use or sale of a state asset for free or at less than the market price. The State
Aid Modernisation (SAM) initiative focuses on ensuring that state aid policy is supportive of the
goal to achieve a strong, dynamic, integrated and contestable single market; and to provide
greater clarity, transparency, predictability and rationalisation of the procedures.
The guiding principle is that aid should only be given where there is an incentive effect, used
only where there are genuine market or system failures and/or to redress regional disparities.
The SAM process has also resulted in an increased focus on ex-ante evaluation that places an
onus on Member Stats and agencies to ensure that the support schemes in place are within the
relevant rules and are evaluated to ensure ongoing compliance.
In broad terms, the enterprise agency financial supports aim to either:
increase capacity – to stimulate greenfield or expansion investments (increase the base of
companies); or to
build capability - in order to accelerate sustainable growth in job creation and/or exports,
to strengthen resilience and/or to garner strategic responsibility within a global
corporation (e.g. through leadership and management development, investments in
RD&I, enhancing productivity and competitive positioning in an international context).
There is no ‘either/or’ in relation to the above objectives. The evaluations reinforce the need to
ensure an appropriate balance between activities focused on capacity and capability building
and the role of each in contributing to jobs and growth. Such a balance is based on the concept
of a continuing spiral of ‘competence building - capacity building – competence building….’
depending on life-cycle stage and baseline capability and/or strategic positioning within a
corporate. The balance of supports may also be determined by the broader economic
environment, by EU state aid guidelines and by the challenges and opportunities faced by
enterprise at a particular point in time. Coming from an evidence base means that any such
decisions are well informed.
The following enterprise policy aims will continue to apply over the coming years, with
interventions being used by the agencies as appropriate:
Broadening the base of companies that:
invest in Ireland (including start-ups, foreign direct investment, expansions, overseas
entrepreneurs);
General Block Exemption Regulation. Regional Aid Guidelines and De Minimus Aid can also apply
(Appendix X)
480 Also, Horizon 2020 sets out objectives and targets at an EU level and also for Member States

187
are exporting and/or have the potential to do so;
engage and invest in RD&I to develop and deliver differentiated products, services
and solutions and address new market opportunities; and/or
are involved in value added and productive activities.
Building depth in capability within enterprises:
in core competences that are not easily replicable and that enable them to build scale
and to gain leadership positions in markets;
to set strategic, long term ambitious goals for growth with the ability to deliver on
them;
in terms of Irish owned entities, strengthen strategic approaches to identifying and
utilising appropriate sources of funding/financing at appropriate stages of
development; and/or
in terms of foreign owned entities, to play a key strategic role within their
corporation.
Agency supports delivering impact
We need to ensure that our state interventions are delivering impact and stimulating additional
economic activity. DJEI has recently completed a comprehensive programme of evaluations of
individual agency programmes (including those provided by IDA Ireland, Enterprise Ireland,
CEBs (now LEOs) and SFI interventions where there is a touch point with companies)
481
. The
evaluations were undertaken across three broad thematic areas; start-ups and entrepreneurship;
research, development and innovation; and business development supports
482
.
A systematic programme of evaluations of agency supports – evidence of impact
The findings of the evaluations showed that the individual supports were deemed to be
appropriate, efficient and effective
483
. Where relevant, a cost benefit analysis was undertaken
and in all cases a positive return to the State for its investment was evidenced. It is not intended
to detail all of the findings or recommendations of the individual programmes here, but by way
of example
484
:
turnover per employee for HPSUs increased over the evaluation period (2004-2010) by
114.8 percent. The comparator group (non HPSUs) showed an increase of 8.4 percent
over the same period;
481 Earlier evaluations were undertaken by Forfás on behalf of DJEI (Forfás is now integrated as the
Strategic Policy Division within DJEI)
482 Reports for each thematic area, and for the individual interventions within each thematic area are
available at www.djei.ie
483 With the exception of the relatively low cost eBMI (e-Business) intervention in that it was not
possible to definitively attribute the outcomes to participation in the programme
484 The reader is advised not to directly make comparisons with regard to CBA - the methodologies are
set out in the full reports available on www.djei.ie

188
exports as a percentage of sales for HPSUs increased from 32.6 percent in 2004 to 79.8
percent in 2010. The comparator group saw fluctuations within the range of 35.6 percent
and 38.9 percent;
companies that received supports under the Enterprise Ireland Research, Technology and
Innovation (RTI) programme increased strategic and technical skills levels and export
intensity since they first obtained grant approval. An analysis of cost benefit indicates that
a return of €1.82 was achieved in the year 2010 for every €1 of support. It is important to
recognise that the evaluation spanned a period of economic boom and bust - for
example, the CBA in the year 2007 (i.e. immediately prior to the recession) demonstrates a
return of €3.34;
Enterprise Ireland company expansion supports estimate a return of €2.81 for every €1
approved. Although not always possible to quantify, the evaluations evidenced significant
behavioural additionality identified in leadership ambition and strategic capabilities, skills
and firm survival rates;
the IDA Ireland RD&I initiative shows that a return of €5 was achieved in 2009 for every €1
of state investment, and that the programme delivered on its objectives to increase the
embeddedness of foreign subsidiaries in Ireland;
the SFI, Centres for Science, Engineering and Technology (CSETs) led to a step change in
the number and depth of relationships between academics and the business community
in Ireland and an increase in the quality of research being undertaken here in Ireland; and
at the time of the evaluation (2012) circa 70 percent of industrial participants had made
use of, or planned to make use of, research centre outputs; and
lean client companies had an annual productivity value that was of the order of €37,000
per employee higher than in the control group485
. This likely underestimates the longer
term impact, given that the analysis cannot pick up any programme effects on capacity
increases (for the same inputs) that have yet to impact on sales. The econometric analysis
also revealed that the increase in productivity was not at the expense of jobs.
The evaluations have informed and will continue to inform the design and development of
individual interventions to ensure enhanced effectiveness and efficiency.
An overarching perspective – informed by evaluation
A synthesis of the programme of evaluations was completed in 2015
486
. The overarching
analysis complemented the individual programme evaluations and demonstrated that the
agency assisted enterprises demonstrated resilience and strong performance relative to the total
enterprise base.
The enterprise development agencies (IDA Ireland and Enterprise Ireland) delivered an increase
in net employment of 25,616 over the past three years (2012 -2014) since the launch of the
Action Plan for Jobs process
487
. Overall, within the agency client base the enterprises that
485 Based on sales per employee and based on an analysis primarily of the LeanStart programme.
Companies engaging in LeanPlus and LeanTransform were at earlier phase of their specific project and
therefore not amenable to ex-post analysis
486 Evaluation of State Supports for Enterprise, Synthesis and Conclusions, DJEI, 2015
487 DJEI Annual Employment Survey 2014

189
received supports demonstrated greater resilience throughout the recessionary years, in that
they recovered at a faster pace and greater rate than the cohort that did not
488
.
Taking a look at the pre-post boom periods (2001-2014) agency client companies demonstrated
the ability to bounce back at a faster rate than the overall economy in terms of annual
employment growth (Figure 13). Employment growth in the agency firms was behind the
national average from 2001 to 2007, reflecting the very strong growth in the domestic sector,
particularly in more labour intensive areas such as construction and retail over this period, in
addition to the challenging international trading conditions in the early part the decade
489
.
Figure 13 Annual employment growth – IDA Ireland, Enterprise Ireland firms & total
economy 2001-2014
Source: CSO QNHS, DJEI Annual Employment Survey
The employment impacts of the collapse in the domestic economy and the crisis in international
markets are evident in 2008-2009. Notably, in a reverse of the trend from 2001-2007,
employment growth in the exporting sectors has been higher than the wider economy since
2009. It would appear that there is a lag between employment growth and growth in exports,
which is expected as firms use up existing capacity before increasing employment.
Enterprise Ireland and IDA Ireland companies exhibited strong recovery in exports in 2010 and
2011 given the low base in 2009 (Figure 14). Enterprise Ireland supported companies have been
growing exports at a faster rate than total economy exports
490
. This increase in export growth is
now translating into strong employment growth.
488 Evaluation of State Supports for Enterprise, Synthesis and Conclusions, DJEI, 2015
489 It should be noted that Enterprise Ireland began to work with the contracting construction sector in
2008 to promote the internationalisation of the sector
490 Total economy exports include e.g. primary production, bulk commodities and other merchandise
and services that are not generated by the enterprise agency supported cohort of companies
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Enterprise Ireland IDA Ireland Total Economy

190
It is important to acknowledge that transformational change is vital if a company is (even) to
sustain existing employment when operating in a fast paced and intensely competitive
environment. In this context, we may not always see a direct increase in net job creation
particularly in the short term as enterprises are building capabilities in leadership, management
and/or innovation for example.
Figure 14 Percentage growth in exports – IDA Ireland, Enterprise Ireland firms, & total
economy exports 2001-2014
Source: CSO Balance of Payments, DJEI Annual Business Survey of Economic Impact
An analysis of churn provides evidence of strengthened resilience and sustained employment
within the agency client cohort. Churn looks at gross job losses taken as a percent of the
previous year employment base. In the case of Enterprise Ireland's portfolio churn has decreased
from a peak of 16.9 percent in 2009 to 6.5 percent in 2014. Even in 2006-2007, when
employment was strong, the level of gross job losses was at 8 to 9 percent, indicating that
Enterprise Ireland companies on the whole are now sustaining more employment than in
previous years. The same analysis of IDA Ireland's client portfolio shows that gross job losses
decreased from a peak of 14.9 percent in 2009 to 6.5 percent in 2014. And similarly, in the peak
employment years the level was between 8.8 and 10.1 percent.
A suite of supports – tailored to deliver greater impact
The evaluations serve to highlight the specific role that each intervention plays within the overall
enterprise policy context. The agencies take a company centric approach and tailor support to
company need and strategic development to deliver economic impact.
The enterprise cohort is different for each of the agencies and therefore so too is the range,
rationale and objective of each direct intervention. Even within the agency client bases, there is a
range of companies of very different scale, strategic ambition and life-cycle stage. In this regard,
having a suite of supports available to companies depending on size and stage of development
is appropriate – and there is no compelling evidence to support a pre-defined sequencing
and/or combination of supports. Nevertheless, our evaluations and review has highlighted a
-15%
-10%
-5%
0%
5%
10%
15%
20%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Enterprise Ireland IDA Total Exports

191
number of aspects that inform the way in which this system of supports can be used judiciously
to deliver greater economic activity and longer term sustainable growth.
The importance of extending an active and competitive company base
We need to continuously incentivise new company formation and first time investment
(including start-up and greenfield investment) focusing on improving the survival rates and
longer term sustainability. Our aim is to deliver more in terms of an active and competitive
company base that demonstrates the ability to scale on international markets, and (in terms of
foreign owned enterprises) to play a strategic role within the overall corporation. The
evaluations indicate significant value in those supports provided by the LEOs, Enterprise Ireland
and IDA Ireland which stimulate new investments. Interventions which incentivise behavioural
change within existing companies and enhance their competitiveness so that they engage in
‘new for them’ activities, such as RD&I and/or productivity enhancements, are crucial in terms of
broadening and refreshing the client bases, and will continue to be part of the intervention mix.
The importance of capability building from the outset
Companies at the very early stages of development that have engaged in management
development and internationalisation have much better growth outcomes relative to the general
population
491
. Consideration should be given by the LEOs and by Enterprise Ireland to ensure
that appropriate capability building supports such as mentor services and/or management
development are provided either in advance of any other financial incentives and/or as part of
an overall capacity building financial support package (i.e. ‘smart’ money). Such a focus would
also serve to deliver on the ambition set out in here to strengthen the survival rates of start-ups.
A continuing and concerted approach to building leadership and management capabilities
The leadership/management development and skills measures within Enterprise Ireland account
for relatively high proportion of total projects (30 percent) but a relatively small amount of total
approvals expenditure (11 percent), which suggests a relatively low cost compared to other
measures. The individual evaluations demonstrate a significant impact in terms of mind-set
change, levels of ambition and strategic capability to deliver on an accelerated growth path.
A focus on competitiveness - transformational change
The Government has a role to play in terms of enhancing the business environment and in
addressing relative cost competitiveness in areas where it can exert direct influence (See Section
E – Excelling in getting the basics right). We need a continued focus on delivering
transformational change and competitiveness at the level of the enterprise, targeting areas
where there is less take-up of interventions to date including e.g. Lean, RD&I and Innovation
vouchers (technology adoption) across the enterprise base and including both Irish owned and
foreign owned entities.
The need to review (and refresh) offerings for investment and re-investment in light of
intensified international competition
IDA Ireland is now attracting foreign enterprises that are at an earlier (or first) stage of
internationalisation. It is likely that the broader range of internationalisation activities,
accelerator programmes and sources of funding (e.g. VC funds) are more pertinent to this
491 Based on more detailed meta-analysis undertaken by DJEI of companies employing less than 10
people

192
cohort than has been the case heretofore for IDA Ireland client companies. For this cohort a
bundling and/or packaging of interventions (and including both financial supports and
advisory/brokering supports) likely presents a more compelling proposition encompassing, for
example, Lean, RD&I (including innovation in services and business process), market access,
environmental and training supports.
Developing strategic client engagement models
As discussed above, the agencies develop strong working relationships with their client base. As
companies continue on a growth path and/or compete against affiliates for the next wave of
investment, it is important that the State plays a supportive role. Sectors and activities
continuously evolve, and so too do the companies and their way of doing business. Investment,
therefore, is not a ‘one-off’, but a continual spiral of improvement involving capability building -
capacity building - capability building ….etc.
The analysis points to the challenge faced by the enterprise development agencies to target
supports where it is likely to generate optimum return on state investment, deliver job creation
and export growth and where it results in a better outcome than would have been achieved
without intervention. The nature, ambition and capabilities of the entities differ (within both
Enterprise Ireland and IDA portfolios); enterprises are at a different scale and stage of lifecycle
development; the opportunities and challenges are company specific and the agencies operate
with limited resources.
The analysis points to: high returns achieved when dealing with companies of scale (as
evidenced in IDA Ireland’s RD&I programme evaluation); greater returns achieved from bundling
supports and building longer term relationships; the increase in numbers and proportion of
companies of scale within Enterprise Ireland’s portfolio as a result of continuous engagement;
the sustained impact resulting from investment in leadership development; as well as the
success of lower value interventions in broadening the base and activity of enterprises.
Based on the analysis and findings of the overall suite of evaluations, the agencies are better
informed as to how to develop a more strategic and targeted approach to working with its client
cohort. This would involve, for example considering when and where an intense engagement
model would be of value; in dealing with the broader range of needs of early stage foreign
owned entities; in working with more mature entities on transformation; in sequencing and/or
combining supports more effectively etc.
A complex environment?
Small companies in particular point to a complexity in terms of what is on offer. This complexity
(perceived or otherwise) may be exacerbated to some extent by marketing approaches that
‘brand’ certain interventions to attract a particular cohort of prospective clients – e.g. to attract
more female entrepreneurs, or focused on a specific region or sector. Other sources cite the
range of State Bodies that can serve to add to the complexity for small enterprises and start-ups
in particular including e.g. BICs, LEADER, IoTs etc., as well as a range of sector specific and/or
regionally based bodies492
. This issue is one that has been cited for a long number of years, and
some attempts have been made to address it. The Government’s SME support tool
493
aims to
492 Including for example, Bord Bia, Irish Film Board, Fáilte Ireland, Western Development Commission,
Údarás na Gaeltachta, Bord Bia, Irish Film Board, etc.
493 https://www.localenterprise.ie/smeonlinetool/businessdetails.aspx

193
guide SMEs to the most appropriate agency. Although Enterprise Ireland has made some
progress in streamlining its suite of offers, there is scope to further simplify the menu of options
available for start-ups and early stage entities. It is also crucial that relevant Development
Advisors within Enterprise Ireland and the LEOs are adequately equipped and can signpost to
other relevant service providers if/as necessary (including for example Skillnets).
Increasingly, enterprises are also citing the challenge in navigating the research infrastructure
environment - which from their perspective can be daunting and unclear as to ‘what is what’ and
includes National Research Centres, Technology Centres, Gateway Centres. Some progress is
being made to address this and Knowledge Transfer Ireland is a significant initiative in this
regard.
An integrated and collaborative approach
The enterprise agencies play a key role in stimulating investments, economic activity and
accelerated growth above that which would be achieved without direct intervention. At the
same time, the business environment is becoming increasingly complex, and the needs of a
company differ depending on stage of its development, scale and strategic ambition.
Our analysis demonstrates that there is a comprehensive suite of supports available, and that
the way in which we use such supports – appropriate to the needs of the enterprise, and
focused on delivering on defined objectives - is important in terms of adding value.
Nevertheless, from the perspective of the enterprise there is scope to improve the alignment
and coherence of the range of services available across all of the agencies charged with
supporting enterprise development.
We will ensure that we are making optimal use of the respective strengths and offerings of the
enterprise development agencies and that separate responsibilities do not compromise a
coherent and cohesive enterprise support framework.
An integrated and collaborative approach to supporting enterprises
Deliver an integrated approach to meeting enterprise needs, ensuring that the
range of services on offer across the development agencies as a whole is aligned
and coherent to business, in areas such as linkages, entrepreneurship, leadership
and management development, sectoral ecosystem development, and trade and
investment promotion. This includes agencies of other Departments such as Bord
Bia in relation to food companies, Fáilte Ireland in relation to tourism, and of
entities such as the LEOs, BICs, LEADER and IoTs in relation to small firms and
start-ups nationally and regionally.
DJEI and
others
Strengthening evaluations: best practice in a complex environment
As the OECD points out, evaluation of enterprise policy is relatively nascent and has some
catching up to do with other policy areas (including for example, infrastructure investment or
health)
494
. In this context, the suite of evaluations of enterprise supports completed by DJEI and
Forfás over recent years has helped to advance evaluations practice and capabilities
494 Evaluation of Industrial Policy: Methodological Issues and Policy Lessons, Warwick, K. and A. Nolan,
OECD Science, Technology and Industry Policy Papers, No. 16, OECD Publishing, 2014

194
considerably. The evaluations have served to strengthen the development of individual policy
interventions and have provided robust evidence to demonstrate that value for money is being
achieved in supporting enterprise development. The approach taken also serves to highlight the
complexity involved in isolating the impact of an individual programme from within the overall
system.
The development of enterprise supports and policies over the coming decade in Ireland should
continue to be informed by strong evidence, informed by robust and independent evaluations.
As enterprise policy itself evolves toward a systems approach, Ireland is now well positioned to
build on its expertise in managing complexity. Nevertheless the evaluations have highlighted a
number of areas for focus in the future development of evaluations practice and enterprise
policy development:
embedding a culture of evaluations;
advancing evaluation methodologies and approaches;
managing complexity; and
developmental evaluation.
Further embedding a culture of evaluations
While the agencies have detailed ex-ante evaluation and appraisal at project level in the case of
IDA or investment plans in the case of Enterprise Ireland, information at higher programme level
is less consistent. Ex ante evaluation at the design and or re-design stages of an intervention
requires a clear statement setting out: the enterprise policy context; the theory of change and
specific programme objectives; the rationale for State intervention; how the support is intended
to operate within the overall system of supports; and its interaction or synergies with other
supports
495
.
In terms of objectives, although the ultimate aim of agency programmes is to deliver enhanced
export and employment growth, the specific programme may seek to achieve this, by for
example, increasing R&D activity (with R&D intensity identified as a metric), enhancing
productivity (with output per head used as a metric), or strengthening survival rates. More
specificity is required in setting out objectives for the individual programme and the metrics that
will be used to determine impact and/or outcomes.
Some progress has been made in this regard and Enterprise Ireland is committed to continuous
evaluation. While IDA Ireland carries out evaluation at project level, consideration should be
given to improving management information systems to allow for routine monitoring at a
programme level.
Ensuring independence in evaluations
It is appropriate that each agency continues to undertake regular evaluation of its own
programmes, including ex-ante, interim and ex-post evaluations. At the same time, it is crucial
for the integrity of the evaluations that they are conducted in a manner that is robust,
independent and stands up to external scrutiny.
495 Ex ante evaluation should be undertaken in line with the DJEI evaluation framework to ensure
consistency of approach

195
Advancing evaluation methodologies and approaches
Managing complexity
Evaluating the direct supports is important for ensuring the individual programmes are
appropriate, functioning as they should, achieving specific objectives and delivering
additionality. The evaluations undertaken to date recognise that the agency client companies
have access to a range of financial supports and to a range of ‘soft supports’ including advisory
supports from the agencies, peer networks, opportunities for collaboration and access to
overseas office networks. Given the numerous variables which are difficult to control for
496
, the
evaluation of enterprise supports is arguably more complicated than, for example, evaluation of
infrastructure projects where the parameters are more clearly defined.
The evaluations of agency supports undertaken to date can be categorised as sitting somewhere
in between the OECD ‘complicated’ and ‘complex and complicated’ type of evaluation, in that
the individual programme evaluations were grouped together as part of an overall approach to
the development and evaluation of enterprise policy. The OECD sees these types of evaluation
as more informative compared to a ‘simple’ approach to evaluations (Table 8).
Table 8 Two-way classification of the industrial policy evaluation challenge
Single measure Package of measures
Standard / well
understood
Simple – use rigorous
counterfactuals, control groups,
state of the art estimation
techniques
Complicated – apply single measure techniques
to components and where possible, take account
of interactions and multiple treatments and
influences
Uncertain /
complex
Complex – use experimental
methods, test/learn/adapt
Complex and complicated. Counterfactuals may
not be possible. Apply single measure
techniques to components, take account of
interactions and systemic effects, use qualitative
measures and more informal methods of
learning by doing
Source: OECD, Evaluation of Industrial Policy, 2014
In addition to assessing the individual programme appropriateness, effectiveness and efficiency,
the programme evaluations helped to better understand how supports interact with each other,
spill over effects and unintended consequences. For example, there were significant capability
building impacts evident in the evaluations of RD&I and higher additionality arising from
combinations of supports was evidenced in the internationalisation programmes evaluation.
Furthermore, some of the evaluations assessed partial deadweight to provide a more nuanced
approach to assessing impact and additionality
497
.
496 For example ambition, strategic capabilities, flexibility, networks in addition to advisory and soft
supports
497 As developed by Lenihan, 2004, Evaluating Irish industrial policy in terms of deadweight and
displacement: a quantitative methodological approach, Applied Economics, Vol 36, Issue 3, pp 229-252

196
Systems thinking also requires that evaluations of state interventions focus not only on the
quantifiable and the monetary benefits but also deepens our understanding of wider economic
impacts (e.g. multiplier effects and clustering impacts) and behavioural change. For example,
behavioural effects such as increasing enterprise level capabilities, collaboration or incentivising
strategic change are now clear aims of state intervention beyond a simple calculation of
economic return. This systems thinking adds considerable complexity for meaningful
evaluations.
In this more complex and complicated environment, OECD recommend that a variety of
evaluation approaches may be required. This includes, programme logic model evaluation and
greater use of qualitative methods, case studies, analysis of secondary data and testing new
forms of evaluation such as hypothesis testing.
Developmental evaluation
Linked to the need to manage complexity, there is potential to experiment with more
‘developmental’ forms of evaluation methodologies within the existing DJEI evaluation
framework. The developmental evaluation concept is congruous with the notion of the
‘experimental State’ which situates evaluation as a key policy tool in developing modern
enterprise and innovation policy. Such approaches could be beneficial where new models of
engagement with enterprises are developed and as the systems approach in enterprise policy
itself evolves, for example, in the areas of clustering, peer-to-peer networks, or one-to-many
interventions.
Developmental evaluation techniques include randomised control trials498
and hypothesis
testing. Randomised control trials are more appropriate in pilot programmes that may be rolled
out on a much larger scale. Questions regarding selection or fairness in approach can be
counteracted through a phased introduction of a scheme.
Hypothesis testing or theory-based evaluation could be particularly useful in smaller
programmes, where 4-5 distinct measurable hypotheses about how the programme will impact
(e.g. increases private sector RD&I, more public-private partnerships) can be ‘checked’
periodically. This is a short, sharp, less resource intensive approach whereby a programme can
be evaluated at a higher level but with quite a good degree of certainty that the programme is
doing its job. Where the hypotheses are not acting as intended when checked, a more in-depth
evaluation can proceed if necessary. The OECD has pointed to a potential template for such an
approach
499
.
498 Randomised control trials involve randomly awarding supports to some applicants and declining to
others and tracking the ‘treated’ versus non-treated group performance thereafter relative to the
programme objectives. There may be challenges in implementing in the context of a relatively small
enterprise base, state aid and regulatory and legislative issues would need to be considered
499 Evaluation of Industrial Policy: Methodological Issues and Policy Lessons, Warwick, K. and A. Nolan,
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197
Embedding a system of evidence based policy development to maximise
economic impact arising from state intervention
In the immediate term:
undertake an evaluation/review of Ireland’s trade and investment
promotional activities overseas as part of the overall system to
stimulate trade and investment; and
using the concept of developmental evaluation, identify an
appropriate intervention in the short term and undertake an ex-ante
review (An example might include the proposed clustering initiatives
or grand challenges approach).
DJEI
DJEI

IN
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O
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AGILE
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Section E

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Finance for growth
Introduction
This chapter looks at Ireland's funding environment for enterprise and sets out our ambition
within the context of Enterprise Policy 2025 aimed at supporting a competitive, innovative
enterprise base over the coming decade.
The funding environment
Finance is the lifeblood of every business. It is needed at every stage of the business
development lifecycle from the start-up phase through to growth and expansion. Enterprises
need access to finance for working capital and to fund expansion and growth. In order to
remain competitive enterprises need to invest to enhance productivity and skills, to increase
capacity, to develop new products and to access new markets.
The international financial crisis and the systemic problems within our national banking system
together created an extremely challenging environment for SMEs in relation to accessing
finance. The challenges facing SMEs in Ireland are the product of a complex interplay of
demand and supply side factors. Both pre- and post-crisis, Irish SMEs are among the most
reliant on bank financing in Europe
500
. Consequently Irish SMEs have been disproportionately
exposed to the weaknesses in the banking sector. Much work has been done over recent years
to disentangle the demand and supply side factors, to redress the many issues that impeded a
healthy flow of credit and to encourage increased and appropriate lending to business. Over the
period of Enterprise Policy 2025 there will be a continuing need to ensure:
competition in the banking market; and
the availability of increased access to alternative sources of non-bank funding.
This is critical if Irish companies are to continue to create sustainable employment and to
maximise the opportunities available to them across global markets.
In addition, if Irish companies are to grow and compete in international markets, we need to
develop a stronger equity culture and access to equity as part of a broader mix of financing
options overall. While equity finance is not suitable for all enterprises (which is reflective of the
situation across the EU), it is an important element of the financial infrastructure needed by Irish
business and we need to ensure firms compete on a level playing field. Equity finance can be
raised through individuals, business angels, venture capitalists and private equity funds. There
has been greater focus at European level on stimulating investments and strengthening capital
markets and in this context the Action Plan for the Capital Markets Union (CMU) was published
on 30
th
September 2015
501
.
The access to finance landscape does not operate in a vacuum and the interlinkages between
the funding environment and the tax code should not be underestimated. We need to ensure
500 The importance of banks in SME financing: Ireland in a European context, M. Lawless, F. McCann
and C.O’Toole, Central Bank of Ireland, Economic Letter Series, 2013
501 http://europa.eu/rapid/press-release_IP-15-5731_en.htm

202
that Ireland has an internationally competitive tax regime that promotes investment in Irish
companies, managed risk taking, and entrepreneurship and facilitates generational transfer (see
later chapter on taxation policy).
The nature and mix of funding sources required by a business entity differs along the business
lifecycle. In general the level of investment and nature of funding is relevant to stage of
development, market orientation and/or business strategy of the enterprise. A simplified
overview is presented in figure 9, accepting that funding decisions are company specific and
influenced by a number of parameters.
Figure 9 Finance continuum for indigenous innovative exporting firms
Recent initiatives - an evolving landscape
The State’s involvement in the funding environment is aimed at maximising economic
development and, where necessary, is designed to redress market failures, and drive
competitiveness and innovation. The aim is to ensure that all sustainable business opportunities
do not falter as a result of being unable to access requisite finance. Since 2011 Government
policy has focused on supporting enterprises in accessing an appropriate supply of financing
from both bank and non-bank sources. A number of initiatives have been introduced to increase
the availability of access to finance for SMEs and to contribute to the evolution of a more
effective institutional architecture overall, including the:
introduction of a risk sharing State backed Credit Guarantee Scheme supporting an
increase in lending by the domestic banks;
establishment of Micro Finance Ireland in September 2012, supporting lending up to
€25,000;
establishment of the Seed and Venture Capital Scheme (2013-2018) to support the
creation of new funds through open calls for expressions of interest;
IPO

203
establishment of three funds focused on investing in medium sized enterprises developed
under Enterprise Ireland's Development Capital Scheme Strategy to support the
emergence of a private equity market in Ireland;
establishment of Innovation Fund Ireland, supporting an increase in the availability of
international venture capital;
establishment of the Credit Review Office (CRO) to help SME or farm borrowers who have
an application for credit of up to €3m declined or reduced, and who feel that they have a
viable business proposition. The CRO also looks at cases where borrowers feel that the
terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or
have been unreasonably changed to their detriment;
establishment of the Strategic Banking Corporation of Ireland (SBCI)
502
in September
2014, which operates as a wholesale lending institution. €400 million of the available €800
million funds has already been made available through AIB and Bank of Ireland to
supports SMEs. The SBCI will also help fund new entrants and alternative providers of
finance to increase competition in the marketplace for SME finance. The SBCI is in
discussions with other banks and a number of non-bank providers of finance to provide
products such as invoice discounting, leasing and asset based finance in order to broaden
the funding options available to the SME sector. An immediate benefit of the SBCI has
been to increase the availability of competitively priced loans for support investment and
working capital; and the
establishment of the Ireland Strategic Investment Fund (ISIF)
503
which will operate as a
sovereign development fund with the capacity to invest €7.4 billion
504
supporting the
Government's economic strategy through commercial investment.
In addition, in order to communicate the enhanced range of financial supports available to
business the ‘Supporting SMEs’ online tool and its promotion through the web portal
actionplanforjobs.ie provides access to information on over 80 Government business supports
across over 30 Departments and Agencies through one easily navigable website
505
.
Work is ongoing across a number of areas to further enhance the funding landscape. The
Department of Finance (DoF) and DJEI are advanced in the development of an integrated export
finance strategy with financing products and platforms being developed by the SBCI and the
ISIF in conjunction with Enterprise Ireland
506
.
502 Established as a private company with the Minister for Finance as the sole shareholder. Funding for
the SBCI has been provided from KfW (the German State Development Bank), the European Investment
Bank and the Ireland Strategic Investment Fund (ISIF)
503 Legislation was passed to transition the National Pensions Reserve Fund (NPRF) into the ISIF. The
ISIF is a new fund to which the assets of the NPRF were transferred, involving €7.5 billion of funding
available for investment. ISIF has the ability to participate in all levels of a project or company’s capital
structure including senior debt, mezzanine debt, traditional private equity (either direct or via an
investee fund), venture capital, preferred equity and ‘special situations’ e.g. turnaround, buyout
504 Unaudited value as of 30/09/14
505 www.localenterprise.ie/smeonlinetool/businessdetails.aspx
506 Action Plan for Jobs, 2015, http://www.djei.ie/enterprise/apj.htm

204
There is ongoing review and analysis of the operation of existing initiatives to assess take-up
and levels of awareness and ensure their continued relevance to business.
While excessive SME debt has been a legacy of the downturn in recent years, the banks have
been engaged in a systematic exercise to offer resolutions to distressed SMEs focused on the
borrower’s maximum affordability under Central Bank oversight. It is crucial that the levels and
types of lending are monitored to ensure SMEs have access to appropriate and competitive
sources of finance, led by the SME State Bodies Group
507
and building on existing surveys.
There has been some debate over recent years, post the boom period, regarding capabilities -
firstly, within the banking sector, to bring experience and good judgement to bear in assessing
risk when applications for funding are less capital intensive and related to innovative sectors of
the economy; and secondly, within SMEs, to present a well-structured, clear and credible
business plan. Much work has been done to redress this situation, including raising awareness
amongst enterprises as to what is available for them, consistent monitoring and review, and
developing the skills and financial literacy of banking personnel and SMEs.
Our ambition
In relation to finance for growth our ambition as the best place to succeed in business by 2025 is
that we will:
provide a comprehensive and competitive funding environment to support our enterprises'
ambitions, through from pre start-up to maturity, such that no viable business opportunity will
falter due to lack of access to appropriate funding.
The equilibrium of supply and demand in relation to finance is a constantly shifting 'space'. Our
immediate focus over the coming years is to continue to address the current challenges,
stimulate competition in the market and ensure Irish companies can be funded to an extent that
they can compete internationally.
Building on progress made, including for example the establishment of ISIF and SBCI and the
ongoing work of the SME State Bodies Group our aim in the medium term is to ensure that
there is a wider range of financial instruments on offer and that there is a greater funding mix
used by Ireland's enterprise base in terms of debt/equity and bank/non-bank financing options.
We also aim to ensure that business owners know and understand the range of options
available, can make strategic use of funding sources appropriate to their particular needs and
are well equipped to present compelling and credible business plans. It is important too that
funding providers understand the businesses of today, the changing environment and range of
markets in which Irish businesses now operate, have the expertise and confidence to take
managed risks, and will provide funding and added value products at competitive rates.
507 Chaired by Department of Finance, this Group’s primary function is to facilitate the coordination of
policy formulation and implementation across the relevant Government Departments and Agencies,
primarily through the implementation of the commitments contained in the ‘Access to Finance’ chapter
of the Action Plan for Jobs, and feed into the work of the Cabinet Committee on Mortgage Arrears &
Credit Availability. A further aim is to achieve a consensus position prior to bringing items to the SME
Funding Consultation Committee

205
Bank funding
Bank funding remains the primary source of funding for many of Ireland's SME sector. There
were considerable challenges facing businesses post the boom and 'property bubble' years and
during the subsequent recessionary period and in the context of a collapsed banking
infrastructure. Much progress has been made over recent years to disentangle the demand and
supply side factors and to redress the many issues that impeded a healthy flow of credit.
Recent investment and lending performance
The latest data from the CSO for 2014 indicates a significant pick-up in investment by the
enterprise sector as we emerge from the economic downturn. Investment in plant and
machinery by the manufacturing sector reached an all-time high of €4.57 billion, an increase of
47 percent on 2013.
The SME Market Report for the first half of 2015 provides insights of developments in the Irish
SME credit market and indicates that applications for new loans and leasing/hire purchasing
show continued growth
508
. The majority of applications are for working capital purposes (48
percent), particularly so for micro enterprises. Applications are also high for ‘growth and
expansion’ at 25 percent and for new vehicle/equipment at 29 percent. Rejection rates, having
shown reductions in the previous report, have since increased from 14 percent to 16 percent.
The current rejection rate of 15.7 percent in Ireland is higher than EU1
509
at 9.1 percent.
ESRI research undertaken in 2014 cautions that it will be important that the property sector does
not crowd out lending to the rest of the SME sector and their initial analysis suggests that the
credit levels available to the (more capital intensive) manufacturing sector is below desirable
levels
510
. The Enterprise Ireland Development Capital Funds and the establishment of the ISIF
may go some way to addressing this.
Challenges remain
Having rolled out a range of initiatives to support SMEs, it is crucial that implementation is
sustained and that ongoing monitoring continues to ensure effectiveness
511
. We also need to
raise awareness on the part of SMEs of the range of funding sources available - not only of bank
financing, but to the wider range of potential sources of funding that are available building on
progress already made to date.
While acknowledging that much has been achieved and that debate persists as to the extent to
which the SME finance gaps are driven by lack of demand or lack of supply, the issues relating
to access to finance (and a return to fiscal stability) remains a central focus for Government
512
. A
number of challenges remain including for example:
508 SME Market Report, 2015 HI, Central Bank of Ireland
509 EU1 comprises Austria, Belgium, Germany, Finland, the Netherlands and France. Ireland’s rejection
rates are also higher than EU2 which comprises Portugal, Italy, Spain and Greece which is currently 9.5
percent
510 Credit Requirements for Irish Firms in the Economic Recovery, Lawless, M., McInerney, N., McQuinn,
K., and O'Toole,C., Special Article in Quarterly Economic Commentary, ESRI, September 2014
511 The standing State Bodies Group, led by Department of Finance continues to monitor progress
512 As evidenced by the Action Plan for Jobs 2012 to 2015, the Spring Economic Statement and the
ongoing work of the SME State Bodies Group established in 2012

206
the banking system needs to further deepen its understanding of innovative sectors
(including both manufacturing and services activities) and of enterprise growth and
internationalisation strategies in an increasingly globalised environment;
the importance of continuing the systematic offering and delivery of debt resolutions to
distressed SMEs focused on the borrower’s maximum affordability, under Central Bank
oversight;
although there appears to be some progress in relation to (onerous) levels of security/
guarantees required for loans and asset finance, this remains a key concern for
enterprises entering a growth phase
513
;
smaller and younger firms, and those engaging in new products and services are more
likely to have a personal guarantee imposed
514
;
the cost of finance continues to be an issue - new business interest rates for non-financial
corporations (NFCs) are higher in Ireland than in the euro area – in 2014 rates were 60
percent higher for loans up to €1 million and 81 percent higher for loans above €1
million
515
. In November 2014, interest rates in Ireland for revolving loans and overdrafts
were 42 percent above the euro area average
516
. Given that the business banking market
has become highly concentrated, facilitating new entrants to the market is crucial
517
;
the need to ensure the provision of a range of added value products for companies at all
stages of the developmental lifecycle;
the continuing need to raise awareness in the business community of what is being done,
and of the increasing range of options available to them; and
the continuing need to benchmark the availability of financing, the range of products, and
the costs of debt, to evaluate Ireland's competitive position relative to our trading
partners.
513 The Department of Finance commissioned Red C SME Credit Demand Survey, April – September
2014 states that "73 percent of all approved credit applications have criteria and conditions attached to
them – the most imposed condition being regular management accounts provided to the bank.
However, it is positive to see that personal guarantees as a condition of finance declines again this
period to 38 percent, down from 44 percent in March 2014 and 50 percent a year ago."
514 The use of personal guarantees in Irish SME lending, Carroll, James, Fergal McCann, and Conor
O’Toole, 2015, Economic Letters 06/El/15, Central Bank of Ireland and synopsised in the SME Market
Report, Central Bank of Ireland 2015 H1
515 Costs of Doing Business in Ireland 2015, National Competitiveness Council/DJEI, 2015 (original data
source European Central Bank)
516 Costs of Doing Business in Ireland 2015, National Competitiveness Council/DJEI, 2015
517 The scaling back of the domestic bank sector and the withdrawal of many foreign banks highlights
issues regarding levels of competition in the business banking market. As market power increases and
the degree of competition falls, SMEs face higher financing constraints, see Does Bank Market Power
Affect SME Financing Constraints?, O'Toole, C., Ryan, R., McCann, ESRI Research Bulletin, March 2014. A
key goal of the SBCI is to facilitate the entry of new providers of SME funding to the Irish market and it
will be important that this goal be realised

207
The equity environment
The equity landscape in Ireland has developed substantially over the past 10 to 15 years. Equity
finance comprises business angels and private investors, venture capital and private equity
518
.
The State has actively supported the development of this segment of the market through a
range of investments including the Seed and Venture Funds, the Development Capital Scheme,
IFI and ISIF.
Central Bank data can be used to assess the levels of equity across the enterprise base. In the
business sector (NFCs) the major source of funding (50.4 percent) is ‘shares and other equity’
although this does not provide any insights into the proportion of the population of companies
that actually use equity. In a recent ECB survey
519
covering the period April – September 2014,
Irish SME respondents that indicated they required equity investment decreased from 8 percent
to 3 percent over the previous year. A total of 16 percent thought equity relevant to their firms.
However, for 78 percent of the SME respondents equity was not considered by them to be
relevant to their firms.
In practice, equity investment tends to be taken up by a relatively small cohort of companies
520
-
primarily start up, high potential growth companies and more mature companies with expansion
or growth plans. Nevertheless, studies by Forfás
521
and InterTradeIreland highlight a lack of
awareness and understanding amongst some sectors and more mature businesses of equity and
quasi equity options for whom equity would be appropriate
522
. The significance of equity
availability for a cohort of strategically important enterprise agency client firms cannot be
underestimated, particularly in the context of the ambitions set out in this strategy to
systematically grow our Irish owned enterprises to scale.
Although much has happened in the funding environment since the reports were published, the
lack of understanding of the benefits in relation to equity options persists. Anecdotal evidence
points to a reluctance in the case of some owner/managers, particularly non exporters, to
consider equity as an option (even if it appears to be appropriate for growth strategies) because
of a lack of trust, or lack of willingness to 'give away' a share of their company. The reality is,
however, that this apparent lack of openness to equity investment can (and does) have a
negative impact on an enterprise's ability and ambition to accelerate growth to scale.
Initial public offering (IPO)
A major challenge in Ireland and internationally is to facilitate entrepreneurs and principal
investors to realise some of the gains from their investments and to attract further necessary
investment for growth, without having to exit the business entirely, should they have the
ambition to grow the business further.
518 A Review of the Equity Investment Landscape in Ireland was published by Forfás in January 2013
and a number of the actions set out have been progressed since then
519 Survey on the access to finance of SMEs in the euro area (SAFE), ECB, 2014, April – September 2014
- Background data, Q4 Financing Structure - Irish respondent sample was 459 SMEs
520 Accepting that all companies need some element of equity investment
521 Now integrated as the Strategic Policy Division into the Department of Jobs, Enterprise and
Innovation
522 Access to Finance for Growth for SMEs on the Island of Ireland, InterTradeIreland, December 2013

208
From an enterprise policy perspective it is important that Irish companies are informed about
the options available to list in Ireland and overseas. The establishment by the Irish Stock
Exchange, with the support of Enterprise Ireland, of the IPO Readiness Programme is a welcome
development. The announcement by the Irish Stock Exchange (ISE) and NASDAQ OMX
(NASDAQ:NDAQ) of their intention to bring dual ISE/US market access to Irish companies
enabling them to raise capital more easily on both sides of the Atlantic is also welcome,
although the size of the companies and potential regulatory burden placed on very small
companies also needs to be considered.
Corporate venturing
Corporate venturing (CV) involves a company purchasing a minority equity stake in another firm
and there is evidence of some CV activity in Ireland in more recent years. Investments are
usually made in start-up or post start-up stage companies, i.e. companies that can exist
independently, that are close to generating revenue and have proprietary intellectual property
(IP). Over the period of Enterprise Policy 2025 we need to acknowledge and monitor the
interplay between multinationals and the start-up sector so as to support optimum outcomes.
Enterprise Ireland - stimulating the VC funding environment
Enterprise Ireland has played a key role in terms of stimulating Ireland's environment for VC
funding since 1994 and the Forfás evaluation undertaken in 2012 validates the State's role in
addressing a clearly defined market failure
523
. In advance of developing the third VC fund for
the period 2007-2012, a review was undertaken by PWC. At that time it was concluded that
although significant progress had been made, the VC market in Ireland was still relatively young
and underdeveloped vis a vis international benchmarks and had not reached a point where it
could be considered sustainable in its own right. This situation was deemed to still exist in 2012
by a sub-committee of the SME State Bodies Group.
On this basis the Government announced the establishment of the €175 million Seed and
Venture Capital Scheme 2013-2018 to enable Enterprise Ireland to continue to invest, on a pari
passu basis with the private sector, to ensure the availability of venture capital for Irish start-up
and scaling companies. This continued investment in the VC sector is in line with the experience
of our international trading partners.
Stimulating equity investment - incentives
A Department of Finance review (2011) of the Business Expansion Scheme (now the Employment
and Investment Incentive or EII) found that 'since its inception, the BES has proved successful in
helping SMEs gain access to capital investments, with a view to supporting job retention and
creation in the State'. Recent adjustments have been made to the EII in that the amount of
finance that can be raised by an enterprise has been increased to €5 million annually, the
required holding period for the shares has increased from three to four years, and the qualifying
sectors have been expanded.
The Seed Capital Scheme has been rebranded as the Startup Refunds for Entrepreneurs Scheme
and a simple and easily accessible guide has been launched (May 2015) to address concerns
523 The overall aim of the agency's involvement was to address a market failure in the Irish ecosystem
focused on entrepreneurs and businesses in high technology and/or knowledge intensive sectors. Note
that the evaluation did not assess the performance of the funds themselves (Funds 2 and 3), see
Evaluation of Enterprise Supports for Start-ups and Entrepreneurship, Forfás, March 2012

209
relating to the relatively low levels of take up. Provisional figures
524
for 2013 suggest that just
sixty-five companies benefited from the relief at a cost of €1.3 million. We need to continue to
raise awareness of these schemes and the enterprise development agencies, relevant offices and
bodies
525
can play a role in this regard. The take up of these initiatives will continue to be
monitored, with any remaining barriers and/or disincentives addressed. It is important to
evaluate on an ongoing basis whether these schemes remain internationally competitive. Work
will continue across Government to ensure the appropriate incentives are utilised to encourage
investment.
A vibrant equity funding environment is particularly important to deliver on our ambition for a
dynamic entrepreneurial community and to grow more Irish owned companies to scale. There is
a continuing need to stimulate and encourage potential investors to invest and support the
development of equity networks and markets.
Alternative sources and new forms of financing
Changes in the economic and business environment resulting from technological development,
social media changes and changes instigated by responses to the crisis have led to the growth
and development of innovative and progressive alternatives in the non-banking space. There is
a range of non-banking funding instruments available to enterprises, some of which have been
in existence for some time, including:
invoice discounting or supply chain financing;
off balance sheet financing sources, such as lease financing, hire purchasing or factoring;
loans from family, friends or others; and
crowd funding or peer lending.
Examination of the best means of supporting these innovative, decentralised and disruptive
approaches will need to be undertaken quickly so as not to stymie their development in the Irish
market and their potential to support Irish businesses in terms of access to finance and/or new
product development.
Profitability, working capital and cash flow
The ultimate objective of growing successful Irish businesses on international markets is that
they can be profitable and have the resources to continue to invest, expand, innovate and create
sustainable jobs over the longer term. It is important that businesses have the retained earnings
available to grow and scale their businesses from their own resources as well as from external
debt and equity finance. The initiatives set out in other parts of this document are focused on
building this improved performance.
524 PQ 16419/14
525 Including Enterprise Ireland, LEOs and Skillnets - e.g. through Start Your Own Business courses,
financial literacy and management development programmes and in the provision of advisory services
to client companies

210
Companies may also utilise working capital (accounts receivable/payable) as a short term
funding alternative. This form of short term 'funding' is not always appropriate. It can entail
businesses relying excessively on their suppliers to help finance their business (and can have a
resultant negative impact on suppliers' own ability to fund their operations with any degree of
certainty), impacting on their ability to expand and create employment. Ensuring the availability
of working capital for exporters so Irish companies can compete on an internationally
competitive basis will remain a priority over the period of Enterprise 2025.
Some progress has been made in terms of changing the culture with regards to prompt
payments - aimed at facilitating effective management of cash flow by businesses including, for
example, the introduction of the Prompt Payments legislation 2011 and the recently launched
Prompt Payments Code that sets standards for best practice in payment and is administered by
the Irish Institute of Credit Management (IICM) on behalf of DJEI.
EU funds and engagement with international funding institutions
Since 2012 there has been an emphasis on increasing our engagement across Government with
both the European Investment Bank (EIB) and the European Investment Fund (EIF) including in
developing and implementing mechanisms designed to maximise the provision of financing to
SMEs. Recent changes in the Irish infrastructure, including the establishment of the SBCI, afford
the potential for a deeper and more intensive collaboration. Enterprise Ireland has also co-
invested with the EIF on a number of occasions and are currently finalising the establishment of
the EIF European Angels Fund in Ireland.
There is an opportunity to maximise our engagement so as to ensure that there are no
untapped or underutilised sources of international funding for SMEs. In this context the
emphasis will be on targeting those financial instruments which are potentially of most benefit
to companies in Ireland, including the:
European Commission’s Investment Plan for Europe (EFSI) known as the ‘Juncker Plan’ is
an ambitious infrastructure investment programme aimed at unlocking public and private
investments of at least €315 billion over a three year fiscal period (January 2015 to
December 2017);
Horizon 2020 (the Framework Programme) involves a fund of €80 billion supporting
collaborative research. Enterprise Ireland (through its Framework Programme Network)
can help researchers and enterprises to collaborate with research teams in Europe and
win funding for Irish research projects
526
; and the
Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME)
programme which will run from 2014 to 2020 with a budget of €2.3 billion aimed at
supporting entrepreneurs and SMEs.
We will continue to develop actions to optimise these instruments to grow and develop the Irish
economy.
526 We will maintain a policy focus on commercialisation to ensure the effective transfer of Horizon
2020 Intellectual Property into commercial ventures

211
The establishment of the Capital Markets Union (CMU) is a key element of the Juncker Plan. The
CMU aims to create deeper and more integrated capital markets in the 28 Member States of the
EU to redress the imbalance of the traditional dominance of EU banks in financing the economy.
The European Commission cites the fact that European SMEs receive five times less funding
from capital markets
527
. CMU, through a wide ranging series of initiatives, aims to make EU
capital markets more integrated, liquid and competitive. Its ultimate purpose is to increase
resilience of the financial system and provide greater opportunities for SMEs and longer term
infrastructure projects.
The CMU is set to be a high profile initiative scheduled to run from 2015 to 2019. An Action Plan
by the European Commission was launched in September 2015 that set out specific actions that
will be taken over the next four years
528
. While there will undoubtedly be benefits to the broad
European economy, Ireland’s particular focus will be on what the CMU can do for SMEs and for
smaller markets. In this context, the Commission will take forward action in a number of priority
areas including ‘providing more funding choices for Europe’s businesses and SMEs’ to:
modernise the Prospectus Directive to make it less costly for businesses to raise funds
publicly, review regulatory barriers to small firms listing on equity and debt markets and
support the listing activities of small firms through European advisory structures;
launch a package of measures to support venture capital and equity financing in the EU,
including catalysing private investment using EU resources through pan-European funds-
of-funds, regulatory reform and the promotion of best practice on tax incentives;
promote innovative forms of business financing such as crowd-funding, private
placement, and loan-originating funds whilst safeguarding investor protection and
financial stability; and
explore ways to build a pan-European approach to better connect SMEs with a range of
funding sources.
The immediate actions include a consultation on venture capital and legislative proposals to
establish a framework for simple, transparent and standardised securitisation
529
.
In conclusion, we have set out a number of actions aimed at establishing a robust funding
environment for enterprise over the coming decade. Delivering on these actions will require the
commitment of a range of stakeholders including government departments, the enterprise
development agencies and other bodies.
527 Communication from the Commission to the European Parliament, The Council, The European
Economic and Social Committee and the Committee of the Regions, Action Plan on Building a Capital
Markets Union, September 2015 http://ec.europa.eu/finance/capital-markets-union/docs/building-
cmu-action-plan_en.pdf
528 ibid
529 Immediate actions (September 2015) also include an adjustment to Solvency II legislation to make
it easier for insurers to invest in infrastructure and European Long Term Investment Funds (ELTIFs) and
consultations on covered bonds, and a call for evidence on the cumulative impact of financial legislation

212
Establishing a robust funding environment for enterprise
Drive competition in the lending market and the provision of the widest range
of services to meet the needs of internationally trading and innovative
enterprises.
DoF
Work with financial institutions (both nationally and internationally) to facilitate
the creation of a comprehensive and competitive funding environment to
support our enterprises' ambitions through from pre-start up to maturity
including to:
Stimulate greater equity and quasi-equity investment;
Encourage the use of capital markets in the funding eco-system for
indigenous companies, in areas such as early stage listings;
Strengthen the capabilities of Irish owned enterprises in terms of
strategic use of funding options for growth; and
Promote new alternative sources of funding such as peer-to-peer
lending and ensure our regulatory regime is fit for purpose and
adaptive to new and alternative forms of funding/financing.
DoF, DJEI,
DPER, EI
Engage with European and International financial institutions and funding
streams - ensuring that we optimise the potential to enhance Ireland's funding
environment over the coming years.
DoF, DPER,
DJEI, EI

213
Taxation policies
Introduction
The framework of taxation is part of the enterprise ecosystem and an important competitiveness
factor for Irish based companies trading internationally and competing for talent. There is a
positive relationship between a pro-enterprise tax environment and a stable macroeconomic
environment. Certainty, stability and predictability in taxation policy facilitate enterprise
decision-making, minimises business costs and supports enterprise growth.
A growth-friendly tax regime
Ireland has continued to evolve a taxation system that is clear, transparent and predictable. Over
recent years amid the continuing effort to restore sustainability to the public finances,
government policy has placed a key emphasis on building a growth friendly regime. Overall, the
Government is committed to broadening the tax base in a manner consistent with the OECD
hierarchy of taxes, which sees corporate taxes as most harmful to growth, followed by personal
income taxes, and then consumption taxes, with recurrent taxes on immovable property as the
least harmful.
Over the decade to 2025 we can anticipate that competition for internationally mobile
investment will continue to intensify. All of the signals are pointing towards a scenario where
corporate tax will remain critically important but less of a differentiator for Ireland in an
international context
530
. Our competitive offering in relation to corporate tax will continue to be
based around a combination of rate, regime and reputation, complementing the key non-tax
related differentiators of talent, innovativeness, connectedness and quality of place.
The underlying principles that will guide enterprise taxation policy to 2025 include:
maintaining a competitive environment in Ireland for internationally mobile investment;
stimulating enterprise development and growth; and
ensuring that Ireland remains an attractive place for the talent our enterprises need.
Maintaining a competitive environment for internationally mobile investment
Ireland's low corporation tax rate has been an important and longstanding element of enterprise
policy and of wider economic policy in Ireland. It has played an extremely important role in our
competitiveness for foreign direct investment and also in supporting enterprise development
generally. As set out in the roadmap for Ireland's tax competitiveness alongside Budget 2015,
Ireland will continue to structure its corporation tax system on the basis of:
Rate: Ireland remains totally committed to the 12.5 percent corporation tax rate;
Regime: A system that is open, transparent, predictable and built upon substance; and
Reputation: A system that plays by the rules.
530 For example, as competitors competing directly on rates and incentives, modifications to
international taxation rules, and the possibility of greater coordination on taxation matters at EU level

214
In an evolving international tax rules environment, Ireland is in a strong position to continue to
win and retain activities of substance and high value.
Ireland will continue to develop its competitive taxation offering in support of the expansion of
domestic enterprise and the attraction of FDI aimed at attracting, retaining and embedding
operations of scale and value add. This will include measures to drive forward a range of
enterprise policy objectives, including increasing levels of investment in R&D activities, and
strengthening our offering around intellectual property.
Ireland's accelerated capital allowance scheme for intangible assets has been enhanced to make
Ireland an attractive location for companies to locate and develop intellectual property and
locate associated high value jobs here. The Government has also announced that it will
introduce the first OECD compliant Knowledge Development Box (KDB) in 2016. The KDB will
provide an effective and competitive tax rate
531
for Intellectual Property income that derives
from IP assets developed from substantial activity.
Stimulating enterprise development and growth - investment in productive activities
It is entrepreneurs who take risks, start and grow businesses and create jobs. Acknowledging
that there is a strong interplay between the tax and the funding environments, the tax
environment can influence an individual’s decision in whether or not to establish a business in
the first instance and in what jurisdiction to locate a business. Today, entrepreneurs are
increasingly mobile and we need to ensure that Ireland continues to provide a competitive
environment so that entrepreneurs will choose to establish and grow from here (accepting that
considerations relating to end markets, proximity to customers etc., also play a role in business
location decisions).
Ireland offers numerous taxation incentives aimed at stimulating productive investment activity,
particularly at start-up level
532
:
The Start-Up Company relief provides corporation tax relief from corporation tax on
trading income (and certain capital gains) of new start-up companies in the first three
years of trading, in order to encourage economic activity and employment in Ireland.
The Startup Refunds for Entrepreneurs Scheme (SURE) provides a refund of income tax
paid to those who establish and work full-time in their own company, supporting the
creation of jobs, and encouraging those thinking about becoming an entrepreneur to
take the next step.
The Employment and Investment Incentive (EII) seeks to broaden the financing mix of
SMEs away from a high reliance on debt financing towards a greater use of equity
funding, by providing an income tax incentive to private or equity investors of companies.
The Foreign Earnings Deduction meanwhile supports Irish enterprise expansion and
access to new export markets, by providing for a capped income tax deduction for
531
Budget 2016 introduced a rate of 6.25 percent, which equates to 50 percent of the standard trading
corporation tax rate
532 Budget 2014 introduced a 10 point tax reform plan to help small businesses in particular

215
individuals who temporarily carry out office or employment duties in specified
countries
533
.
There are some elements of Ireland's entrepreneurial tax offering that can be improved upon,
particularly in the context of our nearest trading partners. The Department of Finance engaged
in a consultation process in early June on how best to support entrepreneurship through the
taxation system. Budget 2016 has started to address the differential taxation of self-employed
income (including the salaries of owners-directors)
534
and enhancements have been made in
relation to capital gains tax.
Ensuring that Ireland remains an attractive place for talented individuals
A competitive personal tax regime is important factor in attracting and retaining talent. The
difference between the employers’ cost of hiring an individual and the individual's actual take
home pay (the tax wedge) is important in the context of foreign nationals looking at
opportunities in Ireland and also Irish nationals considering the possibility of returning home. It
is also relevant for Irish based businesses having the ability to attract key skillsets on a
competitive cost basis, to assist them in their growth
535
. Ireland's income tax system is highly
progressive by international standards. Nevertheless there are also disincentive effects including
marginal tax rates of in excess of 50 percent for higher income workers when USC and PRSI are
taken into account. Budget 2016 made significant changes to the Universal Social Charge (USC)
as a result of which the marginal rate of tax for middle-income earners has dropped below 50
percent.
The Department of Finance has taken steps to enhance the attractiveness of Ireland to global
talent through the Special Assignee Relief Programme (SARP), to attract specialised, experienced
senior executives. The key employee provision of the R&D tax credit is designed to assist
companies, particularly SMEs, to attract and retain key talent.
Share ownership has the potential to support the attraction and retention of talent, and to
reduce fixed labour costs and capital requirements for high potential start-ups and scaling
companies which are cash flow poor but have significant potential for capital appreciation.
There is some scope to enhance the attractiveness of share-based remuneration in the Irish
context.
533 At present these include the BRIC countries, and countries in Africa, the Middle East, Asia and Latin
and South America
534 Budget 2016 starts the process of delivering parity of treatment through the introduction of a new
income tax credit for the self-employed
535 Ireland ranked 10th overall in INSEAD's Global Talent Competitiveness Index 2014, but 55th in
terms of the extent and effect of taxation on attracting talent

216
We will continue to maintain our commitment to transparency and stability
and on enhancing the environment for business investment, innovation and
entrepreneurship
We will continue to implement the changes set out in the tax roadmap for
Ireland’s tax competitiveness , and will:
maintain the competitiveness of our Corporation Tax Rate;
continue to expand Ireland's tax treaty network; and
implement a Knowledge Development Box in 2016, within the
guidelines agreed at various international fora.
DoF
We will continue to enhance the relative competitiveness of the taxation system
(and especially relative to our nearest trading partners), and will:
support entrepreneurship, start-ups and the competitiveness of Irish
SMEs that includes a range of aspects such as investment incentives,
CGT etc.;
address disincentive effects within the tax and social welfare systems
affecting the self-employed, taking into account, and with regard to,
the differing treatments between self-employed tax payers and
PAYE workers within a stated timeframe; and
ensure that existing initiatives are subject to periodic review to
enhance effectiveness and optimal levels of take-up.
DoF

217
Cost competitiveness
Introduction
Cost efficiency is a strategic imperative for all firms in order to maximise potential returns in a
competitive environment. Relative cost performance plays an important role in determining an
enterprise’s ability to compete in international markets, and to attract mobile capital investment.
A competitive market environment also allows new firms to challenge incumbents, efficient firms
to grow, and inefficient ones to exit, helping boost economic growth and living standards.
Ireland’s cost base improved substantially across a range of metrics in the wake of the recession,
making Irish firms more competitive internationally and making Ireland a more attractive
location for firms to base their operations. Despite low levels of inflation in recent years,
however, Ireland remains a high cost location. Furthermore, many of the reductions in costs
were a cyclical response to the recession, which can be eroded as economic growth returns. In
light of this, the economy is at a turning point in terms of cost competitiveness, with latest data
showing that overall relative cost competitiveness has begun to deteriorate and that a series of
upward cost pressures are emerging
536
. Harmonised competitiveness indicators show that
Ireland’s relative cost competitiveness is now declining vis-à-vis Ireland’s main competitors.
Particular focus is required to address domestically influenced cost factors in the labour market
and in the energy sector.
Pay and earnings
Pay costs constitute one of the most significant input costs for most firms, particularly service
firms, which are playing an increasingly large role in the Irish economy. Following the rapid
wage growth unsupported by productivity in the pre-2008 period, in which wage developments
ran up to 50 percent higher than the euro area average, the growth in labour costs slowed
appreciably in the wake of the recession. Some competitiveness in pay costs was restored
during the recession, partly due to improved productivity, but largely driven by a fall-off in
demand and reduced capacity constraints, allied to compositional changes in employment (i.e.
the collapse in construction).
Recent Irish labour cost growth has been modest but positive, and less than the euro area
average, after several years of marginal decline (2010/2011). In 2013, in terms of gross wages
(wages, taxes on income, and employer and employee social security contributions), Ireland had
the 8th highest gross and net wage level in the euro area
537
. While Ireland has been improving
its competitiveness in relative terms compared to the euro area in recent years, it is concerning
that even in the face of modest wage growth, productivity is not keeping pace with this wage
growth. This is reflected in the rise in recent years of Irish unit labour costs, which measure the
average cost of labour per unit of output (i.e. productivity)
538
. It is critical from a competitiveness
536 See Costs of Doing Business in Ireland 2015 (April 2015), DJEI/National Competitiveness Council,
and summary in Appendix XI
537 Ireland’s Competitiveness Scorecard 2014, p.53, Forfás/National Competitiveness Council
538 Unit labour costs (ULC) measure the average cost of labour per unit of output, and are calculated as
the ratio of total labour costs to real output. ULCs should not be interpreted as a comprehensive
measure of competitiveness, but as a reflection of cost competitiveness. Unit labour cost measures deal

218
perspective that into the medium and long term, especially as the Irish labour market tightens,
that increases in labour costs are linked with productivity improvements.
The Government itself has little direct control over private wage rates, but does exert some
influence in the labour market, for example through the rate at which the National Minimum
Wage is set (now to be advised on by the recently established Low Pay Commission), the level of
public sector pay, and the level of taxation on labour, and how taxes generally are applied-
which influences pay costs and the level of inflation. The Government also facilitates orderly and
responsible wage developments through the State's industrial relations machinery, and its
regulation of sectoral wage setting mechanisms. The Government has recently created the
Workplace Relations Commission, a major reform of Ireland's industrial relations institutions,
and this is to be complemented by the passage of recently published reforming legislation in
respect of Registered Employment Agreements and Employment Regulation Orders, Collective
Bargaining, and establishment of the Low Pay Commission.
All will play key roles in ensuring an environment in which there is greater certainty and stability
in pay costs and industrial relations for enterprise, with agreements on terms and conditions
based on clear, balanced and evidence based mechanisms to deal with specific industrial
relations issues. These will be based on comparators, and take into account the sustainability of
the employers' business in the long term.
We will drive productivity growth as a national imperative and support
enterprises to get to international benchmarks relevant to their sectors
The National Competitiveness Council will place a high priority on the measures
required to drive productivity growth in the economy over the next five years, as
we seek to grow jobs, improve standards of living, and international
competitiveness.
DJEI/NCC
Sustain the focus on productivity performance in deliberations on wage increases
and emphasise the need, from a sustainability and competitiveness perspective,
for wage growth to be underpinned by productivity.
DJEI, DPER
Many of the other recommendations set out in this strategy are directly relevant to
driving productivity growth including those relating to education and skills, science,
technology and innovation, infrastructure investments, interventions at the level of
the firm focused on capability building etc.
Competition and consumer protection
Competition is a key driver of efficiency, innovation and long term growth in business, while
consumer protection builds consumer confidence and empowerment and is a pivotal ingredient
to increased business activity.
exclusively with the cost of labour, which though important, should be considered in relation to
changes in the cost of capital

219
Limited competition in many locally traded sectors of the Irish economy (e.g. legal and other
professional services, in which regulatory restrictions persist) has contributed to prices and costs
being out of line with many of Ireland's competitors
539
. At present, there are upward cost trends
particularly in business services, after several years of price reductions over the course of the
recession. In terms of the overall professional service regulation, Ireland is ranked 11th out of 29
OECD countries; in relation to the legal profession Ireland is ranked 23rd
540
. Poor relative
performance with regard to the restrictiveness of the legal profession reflects a range of scores
across indicators measuring ‘inter-professional cooperation’, ‘compulsory chamber membership’
and ‘regulations of the form of business’
541
.
A recent trend has seen prices for internationally traded goods as generally flat, while the price
of domestically traded goods and services has been increasing. In Q3 2014, prices for a basket
of business services were 6.5 percent above 2010 levels. In spite of the reductions in legal costs
in recent years, Ireland remains an expensive location to enforce a business contract, with
lengthy timeframes a key factor. The Legal Services Bill, once enacted should help to deliver
more efficient, transparent and competitive legal services in Ireland, and thereby reduce costs
for the enterprise sector.
Government has a major role to play in enhancing competition and consumer rights through its
power to implement and reform regulation in both the public and private sectors. Its chief
instrument in these fields is the Competition and Consumer Protection Commission (CCPC),
established in 2014 following a merger between the Competition Authority and the National
Consumer Agency, which is responsible for the enforcement of competition and consumer
protection law. It aims, through investigation, enforcement and policy advocacy, 'to make
markets work better for consumers and businesses'
542
. A transparent, effective enforcement
regime provides certainty that is conducive to enterprise.
The CCPC has been granted greater powers with which to deal with both competition and
consumer issues that affect both business and consumers and to promote and enforce
compliance with the new Grocery Goods Regulations governing aspects of commercial
relationships in the grocery sector.
Besides proactively acquiring market intelligence, the Commission has a critical role to play in
identifying and addressing anti-competitive behaviour (including oversight of mergers and
acquisitions).
In terms of the future competition policy agenda, from an enterprise perspective, it is important
that progress is achieved on competition issues where they affect business input costs, including
the regulated sectors, such as energy, waste and the construction sectors. Implementation of
this agenda lies not only with the CCPC but also with the relevant sectoral regulators
543
. The
Commission is in the process of undertaking analysis of 'competitive neutrality', which covers
the concept that there should be a level playing field for all entities (whether State owned or
539 Ireland’s Competitiveness Scorecard 2014, National Competitiveness Council, 2014
540 Ibid
541 Ibid
542 Strategy Statement of the CCPC, 2015-2018, Competition and Consumer Protection Commission,
p.2
543 See Regulating for a Better Future: Government Statement on Economic Regulation, 2013

220
private) involved in the same economic activities (e.g. the provision of after school supervision
services). Opportunities still exist for reform in the sheltered sectors (legal and healthcare).
Strengthening competition
Drive and promote competition across all market sectors of the economy to inter
alia address barriers to entry and create a level playing field for all entities.
In this context, set benchmarks to be achieved on a continuous basis in areas for
particular action.
DJEI/CCPC,
Relevant
Govt Depts/
Sectoral
Regulators
The cost of regulatory compliance
Regulation plays an essential role in ensuring that economic activity by individual economic
actors is consistent with wider national policy objectives. It is important, from an enterprise and
competitiveness perspective, that the regulatory environment is responsive, and generates
security and stability for business without imposing unnecessary regulatory costs, facilitating a
firm platform for innovation, keen competition and growth. Ireland is shown by international
benchmarking statistics to impose a relatively low burden of regulation on business, and that
the regulatory environment is relatively more progressive and supportive for enterprise.
The regulatory environment can confer a considerable cost burden on business, both in terms of
'substantive' compliance costs, and 'administrative' compliance costs. While a stable legal
environment in which business regulation plays a major role is important both for Irish owned
firms and the attraction of FDI, the continuing challenge is to ensure that regulation is
proportionate and well implemented. The Government's objective is to maintain a regulatory
system that is internationally recognised for its efficiency and effectiveness, within a framework
of mandatory European Union regulation, and improve the interface between government and
business generally.
There has been a cross-Government programme to reduce the administrative burden on
business by 25 percent. The High Level Group on Business Regulation, currently chaired by
Minister of State for Business and Employment, works to identify the administrative burdens
placed on businesses arising from regulation and to determine ways to reduce and simplify
these burdens or eliminate them where they are unnecessary. In addition, the EU’s Smart
Regulation agenda emphasises regulatory fitness and seeks to minimise the regulatory burden
on SMEs. The new EU Accounting Directive 2013/34/EU, for example, aims to reduce the
administrative burden for small companies by adopting a ‘think small first’ approach. It
introduces a simplified set of financial reporting requirements on small companies. The
imminent introduction of a new Integrated Licensing Application Portal is aimed at streamlining
the application process for licenses particularly where businesses need to acquire multiple
licenses.
Challenges persist in some areas however. The administrative cost burden of regulation
continues to be raised by small businesses, particularly in the area of employment law. While
Regulatory Impact Analysis (RIA) is employed to ensure new regulations are evidence based and
designed in a manner that does not impose unnecessary costs on society and the economy,
more can be done to ensure that a 'think small first' principle is applied through the RIA
mechanism.

221
Continuous improvement and modernising of the regulatory environment also provides an
opportunity to develop Ireland's competitive advantage for sustainable enterprise growth. The
Department of Jobs, Enterprise and Innovation develops and implements policy for appropriate,
smart and proportionate business regulation by specialist bodies such as the Companies
Registration Office (CRO), the Office of the Director for Corporate Enforcement (ODCE), and the
Irish Auditing and Accountancy Supervisory Authority (IAASA).
Raising regulatory awareness:
The Government has launched various initiatives tasked with raising regulatory awareness amongst
business. These include launch of the www.businessregulation.ie web portal, which brings together many
strands of regulatory and compliance information applicable to business, particularly making it easier for
SMEs and start-ups to identify the regulations that apply to them. 'Taking Care of Business' events are also
held, where small business and entrepreneurs have the opportunity to engage with upwards of 25
regulatory bodies, with the informal two way communication a means of reducing the perceived burden of
regulation, through the provision of advice and support, and giving small and start-up businesses a
prioritised set of actions to take to achieve regulatory compliance most efficiently and effectively.
More generally, major recent developments in Irish business regulation include the Companies
Act 2014, which is to be fully implemented over the next few years. The Act aims to simplify and
modernise Irish company law, to create a modern state of the art legislative code for companies
and its enforcement by the company law regulatory bodies, to make Ireland a more attractive,
efficient and secure place in which to do business. During the transition period under the Act,
the CRO and DJEI will work to make the implementation process as business friendly as possible,
through provision of useful and targeted information.
Major advances have also been made in facilitating e-compliance, e-filing and e-learning for
business, helping produce significant time and cost savings for businesses and entrepreneurs
544
.
This encompasses the registration of business taxes, and a one-stop integrated licensing portal,
amalgamating applications for business across Government departments, agencies and licensing
authorities.
Business regulation
Drive the system-wide initiative to reduce the regulatory administrative burden
for businesses under the guidance of the High Level Group on Business
Regulation.
DJEI and
other Govt
Departments
Raise awareness and better inform business of the regulatory and compliance
information applicable to them informed by a review of the functionality of the
web portal www.businessregulation.ie.
DJEI and
other Govt
Departments
Other non-pay costs
Non-pay costs in Ireland have been the subject of extensive analysis to date, notably by the
National Competitiveness Council, which over recent years has shown that Ireland needs to
improve its performance relative to other countries across a range of business inputs including:
544 The Health and Safety Authority's 'BeSmart' initiative is a case in point

222
energy, waste, rents and property. Within these costs, there are elements that are controllable
(i.e. those costs open to domestic policy action) and non-controllable (costs that are externally
determined). The controllable cost elements can be addressed either through direct
Government measures, or the establishment by Government of a regulatory or investment
climate in which the private sector can help reduce the cost base. In the case of costs that are
within the direct control of businesses themselves, Government can also act to encourage the
most efficient and cost-effective approach to businesses management.
Energy
Energy costs can comprise a large component of direct non-wage costs for some firms. Changes
in relative energy prices have potentially far-reaching effects on investment, production and
trade patterns in internationally trading sectors, particularly large business consumers in Ireland,
such as the food sector, and other manufacturing sectors such as engineering, ICT, medical
devices and pharmaceuticals (many are important regional employers, operating in low margin
markets where prices are determined globally).
While aspects of the Irish energy market have improved in recent years, there was a sharp
deterioration in Ireland's cost competitiveness between 2010 and 2014. This has left Ireland an
expensive location for energy compared to most of its EU peers, with EU energy prices in turn
generally higher than prices in the US, Ireland is the 6th most expensive location in the euro
area for both SMEs and large electricity users, while lying in mid-table in the euro area in terms
of industrial gas prices.
Given Ireland's heavy dependence on imported energy, the difficulty is that Ireland's energy
prices are largely determined globally. The Government is fully supportive of the EU's
comprehensive review of its energy competitiveness545
. In addition, Irish policy has focused on
reducing costs through maximising energy efficiency. This has included the launching of an
Energy Efficiency Fund and National Energy Services framework, to enhance Ireland's energy
performance by inspiring adoption of energy efficiency and management techniques, and
accelerating the market for energy retrofits. A National Energy Efficiency Plan has also been
launched, with the objective of achieving 20 percent efficiency savings to 2020 across the public
and private sectors. A comprehensive suite of supports for commercial and public sector bodies
have also been introduced, such as the Large Industry Users Network, EI's lean business
programme, the enterprise agencies' environmental aid programme, while the Sustainable
Energy Authority of Ireland (SEAI) also has programmes for SMEs
546
. A new Energy policy white
paper is being formulated by the Department of Communications, Energy and Natural
Resources to reassess Ireland's energy priorities and ensure the right policy choices are made to
support long term economic growth and international competitiveness. This will include
addressing the controllable elements of energy costs in Ireland, promoting energy efficiency,
reducing costs and improving security of supply.
545 EU industrial electricity prices are more than twice those in the US (a key competitor and source of
FDI) and 20 per cent higher than in China, while EU industry pays three to four times more for gas than
competitors in the US, Russia and India.
546 It has been estimated (2013 APJ, p.42) that most businesses who have not yet addressed the issue
of energy efficiency can reduce their costs by 20 percent for minimal outlay.

223
Waste costs
The availability of waste management services and their associated costs are important
competitiveness issues for Irish enterprise, particularly for internationally trading sectors such as
food, pharma, and ICT, and domestic sectors such as hospitality and retail. Ireland remains
highly dependent on landfill facilities, although there has been a significant move away from
landfill towards a more environmentally sustainable approach to waste management, as
required under the EU's Waste Framework Directive. Irish landfill costs are among the most
expensive compared with a relevant peer group average used by the National Competitiveness
Council (e.g. the OECD and euro area average), increasing from €93 per tonne in 2010 to €113 in
2014. This increase is largely attributable to increases in the landfill levy, one of a range of
regulatory and market based instruments to help Ireland meet its EU landfill targets
547
. Thermal
treatment costs (gate fees), although lower than landfill costs, are also expensive in comparative
terms.
The landfill levy aside, Irish waste management costs are driven by a number of factors,
including the EU's polluter pays principle; Ireland's small and dispersed population; and
competitive costs in other EU countries, resulting from their excess low cost waste infrastructure.
Combined with the increase in Ireland's landfill levy, these lower costs in other EU countries
encourage the export of an increasing amount of residual Irish waste. These lower waste costs
are unlikely to continue in the long term, however, which could leave Irish businesses vulnerable
to price increases. Other more controllable factors include the regulatory and policy uncertainty
preceding publication of a new national waste policy in 2012, which resulted in higher costs for
consumers and higher risks for infrastructural investment. There was also a fragmented regional
approach to waste planning and implementation up to 2014, resulting in small scale facilities,
while the cost structures of waste collection and infrastructure companies have also influenced
costs. The reduction of regional waste management plans under the new waste policy from 10
to three has the potential to alleviate this. There have also been lengthy delays in the planning
process, on the timely delivery of cost competitive waste management infrastructure.
Water/waste water
Water/waste water costs for enterprise compare well to competitor markets, although they vary
considerably by local authority area548
. Development of a new business pricing framework in
Irish Water has led to a degree of uncertainty on future costs. There is a need for investment in
water infrastructure, which, allied to the cost of meeting environmental targets, could result in
increases in prices – although these may be offset to a degree through the efficiency gains
arising as a result over the longer term
549
.
Property
Growth in the property market since 2014 has, in common with the residential sector, seen
significant rises in commercial sector capital values and rents, following several years of
significant cost reductions. This is partly a result of shortage of supply arising from the collapse
of the construction sector after 2008, and the return of economic growth. Capital values have
547 The others include source separated collection of bio-waste, pre-treatment and restriction of
particular waste streams to landfill, and producer responsibility initiatives for waste streams (e.g.
packaging, waste electrical and electronic equipment).
548 Costs of Doing Business in Ireland 2015, National Competitiveness Council/ DJEI, 2015
549 Ibid

224
increased strongly in all commercial sectors e.g. office, industrial, retail, and were up 31.4
percent in the year to early 2015. Rising property costs are viewed as posing a significant threat
to competitiveness, with a direct link between house prices and upward wage expectations. This
has been accompanied by a growing shortage of Grade A office space in prime city centre
locations, partly a result of Ireland's success in attracting foreign direct investment. These
constraints have the potential to result in future rent increases, and impact adversely on
Ireland's competitiveness and attraction of FDI. This also affects tourism, with hotel
accommodation failing to keep pace with the increase in demand.
Government policy has sought to ease supply constraints and rising property costs through
policy changes to assist the property and construction sectors, such as tax incentives, and
publication in 2014 of Construction 2020 - A Strategy for a Renewed Construction Sector
550
. The
strategy is aimed at ensuring a strong and sustainable construction sector, capable of building
the houses and infrastructure needed, through housing targets, changes to the planning
process, availability of finance, monitoring and regulating of the industry, and ensuring high
skills and opportunities for its workforce. The strategy envisages development of a National
Planning Framework (to succeed the National Spatial Strategy), publication of a general scheme
of a Planning Bill, and a proposed Policy Statement on Planning. It notes the importance of a
good supply of commercial premises as a key requirement for economic progress. A public
consultation is also to be launched to determine whether landowners are holding onto zoned or
serviced development land for higher prices, with the potential for taxation measures depending
on its outcome.
The Government has urged local authorities to exercise restraint in the setting of commercial
rates, and has been seeking revaluation of commercial premises to provide the basis for an
adjustment of commercial rates. The existing system of rates is seen as doing little to encourage
the efficient use and development of vacant commercial land, weakening the incentive for
existing businesses to expand and discouraging entrepreneurship.
Business services and other input costs
Overall, Ireland's current price profile can be described as 'high cost, rising slowly'. Irish price
levels are 16.8 percent above the euro area average. In 2013, Ireland was the 3rd most expensive
location in the euro area for consumer goods and services, while costs relative to national
income remain high when compared to the euro area average. When a range of goods and
services categories are considered, Irish price levels are above the euro area average in 10 of 12
of the categories551
.
In terms of the broader cost environment, while Irish consumer prices adjusted downward in the
years following the recession, in 2014 Ireland remained an expensive place to live. During the
course of the recession, Ireland's inflation rate (in some years Irish prices actually experienced
550 Construction 2020: A Strategy for a Renewed Construction Sector, Department of the Taoiseach,
2014
551 Those categories running above the euro area average are alcohol and tobacco, driven significantly
by tax policies; health; restaurants and hotels; communication; miscellaneous goods and services; actual
individual consumption; housing and utilities; education; food and non-alcoholic beverages; recreation
and culture; and transport. Only housing and maintenance, and clothing and footwear, are at or below
the EU average.

225
deflation) was consistently amongst the lowest in Europe, resulting in a narrowing price
differential.
Since early 2014 in the case of the dollar, and mid-2013 for Sterling, euro weakness has boosted
Irish competitiveness, important given the strength of both the UK and US markets as
destinations for Irish exports.
The price of a range of business services charged by domestic service producers to other Irish
based businesses has generally increased since the end of 2011. This follows a period of
significant price declines over the course of the recession. As of Q3 2014, prices were 6.5 percent
above 2010 levels. Following a long period of steady decline the cost of accountancy services
has begun to increase, although they remained 5 percent below 2010 levels in Q3 2014
552
.
As discussed earlier in the chapter on Finance for Growth, the cost of credit to Irish business is
relatively high relative to the euro area with interest rates on business loans consistently higher
than equivalent euro area rates. At the end of 2014 loans up to €1 million were 60 percent more
expensive in Ireland compared to the euro area. This differential increased from 31.5 percent in
2013 and 20 percent in 2009. There is, however, a strong level of convergence between retail
interest rates in Ireland and the euro area for loans of 1 year, 1 to 5 years, and over 5 years'
duration.
In terms of Irish consumer prices, despite adjustment downwards following the recession, in
2014 Ireland remained an expensive place to live. Ireland's current price profile can be described
as 'high cost, rising slowly'. Price levels are 16.8 percent above the euro area average. In 2013
Ireland was the 3rd most expensive location in the euro area for consumer goods and services,
while costs relative to national income remain high when compared to the euro area average.
Across a range of goods and services categories, Irish price levels are above the euro area
average in 10 of 12 of the categories
553
.
We will take the actions necessary to improve Ireland’s relative cost
competitiveness in the areas that are within our control
Energy
Position cost competitiveness as well as environmental considerations at the
centre of Ireland's national energy policy and its negotiating position in relation
to environmental and energy policy at EU level, with improvements in Ireland’s
environmental sustainability done at least cost.
DCENR
Bring forward measures to secure the optimal functioning of the North-South
Integrated Single Electricity Market so that future energy needs are met at least
cost.
CER
552 Ireland’s Competitiveness Scorecard 2014, Forfás/National Competitiveness Council
553 Those categories running above the euro area average are alcohol and tobacco, driven significantly
by tax policies; health; restaurants and hotels; communication; miscellaneous goods and services; actual
individual consumption; housing and utilities; education; food and non-alcoholic beverages; recreation
and culture; and transport. Only housing and maintenance, and clothing and footwear, are at or below
the EU average, see Consumer Costs and Inflation, Forfás, 2014

226
Waste
Promote private investment in and competition between cost effective,
commercially viable, integrated and diversified waste treatment options across
the waste management spectrum through the framework of the new regional
waste management plans
554
. These options include energy recovery thermal
facilities, which can play a role in meeting renewable energy targets.
Local
Authorities
Implement the EU's environmental obligations in the most cost effective manner,
and ensure that Ireland's negotiating position on EU waste policy issues is
informed by enterprise competitiveness as well as environmental considerations.
DECLG, DJEI
Property
Drive the efficient and productive use of land, discouraging land-hoarding and
helping to resolve the current housing and commercial property challenges,
including consideration of mechanisms such as an annual site value tax.
DECLG, DoF
Fully implement the Construction 2020 Strategy, including creation of a coherent
policy response and regulatory certainty around planning and zoning, to ensure
delivery of an appropriate mix of commercial property.
DoT and
other
relevant
Departments
Working with enterprise to increase efficiencies
Develop initiatives to ensure that businesses are aware of how best to:
reduce their energy use; and to
exploit waste management reduction processes and technologies.
DJEI, SEAI,
Enterprise
Agencies,
Business
Rep Bodies
554 Refer also to A Resource Opportunity, Waste Management Policy in Ireland, DCENR, 2012 which
sets out how Ireland can minimise waste while maximising the resources we can recover from waste
(resource efficiency)

227
Infrastructure priorities
Introduction
The availability of competitively priced world-class infrastructure (e.g. transport, telecoms,
energy, environmental) and related services is critical to support enterprise development, by
enhancing productivity, competitiveness, connectivity, and helping secure efficiency gains and
reduced average production costs. While there has been noticeable improvement in the quality
of Ireland's infrastructure in the past two decades, particularly in transport and telecoms access,
Ireland still lags countries with which it competes for trade and investment in a number of
aspects. This is partly a reflection of a decline in public capital expenditure since 2008. The
impact of this reduction in investment has to date been mitigated by weaker demand for
infrastructural services during the recession (e.g. reduced road traffic, declines in energy
demand). As the country returns to growth, however, targeted investment and reform is
required to address existing and likely infrastructural bottlenecks which could constrain
enterprise productivity growth, limit sectoral opportunities and adversely affect Ireland's
attractiveness as a base for globally connected businesses.
In 2015, the Government will publish a new infrastructure investment framework to 2020, which
follows a review of infrastructure requirements and will be informed by the needs of enterprise.
Elements of economic infrastructure, particularly those in areas not favourable to private
investment, are directly funded by the Exchequer, while in some infrastructure areas, the role of
private sector providers has grown significantly in recent years. There is significant scope for
Government to improve infrastructure capacity and deliver more cost effective, higher quality
services to business users without the need for Exchequer investment, by addressing policy and
regulatory barriers. Putting in place the right policy framework is important to give investors the
confidence to commit to long term infrastructure projects, and ensure the supply chain has the
certainty and resources it needs to deliver effectively.
Infrastructure priorities for enterprise
Informed by enterprise needs, the Department of Jobs, Enterprise and Innovation in conjunction
with the enterprise agencies has highlighted the following priority areas for enhancement and
further investment over the medium term:
International access: Excellent and competitively priced air and sea connectivity is crucial
in providing links with key trading and investment locations in high growth markets. Air
connectivity is crucial in demanding easy access to other company office locations and
overseas clients. The continued growth of volume freight trade also demands good
international maritime access in the form of increasingly sophisticated, high quality and
cost competitive sea freight services to get products to market efficiently.
Internal access: Good international connectivity must be complemented by good internal
access to air and sea ports, with an integrated transport system providing for the quick
and efficient movement of people and goods. Targeted investment is required to ensure
economic activity can be supported, and congestion and its associated costs avoided with
an expected rise in demand for transport services with the return of growth.

228
Energy: Investment in energy infrastructure is crucial to ensure security of supply,
environmental sustainability, and competitiveness. Policy and regulatory decisions can
ensure timely private sector investment at least cost to meet enterprise needs, and tackle
Irish energy's controllable cost components. Under the new Energy Policy, this can include
helping adapt the fuel mix by incentivising market players to invest in particular fuels or
types of generation plants.
Telecommunications: World class connectivity is vital to ensure Irish based companies
can compete internationally, engage in e-business and e-commerce, and that Ireland can
support the development of data intensive sectors such as ICT and digital media. Despite
significant investment to date, the focus needs to shift from minimum download speeds
to accelerating availability of high upload speeds/symmetrical capability, low latency and
low contention ratios. Wireless services, spectrum policy and management also has to
support Ireland's attractiveness for emerging wireless services and technologies,
continued investment in mobile telecommunications infrastructure and the delivery of
innovative and quality services to enterprise. Ubiquitous broadband is also essential to
the attraction and development of homeworking initiatives and initiatives to stimulate
demand and demonstrated technologies and work practices should be developed and
supported.
Water and waste services: The water policy and regulatory framework should be
designed and implemented to ensure Ireland can deliver certainty and competitively
priced quality water services for business, particularly water intensive sectors.
Delivering sustainable, reliable and quality transport networks, water, energy
and telecoms
Starting with the Government's new Infrastructure and Capital Investment Plan to
2021, prioritise productive investment in line with the needs of enterprises
competing internationally, paying particular attention to the areas set out below
where funded from the exchequer.
DPER
Energy:
Increase electricity interconnection to the North, Britain and continental Europe
and diversify gas sources and supplies (installation of a twin gas pipeline at
Moffat and new gas storage facilities) to ensure security of supply.
DCENR
Water services:
Deliver on Ireland's potential to make water services a competitive advantage in
the attraction of mobile investment and the development of indigenous
enterprise in water intensive sectors in the longer term.
Ensure that Irish Water prioritises the medium and longer term investments
required to address enterprise needs and drives efficiencies in water service
delivery - particularly by addressing urgent service constraints in Dublin, and
ensuring sufficient capacity in large regional urban centres. Priority for required
capacity and quality levels should be given to enterprise and development zone
locations.
CER, DECLG
CER, DECLG

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International and internal access:
In air transport implement the 2015 National Aviation Policy to help secure new
investment in Ireland's international connectivity, and provide regulatory
certainty. In particular investment will need to accommodate the trend towards
larger aircraft, and development of Dublin as a hub airport, both of which can
help ensure competitive direct access for business passengers, tourists, and
freight to long haul destinations in existing and emerging growth markets;
In sea transport: Implement the 2013 Ports Policy framework such that the
future needs of maritime connectivity are periodically reviewed; that access to a
wide range and frequency of port services at competitive prices is ensured; and
that deeper water facilities are provided at Irish ports that can accommodate the
international trend towards larger shipping vessels;
In land transport: Invest to maintain, renew and improve the network to
efficiently address congestion and to address bottlenecks in key urban centres;
increase use of Intelligent Transport Systems; improve connections to key
seaports and airports; underpin identified national and regional spatial planning
priorities (including improving access between main urban centres where
required and providing access to poorly served regions); and support large-scale
employment proposals
555
; and
Ensure that our regulatory environment is capable of facilitating the provision of
safety focused, cost optimal services.
DTTAS, CAR
DTTAS
DTTAS, NRA,
NTA
DTTAS
Telecommunications:
By 2020, under the National Broadband Plan, secure investment in the provision
of high speed and competitively priced broadband services to ensure that no
region of the country is disadvantaged
556
.
Promote and facilitate the provision of the resilience and low latency that
enterprises and particularly data intensive activities require, and work with the
market to accommodate ever increasing transatlantic data capacity through
direct international fibre connections to Europe and the US
557
.
Take a proactive approach to the shaping of the European Commission's plans to
further develop the digital single market, and ensure that EU spectrum policy
continues to allow Ireland discretion to use the spectrum innovatively and
efficiently.
DCENR
DCENR
DCENR,
COMREG
555 Refer also to Investing in our Transport Future – A Strategic Investment Framework for Land
Transport, Department of Transport, Tourism and Sport, August 2015
556 The draft Broadband Intervention Strategy, published in July 2015, sets out the Government’s
proposals to ensure that all business and citizens will have access to high speed broadband services by
2020. Commercial investment in broadband infrastructure and services since the National Broadband
Plan (2012) has exceeded expectations
557 It was announced in April 2015 that funding has been secured for a high-speed fibre-optic network
between New York and County Mayo. Construction is scheduled to begin in the summer of 2015, and
be ready for use in early 2016

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Section F
Effective execution

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Effective execution
Moving toward a systems approach to enterprise policy
The rationale for state support to enterprises has broadened beyond a simple market failure and
externalities concept to encompass a broader set of ‘systems’ considerations. A systems
approach sees deeper and more meaningful engagement between the Government and public
sector, higher education institutes and enterprises; increased connectedness between
complementary policies that can collectively drive sustainable enterprise growth and higher
standards of living; and in terms of how we engage with enterprises and optimise the use of
available supports to deliver greater economic impact
558
.
A systems approach underlines the fact that enterprise policy does not operate in isolation from
other parts of government. Other Government Departments have a key role to play in delivering
on the differentiated eco-system – aware of, and informed by, the evolving needs of enterprise
in an intensely competitive global environment. A systems approach is informed by evolving
thinking in industrial policy that sees the role for the State as a co-ordinator, networker,
promoter and informer, in addition to investment partner. Our policy approach over the next
decade aims to strengthen the systems approach to enterprise policy in Ireland. In this context,
DJEI plays a key role as the advocate for enterprise.
Building on the institutional reforms achieved as part of the Action Plan for Jobs whole-of-
Government approach, we will ensure effective implementation of the recommendations and
actions set out in this strategy.
A systems approach to delivering on our ambition
Ensure a whole-of-government approach to progressing implementation of
Enterprise 2025 to establish a top three competitiveness position, to boost
productivity and innovation in the public and private sectors, to sustain full
employment and to improve living standards over the longer term.
DoT, Gov
Depts
Engaging effectively with the EU
Ireland’s policies are informed (to a great extent) by EU. It is important that such discussions are
informed by our enterprise policy objectives. We need to ensure that the priorities for Ireland's
ongoing engagement with EU in a range of fora are informed by this Enterprise Policy 2025 and
that there is a continuous feed-back loop to facilitate and inform any policy flexibilities required
in response to new and emerging external influences, while maintaining a focus on Ireland's
longer term enterprise policy objectives.
558 Beyond Industrial Policy: Emerging Issues and New Trends, Warwick, K. I, OECD STI Policy Papers,
No. 2, 2013; Enterprise policy evaluation: Is there a ‘new’ way of doing it?, Lenihan, H. in Evaluation and
Program Planning, 34 (4), 323-332, 2011

234
Engagement with EU
To ensure that Ireland remains an attractive place for Irish owned enterprise to
grow, and to win new investment in high-technology areas from foreign and Irish
owned enterprises for Europe, we will pursue an active policy at EU level to
accelerate progress on: developing the EU Single Market for goods and services;
European competitiveness and reform; on international trade agreements to
provide access to international markets, including the completion of the TTIP;
and to influence progress at WTO level in the removal of all barriers to trade with
the aim of achieving positive outcomes.
Gov Depts
The regulatory environment
Regulation is pervasive within the enterprise environment and has arisen throughout this report
in many guises. Regulation’s primary purpose is that of protection - against adverse outcomes
(for example, in healthcare, health and safety, environment and habitats, building standards,
transfer of sensitive data, employment conditions, competition in markets etc.). How regulation
operates is an important characteristic of the business environment.
As highlighted earlier in this report regulation has administrative implications for enterprise in
terms of maintaining compliance, sometimes across multiple areas. Minimising the regulatory
administrative burden is an ongoing policy priority. A robust and efficient system for
investigating and dealing with compliance issues is a key element. In a highly competitive
international environment for investment, an efficient and robust regulatory system can be a
source of competitive advantage and an attractiveness factor for mobile investment.
Regulatory certainty is another key dimension to the regulatory environment and can be a
determining factor in significant investment decisions, be it in relation to property and
infrastructure development, or major investments in areas such as pharmaceutical
manufacturing or digital media. We need to ensure that the regulatory system in Ireland is one
that stimulates investor confidence in longer-term projects. Timely transposition of new EU
directives and regulations is an important aspect in maintaining regulatory certainty.
Regulation often raises the bar in relation to quality, standards and safety and as such is an
important driver of innovation leading to the development of improved products and services.
Government can therefore play a proactive role in stimulating innovation through the regulatory
system.
Recommendations are set out pertaining to the regulatory environment in the sections on
Innovativeness, cost competitiveness and infrastructure investment.
Data on enterprise performance
In a context of a changing environment for enterprise generally, there is an emerging lack of
data in certain areas important for measuring enterprise policy objectives and outcomes. In
some cases the absence of data has been known and highlighted for a number of years, while in
others it has more recently emerged.

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The report of the Services Strategy Group
559
published in 2008 stated that, despite the
importance of the sector, accurate and up-to-date metrics of service activities were not readily
available. This remains the case today, for example there is very limited information available on
the composition of services exports.
In another example, the assessment and discussion of Ireland’s productivity performance earlier
in this report was limited by the dearth of up to date data. Although industry-wide data is
available for years up to 2014 (Conference Board Total Economy database) or up to 2012
(OECD), the most recent sectoral data series ends in 2007 (KLEMS EU database). That data shows
the significant variation between sources and the extent to which national productivity measures
can mask significant changes at sectoral level. The most effective interventions to boost
productivity such as skills programmes, technology adoption, business process improvements,
and regulatory change, will be sector specific but progress in this area is hampered by the lack
recent sectoral productivity data. Given that the composite data required to build such a dataset
is likely to be already collected at sectoral level (e.g. employment, hours worked, compensation,
output, capital stock etc.), the potential for producing such a dataset should be explored as soon
as possible.
Outward Direct Investment (ODI) around the world has become an important
internationalisation strategy for firms, yet gathering data to measure and support this activity is
a persistent challenge. For example, while it is possible to source data on direct investment
income flows from the CSO's Foreign Direct Investment publication, and data on principal
trading aggregates for services enterprises560
from the CSO's Annual Services Inquiry and
Balance of Payments publications, and data on foreign affiliates (e.g. country in which it is
located, activity of the affiliate, turnover of the foreign affiliate, and number of persons engaged
in the foreign affiliate) from the CSO's Outward Foreign Affiliates survey, the data is not linked.
This means that basic questions about ODI activity from Ireland cannot be answered. The
Department of Jobs, Enterprise and Innovation's own surveys do not currently provide suitable
data to overcome this problem, but this is an area currently under consideration.
Turning to more recent examples, there are a number of phenomena associated with the
structuring of multinational global corporate footprints that have implications for the true
measurement of economic activity reflected in Ireland’s economic statistics and which in turn
impacts on evidence-based policy-making. Examples of this include the impact of large retained
earnings of redomiciled PLCs located in Ireland
561
; the impact of contract manufacturing (Ireland
as a net contract manufacturing user); the potential effects of incorporating aircraft leasing firms
fully into the Irish national accounts; and understanding the general impact of increased
participation in global value chains (GVCs) in terms of domestic value added in the context of
both manufacturing and services.
While some or all of these issues may not be peculiar to Ireland, it is important that strategies
are in place to mitigate, if not remove, their impact on our ability to assess and devise enterprise
policy into the future.
559 http://www.forfas.ie/media/forfas080912_services_strategy.pdf
560 For example, turnover, stocks, capital assets, personnel costs, VAT, purchases, employment,
location, exports, imports
561 The Effect of Redomiciled Plcs on GNP and the Irish Balance of Payments, FitzGerald, J, 2013 and
Problems Interpreting National Accounts in a Globalised Economy – Ireland, FitzGerald, J, 2015

236
It is also important to continue to assess Ireland’s enterprise and economic performance in an
international context, and the National Competitiveness Council has an important role in this
respect. The Small Advanced Economies Initiative provides a useful vehicle through which
Ireland’s progress can be tracked alongside similarly sized economies
562
.
Strengthening data collection
Strengthen data collection and monitoring of metrics in relation to the expanded
range of international business expansion modes, including ODI and M&A with a
particular focus on determining more accurately the economic impact of such
activities within the Irish economy.
DJEI, CSO
Adapt existing surveys to include relevant questions that will serve to increase
our understanding of where and how cross cutting technologies and disciplines
are being applied and where and how they add value (ICTs, Green and Design).
Such analysis would serve to inform the development of policies and facilitate
ongoing monitoring of developments.
DJEI, CSO
562 See Appendix XII for further detail on the Small Advanced Economies Initiative

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Appendices

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Appendix I Measuring success
Measuring success (1) – Overarching national outcomes
Overarching national outcomes Metric Current
Perform
-ance
Potential by
2020
Baseline
year
1 Employment & regional potential
2.180m in employment by 2020 Annual Employment Growth (000’s) 1,958.7 2,180 Q2 2015
71 percent of 20 to 64 year olds will be in
employment by 2020
Employment Rate 20-64 year olds 67 71 2014
Optimising regional potential
Regional unemployment rates will not be
higher than 1 percentage point than national
unemployment rate
<3% <1% Q1 2015
2 Export-led growth
Increasing exports
Grow Irish owned exports by 6-8% per annum
by 2020563 €16.3bn €24-€26bn 2014
3 Innovativeness
Increase Investment in RD&I GERD percentage of GNP 2.05% 2.5% 2012
Innovative Culture SMEs introducing product or process
innovations (as % of all SMEs)
35% 45% 2015
4 Talent
Highly skilled workforce Tertiary education attainment 30-34 year olds 52.2% 60% 2013
5 Competitiveness
Rank in top 3 most competitive small
countries in the world
World Bank Doing Business (189 economies) 13564
1-3 2015
Sustaining the profitability of Irish owned
firms (across all sectors)
Gross operating surplus as % of turnover
(CSO Business in Ireland) (7.3% in 2010)
9.6% 10% 2012
6 Living standards
Restoration of living standards to pre-
recession levels and maintain an above
average position relative to the Euro-19
over the period to 2025 and beyond
GNI per capita in Purchasing Power Standards
(Eurostat)
(EU-19 =100)
98 105 2013
563 Excludes foreign owned entities within EI portfolio, e.g. food
564 Other small countries currently ranked ahead of Ireland include Singapore (1), New Zealand (2),
Hong Kong (3), Denmark (4), Finland (9) and Iceland (12)

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Measuring success (2) - Enterprise level performance and potential
Firm level activity Metric Current
Perform
-ance
Potential
by 2020
Baseline
year
1 Sustainable enterprise
Increase no. of start-ups by 25 percent No. of enterprise births per annum 12,551 15,700 2012
Increase no. of enterprises surviving to 5 years
by 25 percent
Survival rate of start-ups (5 years) 6,513 8,141
2007-
2012
Increase in scaling activity
EI Firms>€3m sales out of Ireland
EI Firms > €20m sales out of Ireland
EI Firms >€100m sales out of Ireland
860
225
54
1,100
300
90
2013
2 Export growth & employment
Increase Irish-owned export intensity Irish owned exports as % of sales 51% 55%-60% 2014
Broadening base of Irish owned exports Beyond UK markets by €5-€6 billion €10bn €15-€16bn 2014
Increase EI employment Increase employment by 32,000 180,000 212,000 2014
Increase in IDA employment
Increase employment by 35,000 by 2019
(extrapolated to 2020 at 42,000)
175,000 216,000 2014
Increase FDI investments
900 new IDA supported investments by
2019 (extrapolated to 2020 at 1,080)
779 1,080 2010-2014
3 Innovation
Increase in RDI active firms No. of EI R&D Active Firms >€100k 858 1,000 2011-2014
Increase in RDI active firms of scale No. of EI R&D Active Firms >€1m 139 220 2013
Increase in FDI R&D investment
Win cumulative €3bn in RDI investment by
2019 (extrapolated to 2020 at €3.6 bn)
€2.5bn €3.6bn 2010-2014
Increase in Foreign Owned RDI active firms
120 additional companies to engage in
R&D by 2019 (extrapolated to 2020 at 145)
330 475 NA
4 Connectedness
Increase no. of enterprise collaborations by a
third
No. of enterprise collaborations with
HEIs/PROs (note different basis for metric
applies by agency)
839 (EI)
900 (SFI)
1,200
1,125
2013
Increase in Direct Economic Expenditures by 25
percent
ABSEI Direct Economic Expenditure (Irish
materials and Irish services)
€28.8bn €36bn 2013
Innovative SMEs collaborating with others
Innovative SMEs collaborating as a
percentage of SMEs
35% 45% 2015
5 Talent and skills development
Double investment in training and upskilling
for employees
Expenditure on training per employee €543 €1,100 2013

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Measuring success (3) - Key monitoring indicators
The following indicators on productivity and export performance are useful in monitoring
comparative performance on an ongoing basis.
Monitoring
Indicators
Metric Current
Performance
Potential
by 2020
Baseline
1 Productivity
GVA per person engaged for
indigenous sectors
€40,900 (80% of UK &
Germany, 60% of
Denmark levels)
Equivalent
to UK &
Germany
2011
2 Productivity
Output per hour worked, total
economy, percentage change at annual
rate565
2.5%
Sustain an
EU top 5
position
2008-2013
3 Export led growth % Share of World Trade Manufacturing 0.62%
36th
world
ranking
2014
4 Export led growth % Share of World Trade Services 2.70%
11th
world
ranking
2014
Measuring success (4) – Monitoring sustainable employment growth
The importance of full employment being on a sustainable basis is a core objective of Enterprise
2025. The following are broad indicators of what constitutes a sustainable balance of
employment across exporting and non-exporting sectors of the economy based on the pattern
of economic performance generally over the past 15 years
566
. Multiple factors influence the
sectoral distribution of employment so the metrics presented here should be treated as
indicative only. However, movement outside of the ranges set out below would trigger more in-
depth analysis.
Monitoring
Indicators
Metric Sustainability
metric
1
Employment in
domestic activity
Proportion of the labour force employed in the seven sectors that
comprise the ‘domestic’ component of the economy567
45% to 47%
2
Gap between
employment in
domestic &
exporting activity
Difference between the proportion of the labour force employed in
domestic sector activity and the proportion employed in exporting
activity568
(% point differential)
<22%
565 Sectors contribute variously to total economy productivity performance. Monitoring of the total
economy performance should be accompanied by analysis at a sectoral level
566 Further details in relation to monitoring of sustainable employment growth is contained in
Appendix III
567 Incl. construction, wholesale and retail, transport and storage, accommodation and food services,
professional, scientific, technical, administrative and support services, and other services, QNHS
568 For the purposes of this particular analysis, exporting activity employment is estimated using the
CSO QNHS data, specifically NACE codes B-E (Industry) and J (Information and communication), and
data from DJEI's Annual employment Survey (Internationally Traded Services)

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Appendix II
Overview of technology disruptors and their impacts
Technology Impacts (selective)
Mobile internet By 2015, wireless web use is expected to exceed wired use
New ways of knowing, perceiving and interacting with the physical world
Rapid evolution: intuitive interfaces, new formats, wearable devices
Automation of
knowledge work
Driven by advances in A.I., machine learning and natural user interfaces (voice recognition) and
sophisticated analytics
Augmenting talents of skilled employees or fully automating certain roles
Internet of Things Embedding sensors and actuators in machines and other physical objects – rapidly spreading
Allows organisations to manage assets (including remotely), optimise performance, and create
new business models
Cloud technology IT resources such as computation and storage available on an as-needed basis
Enabling explosive growth of internet-based services, improving the economics of IT, and
generating new business models
Advanced robotics Advanced robots have enhanced senses, dexterity and intelligence
Potential to substitute humans in more manufacturing tasks and service jobs (esp. cleaning
and maintenance). Driving innovation in healthcare – surgical robots, robotic prosthesis etc.
Autonomous/near
autonomous
vehicles
Machine vision, A.I., sensors and actuators enabling creation of cars, trucks, boats, aircraft etc.
that are partially or completely autonomous
Suggests revolution in ground transportation – regulations and public acceptance permitting.
Benefits re safety, reduced CO2 emissions, productivity etc.
Next generation
genomics
Convergence of science of sequencing with big data analytics capabilities
Potential for profound impacts in medicine, agriculture, biofuels, drug discovery
Energy storage Includes batteries and other systems that store energy for later use e.g. lithium-ion batteries.
Further advances in energy storage would make electric vehicles cost competitive with internal
combustion engines
3D printing Performance of additive manufacturing machinery is improving, the range of materials is
expanding and cost is declining rapidly
Enables on-demand production, reduces waste, create more complex objects, e.g. bio-printing
Advanced
materials
Include smart materials that are self-healing, self-cleaning, memory metals, nanomaterials etc.
Advanced nanomaterials include grapheme and carbon nanotubes. Nanoparticles are being
researched for applications in pharmaceuticals
Advanced oil and
gas discovery
Ability to extract so-called unconventional oil and gas reserves from shale is gathering force
Potential to unlock new types of reserves including coalbed methane, tight sandstones and
methane clathrates boosting availability of energy from fossil fuels for decades
Renewable energy Solar cell technology progressing rapidly and costs is declining. Solar and wind power
increasingly being adopted at scale in advanced economies
China, India and other emerging economies have aggressive plans for solar and wind adoption
which will enable further rapid economic growth
Source: Disruptive technologies: Advances that will transform life, business and the global economy,
McKinsey & Co, 2013

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42%
49%
42%
25%
19%
21%
17%
23%
8%
5%
0%
10%
20%
30%
40%
50%
60%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
EmploymentasaPercentageoftheLabourforce
Domestic
Exports
Non-market, Health
and Education
Agri-fish
Appendix III
2.1 million people at work: sustainability and assessment
The importance of full employment being on a sustainable basis has been stated on numerous
occasions by the Minister for Jobs, Enterprise and Innovation, and the point is repeated clearly in
the Government’s 2015 Spring Economic Statement. The sustainability (or unsustainability) of
employment is to a large extent tied to the macroeconomic activity generating it, as is obvious
from the composition of national GDP over the period of the boom, and its consequences for
the crash. In short, the boom was driven by a surge in consumption and investment activity
which dwarfed the contribution of net exports to national wealth. As a proportion of overall
economic output, government spending was more or less steady. This macroeconomic profile
had a significant impact on the sectoral distribution of employment, as illustrated below.
Figure A3.1 Estimated sectoral breakdown of employment, as a percentage of the labour
force, 1998 – 2014
Source: DJEI Strategic Policy Division calculations based on CSO QNHS and DJEI’s Annual
Employment Survey
How full employment of 2.1 million would be precisely distributed across the categories used in
the illustrative categories above is difficult, if not impossible, to say. The factors influencing the
sectoral distribution of employment are many and complex, and the environment uncertain.
They include demand factors (e.g. international/national trends in goods and services, global
economic performance, international demographics, trends in FDI etc.), and supply factors (e.g.
the skills pipeline, materials and input costs and availability, domestic policies and incentives
etc.). In addition, the numbers of actors, policies and decisions influencing the sectoral
distribution of employment (and, hence, its sustainability) number the thousands, if not millions.
Finally, a particular sectoral distribution of employment is not a policy outcome that is subject to
the will of the government. This complex policy environment is one where heuristics can be
useful.

244
Heuristics are processes that deliberately ignore information and enable fast decisions that can
be useful in light of the complexity of the forces influencing the sustainability of employment,
uncertainty of the environment, and limitations of policymakers and resources. They are not
intended to replace deeper analysis but can flag the necessity to undertake it. That said, in
contrast to the widely held view that less processing reduces accuracy, the study of heuristics
shows that less information, computation, and time can in fact improve accuracy
569
. Collecting
and processing the information necessary to fully understand employment sustainability and to
know when precisely (and what) corrective policy action should be taken, is costly, perhaps
punitively so.
Consider two examples. First, policymakers could consider Ireland’s employment profile to be
approaching unsustainability if/when the proportion of the labour force employed in certain
economic activity reaches X percent. Of course, there will be debate over what X should be, and
what sectors should be included. One possibility would be to look at the proportion of the
labour force employed in the seven sectors which comprise the “domestic” category set out in
Figure A2.1 above. (i.e. construction, wholesale and retail, transport and storage,
accommodation and food services, professional, scientific, technical, administrative and support
services, and Other Services as per the CSO’s QNHS).
Figure A3.2 Estimated proportion of labour force employed in domestic activity,
1998 – 2014
Source: CSO QNHS data, DJEI SPD categorisation (line indicates 46 percent level)
569 See Heuristics: The Foundations of Adaptive Behaviour, Gigerenzer, Hertwig and Pachur (eds.),
2011, The Dog and the Frisbee, Haldane, Bank of England, 2012, and A Complexity Theory for Public
Policy, Morçöl, 2012.
42%
43%
45% 45% 45%
46%
47%
48% 48%
49%
45%
41%
40%
39% 39%
41% 42%
0%
10%
20%
30%
40%
50%
60%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

245
Consideration could be given to using the proportion from, say the early 2000s (45 - 47 percent)
as a safe ceiling heuristic for domestic-activity when examining the sustainability employment
distribution across economic activity. This data has the benefit of being extracted directly from
the QNHS and has not been subjected to any calculation or extrapolation, merely aggregation.
Second, as an alternative or as an addition, one could consider the relative proportions of the
labour force employed in domestic sector activity (above) versus exporting activity. It may be
that it is not the proportion of domestic sector employment on its own per se that is important
for sustainability, but rather the extent to which that proportion exceeds or grows relative to
employment supported by exporting, which can be considered more sustainable.
Figure A3.3 Estimated gap between proportion of labour force employment supported by
domestic and export activity, 1998 – 2014
Source: DJEI Strategic Policy Division calculations based on CSO QNHS and DJEI’s Annual
Employment Survey (line indicates 22 percent level)
Unlike the first example, this data does not have the benefit of being extracted directly from the
QNHS, as it is subjected to calculation, extrapolation, and categorisation. It does however offer
another potential option i.e. policymakers should consider Ireland’s employment profile to be
approaching unsustainability if/when the proportion of the labour force employed in domestic
activity exceeds that of exporting activity Y percent. For the purposes of this particular analysis,
exporting activity employment is estimated using the CSO QNHS data, specifically NACE codes
B-E (Industry) and J (Information and communication), and data from DJEI's Annual employment
Survey (Internationally Traded Services). Again, there will be understandable debate over what Y
should be, and what sectors should be included. Consideration could be given to using the gap
from, say the early 2000s (21 - 23 percent) as a safe differential heuristic for domestic-versus-
exporting-activity when examining the sustainability of employment distribution across the
economy.
17%
18%
20% 20%
21%
23%
25%
26% 26%
28%
24%
21%
20%
19% 19%
20%
21%
0%
5%
10%
15%
20%
25%
30%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Gap
(Percentage
Points)

246
Given recent labour market performance, the Department of Finance forecasts for growth, and
the employment targets of the enterprise development agencies, the Government’s target of 2.1
million at work in 2018 can be approached with a certain degree of optimism. However, Ireland
cannot afford to lose sight of the importance of sustainable jobs growth, and the heuristics
proposed here (or some alternative) can assist in this regard. Avoiding repetition of the most
recent employment crisis will mean keeping a check on the extent to which jobs in Ireland are
concentrated in more vulnerable, largely domestically trading sectors such as construction,
retail, accommodation and food. The challenge for policy makers is twofold: first, establish
assessment criteria for employment sustainability and second, consider what policy options are
open to Government to correct unsustainability, well in advance of its occurrence and detection.

247
Appendix IV
Map A4.1 Distribution of all agency supported foreign owned companies in 2014,
classified by employment size

248
Map A4.2 Distribution of all agency supported Irish owned companies in 2014,
classified by employment size

249
Appendix V
Review of Trade, Tourism and Investment Strategy 2010-2015
New Market Approach - Segmentation
High Level Targets
Jobs: Increase the number of new jobs directly associated with exporting enterprises by over
150,000, in manufacturing, tourism and internationally trading services, and with the creation of
a similar number of new indirect jobs: IDA Ireland: 75,000; Enterprise Ireland: 60,000; Tourism:
15,000
Exports: Increase the value of exports by State agency assisted indigenous companies by 33
percent and diversify the destination of indigenous exports
570
Tourism: Revised target and new metrics: increase overseas visitor numbers to 7.2 million,
visitor revenue of €3.6 billion, and promotable visitor revenue of €2.3 billion
Inward investment (FDI): Secure an additional 780 inward investment projects through IDA
Ireland
Education (new target): Increase the direct economic contribution of international education
to the Irish economy, from €682 million in 2010 to €900 million.
570 Increase share of food and drink exports to countries outside the UK, from 56% to 62%; Increase
share of other exports to countries outside the UK, from 57% to 63%; Increase the share of food and
drink exports to Asia, from 4.3% to 7%

250
Appendix VI
Destination of Enterprise Ireland client-company exports 2009-2013
Figure A6.1 Destination of Manufacturing Firms’ Exports (Enterprise Ireland) – 2009 to
2013
Figure A6.2 Destination of Services Firms’ Exports (Enterprise Ireland) – 2009 to 2013
Source: DJEI Annual Business Survey of Economic Impact (special calculations, unpublished data)
0 5 10 15 20 25 30 35 40
UK
Rest of Europe
North America
Asia
Rest of World
%
2013
2012
2011
2010
2009
0 10 20 30 40 50 60
UK
Rest of Europe
North America
Asia
Rest of World
%
2013
2012
2011
2010
2009

251
Appendix VII
Cluster enabling policies – international examples571
The nuancing of approaches to the maturity of the cluster landscape and enterprise base. For
example, in Baden Württemberg clustering is more developed and the policy approach
therefore focuses on programmes that bring excellence to operations and improve standards
within existing clusters. In France, calls for tenders and more directive intervention are used to
kick-start the clustering process. This accords with international research which shows that
clusters at different stages of maturity exhibit different characteristics and different levels of
connectivity
572
;
The role of cluster managers is key - they build connections between participants from
different (sometimes opposed) backgrounds and play a key role in communications, facilitation
and networking. The project manager typically possesses a level of expertise and familiarity with
the sector/activity base which facilitates efficient engagement with specialised researchers and
academics and industry players;
The fact that strong clusters are not necessarily bounded by local or regional administrative
boundaries, just as local economic dynamics are similarly unconstrained spatially;
The role of private sector funding in building a sense of ownership. The contribution by
members to the running of the cluster initiative builds a sense of ownership and also sets a level
of expectation regarding a return to members in terms of quality of service and impact. The
private:public sector funding mix may shift over the lifecycle of a cluster initiative with public
sector contribution relatively higher at the outset and reducing thereafter;
Clusters become attractiveness assets when they have managed to build a strong
international brand and effective networks. A strong brand and cluster dynamic can aid in the
attraction of further investment and bolster the reputation of the location for business. The case
studies also highlighted the fact that creating a common brand is only one aspect of building a
reputation and impact internationally. The ‘Maritime Bergen’ cluster in Norway has struggled to
build a shared marketing strategy to date.
The State cannot ‘create’ clusters; rather its role is that of enabler, and to intervene on a
supportive basis to accelerate activity
573
. The most successful cluster policies have generally
focused on supporting activities that already make strong contributions to economic growth
and where there are pre-existing collaborations in evidence.
571 Based on research undertaken by Ernst & Young for DJEI
572 The Cluster Initiative Greenbook 2.0, Lindqvist, G., Ketels, C., and Sölvell, Ö., 2013
573 ‘Cluster initiatives are the ‘lubricant’ that allows the ‘engine’ of cluster dynamics to operate at
higher speed’, The Cluster Initiative Greenbook, Sölvell, Ö.,Lindqvist, G. and Ketels, C., (1st Ed.),
Stockholm, Ivory Tower, 2003

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AppendixVIII
Newareasofopportunity-asnapshot
Businessmodels,sectorsandactivities,emergingmarketopportunities….
(inalphabeticalorder)
Newareaof
opportunity
BriefsynopsisBuildingonexistingcapabilities
Agritech
Smart(precision)
agriculture
Smartagriculture(alsoknownasprecisionagriculture)istheapplicationofICTtotraditionalagriculturetodevelopasmart
agriculturecapability,whichcanfacilitatebetterproductivity,yields,safety,andenvironmentalsustainability,particularlyin
dairyfarming.Smartagriculturecapturesandanalysesdatatohelpdrivedecisionsupportsystemstoestablisha
systematicapproachtomanagingonfarmfactors.Itcanbeappliedto,andenhanceanimalwelfare,soilandgrassland
management,biodiversity,traceabilityandfoodsafety,andultimatelyanenvironmentallyandcompetitivelysustainable
intensificationofproduction.
SmartagriculturehasaparticularrelevanceforIrelandinthecontextofthecurrentmajorexpansionofthedairyindustry
withtheliftingoftheEU’smilkquotasystem.Irelandisalsohometosomeoftheworld’sleadingfoodandtechnology
companies.Internationalpopulationgrowthandgrowthofthemiddleclassinemergingmarketstogetherwithageing
populationsaredrivingincreasedconsumptionofdairyproteinsandcreatinghigherdemandforincreasedyields.
Concernsaboutenvironmentalsustainabilityandfoodsafetycreateaneedforincreasedmonitoringcapability.
Informationand
CommunicationsTechnology
Dataanalytics
Cloudcomputing
Agri-foodsector
Researchinfrastructures
Advanced
manufacturing:
3-D
printing/additive
manufacturing
3-Dprinting(oradditivemanufacturing)introducesacompletelynewapproachtotraditionalmanufacturingprocesses
(whichinvolveshaping,casting,moulding,forging,bending,cuttingmaterialsintotheirapproximateshape)bybuildingup
theproductlayerbylayerintoathreedimensionalformunderdigitalcontrolfromamasterdesignfile.Powderedmetals
aremeltedusingalaserlayerbylayertocreatethefinal3-Dshape.
Thismeansextremelycomplexproductscanbemadewithoutthenormalstressesanddefectsfoundintraditional
manufacturedobjects.3-Dprintingiscurrentlybeingusedinrelativelyspecialisedareassuchasaerospace,andinsmall
sizesandrelativelysmallvolumes.Overthemediumtermitoffersthescopetocustomiseatnoincrementalcostand
producefeweritemsatlowercost,thanwouldbethecasewithassemblylineproduction.
Manufacturing
IrishCentreforManufacturing
Research

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Newareaof
opportunity
Aquaculture
Aquacultureisthefarmingofaquaticorganismssuchasfish,crustaceans,molluscsandaquaticplants.Itinvolves
cultivatingfreshwaterandsaltwaterpopulationsundercontrolledconditions.Aquacultureisalabourintensiveindustry
providinghighvalueproducts;itsexpansionwillresultinjobcreationinperipheralcoastalcommunities,andwilldrivethe
expansionoftheseafoodprocessingindustrythroughincreasedrawmaterialsupply.Inaquaculturethereisstrongglobal
demandforbothfinfish(salmon)andshellfish(mussels,oysters).
Irelandiswellplacedtoincreaseitsgrowthoftheseproducts,andneedstomeetEUregulatoryobligationssetoutinEU
EnvironmentalDirectives(NaturaDirectives)inordertocapturethefullpotentialoftheindustry.Ireland’sreputationinICT
canalsoreinforcetrustintheIrishaquaculturestock,throughthedevelopmentoftraceabilitysystemstosupportfood
safetyandtrade.
Fishfarming
SeafoodProcessing
ICT
BigData
Bigdataisabroadtermfordatasetssolargeorcomplexthattraditionaldataprocessingapplicationsareinadequate.
Datasetsgrowinsizeinpartbecausetheyareincreasinglybeinggatheredbycheapandnumerousinformation-sensing
mobiledevices,aerial(remotesensing),softwarelogs,cameras,microphones,radio-frequencyidentification(RFID)readers,
andwirelesssensornetworks.Challengesincludeanalysis,capture,datacuration,search,sharing,storage,transfer,
visualisation,andinformationprivacy.Real-timedataandpredictiveanalyticsisrelevantforavastrangeofsectorsand
activitiesandinformseffectivedecisionmaking,increasedefficiencies,reducedrisk,spotbusinessandconsumertrends,
facilitatethedeliveryoftargetedandcustomisedservicesandsolutionsetc.
WehaveestablishedataskforceonBigDatatobuildonexistingenterprisestrengthstomakeIrelandaleadingcountryin
EuropeintheareaofBigDataandDataAnalytics.
ICT,sensortechnologies,
analytics
‘BornGlobals’
Abornglobalisaventure(predominantlyaknowledgeintensive,hightechnologyenterprise)launchedtoexploitaglobal
nichefromthefirstdayofitsoperations.Itisinternationalbydesignandtendstoberelativelysmallwithfewerfinancial,
humanandtangibleresourcescomparedtolargemultinationalenterprisesusuallyconsidereddominantinglobaltrade
andinvestment.Ittendstoadoptadifferentiationstrategybydevelopingdesignsandhighlydistinctiveproductsthat
targetnichemarkets,whichmaybetoosmallforthetastesoflargerfirms.
Agrowingnumberoftheseentrepreneursandstart-upsarewillingtogoanywheretomakeasuccessfulbusinessand
Ireland’sclusterofdigital
enterprises
Dynamiccityregions
Broadbandinfrastructures

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Newareaof
opportunity
wanttodoitrapidly.Theirglobalfootprintisdeterminedbyaccesstofinancing,talent,innovationandproximitytoclients
–anecosystemthatfacilitatestheflowofknowledge,ideasandexperiencewithina‘community’.Theyaredrawninthe
maintocitieswherethesefactorscoincide.
ICTallowsthemtoprocessinformationefficientlyandcommunicatewithpartnersandcustomersworldwideatpractically
zerocost.Whilebytheirnatureinvestmentsbythesecompaniesaresmalleronaverageinitiallyintermsofjobnumbers,
theexpectationassociatedwiththesefirmsisthattheywillgrowrapidlyfromtheirnewIrishbase.
Compositesand
advanced
materials
Newmaterialsandprocessingmethodse.g.smart,advancedandnextgenerationmaterials,havethepotentialto
revolutioniseexistingindustriesaswellastocreatenewones.Smartmaterialsforexamplechangetheirproperties,their
structureorcomposition,ortheirfunctions,andaremostlyembeddedinsystemswhoseinherentpropertiescanbe
favourablychangedtomeetperformanceneeds.
Newwaysofprocessing/formingorcoatingforanexistingmaterialwillalsoenhanceitscharacteristics,whichcanprovide
radicalandmajoropportunitiesforexistingandnewmanufacturingactivities.
Newmaterialsusuallyrequiretheintroductionofnewmanufacturingprocesses,skills,mensurationandqualityassurance
procedures,whichinturnoftenrequireextensiveinvestmentinequipmentandknowledge.
Complexmanufacturing
MedicalDevices,pharma/bio
engineering,food,packaging….
IrishCentreforComposites
Research
AdvancedMaterialsand
BioengineeringResearchCentre
eHealth
(telehealth)
Europeatnationalaswellascross-borderlevelisfacingchallengessuchasageingsocieties,chronicdiseasemanagement,
patientandprofessionalmobility,andhealthprofessionalshortages,thateHealthcouldhelptoimprove.E-healthprovides
anewmethodforusinghealthresources-suchasinformation,moneyandmedicines,andisarecognisedtoolin
enhancingthemodernisationofnationalhealthcaresystems.TheEUe-healthsectorincludeslargecompanies,butis
particularlycharacterisedbyaverylargenumberofSMEs.
Thedevelopmentofconnectedhealthtechnologiesrequiresacrossdisciplinaryapproachinvolvingmanyresearch
disciplinesandsectors.EnterpriseIrelandproactivelyengageswithclientsacrosslifesciences,software,andinternational
services,andtheresearchcommunityinexploringopportunitiesinthisend-market.
Advancedmanufacturingin
medicaltechnologies
Embeddedsoftwaresystems
Wirelesscommunications
ICT/dataanalytics/Software
Healthcareservices
Researchinfrastructures

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Newareaof
opportunity
e-tailing
E-tailingisstillinexpansionmodeandisawideandopenmarketwheresmall,innovativecompaniescangaintractionvery
quickly.Establishedmakersofconsumerproductsmaytakeadvantageofthee-tailingplatformtotapintonewmarkets.
Somewillengagewithonlinevirtualmarketplacessuchase-BayorAmazontappingintohugeaggregatedtrafficflows,
whileotherswilladopttheirownonlinestorefronts.Thetraditional‘bricksandmortar’retailerisadaptingtotheonline
channelandhavingtoadjustbusinessmodelsandsupplychainconfigurations.Therearerelateddevelopmentsand
opportunitiesaroundsecuree-payments,dataanalytics,digitalmarketingandlogistics.
E-tailingishavingasignificantimpactinemergingeconomies,withChinaleadingtheway.China’sbroadbandpenetration
isstillonly30percentbutin2011itsurpassedonlinesalesinJapan,theUKandGermany.
Thegrowthofe-tailingposeschallengesfortownandcitydevelopmentandplanningwheretheneedforphysical
storefrontsgivewaytoincreaseddemandforwarehousingandotherlogistics.
ICTInternettechnologies
ICTspaymentsandsecurity
Retail
Transportandlogistics
Fintech
IdentifiedintheIFS2020asanemergingareaofpotentialforbothIrishownedandforeignownedenterprises.Fintech
involvestheapplicationoftechnologicalinnovationtotransformthefinancialservicessector.Thenextgenerationof
financialservicesbusinessmodels,productsandservicesisbeingshapedbytheincreasingsignificanceofdataand
analytics,securityandriskmanagement,digitisation,enterprisemobility,ePaymentsandenhancedcustomerexperience.
ActionstorealisethepotentialwillbeprogressedthroughtheIFS2020implementationprocess.
Financialservices
Softwareengineeringand
technologies
Geosciences
Geosciencesunderpinthediscoveryofrawmaterials,waterandenergyresourcescriticaltotheworldeconomy,withina
contextofincreasingdemandanddiminishingsupply.Irelandhasmanysuchresources,includingEurope’slargestzinc
mine,untappedhydrocarbonresourcesinchallengingNorthEastAtlanticdeepwaterenvironments,andadiverse
geologicalframeworkwithimportantseabedandgroundwaterresources,alongwitharangeofcompetenciesinthisfield.
DJEIthroughScienceFoundationIrelandhelpsfundtheIrishCentreforResearchinAppliedGeosciences(iCRAG),which
carriesoutresearchtofindandharnesstheseresourcesinanenvironmentallysustainableway.TheCentre’saimisto
transformgeoscienceresearchinIreland,andhelpdelivereconomicimpactforabroadrangeofapplicationareasand
industries,applicableinIrelandandoverseas.
Internet&mobiletechnologies
Appliedgeosciencescapabilities
andresearch
Mining
Oil&GasExploration

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Newareaof
opportunity
Internetofthings
TheInternetofThingscanbedescribedastheintersectionbetweenthe‘virtual’(internet)worldandourphysicalworld,via
‘things’ordevices.Theseconnecteddevicesareenrichingourdailylives,ineverythingfromentertainmentandhome,to
energy,transport,healthcareanddiet.
TheInternetofThingsisalreadydeliveringrealbenefitsinalmosteveryarea.Remotesensorsandmonitoringdevicesare
beingdevelopedthatcanhelpuswithourfitness,health,energymanagement,dietandtravel.Theycouldhelpmedicsto
remotelymonitorintravenousdrugdeliveryandtestfordiseasesthrough‘smart’tattoosontheskinandhelpcar
manufacturerstocreatesensorsthatmonitorandreportonairqualitywithinthecar.
ThereisahugeopportunityintheInternetofThingsforIreland.It’spredictedthatbetweennowand2020,halfofthe
businessopportunitieswithintheInternetofThingswillbeattributedtostart-upbusinesses.
ICTmobile&sensor
technologies&Internet
Impacting….
Medicaldevices;Agriculture;
Healthcareandwellness;
Transportandlogistics;Energy
management;Constructionand
'smart'buildings
SharingEconomy
Thesharingeconomycanbedefinedasonlineplatformsthathelppeopleshareaccesstoassets,resources,timeandskills.
Todatethesharingeconomyhasbeenprimarilydominatedbypeer-to-peermarketplaces(e.g.makingyourhome
availabletoothersforholidays,couchsurfingetc.)althoughitisagrowingphenomenonwithintheB2Bsector.Itislikely
thatthesharingeconomywillpresentconsiderabledisruptiontoalreadyestablishedmarketsand/orprovideopportunities
fortraditionalbusinesstoextendtheirbusinessmodels.ExamplesincludeAirbnb,CityCarClug,HailoTaxis.
Giventhatthesharingeconomyisbasedononlineplatforms,thereisalsolikelypotentialintermsofthedevelopment
and/ormanagementofsuchplatformsandaspectssuchaspersonalverification,e-money,innovationinbusinessmodels,
dataanalytics,customerengagementandbehaviouralanalysisetc.,presentingopportunitiesforIrelandtoattract
investmentand/ortostimulateentrepreneurshipandstart-upsthatcanquicklyscale.
Broaderpolicyissuesarisethatrelatetoe.g.regulation,insurance,outputmeasuresetc.Furtheranalysisisrequiredto
betterunderstandtheimplicationsforexistingandpotentialenterpriseinIreland.
ICTinternettechnologies
ICTmobiletechnologies
Regulatoryenvironment
Impacting…
Hospitality,
Transport
Retail
…likelyothersovertime

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SmartAgeing
‘Smartageing’istheintersectionbetweentheneedsofolderpeopleandsolutionsofferedbynewtechnologyand
innovationthatsupportsactiveandhealthyageing.Globalanddomesticdemographicchangesweightedtowardsthe
olderagecohort,theincreasedincidenceofchronicdiseasesanddisability,shiftfromhospitaltopatientcentriccareinthe
community,andincreasingconsumerwealth,areleadingtoincreaseddemandforproductsandservicescatering
specificallyforolderpeople.Thereisalsoagrowingemphasisonthehealthandlifestylemarket,focusedonearly
diagnoses,prevention,andindependentliving.TheEU’sHorizon2020identifiedhealth,demographicchangeandwell-
beingcareasagrandchallenge.
Solutionsandapplicationsincludehealthmonitoringanddiagnostictechnologies,healthinformatics;self-careand
diagnosis,telecare,connectedhealth;foodforhealth;assistiveandremotetechnologies,bothmechanicalandelectronic
systems;andsmarthomesfeaturingsensortechnologies,safetyandsecuritysystems.
ThereispotentialtobuildIrelandasapreferredlocationforinternationalcompaniesseekingtoresearch,developandtrial
newapproachestoaddressingthechallengesandopportunitiesforanageingpopulation,andoptimisethecommercial
exploitationofscientificbreakthroughsemanatingfromresearchcentresandbusinessesinIreland.
MedicalDevices
ICTmobilecommunications
ICTsensortechnologies
Internettechnologies
Businessservices
Healthcareservices
Functionalfoods
Space
Irelandhasdevelopedathrivingspaceindustryandresearchcommunityinrecentyears,withagrowingnumberofIrish
companiesdevelopingproductsandservicesfortheEuropeanSpaceProgramme,courtesyofIreland’smembershipofthe
EuropeanSpaceAgency(ESA),andthatcanbemadeavailableontheglobalmarket.Ireland’smembershipoftheESAhas
allowedIrishindustrytodevelophighlyadvancedtechnologieswithextremelyhighlevelsofperformanceandreliability
requiredforspacesystems.Irishcompanieshavedemonstratedanabilitytobringinnovativetechnologiestothe
commercialspacemarket,whichinmanycaseshavebeendevelopedincollaborationwithIrishuniversitiesandresearch
institutes.Theyhavealsoshownastrongcapacitytoadaptspacetechnologiesfornon-spacemarketssuchasaerospace,
biomedicalandtelecommunications.
Irishspacecompaniescoverawiderangeoftechnologyareasincluding:spacecraftavionics,electroniccomponents,
softwareforspacecraftcontrolandhumanspaceflight,advancedmaterialsandstructuresforsatellitesandlaunchvehicles,
spacepropulsion,optoelectronicdevicesforsatellites,andbiomedicalinstrumentsforhumanspaceflight.
Advancedmaterialsand
processes
Lifeandphysicalsciences
Optics/optoelectronics
Groundstationsystemsand
networks
Onboarddatasystems
Spacesystemssoftware

258
Appendix IX
Table A9.1 Sector Economic Contribution Table (see note overleaf)*
Sector
Categorisation
Empl. 2014
(‘000s)
% Change
09-14
Exports 2014
€ billion
% Change
09-14
Building on
Strengths
ICT 77.2 21.0 46.8 50.8
Pharma/Bio (includes chemicals) 34.7 14.1 51.6 4.6
Medical Technologies 26.4574
12.4 8.7575
36.9
Int’l Financial Services 35.0576
16.7 17.9 36.7
Agri-Food 54.0 9.8 9.3 43.0
Int’l Trading Business Services 23.9577
11.4 28.9 25.9
Engineering 31.9 -4.8 5.4 -12.1
Sub Total 283.1 - 168.6 -
A renewed
Focus on
Mature Sectors
Tourism & Hospitality 147.6 7.6 3.7 4.1
Retail & Wholesale 276.7 0.9 n/a n/a
Construction 150.7
578
-9.7 0.3 60.0
Transport, Logistics & Distribution 88.3
579
-4.7 4.5 47.8
Other Manufacturing & Sub Supply 71.2 -14.6 10.2 23.4
Agriculture- excluding fishing 104.3 19.6 0.7 31.7
Domestic Financial Services 55.0 -19.6
Sub Total 893.8 - 19.4 -
Emerging
Opportunities
& Untapped
Potential
Green Enterprise 9.1
580
40.0 2.8 n/a
Creative Industries 26.0 2.4 n/a n/a
Marine/Maritime 5.7
581
14.0 0.5 62.7
Private Healthcare Services 130582
31.6 n/a n/a
Private Education Services 42.5583
20.4 n/a n/a
Sub Total 213.3 3.3 -
Other – excluding utilities 187.2584
1.8 16.5 -
Utilities 36.4 -18.2
Public Sector 325.1 -9.0 n/a -
Grand Total 1938.9 0.9 207.8 37.0
574 Annual Employment Survey 2014, DJEI
575 DJEI ABSEI 2013, ‘Medical Device Manufacturing’. – 2013 used as a proxy for 2014
576 A Strategy for Ireland’s International Financial Services sector 2015-2020
577 Annual Employment Survey 2014, DJEI
578 Includes civil engineering, specialised construction activities, architectural and engineering
activities; technical testing and analysis
579 Excludes water transport which is captured in Marine/Maritime
580 Based on Report of High Level Group on Green Enterprise 2009
581 Comprises fishing and aquaculture and water transport
582 Based on total healthcare employment in the State less public sector health employment
583 Based on total education employment less public sector education
584 Includes other manufacturing and primary production and other services (primarily locally traded)

259
Note re sector economic contribution (Table A9.1)
Economy-wide sectoral enterprise data comes from a variety of sources, is often not readily
compatible in terms of sector categorisations and/or time periods, and may represent only
certain portions or samples of the overall activity base. An added complication is capturing on-
going sector dynamics and the changing character of the enterprise mix within the confines of
existing database classification systems. As such the table above provides an indicative cross-
sectoral view and data sources are contained in the footnotes as appropriate. All data is sourced
from CSO unless otherwise stated in the footnotes – ‘n/a’ = not available.

260
Appendix X
Summary of State Aids
Aid Guideline Brief overview
Regional Aid
Guidelines (RAGs)
Capital/employment grants aimed at building capacity (employment) and redressing
regional disparities. Grant intensities are determined by scale of company (globally)
and by regional location. The evaluations span to RAGs time-frames. Under the
Guidelines pertaining during the evaluation periods grant intensities range from
between 0 percent and 35 percent toward eligible expenditures
General Block
Exemption Regulation
(GBER)
Allows Member States to grant such aid without first notifying the Commission. The
GBER includes areas such as SMEs (investment and employment aid, consultancy aid,
aid for SME participation in fairs), aid in the form of risk capital and aid for promoting
female entrepreneurship), research, innovation, regional development, training,
employment
DeMinimus Aid
Small amounts of aid provided to one company (up to a limit of no more than
€200,000 in any 3 year period) are outside the terms of State Aid
Research,
Development and
Innovation
Aid for research and development projects, research infrastructure, innovation clusters,
innovation aid for SMEs, process and organisational innovation, R&D in the fishery
and aquaculture sector. Subject to certain limits governed by the EU RD&I Guidelines.
Grant intensities are determined by the nature of R&D being undertaken as well as
scale of the global entity
Training
To improve the strategic capability and competitiveness of enterprises in Ireland
through the training of employees. Intensities are determined by nature of the training
whether specific (to the firm/employment) or general (transferable)
Environmental
Incentivise and accelerate investment in initiatives that will encourage undertakings to
comply with new Union standards for environmental protection; to improve energy
efficiency; to promote the uptake of energy from renewable sources and to encourage
the carrying out of environmental studies. The aid intensity up to 40% of the eligible
costs and may be increased by 10% for medium sized undertakings and 20% for small
undertakings and by 5% for investments located in assisted areas as outlined in
Ireland’s Regional Aid Map 2014 - 2020
Source: DJEI State Aid Schemes585
Note: Under these State aid rules, DJEI operates 5 State Aid Schemes which are administered by the
enterprise development agencies: Regional Aid, Research Development and Innovation; Training
Support; SME and Start-Up and the Environmental Aid Scheme. Within these Schemes, a number of
different programmes and grant offerings are developed and delivered by the enterprise development
agencies.
585 See http://www.djei.ie/enterprise/stateaid/schemes.htm for further detail

261
Appendix XI
Summary of Business Cost Trends in Ireland (NCC 2015)
Labour
Costs
Expected that upward wage pressures will increase as labour market tightens.
Following a number of years of marginal decline, Irish labour costs are on the increase (2.2
percent in 2012, 0.7 percent in 2013, one percent in the first two quarters of 2014) but less
than the euro area average. Strong increases in manufacturing, the financial and ICT
sectors in the last year.
Irish unit labour costs up one percent in 2013 after several years of improvements but are
improving relative to euro area, therefore a slight improvement in Irish competitiveness
which is expected to continue in 2015 and 2016.
Ireland’s minimum wage is the 4th highest in the euro area (measured in euro terms), and
9th highest when expressed as a percentage of average gross monthly earnings.
The cumulative impact of increases in income taxes, changes to bands, introduction of the
USC etc. have weakened competitiveness since the onset of recession.
Property
Costs
After several years of cost reductions (construction and rental) the commercial market
increasing in both capital values and rents in all sectors (up 31.4 percent in the year) but
esp. retail. Property costs are a threat to sustained competitiveness.
Shortage of prime offices could result in future rent increases and impact the attraction of
FDI.
Rising house prices drive up wage expectations, and has impact on competitiveness.
Hotel accommodation cost rising, esp. Dublin, affects competitiveness of tourism.
Commercial rates sig. variation across local authority areas and increasing as a source of
revenue for LAs as funding from Central Government is reduced.
Transport
Costs
Stability generally, except increase in air transport prices (12.4 percent) in the past year
Diesel prices, a significant cost for haulage, are 5.5 percent higher in Ireland than in the
euro area.
While it is more expensive to export from Ireland, Irish administrative processes are
efficient and compare favourably with processes in our key competitors.
Continuation of weak euro could have an adverse impact on petrol and diesel prices
(although crude oil prices are currently low, crude is priced in US dollars)
Utility Costs
Energy costs in Ireland are expensive compared to most of EU. Ireland is the 6th most
expensive Euro location for both SMEs and large electricity users. US gas prices much lower
than EU.
Irish landfill costs among the most expensive vis benchmarked countries. Up from €93 per
tonne in 2010 to €113 in 2014 (landfill levy). Thermal treatment (gate fees) also among
most expensive.
Water/waste water costs for enterprise compare well to competitor markets. Development
of a new business pricing framework in Irish Water has led to a degree of uncertainty on

262
future costs. Need for investment in water infrastructure, allied to the cost of meeting
environmental targets, could result in increases in prices - depending on efficiency gains
arising.
Telecoms relatively competitive - concerns persist re the quality (speed) of services
available. For enterprise, availability is more of a concern than cost issues.
Credit Costs
New business interest rates for non-financial corporations are higher in Ireland than in the
euro area – rates are 60 percent higher for loans up to €1m and are 81 percent higher for
loans above €1m.
In Nov 2014, interest rates for revolving loans & overdrafts were 42 percent above euro
area average.
Business
Services and
Other Input
Costs
Over 2012 to 2014, prices for a range of business services (e.g. transport, postal and
courier, and computer consultancy services) increasing in Ireland following declines during
recession.
Legal service costs have fallen recently after a long period of price stickiness. Ireland,
however, remains an expensive location to enforce a business contract.
In Q3 2014, prices for a basket of business services were 6.5 percent above 2010 levels.
Overall, since 2010, service prices have risen by more than manufacturing prices.
Broader
Cost
Environment
Ireland’s current price level and inflation profile is high cost but rising slowly. In 2013,
Ireland was the 3rd most expensive in euro area (consumer goods and services) and 16.8
per cent above euro area average generally (above the euro area average in 10 of the 12
categories)
Principal contributors to inflation over last 12 months: “Miscellaneous goods and services”,
esp. health insurance; “Alcohol and tobacco”; “Education” and “Restaurants and Hotels”.
House prices and rents going up again may have significant consequences for affordability
and wages.
Source: Costs of doing business in Ireland 2015, National Competitiveness Council, April 2015

263
Appendix XII
Small Advanced Economies Initiative
The Small Advanced Economies Initiative (SEAI), established in 2012, is a collaboration between
Denmark, Finland, Ireland, Israel, New Zealand and Singapore. The SAEI brings together officials
and experts from its member countries to consider policy issues of common interest where the
perspective of being a small advanced economy influences policy choices. The initiative operates
under three broad streams: economic policy, science and innovation and foreign affairs.
All member countries of the initiative are advanced economies by International Monetary Fund
standards, and are of similar scale in terms of population
586
. Members also exhibit relatively
similar characteristics in terms of GDP per capita
587
. GDP growth rates in 2014 were relatively
strong for the majority of members of the initiative
588
.
An important aspect of the SAEI initiative is the discussion and learning that can take place
between fellow members on potential policy responses to challenges faced by members as a
result of being an SAE. With regard to the economic policy stream of the initiative, a
characteristic generally shared by small advanced economies is that that they are prone to
higher levels of economic volatility than larger economies. Small country growth is increasingly
correlated to global GDP growth. This reflects the relatively high levels of international
economic exposure that small countries face. As can be seen in (Figure A12.1), exports of goods
and services as a percentage of GDP is relatively high in SAEI countries when juxtaposed to the
major economies of China and the United States. For example, while Ireland exports 105
percent of its GDP, the United States and China export 13 percent and 26 percent, respectively.
Additional to the high rate of exports and imports often seen in small countries
589
, there are also
structural drivers for the high level of economic volatility and potential risk. Small countries tend
to have more concentrated export product portfolios
590
, a more concentrated set of export
markets
591
and to rely heavily on a relatively small number of large firms. Therefore, the SAEI
concerns itself with potential policy responses to the economic risk and resilience question. For
example, shaping the portfolio of economic risk exposures, building buffers and creating an
586 The population of member countries in 2014 ranges from 4.5 million in New Zealand to 8.2 million
Israel, while GDP in 2014 (current prices) ranges from $198.1 billion in New Zealand to $340.8 billion in
Denmark (source: IMF 2015)
587 GDP per capita in 2014 (current prices) ranges from $36,991 in Israel to $60,564 in Denmark
(source: IMF 2015)
588 Ireland experienced the strongest growth of 4.8 percent in 2014. Israel, New, Zealand and
Singapore experienced approximately 3 percent growth, while Denmark exhibited 1 percent growth and
Finland, experienced a negative growth rate of -0.1. Over the next five years IMF forecasts predict a
convergence of GDP growth rates between SAEI members
589 SAEI countries also have a higher rate of imports of goods and services as a percentage of GDP
when compared to the United States and China. The Unites States and Chinas rate in 2013 was 17 and
24 percent respectively, while Singapore’s and Irelands was 168 and 84 percent respectively (UN, 2015)
590 In the case of Ireland, three sectors – chemicals, computer services and business services accounted
for 66 percent of total exports in 2013, with chemicals accounting for 29 percent of total exports (CSO)
591 In the case of Ireland, in 2013, 64.2 percent of all agency assisted exports went to the Europe
(including UK) (ABSEI)

264
efficient allocation of risk within the economy, as well as ensuring that the economy can
respond flexibly and quickly when it is hit by shocks.
Figure A12.1 Exports of Goods and Services 2013 (as a % of GDP)
Source: The World Bank, World Development Indicators (available at http://data.un.org)
In relation to the Science and innovation stream, while there is a diverse range of challenges
being faced within the group and a broad range of policy strategies being pursued, there are
common themes of concern evident across the group
592
. These include, the mismatch between
the supply of graduates and the needs of industry; a greater focus on the framework conditions
required for innovation and R&D; and the use of research activity to facilitate regional
development. The changing nature of small country science systems as a result of both internal
and external pressure, the respective roles of universities and public research organisations and
the management of the future pipeline of skilled human scientific resource are also examples of
issues that concern members of the SAEI
593
.
The foreign policy stream explores areas such as strategic issues confronting the SAEs; the
notion of 21
st
century diplomacy, science and diplomacy; SAEs and international organisations;
and the National Branding/Soft Power for SAEs. In relation to SAEs and international
Organisations, members of the initiative already work together formally and informally in a
range of international organisations such as the UN, WTO and the OECD. In particular, the OECD
has been a useful forum where the SAEI
594
have already been working together, particularly on
science and innovation. However, similar opportunities may lie elsewhere, for example with
regard to economic policy and the SAEI aims to explore these options. It has been recognised
that possible coordination among members in relation to specific fora and issues might be a
useful addition to the ‘diplomatic tool box’ of members.
For Ireland, the SAEI presents an opportunity to explore policy insights and learnings with
countries that face similar challenges and risks to ourselves. It will also be useful to benchmark
and observe trends in enterprise and economic performance with these countries with similar
characteristics over time.
592 These themes of concern were evident when the SAEI met in Jerusalem May 2015 (the most recent
meeting at the time of writing)
593 The group has already completed an analysis of impact of pubic research programmes: Broadening
the Scope of Impact - defining, assessing and measuring impact of major public research programmes,
with lessons from 6 small advanced economies - http://www.smalladvancedeconomies.org/wp-
content/uploads/SAEI_Impact-Framework_Feb_2015_Issue2.pdf.
594 Minus Singapore which is not a member of the OECD
0
50
100
150
200
Denmark Finland Ireland Israel New
Zealand
Singapore China United
States
%

265
Appendix XIII
A note on process
The development of this Strategy was led by the Management Board in DJEI (MAC), under the
chairmanship of the Secretary General, John Murphy.
Research, analysis and drafting of the Strategy was undertaken by the Strategic Policy Division in
DJEI with a project team comprising: Maria Ginnity, Céline McHugh, Andrew Colgan, Maurice
Dagg, Alan Power, and Tiago McCarthy.
The MAC and project team were supported by an Enterprise 2025 Working Group, chaired by
Declan Hughes, Assistant Secretary, Strategic Policy Division, with membership drawn from the
Divisions in DJEI and across the enterprise agencies including IDA Ireland, Enterprise Ireland,
Science Foundation Ireland, and the Local Enterprise Offices.
Consultations
The project team consulted with a broad range of stakeholders including business
representative organisations and their members (including Ibec, Small Firms Association, ISME,
American Chamber of Commerce); representatives from other Government Departments and
Agencies; and researchers at the OECD. The project team is particularly appreciative of
stakeholder participation at a number of themed workshops on sector ecosystem development
and clustering, future ways of working and global trends.
For further information on Enterprise 2025, please contact:
Maria Ginnity or Céline McHugh
Strategic Policy Division
Department of Jobs, Enterprise and Innovation
23 Kildare Street,
Dublin 2.
D02 TD30
Tel: 353 (01) 631 2121

266
List of Abbreviations
ABSEI Annual Business Survey of Economic Impact
AES Annual Employment Survey
AI Artificial Intelligence
APJ Action Plan for Jobs
ASEAN Association of South East Asian Nations
B2B Business to Business
B2C Business to Consumer
BERD Business Enterprise Research and Development
BES Business Expansion Scheme
BIC Business Innovation Centre
BIS Bank of International Settlements
BIT Bilateral Investment Treaty
BRICs Brazil, Russia, India, China and South Africa
CAP Common Agricultural Policy
CAR Compound Annual Rate
CBA Cost Benefit Analysis
CBI Central Bank of Ireland
CCP Common Commercial Policy
CCPC Competition and Consumer Protection Commission
CEB County Enterprise Board
CER Commission for Energy Regulation
CGT Capital Gains Tax
CETA Comprehensive Economic and Trade Agreement
CJEU Court of Justice of the European Union
COMREG Commission for Communications Regulation
COSME Competitiveness of Enterprises and Small and Medium Sized Enterprises
CPD Continuous Professional Development
CRO Companies Registration Office
CSET Centre for Science, Engineering and Technology
CSO Central Statistics Office
CSR Corporate Social Responsibility

267
CV Corporate Venturing
DAHG Department of Arts, Heritage and the Gaeltacht
DAFM Department of Agriculture, Food and the Marine
DCENR Department of Communications, Energy and Natural Resources
DECLG Department of Environment, Community and Local Government
DEIS Delivering Equality of Opportunity in Schools
DES Department of Education and Skills
DFAT Department of Foreign Affairs and Trade
DoF Department of Finance
DJEI Department of Jobs, Enterprise and Innovation
DJE Department of Justice and Equality
DMI Design Management Institute
DPC Data Protection Commissioner
DPER Department of Public Expenditure and Reform
DSM Digital Single Market
DSP Department of Social Protection
DoT Department of Taoiseach
DTTAS Department of Transport, Tourism and Sport
DVA Domestic Value Added
EAT Employment Appeals Tribunal
EC European Commission
ECB European Central Bank
EDT Ecosystem Development Team
EEA European Economic Area
EFTA European Free Trade Association
EGA Environmental Goods Agreement
EGFSN Expert Group on Future Skills Needs
EI Enterprise Ireland
EIB European Investment Bank
EIF European Investment Fund
EII Employment and Investment Incentive
EP2025 Enterprise Policy 2025
EPA Environmental Protection Agency
ESB Electricity Supply Board

268
EFSI European Fund for Strategic Investment
ELTF European Long Term Investment Funds
ESRI Economic and Social Research Institute
ETB Education and Training Board
ETC Export Trade Council
EU European Union
EV Electric Vehicle
FDI Foreign Direct Investment
FET Further Education and Training
FP7 Seventh Framework Programme for Research and Technological Development
FTA Free Trade Agreement
FTE Full Time Equivalent
G7 Group of 7 most powerful industrialised Nations
GATS General Agreement on Trade in Services
GBAORD Government Budget Appropriation and Outlays on Research and Development
GBER General Block Exemption Regulation
GDP Gross Domestic Product
GEM Global Entrepreneurship Monitor
GERD Gross Expenditure on Research and Development
GIRDF Global Enterprise Research and Development Co-operation Framework
GNI Gross National Income
GNP Gross National Product
GPN Global Production Network
GVA Gross Value Added
GVC Global Value Chain
GVN Global Value Network
H2020 Horizon 2020, The EU Framework Programme for Research and Innovation
HE Higher Education
HEA Higher Education Authority
HERD Higher Education Expenditure on Research and Development
HEI Higher Education Institution
HGF High Growth Firm
HPSU High Potential Start-up
HR Human Resources

269
HSA Health and Safety Authority
IAASA Irish Accountancy and Auditing Supervisory Authority
IBEC Irish Business and Employers’ Confederation
ICT Information and Communications Technology
IDA Ireland Industrial Development Agency Ireland
IDC Interdepartmental Committee
ID2015 Irish Design 2015
IDF Invention Disclosure Form
IFI Innovation Fund Ireland
IFS International Financial Services
IICM Irish Institute of Credit Management
IKED International organisation for Knowledge, Economy & Enterprise Development
IMDA Irish Medical Devices Association
IMERC Irish Maritime and Energy Research Cluster
IMF International Monetary Fund
IMI Irish Management Institute
INIS Irish Naturalisation and Immigration Service
INSEAD Institut privé d'enseignement supérieur
IoT Internet of Things
IPR Intellectual Property Regime/Rights
IP Intellectual Property
IPA Investment Promotion Agency
IPE Investment Plan for Europe
IPO Initial Public Offering
IRC Irish Research Council
ISBP Innovation in Services and Business Processes
ISE Irish Stock Exchange
ISIF Irish Strategic Investment Fund
ISME Irish Small and Medium Enterprises Association
IT Institute of Technology
ITI InterTradeIreland
IUA Irish Universities Association
JV Joint Venture
KET Key Enabling Technology

270
KfW Kreditanstalt fur Wiederaufbau
KPI Key Performance Indicators
KTI Knowledge Transfer Ireland
LA Local Authority
LEOs Local Enterprise Offices
LMP Local Market Plan
LOA Licenses, Options and Assignments
LRC Labour Relations Commission
LTU Long term unemployed
M&A Mergers and Acquisitions
MBO Management Buy Out
MDC Management Development Council
MFI Microfinance Fund Ireland
MNCs Multinational Corporations
MOOC Massive Open Online Course
MS European Union Member State
MTES Medium Term Economic Strategy
NACE Nomenclature generale des Activities economiques dans les Communautes
Europeennes
NCC National Competitiveness Council
NDP National Development Plan
NDS National Digital Strategy
NERA National Employment Rights Authority
NERI Nevin Economic Research Institute
NESC National Economic and Social Council
NewERA New Economy and Recovery Authority
NFC Non-financial corporation
NFQ National Framework of Qualifications
NIBRT National Institute for Bioprocessing Research and Training
NIS National Innovation System
NPF National Planning Framework
NPRF National Pensions Reserve Fund
NRA National Roads Authority
NSAI National Standards Authority of Ireland

271
NSS National Skills Strategy or National Spatial Strategy
NUTS Nomenclature d’unites territoriales statistiques
ODI Outward/Overseas Direct Investment
ODCE Office of the Director for Corporate Enforcement
OECD Organisation for Economic Co-operation and Development
OGP Office of Government Procurement
PAYE Pay as You Earn
PCP Public Capital Programme
PIYRA President’s Young Researcher Award
PPP Purchasing Power Parity
PRO Public Research Organisation
PRSI Pay Related Social Insurance
PRTLI Programme for Research in Third Level Institutions
PTW Pathways to Work
QE Quantitative Easing
QNHS Quarterly National Household Survey
QQI Quality and Qualifications Ireland
RAG Regional Aid Guidelines
RCEP Regional Comprehensive Economic Partnership
RDI Research, Development and Innovation
R&D Research and Development
RD&I Research, development and innovation
REA Registered Employment Agreement
RIA Regulatory Impact Analysis
RPG Regional Planning Guidelines
RPL Recognition of Prior Learning
RPO Research Performing Organisations
RSES Regional Spatial and Economic Strategies
RTA Regional Trade Agreement
RTI Research, Technology and Innovation
RTO Research and Technology Organisation
SAE Small Advanced Economy
SAEI Small Advanced Economies Initiative
SAM State Aid Modernisation

272
SARP Special Assignee Relief Programme
SBCI Strategic Banking Corporation of Ireland
SBIR Small Business Innovation Research
SCM Supply Chain Management
SCS Seed Capital Scheme
SDO Standard Development Organisation
SEAI Sustainable Energy Authority of Ireland
SFI Science Foundation Ireland
SIRG Starting Investigator Research Grant
SLMRU Skills and Labour Market Unit
SME Small and Medium Enterprise
SOLAS An tSeirbhís Oideachais Leanúnaigh agus Scileanna
SPD Strategic Policy Division, Department of Jobs, Enterprise and Innovation
STI Science, Technology and Innovation
SSTI Strategy on Science, Technology and Innovation
STEM Science, Technology, Engineering, Mathematics
SURE Start-up Refunds for Entrepreneurs Scheme
TFEU Treaty on the Functioning of the European Union
TiSA Trade in Services Agreement
TiVA Trade in Value Added
TNCs Transnational Corporations
TRL Technology Readiness Level
TSSG Telecommunications Software and Systems Group
TTIS Trade, Tourism and Investment Strategy
TTIP Transatlantic Trade and Investment Partnership
TTO Technology Transfer Office
TTSI Transfer Technology Strengthening Initiative
ULC United Labour Cost
UNCTAD United Nations Conference on Trade and Development
UNWTO United Nations World Tourism Organisation
USC Universal Social Charge
VC Venture Capital
WEF World Economic Forum
WTO World Trade Organisation

273
Notes

274
Notes

November 2015
Department of Jobs, Enterprise and Innovation
23 Kildare St.
Dublin 2
D02 TD30
Tel: +353 1 631 2121
www.djei.ie

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