Latest Action Plan for Jobs Progress Report published as Ireland jumps to 15th in world competitiveness rankings, up from 24th in 2011 Competitiveness is a key focus of Action Plan for Jobs
Over €500million in additional credit will be made available to Irish SMEs through the establishment of the Strategic Banking Corporation of Ireland (SBCI), the Government announced today (Thursday).
The SBCI is a new company and it is intended that it will be initially financed by the German Promotional Bank KfW, the European Investment Bank (EIB) and the directed portfolio of the Ireland Strategic Investment Fund (ISIF). The involvement of KfW follows directly from discussion between the Taoiseach and Chancellor Merkel following Ireland’s successful exit from the EU/IMF Programme on finding ways to reinforce Ireland’s economic recovery.
Today’s announcement marks the delivery of a key commitment in the Government’s Action Plan for Jobs 2014, and comes as the Government published the ninth Action Plan for Jobs Quarterly Progress Report, showing that 97 out of the 103 measures earmarked for delivery in Q1 2014 have been implemented.
Also today, the authoritative IMD world competitiveness rankings 2014 were published, showing Ireland in 15th place globally, up from 17th in 2013 and 24th in 2011. In 2000 Ireland placed 4th in these rankings, but this had fallen to 14th by 2007 and then to 24th in 2011.
The system of public quarterly progress reports is a crucial part of the Action Plan for Jobs system – the Taoiseach, Tánaiste and Minister for Jobs holding themselves accountable in public on delivery every quarter ensures that implementation actually happens, in contrast with many high-profile plans in previous times.
Among the other Q1 measures delivered are:
· Opened the 31 Local Enterprise Offices, to provide more and better services to SMEs across the country
· Launched and started a county-based competition to find Ireland’s Best Young Entrepreneur, with a €2million fund for investment in winning businesses
· Developed a government-wide online guide for SMEs so they can learn which of over 80 Government business supports are applicable to their business (www.localenterprise.ie/smeonlinetool)
· Started the national rollout of the Trading Online vouchers to support SMEs in taking advantage of the huge opportunity offered by online selling
· Commenced delivery of a programme to build financial capability in SMEs targeting 1000 participants
· Started implementation of Ireland’s national plan for the Youth Guarantee
· Established new structures to take advantage of the €79billion EU Horizon 2020 Research Programme
· Published a new ICT Skills Action Plan to increase to 75% the proportion of ICT vacancies filled by people from the Irish education system by 2018
· Established new structures to deliver further concrete improvements in Ireland’s competitiveness
· Published Construction 2020, to support a more competitive, innovative construction sector employing sustainable numbers of people
Also in Q1 the OECD published its review of the Action Plan for Jobs, concluding that the plan is working while recommending adjustments to maximise its potential. The review stated that the plan represents a “sound approach” to job-creation and “marks an important innovation in Irish governance”.
Speaking at today’s announcement, the Taoiseach, Enda Kenny TD said: "Jobs are the top priority of the Government. Stability creates jobs, attracts investment and grows economies. This Government has stabilised the national finances and has put Ireland on the road to recovery. We are now seeing over 1,000 jobs a week being created in the private sector, the highest rate of employment growth across the OECD. The Action Plan for Jobs will continue to deliver on our target to create 100,000 new jobs by 2016. I'm delighted that the Government is establishing the Strategic Banking Corporation of Ireland, a result of the agreement I reached with Chancellor Merkel last year on finding ways to reinforce Ireland’s economic recovery. Using funds from the German promotional bank KfW, the European Investment Bank and the Irish Strategic Investment Fund, the first phase will make over €500 million available for small Irish business."
The Tánaiste, Eamon Gilmore TD said: “Today, we are also announcing that the Government has agreed to establish the Irish Strategic Banking Corporation. This, together with the publication of the legislation on the Strategic Investment Fund, marks the delivery of another important commitment in the Programme for Government. It is another example of the kind of reforms that we have to make, to steer the Irish economy towards a sustainable, export-led growth model that generates more and better jobs”.
Speaking at the announcement of the new funding for SMEs Minister Noonan stated: “The establishment of the SBCI will provide over €500m of additional credit for SME’s and will be a great addition to the SME credit landscape in Ireland. Credit is the lifeblood of all businesses and SMEs will now be able to access loans of greater duration, with enhanced terms and potentially at a lower cost facilitated by the SBCI and its on-lending partners. This will promote greater competition in the SME lending sector, will drive economic growth and job creation in this key sector of our economy. The Government will be prioritising the passage of the required legislation through the Houses of the Oireachtas and I expect the SBCI to be facilitating lending before the end of the year”.
The Minister for Jobs, Enterprise and Innovation, Richard Bruton TD said: “The Action Plan for Jobs is working. Today the IMD has announced that our competitiveness performance is continuing to improve – up 9 ranks in the past three years, compared to the 20 places that were dropped between 2000-2011. And the results are clear to see – the CSO has confirmed that in the past twelve months the CSO has confirmed that more than 60,000 additional people are at work across the country. This compares to the 300,000 jobs lost in the three years 2008-2010. And today the IMD has announced that our competitiveness performance is continuing to improve – up 9 ranks in the past three years, compared to the 20 places that were dropped between 2000-2011. We have always said that there is no ‘big bang’ solution to the jobs crisis we inherited, but through the Action Plan for Jobs we are continuously making changes right across the economy to support accelerated job-creation. Competitiveness has been a particular focus, with concrete changes made in areas like costs and skills, and further measures planned for 2014 and future years. By ensuring that these incremental changes happen through the Action Plan for Jobs structures we will build on the progress we have made and support the jobs growth we need”.
Link to Action Plan for Jobs Ninth Progress Report: www.djei.ie/publications/2014APJ_First_Progress_Report.pdf
Link to inforgraphics on Strategic Banking Corporation of Ireland: http://www.finance.gov.ie/sites/default/files/SBCI%20Infographic.pdf
For further information, please contact:
Press Office: Department of Jobs, Enterprise and Innovation, 01 631 2200
NOTE FOR EDITORS 1. STRATEGIC BANKING CORPORATION OF IRELAND
The Irish Strategic Investment Fund (ISIF) aims to invest in growth enhancing projects within the Irish economy rather than investing funds outside of Ireland. It is envisaged that the directed portfolio of the ISIF will contribute around 30% to the SBCI’s funds. It will also provide €10m of equity capital.
European Investment Bank
European Investment Bank The European Investment Bank (EIB) is the European Union’s bank. A key priority of the European Investment Bank is to provide financing to small businesses. It generally finances between 30% and 50% of a project.
Kreditanstalt für Wiederaufbau (KfW) is Germany’s state-owned promotional bank. Due to the direct guarantee from the German State KfW is able to fund itself at favourable conditions on the international capital markets. It then lends the funds onto banks in Germany who in turn lend to SMEs. KfW’s involvement with the SBCI stems from An Taoiseach’s interaction with Chancellor Merkel.
Other Potential Funders
Preliminary contact has been made with other European state development banks in line with the European Commission’s official policy of cross border co-operation in this area.
Strategic Banking Corporation of Ireland
Initially, the Strategic Banking Corporation of Ireland (SBCI) will source funds externally and lend them to SMEs through innovative loans via other institutions called on-lenders. On-lenders can be retail banks or other organisations that have the ability to assess SMEs’ loan proposals. The SBCI will provide loans that are currently not typically offered in Ireland. The SBCI will have a lower cost of funding and this cost benefit must be passed onto SMEs.
Current Retail Banks in Ireland
Existing banks will borrow from the SBCI and lend to SMEs. The Banks will assess the risk of SMEs’ borrowing proposals and the banks will hold that risk. They must demonstrate without a doubt, that the lower cost of sourcing funds from the SBCI is passed onto SMEs, in order to avoid a serious breach of European Union state aid regulations.
New Entrant into Irish SME Lending Market
The SBCI will lower barriers to entry
for new entrants. Such new entrants into the Irish SME lending market will be potentially funded by the SBCI. This will drive competition and innovation. New entrants could be existing international banks, insurance companies and pension funds as well as new Irish lending institutions.
An established SME that wants to borrow to facilitate upfront expenditure on new machinery. It needs to match loan repayments on that capital investment with the future extra revenue or productivity savings from that investment. SME 1 could benefit from a SBCI funded loan whose key feature is an extended repayment holiday. This improves SME 1’s financial sustainability as its cash flow risk has been reduced.
SME 2 is a new start up that would be financially more sustainable if it could pay back a loan to finance capital investment over a longer period than is available to SMEs at present. Its current bank wants the capital repayment to be paid back over three years but a loan funded through the SBCI could be paid back over 6 years.
NOTE FOR EDITORS 2: ACTION PLAN FOR JOBS NINTH PROGRESS REPORT
This is the ninth report from the Monitoring Committee established by Government to monitor and drive implementation of the measures contained in the Action Plan for Jobs. It outlines progress made on measures due for completion in the first quarter of 2014. The Monitoring Committee is jointly chaired by Department of the Taoiseach, the Department of Jobs, Enterprise and Innovation and also comprises representatives of the Department of Public Expenditure and Reform, Forfás, and the Office of the Tánaiste. The high-level goal of the Action Plan for Jobs, first introduced in 2012, is to create the environment where the number of people at work will have increased by 100,000 by 2016, and will have reached 2.1 million people by 2020.
The Government published the third in its multi-annual Action Plan for Jobs series in February this year. This Plan, which contains 385 actions to be implemented in 2014 by all 16 Government Departments and by 46 agencies, will build on the progress made in 2012 and 2013 and continue to improve supports for job-creating businesses and remove the barriers to employment-creation across the economy. These actions are additional to the over 500 actions already implemented under Action Plan for Jobs 2012 and 2013 cumulatively, and reported on by the Monitoring Committee in its previous eight quarterly reports (see www.djei.ie).
Six of the seven Disruptive Reforms introduced in 2013 will be progressed further in 2014 as these are multi-annual initiatives (Big Data/Analytics; ICT Skills; Integrated Licensing Application Service; Trading Online; Energy Efficiency; and National Health Innovation Hub). The Jobs Plus initiative, launched in 2013, has already been mainstreamed and has proven particularly impactful. Three new Disruptive Reforms have been introduced in 2014: Entrepreneurship; Winning Abroad; and Manufacturing: National Step Change. In total, there are nine Disruptive Reforms to be advanced in 2014.
Action Plan for Jobs: Supporting economic growth and job creation
While unemployment remains high, there are continuing signs of progress in the labour market and the economy generally. The latest data from the CSO QNHS shows that there was an increase in employment of 3.3% or 61,000 in 2013 with 89% of this increased employment in full-time roles.
The continuing scale of the employment challenge is evident with 253,200 persons unemployed at the end of 2013. However, this represented a decrease of 41,400 or 14.1% in the number of people unemployed in the year. It is worth noting that this fall in unemployment over the year took place in the context of an overall increase in the labour force which grew from 2,143,500 in Q4 2012 to 2,163,100 in Q4 2013. The rate of unemployment peaked at 15.1% in Feb 2012 and reduced to 11.7 per cent in April 2014 with CSO reporting a fall in unemployment for 22 months in a row.
Employment increased in ten of the fourteen economic sectors reported by CSO during 2013 and fell in four. The largest rates of increase were recorded in the “Agriculture, forestry and fishing”, the “Accommodation and food service activities” and the “Professional, scientific and technical activities” sectors. In terms of the export-oriented sectors of the economy, client companies of Enterprise Ireland and IDA Ireland created 5,442 and 6,570 new net jobs respectively; this represents the highest levels of net new job creation by agency client companies in over a decade.
Actions due in Quarter 1
In the first quarter of 2014, Departments and agencies were to deliver 103 measures under the Action Plan. Six of the measures due in Quarter 1 of 2014 have not been delivered on schedule. In delivering 97 first quarter measures under the Plan, the Government has, for example:
§ As part of Disruptive Reform 1 – Entrepreneurship
o Formally launched the Local Enterprise Offices (LEOs) network, a world class enterprise support facility to provide a ‘first stop shop’ service for local start-ups and small businesses.
o Launched a Customer Charter to ensure a consistent standard of service available to all clients of the LEOs to respond to all business ideas.
o Launched a new website providing information on all national and local enterprise supports as well as guidance and advice on various aspects of starting a business.
o Launched the first of a number of regionally targeted Competitive Feasibility Funds (in Cork region) providing funding of up to €25,000 towards the cost of investigating and validating a business idea. Additional funds will be launched in South East, North East and Mid West regions in 2014.
§ As part of Disruptive Reform 2 – Winning Abroad
o Finalised and published the review of the Government’s Trade, Tourism and Investment Strategy, to encourage a more flexible and focussed approach in Ireland’s efforts to promote trade, tourism and investment overseas.
o Developed and agreed the work programme to deliver the Year of Irish Design 2015.
§ As part of Disruptive Reform 3 – Manufacturing: National Step Change
o Established a National Excellence Award through NSAI to promote and recognise the use of formal business management systems within the manufacturing sector.
§ As part of Disruptive Reform 5 – ICT Skills
o Published a revised ICT Skills Action Plan that addresses ICT skills needs to 2018 and sets out a range of measures with the overarching goal of increasing the domestic supply of ICT graduate output from 63 per cent of demand in 2014 to 74 per cent of demand in 2018 including the provision of an additional 1,250 undergraduate ICT places per year in higher education institutions.
§ As part of Disruptive Reform 7 – Trading Online
o Completed the second trial of the Trading Online initiative in Dublin and commenced work on national roll out of the scheme.
§ As part of Disruptive Reform 8 – Energy Efficiency
o Established the Energy Efficiency Fund under Action 81, to address the issue of availability of sufficient, properly structured finance to support energy efficiency projects in Ireland. The Government has committed up to €35 million to generate a fund of over €70 million when matched with investment from the private sector.
§ As part of Disruptive Reform 9 – National Health Innovation Hub
Assessed and selected the participants for the next round of projects for the Cork Demonstrator based on call for proposals. Under this call, 13 projects involving 16 companies will be supported. The Cork Demonstrator provides for testing of the innovation hub concept and will inform a proposal on the establishment of a National Health Innovation Hub.
And more broadly, in Quarter 1, the Government has, for example:
§ Under Actions 89 and 90, established new structures and mechanisms through the Cabinet Committee on Economic Recovery and Jobs and other Cabinet Committees for ongoing monitoring and reporting on key competitiveness issues for Ireland and the initiatives required to make it easier to do business in Ireland. The Government will consider a report every quarter on key competitiveness issues identified through this process.
§ Under Action 98, progressed completion of Committee stage of the Legal Services Regulation Bill to deliver more efficient, transparent and competitive legal services in Ireland and reduce costs for the enterprise sector.
§ Under Action 107, launched the Energy Policy Green Paper for Ireland which identifies a range of issues that need to be addressed to meet existing and future challenges, and which will feed into the development and publication of a new Energy Policy White Paper.
§ Under Action 113, established a Working Group to investigate the potential for a unified employment permit and visa applications system that will streamline processes for companies and individuals.
§ Under Action 115, commenced preparation of a new national planning framework which will inform new regional spatial and economic strategies.
§ Under Action 122, progressed actions through the Government’s Research Prioritisation Action Group (PAG) to prioritise funding for Innovation in Services and Business Processes.
§ Under Action 141, established the National Support Structure in Enterprise Ireland for the €79 billion EU Horizon 2020 research programme, put in place a range of measures through Science Foundation Ireland (SFI) to incentivise
participation by SFI-funded researchers in Horizon 2020 and provided support for the National Marie Sklodowska-Curie Office in partnership with the Irish Universities Association.
§ Under Action 146, launched the 2014 Enterprise Partnership Scheme through the Irish Research Council to cultivate enterprise focused researchers in the formative years of their research careers.
§ Under Action 170, developed for the first time through Solas an overall annual Further Education and Training (FET) Plan, providing integrated information on a common basis of the full range of FET provision across the 16 Education and Training Boards. Future annual service plans will be shaped in accordance with the objectives of the FET Strategy.
§ Under Action 194, commenced implementation of Ireland’s national plan the Youth Guarantee which provides for targeted labour market activation measures addressing youth unemployment.
§ Under Action 210, commenced a consultation exercise through Enterprise Ireland to inform the sectoral and development stage focus of future calls under the Seed and Venture Capital Scheme 2013-2018.
§ Under Action 221, designed and commenced implementation of a communications strategy aimed at SMEs which will address in particular the issue of access to finance and the range of Government-supported schemes and supports available to SMEs addressing financing needs.
§ Under Action 222, commenced delivery through Skillnets of a programme to build financial capability in SMEs targeting 1,000 participants.
§ Under Action 241, established a working group comprised of SME stakeholders to examine ways to improve SME access to public procurement opportunities and provide input to new public procurement guidelines.
§ Under Action 252, identified a pilot project through Enterprise Ireland for a Small Business Innovation Research (SBIR) type programme in Ireland. SBIR-type programmes provide opportunities for SMEs to develop and demonstrate innovative solutions, supported by a Government entity which acts as a key reference customer.
§ Under Action 282, completed a public consultation process in respect of the 2014-2020 Rural Development Programme which includes measures supporting farm sustainability.
§ Under Action 292, published the Offshore Energy Renewable Development Plan (OERDP) which sets out how Ireland can harness the opportunities presented by offshore renewable energy to contribute to economic recovery, growth and jobs.
§ Under Action 305, published ‘Construction 2020 – A Strategy for a Renewed Construction Sector’ setting out 75 specific actions to help restore a competitive, innovative construction sector, operating at sustainable levels of activity.
§ Under Action 348, progressed the introduction of a National Postcode System, with a view to rolling out the system in the first half of 2015, by signing a contract with the Postcode Management Licence Holder.
However, as stated above, 6 of the measures outlined in the Plan for Q1 have not been delivered on schedule. These are:
§ Develop a National Action Plan in consultation with civil society and Departments in respect of Ireland’s membership of the Open Government Partnership (OGP), focusing in particular on the progression of Open Data initiatives – Action 70. The deadline set internationally for submitting National Action Plans under this initiative has been changed to June 2014. DPER is now working towards the revised international deadline.
§ Seek Government approval for revision of the legislation underpinning the Credit Guarantee Scheme to enhance the take-up and impact of the scheme – Action 208. The Minister for Jobs, Enterprise and Innovation has identified changes required to the Credit Guarantee Scheme. These changes will require an amendment to the Credit Guarantee Act 2012, a new Credit Guarantee Scheme and some other non-legislative changes. The Minister will now bring a Memorandum for Government on the changes which will include permission to draft Heads of Bill for the various amendments to the Credit Guarantee Act 2012, a general Scheme for an amendment Bill and a Regulatory Impact Analysis.
§ Publish detailed analysis of supply chain opportunities in the context of the investment required to meet Ireland’s 2020 renewable energy and energy efficiency targets – Action 294. The final report on these supply chain opportunities is being prepared by SEAI and enterprise agencies and will be produced in Q2 2014.
§ Launch an implementation group to oversee delivery of the Construction Sector Strategy – Action 305. ‘Construction 2020 – A Strategy for a Renewed Construction Sector’ was published on May 14th 2014. The first meeting of the group to support its implementation will take place in the coming weeks.
§ Identify planning related measures, including updating the planning legislative framework through the upcoming Planning Bill and making necessary targeted revisions to the planning system, to support sustainable development and economic recovery – Action 309. This action will be progressed in the context of the recently published Construction Sector Strategy.
Establish the board and governance framework for eHealth Ireland to drive implementation of the Government’s eHealth Strategy – Action 379. Work on developing the governance structure for eHealth Ireland and the appointment of a Board is on-going and it is anticipated it will be finalised over the coming weeks. Approval for the post of Chief Information Officer (incorporating the role of Chief Officer of eHealth Ireland) issued to the Health Service Executive on April 14th 2014.
Supporting SMEs Online Tool
The Supporting SMEs Online Tool is a new cross-governmental guide to help small businesses know which of the over 80 Government supports could possibly fit their business.
By answering the 8 questions in the Supporting SMEs Online Tool, a small business will, in one location:
· Find out which of the over 80 Government business supports from 27 different Government Departments, Agencies and Initiatives are available to them
· Get information on the range of Government supports for accessing credit
· Be told their nearest Local Enterprise Office to discuss the outcomes of the guide further
· Be able to download all these filtered results into a document for their further use
You can check out the Supporting SMEs Online Tool here: