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%.
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 also 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 act globally, this will be the best defence for the economy against perils that may await in 2018/2019. With the added help of a strong online presence SMEs have the advantage of gaining new online, or in-person, consumers. With the massive presence of Google and Facebook, businesses can use these online platforms for promoting goods and services in the locally, nationally and internationally.
South East of Ireland – is it still in recovery mode?
While the report does not specifically address the South East of Ireland, many may argue that the figures may only be applicable to some areas in Ireland. Take the South East for example, the area hardest hit by the recession, there are no clear figures highlighting a significant improvement for SMEs in this area.
In the height of the recession the unemployment rates in this area were the highest in Ireland. Although unemployment has recently fallen to the lowest level since 2008, there are regions that are still suffering from the effects of the recession. The Department of Jobs has admitted the unemployment rate in the south-east is “still too high” after it was revealed it is the worst in the country. The 9.4% unemployment rate in the region that includes Carlow, Kilkenny, South Tipperary, Waterford and Wexford is almost 3% higher than the average rate of 6.7%.
However, every cloud has a silver lining and it is heartening to see improvements in the Irish economy. SMEs have contributed to the growth of the Irish economy in recent years and hopefully the SBA is a reflection to positive things to come for the Irish economy in the future.