The SME Taskforce appointed by the government has published its SME and Entrepreneurship Growth Plan, with a series of recommendations to be “reviewed and taken forward” in the course of this year.

The report sets out a wide range of recommendations with long-term strategic relevance for SMEs and entrepreneurs, including in the areas of digitalisation, clustering, regulation and education.

The taskforce, appointed last September, took its cue from the EU’s SME Strategy adopted last March, which puts forward actions based on three pillars:

• Capacity-building and support for the transition to sustainability and digitalisation
• Reducing regulatory burden and improving market access
• Improving access to financing.

It was also informed by the recent OECD Review of SME and Entrepreneurship Policy in Ireland, and is based on four thematic pillars: entrepreneurship; productivity, digitalisation and competitiveness; clustering and networks; and internationalisation, together with a dedicated chapter on climate policy measures for SMEs.

Taskforce members were drawn from and lobby groups and business, including Oonagh O'Hagan (pictured), owner of the Meagher's pharmacy chain.

In Association with

On enterprise, the report says that “facilitating entrepreneurs to have a voice in contributing to policy and working with policymakers was welcome, and this engagement should be given some degree of structured permanence.

“As a more diverse group, entrepreneurs often do not have the same influence as the multinational and FDI community, but their commitment to and permanence in Irish society merits that their contribution be taken seriously.”

On productivity, digitalisation and competitiveness, it states: “OECD research suggests that challenges in these areas are compounded by low levels of human capital, poor rates of digitalisation, low levels of investment in research and development and low levels of capitalisation.”

Available supports, though many and broad, are difficult to navigate and time-consuming. The tackforce recommends “better coverage and that an SME portal, which applies the ‘only-once’ principle, is developed to streamline access to and promote awareness of the various supports for education, innovation and digitalisation”. 

The German example has shown that increasing efficiency and awareness of relevant clusters and networks will lead to increased collaboration at sectoral and regional level between SMEs, large companies and research institutions. So the taskforce wants SME policy here to move in a similar direction, and in accord with the OECD study’s conclusions.

Taxation Reform

The report notes that advantages of Ireland’s low corporation tax regime are often not enjoyed by entrepreneurs, as their involvement is often at the growth part of the business cycle and not the cash generating stage. Entrepreneurs, and serial entrepreneurs in particular, often depend on liquidity events for a return on their investment and as a source of capital for their next round of investments.

The SME Taskforce recommends reform of the taxation system to support the creation and growth of new enterprises, and re-investment of entrepreneurial capital in Irish enterprise.

It recommends introducing a reduced CGT rate (e.g. 20%) for founders, private investors, VCs or angel investors who invest in non-property SMEs. The taskforce has also recommended allowing CGT losses for loss-making EIIS investments, and full CGT relief on profits on EIIS investments made for a year.

On climate action, the report says: “In order to be resilient in the transition to a low carbon economy, SMEs will need to develop management capacity and skills required to assess the likely changes to their cost base, regulatory environment and market standards or customer preferences. Assessing and measuring where carbon emissions arise in the supply chain, operations, premises, or a customer’s use of the product or service is a good starting point for any business. "

Business minister Leo Varadkar said an 'SME and Entrepreneurship Implementation Group' will be established to take the recommendations forward.

The taskforce report is available here.