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News : Irish Economy Last Updated: Jun 26, 2014 - 3:30 PM


Enterprise Ireland doesn't know how many active client firms it supports
By Michael Hennigan, Finfacts founder and editor
Jun 25, 2014 - 7:26 AM

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Enterprise Ireland, the state agency "responsible for the development and growth of Irish enterprises in world markets" doesn't know how many active client firms it supports.

Sometime past I had a look through annual reports and other publications and on Tuesday I called the press office for the information as it would be a proxy for data on exporters, and later an email suggested that I should contact the Central Statistics Office (CSO) - - a link to a CSO report did not help.

The specific data I was seeking was on the number of active Irish indigenous exporting firms and what prompted my query was an AIB Bank 'Exports Outlook Report' [pdf], that coincided with its announcement a €200m SME Export Finance Fund.    

The Fox News slogan "We Report, You Decide" is similar to our own approach but we try to avoid manufacturing our own facts!

The AIB report produced  in association with the Irish Exporters Association, Bord Bia and IPSOS MRBI, is one of these common 'feel good' outputs, laden with bromides from various boosters.

IPSOS/MRBI surveyed 200 SMEs engaged in exporting goods or services and 30% confirmed that they are planning to export to new countries this year - - 42% of businesses interviewed had up to 5 employees.

In 2012 a similar IBEC survey with input from experts at PricewaterhouseCoopers (PwC) suggested that the lost 350,000 jobs during the bust would be restored by 2016 -- just 18 months away from now!

IBEC/ PWC report says Irish employment will return to pre-crisis levels by 2016; Ernst & Young says 2030

For a start the total value of exports in 2013 at €181bn is wrong - - the correct number is €176bn (see Table 2a here). Balance of Payments data includes a €5bn adjustment for merchandise double-counting.

Ireland does not supply data to a joint OECD-Eurostat trade database because the level of Irish data available is limited.

Data on SMEs (small and medium size firms up to 249 employees) includes both indigenous and foreign-owned firms.

Then when there is data, it can be puzzling.

According to the CSO : "In 2011, Irish multinationals (MNEs) employed over 246,000 persons in foreign affiliates."

Since 2012 when Enterprise Ireland's 2011 annual report was published and a new government entered office, someone decided to omit standard data: "Number of clients achieving annual global sales of €5 million" and "Number of clients achieving annual global sales of  €20 million."

Prior to 2012, the numbers averaged 600 and 200 - - and the export ratio would likely average 40%, suggesting that from a total of 185,000 active enterprises in 2012, the number of exporters is very small.

It's also revealing when it can take two months to rustle up data on for example the take-up of  the R&D 25% tax credit: do ministers ever ask for such data?

In 2009, the French Treasury revealed in data it published, how it's so hard to match the German exporting machine.

It said some 100,000 French firms export goods, or nearly one firm in 20 and this propensity to export is well below that of Germany, close to that observed in Italy, and greater than the figure for the United Kingdom and Spain.

French SMEs are restricted in their international development by their small size and limited innovative capacity. When they export, they export to just one or two countries, generally to neighbouring countries, and 30% fail to hold onto their market for more than a year. German SMEs, which are larger and more innovative, are also bigger exporters, with exports accounting for a larger share of their total revenue, and they also export more regularly.

Comparison with France's main partners confirms Germany's clear dominance as an exporting powerhouse. There is a far greater propensity to export than in France, with nearly 350,000 exporting firms, or 11% of all German firms. Germany also owes its leadership to the relative importance of industry in its economy, as this sector exports a greater proportion of its output than services.

The French statistic that almost a third of new exporters lose their new market within a year is the type of data that would be useful in Ireland - - but then the market for fairytales would need to diminish!

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