SME and Entrepreneurship Policy in Ireland

image of SME and Entrepreneurship Policy in Ireland

This publication presents the findings of an OECD review of SME and entrepreneurship policy in Ireland. It assesses the challenges for SME and entrepreneurship development and offers recommendations for future policy.

SMEs and entrepreneurs play a crucial role in the Irish economy, with SMEs accounting for more than 70% of employment. Attitudes to entrepreneurship are positive and SME innovation rates are high. However, SME productivity has not been increasing in recent years, business entry and exit rates are low and few Irish SMEs are directly engaged in exports. There is also untapped potential for entrepreneurship among women, youth and migrants, and variations across the country in SME and entrepreneurship performance.

Ireland has a strong set of policies and programmes to address these challenges. The business environment is generally favourable, there are many best practice programmes for supporting high potential SMEs and entrepreneurs, and strong co-ordination of policies across government. At the same time, policies could be strengthened in areas such as growing productivity in medium-sized businesses, increasing the start-up rate, increasing exports, fostering enterprise networks and clusters, drafting a unified SME and entrepreneurship policy strategy document and strengthening the role of Local Enterprise Offices.



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.



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