SME productivity in Ireland

This chapter tackles the SME productivity problem in Ireland. Aggregate statistics point to a productivity gap in Ireland. Analysis of microdata reveals that there is a wide dispersion in the productivity of SMEs. The long tail of low productivity SMEs suggests that there is scope for Ireland to boost its productivity by enhancing the diffusion of best practices to laggard SMEs. The causes of low SME productivity in Ireland are discussed, in particular the prolonged use of low-productivity techniques, the potential to improve management practices, and the need to modernise to prepare for challenges such as the digital revolution and entry into export markets. Suggestions are made for the role of policy with regards to several areas pertaining to SME productivity. The Chapter then presents some inspiring policy practice examples from a set of comparator countries, before closing with some policy recommendations.