One in every three Irish businesses are getting tangled in red tape, which they decry as an obstacle to recruitment, growth and innovation, according to new research furnished by LK Shields. The corporate law firm is launching its inaugural Red Tape Survey today, based on feedback from 300 Irish businesses about red tape and its burdens.

The majority (85%) of respondents to survey said that the cost burden associated with regulation in Ireland needed to be significantly reduced. Two-thirds (66%) of firms also claimed that there is too much red tape involved in doing business in Ireland.

Other findings in the LK Shields survey showed that three in five businesses want an independent body to be established to review the impact of red tape on Ireland’s competitiveness. Almost four in five (79%) of businesses also want policy makers to examine the legislative and administrative process to change the regulatory burden.

The Red Tape Survey focused on large and small-to-medium enterprises (SMEs) across all sectors in Ireland, including the service, retail, finance, manufacturing and construction industries.

Over 80% of businesses surveyed employ between 25-99 people, while 9% employ 100-249 and 8% employ more than 250 people.

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Of the businesses with 25-99 employees, only 22% said that Ireland's regulatory environment is more attractive than overseas markets, a figure that rose to 39% of businesses with over 100 employees.

Commenting on the results, David Williams, head of financial services at LK Shields, said: “We acknowledge and support the necessity of robust regulation in all business sectors, but we also firmly believe that much greater efficiencies can be achieved without letting regulatory standards slip, particularly when it comes to the administrative burden of compliance.”

Aidan Sweeney, senior policy executive of business lobby group Ibec, added: “The European Commission has estimated that the cost of regulation on the Irish economy is equivalent to 2.4% of GDP – or €4.5bn per annum.

“We are calling on policy makers to introduce concrete priorities in the next programme for government, including the introduction of a new national legislation database to track development of all new initiatives through the policy making stages.”

(from left) Aidan Sweeney, Ibec; Mark Cunningham, Ed Butler and David Williams, LK Shields