Positive results for SMEs in Ireland as the European Commissions Small Business Act (SBA) fact sheet 2017 was published last week. The SBA is the EU’s flagship policy initiative to support small and medium sized enterprises and is produced annually by the European Commission. It aims to improve an understanding of recent trends and national policies affecting SMEs across the European Union.
The fact sheets form part of the European Commission’s 2016 Annual Report on the economic performance of European SMEs. Ireland’s SBA profile continues to be competitive and the fact sheet shows improvements on last year’s performance.
Ireland – Performing above the EU average
In the area of skills and innovation the SBA fact sheet finds that Ireland is the top performer in the EU. Another measure where Ireland scores well is the percentage of public contracts being secured abroad by SMEs, this is at 17.2% many multiples of the EU average of 2.6%.
In eight of the nine SBA areas; entrepreneurship, ‘second chance’, ‘responsive administration’, state aid and public procurement, access to finance, single market, skills and innovation and internationalisation – Ireland performs above or well above the EU average.
Irish businesses – the need for global vision
SMEs are particularly important for the labour market in Ireland. They generate more than 70% of all jobs in the non-financial business economy, approximately 4 percentage points more than the EU average. Conversely, they generate only 36.6 % of value added, 20 percentage points below the EU average. This reflects the importance of value added growth that large firms, and particularly foreign-owned multinationals, contribute to the Irish economy.
Ireland is making advancements when it comes to SMEs driving further improvement in the Irish economy. However, for small business owners, one of the biggest mistakes that small businesses can make is behaving like a small business. As the global economy becomes more and more interconnected, Irish entrepreneurs need to think big and acting globally, this will be the best defence for the economy against perils that may await in 2018/2019.
The overall business environment in Ireland appears favourable to SMEs thanks to a high number of initiatives taken by the government over recent years. However, some older and newly emerging challenges remain. The cost of doing business for Irish SMEs was already high and is increasing. Concerns include the cost of credit (particularly small loans), interest rates, energy costs and business rates.