John Lyons (Dublin North West, Labour)
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I welcome the delegates from Enterprise Ireland: Ms Julie Sinnamon, chief executive, Mr. Niall O'Donnellan, divisional manager, and Mr. Tom Hayes, divisional manager. They are present to discuss Enterprise Ireland's annual report 2013 and progress to date, including the national microenterprise policy.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give to this committee. If they are directed by it to cease giving evidence on a particular matter and continue to so do, they will be entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or persons or an entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
I invite Ms Sinnamon to make her presentation to the committee.

Ms Julie Sinnamon:

I thank the Vice Chairman and members for the opportunity to attend this afternoon. I am joined by Mr. Niall O'Donnellan, head of policy and investment services, and Mr. Tom Hayes, head of microenterprise and small business. I propose to take the members through the key achievements of 2013 and initiatives under way for 2014. Then my colleagues and I will respond to questions.

Enterprise Ireland's main objective is to grow jobs in Irish companies. For companies to grow their employment, they need to grow their sales. Export growth provides a sustainable growth route, and if companies want to win sales overseas, it will drive growth in Ireland.

Enterprise Ireland works in partnership with its clients, providing a cohesive set of supports, both financial and non-financial, to help them start, grow, innovate and compete in global markets. The ultimate goal is driving economic growth and employment creation. I acknowledge, in particular, the support of our parent Department, the Department of Jobs, Enterprise and Innovation, in this context.

Enterprise Ireland client companies continue to generate increased jobs growth, recording the highest overall net rise in employment levels in the past decade, with 5,442 net new jobs at the end of 2013. Moreover, they provide employment for 175,750 people, comprising 149,718 full-time and 26,032 part-time workers. Irish-owned firms, in terms of payroll and purchases of materials and services produced in Ireland, accounted for €20.28 billion in expenditure in the Irish economy in 2013. As a result, the companies supported by Enterprise Ireland are supporting and sustaining more than 300,000 jobs directly and indirectly throughout the country.

The outlook for new job creation in 2014 is positive, with employment growth returning to the economy and unemployment steadily declining month on month. There remains a considerable task to create the jobs necessary for our economy, but the outlook for our companies and their job creation plans is at its most positive since the recession took hold.

In terms of driving export growth in our client companies, Enterprise Ireland understands that, in a small economy, exports sustain and create jobs. With total exports exceeding €17 billion in 2013, Enterprise Ireland's clients exported more than at any time in the history of the State. Responding to evolving market opportunities for our clients, the Government approved the recruitment of 20 additional staff in high-growth markets. In September, we announced the opening of two new offices, one in Istanbul, Turkey, and a second in Austin, Texas. In tandem with the development of our network, the number of ministerially led trade missions co-ordinated by Enterprise Ireland has more than doubled in the past two years from eight in 2011 to 16 in 2012 and 18 in 2013, with an extensive programme designed to build on export growth in markets where Irish companies are strong and to open doors in new, high-growth markets.

A series of major trade missions have already been completed for 2014. For example, earlier this year Enterprise Ireland organised a mission led by the Taoiseach and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, as part of a five-year strategy targeting €1 billion in exports to the Gulf. An important support for Enterprise Ireland is the embassy network across the globe. The Department of Foreign Affairs and Trade and the Export Trade Council, on which Enterprise Ireland is represented, are key stakeholders in the national drive to increase trade.

During 2013, Enterprise Ireland continued working to increase the number of companies starting up, expanding, exporting and creating jobs. In 2013, we approved support for 104 high-potential start-ups, HPSUs, the most in any single year. Last year also saw a significant increase in female-led projects, with the highest ever level of new investments by Enterprise Ireland in start-ups led by female promoters. Some 41 projects led by women won investments during the year, 14 of which were HPSUs, with the balance supported through the competitive start fund.

Community enterprise centres, CECs, provide a range of facilities that enable entrepreneurs to establish new businesses. A total of 157 centres have been approved for financial support, of which 117 have been completed and are operational. Some 9,300 jobs have been created by companies in CECs in the past decade.

Following on from the Government's decision to restructure the microenterprise and small business support system, the dissolution of the 35 county and city enterprise boards, CEBs, and the establishment of local enterprise offices, LEOs, formally took place in April of this year. The LEOs are now operational across the country, enhancing the availability of supports to entrepreneurs and micro and small businesses. Enterprise Ireland is working through its centre of excellence to support the LEOs and to ensure that the best available services and supports are available to anyone thinking of starting or expanding a business.

In May, we launched a new €500,000 Enterprise Ireland competitive start fund targeted at stimulating new start-ups by graduates. This fund will help start-up and early stage companies to get off the ground and launch new products and services in the international marketplace. The fund will close for applications on Wednesday of next week.

As well as providing tailored support in creating and implementing plans, our capability and mentoring department has developed a number of flagship programmes focused on supporting leadership and management development and building international sales and marketing capabilities in Irish companies. Some 240 executives from client companies participated in significant management development programmes, while 845 executives took part in short programmes, both exceeding targets for 2013. In 2014, we have been developing our approach to peer-to-peer learning and reaching more companies with our learning initiatives.

Enterprise Ireland recognises that our clients must be competitive in order to succeed in international markets. Enterprise Ireland's lean business offer encourages client companies to adopt lean principles and build the capabilities and capacities of their people. A total of 143 lean projects were supported during 2013, comprising 80 LeanStarts, 43 LeanPlus assignments and 20 LeanTransform projects. Clients of all sizes and sectors were involved in these programmes. This has been a core business offer for Enterprise Ireland to help companies to address their competitiveness challenges. To date in 2014, we have supported 47 companies.

Enterprise Ireland offers a range of financial supports to assist clients through all stages of the business cycle. The nature and level of support offered will depend on each individual company's developmental needs and is assessed in consultation with the company's development adviser. Through Enterprise Ireland, the State has invested heavily in stimulating and facilitating the availability of seed and venture capital to provide access to finance for small to medium-sized enterprises, SMEs. In 2013, the fourth seed and venture capital scheme, valued at €175 million, was launched. This scheme is aimed at providing additional funding for high-growth Irish companies with the potential to generate large amounts of additional export sales and grow jobs. It targets an additional €525 million in funding from the private sector, bringing the total to €700 million.

Among the major developments in 2014, Lightstone Ventures partnered with Enterprise Ireland and the National Pensions Reserve Fund, NPRF, to establish a fund worth $172 million. As a result, new funding will be available for the life sciences sector to support company development and job creation.

Enterprise Ireland's role in Ireland's research and technology landscape is centrally focused on empowering Irish companies to create high-value and innovative products for international markets. The office of science, technology and innovation in the Department of Jobs, Enterprise and Innovation plays a central role, co-ordinating research and development supports. In total, 858 of Enterprise Ireland's clients were engaged in significant research and development projects of above €100,000 spend in 2013. Some 139 spent more than €1 million.

In order to promote business innovation with the ultimate aim of creating jobs, Enterprise Ireland also works with the broader enterprise base, including multinationals and the research community. The technology centre programme that Enterprise Ireland runs jointly with IDA Ireland brings consortia of indigenous firms and multinational companies together with academia to tackle problems. In so doing, the centres represent the best of Irish indigenous and multinational companies' researchers working together to solve issues that are too big or costly to be solved by any one company working in isolation.

During the year, two new technology centres were approved, those being, the technology centre for data analytics, CeADAR, in UCD and the centre for pharmaceutical manufacturing based in Limerick. These enhance manufacturing competitiveness and support the research and development mandate of the Irish sites within multinational corporations. We also funded a second phase of Food for Health Ireland, FHI, which is helping to mine milk to identify novel ingredients. This year has seen the launch of the new Horizon 2020 framework programme, which will represent a key source of research funding over the next seven years.

Enterprise Ireland continuously drives the commercial return on the State's investment by providing direct funding to researchers to commercialise their work. Enterprise Ireland has taken the lead in driving the commercial return from research by building the technology transfer infrastructure within the universities, where dedicated technology transfer offices have been established. Commercially relevant research centres have also been established in institutes of technology and campus incubation facilities have been put in place to support new technology companies.

May 2014 saw the launch of Knowledge Transfer Ireland, which is aimed at making it easier to commercialise ideas from State-funded research. The purpose of this new resource is to make it easier to commercialise, and create viable businesses and jobs from, State-funded research from all third level institutes. Knowledge Transfer Ireland is the first resource of its kind in Europe, operating as the State-funded central technology transfer office, which is located in Enterprise Ireland, and operating collaboratively by Enterprise Ireland and the Irish Universities Association. The key service offered is a web portal that enables companies to identify experts, research centres and technology licensing opportunities to benefit their business.

Enterprise Ireland continues to be centrally involved in the Action Plan for Jobs, with a significant element of the plan falling to us for implementation. Enterprise Ireland has responsibility for 77 actions, equating to 96 deliverables, and contributes to a further 34 actions.

On behalf of Enterprise Ireland, I thank the many Departments and agencies across the system, which are important in enabling Enterprise Ireland to do its work with Irish companies. Our client companies continue to make a substantial economic impact at a critical time in the State.

Enterprise Ireland is keenly focused on its ongoing mission to support companies and job creation and moves forward into the second half of 2014 with the objective of playing a central role in the full implementation of the Action Plan for Jobs and the rolling out of a new strategy for enterprise development later in the year. I thank the committee for its invitation to address it today.

John Lyons (Dublin North West, Labour)
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I thank Ms Sinnamon.

Dara Calleary (Mayo, Fianna Fail)
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I welcome Ms Sinnamon and her team and congratulate her on a productive year as well as Enterprise Ireland's ongoing work. Everyone in Enterprise Ireland works incredibly hard for Team Ireland here and abroad and I wish it continued success.

I have specific and general questions. To start with specifics, Ms Sinnamon stated that Enterprise Ireland received sanction to appoint 20 new staff in high-growth markets. Where are those staff and are they fully in place? How many were placed in China?

The CECs and business development managers represent a good innovation. How many of those positions have been filled and has Enterprise Ireland given consideration to sharing that role between a number of CECs? I get the sense that some of the CECs are drifting and are not doing what they could be or fulfilling their potential because the people running them are doing too much else in their communities. While the position of business development manager is welcome, would we get more bang for our buck if it was shared?

Will Ms Sinnamon update us on the LEOs? Mr. Hayes has been in and out to the committee and beaten around the issue often. He has taken many bullets for the Enterprise Ireland team about the new role of LEOs. Our concern, which remains light, is that the fantastic work being done by Enterprise Ireland is far removed from the CEBs. A client going to a CEB would have thought a HPSU was a drug. Clients want to expand their businesses and provide services in their communities without exporting. Will Ms Sinnamon assure the committee that she is aware of this difference? I pay tribute to the former Minister of State, Deputy Perry, for his work in rolling out the LEOs, but will Ms Sinnamon also assure us that the type of client I cited will still be at the heart of the LEO? We all want people to export and we want technology, and some of us visited UCC's Tyndall National Institute to see some of the research to which Ms Sinnamon referred, but there are still people who just want to start a business. Someone must have an interest in them.

Last year, there was an issue with audit reports on Enterprise Ireland's programmes in the south east. Has it been resolved and are new processes in place?

There has been a quadrupling of losses in investor companies since last year, with Enterprise Ireland making a €16.8 million loss. Ms Sinnamon might assert that this was in line with various investments, but why was the jump so large? Was a particular focus put on investments that year, did Enterprise Ireland decide on a clean-out or was there a higher rate of losses in its investments as opposed to in previous years?

Ms Julie Sinnamon:

Regarding the 20 new staff in high-growth markets, approximately ten are in place and competitions are live at the short-listing phase, so we are half way on board. The staff are intended for a range of high-growth markets, but I will ask Mr. O'Donnellan to check the specific figures for the Deputy.

Dara Calleary (Mayo, Fianna Fail)
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There is no rush with them today.

Ms Julie Sinnamon:

We probably have them here. Does Mr. Hayes wish to deal with the----

Dara Calleary (Mayo, Fianna Fail)
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I have a particular interest in Enterprise Ireland's presence in China.

Ms Julie Sinnamon:

We will provide the specifics on China.

John Lyons (Dublin North West, Labour)
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We will move on. Mr. Hayes might discuss the LEOs.

Mr. Tom Hayes:

I will refer to the CECs. To give a bit of background, we had four schemes and have invested €46 million or €47 million in 117 centres that are now operational. As the chief executive stated, they have created 9,000 jobs, with a little over 6,000 people in full-time employment in 1,200 companies. A little over two years ago, we introduced a business manager development scheme. Some 46 managers have been recruited for those centres - 37 in 2012 and nine in 2013. Interestingly, the centres with business development managers employ on average approximately twice the number of people as centres without managers do. We are reviewing the programme, which has concluded. No funding is going into the CECs currently but, with our parent Department, we are trying to decide what the next phase for helping them should be. They play a major role, particularly in rural areas of high unemployment where the incubation centres found in urban environments are not present.

We reviewed 21 of the centres with business development managers. In 2012, they had 354 companies. In 2013, they had 427 companies. In 2014, we forecast they will have almost 500 companies. Likewise, those 21 centres have seen a significant increase in job numbers, from 1,685 in 2012 to 1,722 in 2013 and 1,847 so far in 2014. Undoubtedly, there is a strong correlation between CECs having business development managers and the number of clients and jobs for which they account. We are encouraged by these figures. Financial constraints permitting, we hope to introduce a new scheme to help in areas that are not well serviced by infrastructural supports.

Dara Calleary (Mayo, Fianna Fail)
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I suggest that Enterprise Ireland should engage with Leader companies. Those positions are important and the figures stand up, but there are other ways to skin this cat. Instead of Enterprise Ireland having to foot the expense, some Leader companies could probably help.

Mr. Tom Hayes:

I accept the Deputy's point about a manager looking after more than one centre. Why should someone be 100% committed to one centre when a centre 10 km away does not have a business development manager? There is no reason in the world for that manager not to share his or her experience and help to promote the second centre.

We have developed a draft protocol for the LEOs and CECs to ensure their seamless working relationship in all of the 31 LEO areas.

John Lyons (Dublin North West, Labour)
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Did Ms Sinnamon wish to address further points?

Ms Julie Sinnamon:

The transfer from CEBs to LEOs has happened and all of the LEOs have been formally launched. We are establishing a centre of excellence. We have started training programmes on client services and so on with CEB staff and are rolling out further training in the coming weeks, but we are still in the early days in terms of effecting real change. It is not just a matter of rebranding, but of providing a higher level of service consistently across the country for entrepreneurs.

The entrepreneurs in question have different needs than many of our clients. This morning, Mr. Hayes and I met the Irish Small and Medium Enterprises Association, ISME, for the second time in recent months. We have received plenty of feedback about issues that are arising that we will take on board. In recent weeks, I visited a number of LEOs to get direct feedback as to what is happening on the ground. People have different needs and we will work through the central co-ordination unit with the LEOs and the centre of excellence, but I do not expect that everything will be up and running now. This journey will take some time to effect the type of change that is desired, but we are moving in the right direction.

With regard to the audit report for the south east, there are recommendations that have been fully implemented. Does Mr. O'Donnellan wish to discuss the loss on the equity portfolio?

Mr. Niall O'Donnellan:

There were two major elements relating to the equity portfolio. One was the return we got on our seed and venture funds, which was positive in both years. Actually, it just went down. We got €5 million last year and about €1.8 million this year. The second is that we had a major loss on one company that accounts for a significant amount of that increase. So they are the two major swing factors.

Dara Calleary (Mayo, Fianna Fail)
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Is that company finished or is it still trading? Is there a chance Enterprise Ireland could recoup that loss?

Mr. Niall O'Donnellan:

That company is still trading. We invested significantly in it. We withdrew our investment but a lower price than we paid for it initially so we got significant money back but we got back about half of the money we put in.

Dara Calleary (Mayo, Fianna Fail)
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Enterprise Ireland withdrew the investment. Was there a process or engagement? Did the company not deliver on what it promised to do?

Mr. Niall O'Donnellan:

It was only partly to do with what we needed it to do. On that basis, we decided that our development agenda with this project was finished and, therefore, we decided to get what we could on it from a return point of view.

Dara Calleary (Mayo, Fianna Fail)
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What loss was taken on that specific company?

Mr. Niall O'Donnellan:

This loss would have been about €9 million in total terms.

Dara Calleary (Mayo, Fianna Fail)
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On one company?

Mr. Niall O'Donnellan:

In this case, it was a fund in which we had been involved that became an equity investment.

Dara Calleary (Mayo, Fianna Fail)
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I am trying to work this through. Enterprise Ireland was involved in a fund as opposed to a company?

Mr. Niall O'Donnellan:

It was a fund that was publicly quoted and, therefore, we treated it as an equity investment. Normally, we would treat it under a seed and venture capital site but because this fund was publicly trading, we decided to exit from it, which we did at a loss.

Dara Calleary (Mayo, Fianna Fail)
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What fund was it? I thought the role of Enterprise Ireland was to invest in companies and take shareholdings in developing companies. This area relates to funds.

Mr. Niall O'Donnellan:

The original purpose of our investment in this fund was to help it invest in our companies. It then went public and we stayed in it. We decided at a later stage that it was not investing enough in our companies and decided to withdraw what we could from the company at that point in time. However, the public value of the fund had decreased significantly.

Ms Julie Sinnamon:

Enterprise Ireland invests directly in funds as well as in companies through the seed and venture capital fund. For example, €175 million was allocated for seed and venture capital funding last year, which will leverage €700 million by 25 sectors. Every year, we invest a significant chunk of money in seed and venture capital funds.

Dara Calleary (Mayo, Fianna Fail)
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How many of them does Enterprise Ireland take a €9 million loss on?

Mr. Niall O'Donnellan:

Sorry?

Dara Calleary (Mayo, Fianna Fail)
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Has a loss of this extent - €9 million on one fund - happened previously?

Mr. Niall O'Donnellan:

We would have to go back into the history of it. In some of the earlier funds there would have been some losses, but in this particular-----

Ms Julie Sinnamon:

If one looks at the composite between 1999 and 2013, one can see that we made a profit of €38.55 million on all of our investments in venture capital funds. That is taking the basket of them, so it would be more the exception.

John Lyons (Dublin North West, Labour)
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A question was asked about Enterprise Ireland's presence in China.

Ms Julie Sinnamon:

Of the 20 additional posts we have, four of those have been allocated to China. Three have been allocated to Beijing and one to Shanghai.

Peadar Tóibín (Meath West, Sinn Fein)
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I thank the delegation for the presentation and congratulate it on the successes achieved by Enterprise Ireland throughout the year. One point we would make on a regular basis is that indigenous exports are the smaller relation as opposed to FDI exports. On a policy level, from our perspective, there is a major need to redress that balance. I wish Enterprise Ireland luck in that objective.
The budget of Enterprise Ireland has been falling over the past number of years. Has the budget fallen due to a lack of demand from potential clients within the State or because of a decision made by a Minister that less will be allocated to its role? In respect of regionalisation, I believe there is a big push within the IDA to really regionalise its objectives into the future, possibly because of a lack of emphasis in the past. I am looking at the regional breakdown of Enterprise Ireland's figures. The mid-east has 43% of the jobs and roughly 43% of the increase in jobs, but the mid-west has 7% of the jobs and 3% of the increase. We also see that the west and the midlands have 7% of the jobs. While the distribution by Enterprise Ireland is much better than that of the IDA, there is still a regional issue there. The argument often made is that it is a push-pull experience - in other words, there is a difficulty if one does not have entrepreneurs in the region to pull the demand for Enterprise Ireland. An organisation such as Enterprise Ireland would have objectives for better regionalisation, so there are things it can do to improve that. Could Ms Sinnamon talk us through what Enterprise Ireland hopes to do on that in the next year?
I have been in discussion with a couple of local enterprise offices around the State. I know Ms Sinnamon mentioned that Enterprise Ireland is rolling out training, but some LEOs have not received training and I believe they are identifying a problem both with themselves and their integration with the local authority and Enterprise Ireland.
The BRIC countries remain a phenomenal challenge to us in respect of exports. I know Ms Sinnamon has given the headline figures within the report, but could she talk about the trends within the figures regarding research and development? In respect of North-South co-operation, we met with Science Foundation Ireland yesterday and one of the refreshing elements it mentioned was that it is working with Seagate in Derry and the Tyndall National Institute. They are providing services to the North for free. Could Ms Sinnamon talk about the level of North-South co-operation by enterprise agencies and about objectives into the future?
Is there anything Enterprise Ireland can do with regard to legacy debt? A number of businesses have closed and a number of them are teetering on the brink of closure due to a millstone of legacy debt, although they are functional businesses. There was a report in The Irish Timesabout €27 million worth of support for firms that are connected with the board of Enterprise Ireland. Confusingly, the report then went to state that €271,000 was paid in financial supports to companies last year compared to €3.1 million earlier. Is Ms Sinnamon aware of that report? If so, could she explain it to us?

John Lyons (Dublin North West, Labour)
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There are many questions there. I have written down most of the things here in case Ms Sinnamon forgets any of them.

Ms Julie Sinnamon:

I normally get accused in the other direction with regard to the North-South side. I will start at the beginning in terms of indigenous exports being the smaller relation. The fact is that exports from multinational companies are substantially higher than those from indigenous companies. Having said that, we now have growth year on year and are now at the highest level in the history of the indigenous side. It is worth looking at the impact on the economy of both. Up until last year, the spend in the economy by both multinationals and Irish companies was about €18 billion, so they have both have a similar impact at local level in terms of the overall spend on raw materials, wages and service purchased locally. This year, our figures have gone from €18 billion to €20.28 billion. I have not seen the IDA figure for last year but I would be surprised if it has kept pace. The impact of the indigenous companies in the local economies in every town and village in Ireland is very often not recognised. All people see is the headline export figure. Obviously, the key focus and the rationale for our placing an additional 20 people in overseas markets is to increase the exports on which we will grow jobs, so that is something that is well made.

Last year, we had a shortfall in terms of the budget that was actually drawn down. That was for a couple of reasons. One was that our own resource income was higher than had been projected and, therefore, we needed to draw down less money from the Exchequer than was projected.

Second, there was money for seed and venture capital funds because of certain issues. Once we approve it they then use our funding to try to raise funding in the international markets, so there were delays. It is a timing issue which will catch up over the lifetime of the fund. Last year we needed to draw down less only because of the own resource income and the seed and venture capital side. Funding directly to industry increased.

Mr. Niall O'Donnellan:

Also, the competitive schemes for the dairy and beef industry had come to an end, so their expenditure was decreasing. That is a third factor.

Ms Julie Sinnamon:

In terms of the regionalisation agenda, Enterprise Ireland has much less mobile investment than IDA Ireland. Most people come in and start a company wherever they are actually established; it would only be overseas entrepreneurs or some FDI investments which are mobile. We are trying to drive impact locally. Therefore, investment in third level, the research agenda and the commercialisation agenda, and investment in technology centres with a view to developing technology transfer and spin-outs in local economies are a major part of the drive. A key part of the 2014-16 strategy is the development of regional entrepreneurship plans from the bottom up, trying to work on the strength in each region to ensure we are not missing out on anything and that we capitalise on what is happening locally. Certainly the regional agenda is high on our list of priorities. Perhaps I can invite Mr. Tom Hayes to deal with the local enterprise offices, LEOs.

Mr. Tom Hayes:

Perhaps I will add a little to what has already been said about indigenous exporters. Over two years ago, we set up the potential exporters unit to hit at those indigenous companies for which exporting was only marginal - with an export output of only 5% to 10% - or which were focusing on the domestic market 100%. We put huge effort into that area in the past two years. Around 900 companies attended export awareness events, 300 of which have attended exporting exploration workshops. These are two-day workshops which go through all the mechanics of how to export, with mentoring support, back-up support and advice and connections with our UK office. We have invested a significant amount of money in those workshops in terms of internationalisation grants and feasibility research. That is a cohort of indigenous companies for which exporting would not be the number one priority but we are trying to inspire them and encourage them to export. These companies are spread all around the country.

On the regionalisation issue, we have done much work in the midlands region in terms of outlining what is available, company profiles and the strengths and weaknesses of the region, working with colleges and local enterprise offices. We are looking at the whole enterprise base and working with the IDA to see how we can work better together, rather than having a situation in which Enterprise Ireland does its piece and the IDA does its piece. The results of this will be rolled out in each of the regions.

Deputy Calleary raised the issue of LEOs, which is a challenge. We have already had a number of information days at which Enterprise Ireland and local authorities have outlined the range of services and supports to be provided to the staff of LEOs, and we have also had representatives from the Revenue Commissioners and the Department of Social Protection to ensure a level of joined-up thinking. This will ensure that when a person approaches a LEO, he or she can be directed elsewhere in the event that a LEO cannot assist directly. Commencing this week, some 125 staff will be involved in change management. There is a culture change for people who have worked all their lives in a local authority and those who would have been on the front line in enterprise. We are rolling out a change management process commencing this week.

We are obsessed by the customer, who is king. Senator Feargal Quinn spoke at one of our information days about the customer and we all know the focus he puts on the customer. Irrespective of the changes taking place, the focus on the customer is crucial. The final aspect is that we must ensure the functional competencies of the staff are up to date and up to speed in terms of sectoral dynamics, understanding business propositions, business plans and being able to read the financial statements and accounts of a company, and understanding changing dynamics and technologies within sectors. We are rolling out a suite of programmes to ensure the staff are in a position to connect with the client base that is operational within the LEOs.

Ms Julie Sinnamon:

I covered the challenge for the BRIC countries and agree that it continues to be a challenge. Although the Asia-Pacific region was the highest growth market last year for Enterprise Ireland, with 19% growth, followed by the Latin America group, with 9% growth, it has taken some time to get traction. We hope, given the additional resources being put in place in the next couple of months, we will continue to see traction from that. For the markets that are far away and difficult, one needs personnel as well as funding to go for them, so they are not for everybody. However, we are seeing some success from the companies. Certainly the trade missions this year and last year have helped momentum in those markets.

Peadar Tóibín (Meath West, Sinn Fein)
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May I offer some feedback? I was speaking to someone from a firm recently who mentioned that where expertise of client managers in the target market offices is high in a particular sector, their experience has been very positive, but where that knowledge is uneven it has posed challenges for them.

Ms Julie Sinnamon:

Companies have become increasingly sophisticated in the products and services they provide. A specific set of skills is required in the marketplace. Increasingly, we have been using other people within the market, market pathfinders who are people with the right sectoral knowledge to supplement what we are doing, because one needs a deep sectoral knowledge at market level across the globe. It is true that it cannot be done with generalists and that one needs that specific knowledge.

Peadar Tóibín (Meath West, Sinn Fein)
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There was one final question, which was about the report in The Irish Times.

Ms Julie Sinnamon:

On North-South co-operation, we have a very close working relationship with Invest Northern Ireland and InterTradeIreland in the context of our leadership programmes. Currently we have programmes with IMD in Switzerland and Stanford in which Northern Ireland companies have been participating for the past four or five years. We had our first joint trade mission earlier in the year to Singapore, with Northern Ireland, UK and Irish companies together. We have start-up companies in Cambridge with Northern Ireland. The North does not have the critical mass of companies that we have in different sectors for which we can run leadership programmes. There is extremely close collaboration. We meet with the team in Invest Northern Ireland and InterTradeIreland a number of times each year and there is much information and support for companies on both sides. Any of the programmes we have that are seen to be successful, they have copied. We share any information we have, as there is no reason not to do that.

John Lyons (Dublin North West, Labour)
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What about the article in The Irish Times?

Ms Julie Sinnamon:

The article in The Irish Timeswas on the board members' interests. I am one of those board members. I am on the board of DIT and we put funding into DIT. We have board member salaries. We have a board member who is on CIT - all the funding we put into CIT is in there. We also have a board member who is on the board of Glanbia and we have supported Glanbia. We have a board member on the board of The Irish Timesand we have put some funding into The Irish Times.

The Glanbia investment is the first greenfield dairy processing investment to be built in Ireland in 40 years. It is one we were delighted to have been able to support and to ensure that was won for Ireland as opposed to elsewhere. That is the rationale in that respect. The board members involved would not be there for any of those discussions. The Glanbia board member has shares in Glanbia and therefore he was excluded. He did not realise until he read it in a newspaper that they had even been in discussions with us. There are Chinese walls in operation; there was no question of the board members being involved in those decisions.

John Lyons (Dublin North West, Labour)
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I call Deputy Lawlor.

Ms Julie Sinnamon:

On the question on the county enterprise board funding, an allocation comes into Enterprise Ireland for funding enterprise boards. In the past few years increases were allocated to them when additional funding was allocated by Government. We would have been supportive in making a case for them and supportive of their application for additional funding. It is not an Enterprise Ireland decision in terms of us deciding to allocate funding but we have, in conjunction with our Department, make a case for additional funding for them which they have got. The funding will continue to come in through us.

Ms Julie Sinnamon:

I will ask Mr. Tom Hayes to give those.

Mr. Tom Hayes:

The figure is approximately €30 million in total, the breakdown of which is €15 million for administration and the remainder is broken into measure one and measure two, measure one being direct support to industry in terms of feasibility, employment and capital supports based on a business plan and the other part is related to training and upskilling. As the chief executive said, where they have been able to demonstrate jobs are connected to the propositions and proposals submitted, we have managed for at least the past two years to secure some additional funding for them.

Ms Julie Sinnamon:

The figure allocated to the county enterprise boards through Enterprise Ireland was €30 million in 2013. I will ask Mr. Niall O'Donnellan to respond to the Deputy Lawlor's question on the cost per job.

Mr. Niall O'Donnellan:

The cost per job, on average, is €12,000 or just under €13,000.

Mr. Niall O'Donnellan:

It is a net figure. It is the total amount of money we spend on the new jobs created and that are sustained at the end of a seven year period. It is a rolling figure that we calculate every year. For the past four or five years it has held at €12,5000 or just under €13,000. That figure is probably under pressure. We will probably see some increase in that as the cost of the recession and the increased funds we put into companies during the past two or three years start to impact, but the figure is still holding at roughly the IDA's cost per job figure.

Ms Julie Sinnamon:

I will ask Mr. Hayes to reply to the question about the portal.

Mr. Tom Hayes:

I take on board what the Deputy said about the difficulty in navigating the services that are available. Enterprise Ireland has done a good deal of work in terms of the engine for the LEOs, the portal area for them, and has worked individually with them to develop it. With that front end of the work having been done, we will work with them to ensure it is easily navigable and customer friendly. We have already developed protocols with the organisations such as Revenue, SOLAS, the Department of Social Protection, Microfinance Ireland and the Credit Review Office. Once one goes onto the website, if one does not connect with the appropriate contact, one can be easily referenced to whatever is the appropriate one. I take on board the Deputy's point and I will ensure the site it is easily navigable for anyone who wants to use it.

Ms Julie Sinnamon:

With regard to trade missions opportunities, it depends on the market. In the case of Brazil, Russia, India and China, the BRIC countries, those in the larger companies have tended to gone on trade missions in recent years I do not mean that those companies are very large but the scale of resources required to go on trade missions is beyond their reach of most companies. With regard to closer markets such as the United Kingdom, during the week of the President's visit to the UK, we ran a specific workshop for high potential start-ups, which were very much early stage companies, to help them get into the market. What we organise depends on the need. We also run study visits, in addition to the trade missions, for some of the smaller companies in order for them to go out and see the market and get information on it. We have included some clients with local enterprise offices on some trade missions where they were relevant and were in a position to go on them.

Mr. Tom Hayes:

There were 32,000 promoters involved in the establishment of new companies last year. There were 15,200 new companies established. That is the figure according to GEM. There can be some confusion, 32,000 is the headline figure but that is the number of promoters. Any company starting off might have one or two people involved. The figure of 15,200 new companies would include every sole trade and everybody starting any enterprise.

Ms Julie Sinnamon:

Those are the company registrations.

Mr. Tom Hayes:

Company registrations, exactly.

Ms Julie Sinnamon:

On the Enterprise Ireland figures for last year, there were 104 high potential start-up companies and there were 85 competitive start-fund companies supported, which makes 189.

Mr. Tom Hayes:

Along with the high potential start-up and competitive starts, we also would also have supported approximately 1,000 of those through the New Frontiers programme, competitive feasibility and other types of supports and there would be approximately 1,000 of those that would be financially supported directly through the LEO network. About 10% of the total figure would have a connection or contact financially with Enterprise Ireland or the LEO network.

John Lyons (Dublin North West, Labour)
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I call Deputy Collins.

Áine Collins (Cork North West, Fine Gael)
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I welcome the representatives and it is good to have them here. I congratulate Ms. Sinnamon on a great year and I particularly congratulate her on female entrepreneurship. It is good to see and it is very encouraging. I wish to ask Mr. Tom Hayes about the LEOs in regard to the community enterprise offices and to relate this to the position in local offices in Cork. The local county councils have set up enterprise offices in various towns and they are struggling in rural areas because there is no one there to promote them. The package was that they would fit them out and set them up and that the community had to run them on a voluntary basis, which is very challenging. I suggest that something should be tied in with the LEOs where somebody would call to the local areas.

There should be some collaboration between Enterprise Ireland, local enterprise offices and Cork County Council to make these offices work. Otherwise some of them will become white elephants, which would be a shame. I understand they are specific to County Cork and I am not sure they operate in other counties. There are definitely eight or nine of them in rural towns in County Cork, including Charleville, Mill Street, Youghal and Mitchelstown.

Mr. Tom Hayes:

Is the Deputy referring to county enterprise centres?

Áine Collins (Cork North West, Fine Gael)
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Yes, they are enterprise offices which were funded by the county council but operated voluntarily as hot desks by the community and voluntary sector. They are fully fitted out with broadband and other technology and have meeting rooms and so forth to ensure they can deliver education programmes. Without support to pay staff, it is difficult to operate them as they are currently staffed by volunteers. The capital investment has been made someone staff need to be appointed to man them. I understand one person has been appointed in Greenshoots, which is in Macroom. This issue needs to be addressed.

Mr. Tom Hayes:

It is difficult to comment without knowing the facts of the case. However, I will raise the issue with our manager in Cork. I would be pleased to liaise directly with the Deputy on specific cases.

Áine Collins (Cork North West, Fine Gael)
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We should not waste the opportunity these centres present, especially as State funds have been spent on them.

I have a question to Ms Sinnamon on finance. I have had a bee in my bonnet for a long time about securing financing of between €1 million and €5 million. I am repeatedly told that €750 million is available for allocation but it is not clear how to access this funding. There appears to be some form of blockage to accessing funding for commercialised research and intellectual property, which will be important for job creation. Every time I ask about this, I am given a different answer.

What is the position with regard to mentorship? Where will the new database and technology be located that will drive entrepreneurship and mentorship? Enterprise Ireland's website provides a great deal of information. Would it possible to allow entrepreneurs to submit a series of questions on the website? At present, they must search through a large volume of information. A person accessing the website may not know anything about some of the programmes. For this reason, it would be preferable to have a question and answer type feature on the site that would allow a person to move through a programme step by step. I have heard some feedback on this issue. Is it possible to introduce a national pre-seed programme for people who have an idea but are not seeking seed capital? In other countries, a certain amount of funding is provided, perhaps for one year, to develop or incubate an idea?

Ms Julie Sinnamon:

Mr. O'Donnellan will respond to the question on access to finance.

Mr. Niall O'Donnellan:

I assume the figure of between €1 million and €5 million the Deputy cited refers to equity.

Áine Collins (Cork North West, Fine Gael)
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Yes.

Mr. Niall O'Donnellan:

What we have done to address this matter, which has been an issue for existing companies for some time, was launch the development capital scheme. Under this scheme, we have invested in three funds that are now actively looking for companies in which to invest. The funds available are in the order of between approximately €1 million and €10 million. The three funds, Carlyle, MML and BDO, are actively looking for companies in the marketplace. One investment has been made public and at least on further investment has been closed and will be shortly made public. There is, therefore, a pipeline.

That is one aspect of it. The other element that recently came into play are funds from the National Pensions Reserve Fund. The funding available is at a higher level in some cases but remains complementary.

Áine Collins (Cork North West, Fine Gael)
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This includes the €5 million provided to Lighthouse BCS.

Mr. Niall O'Donnellan:

Yes.

Áine Collins (Cork North West, Fine Gael)
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Who will be able to apply for these funds? Are they only available to companies that are going global?

Mr. Niall O'Donnellan:

The development capital is available to companies that are trading internationally and will grow to achieve a considerable amount of additional international sales and hopefully employment as a result. It is focused on the manufacturing and international services sectors. The NPRF funds are available across the board. They are not solely focused on the exporting sector and are also focused on the domestic market.

Áine Collins (Cork North West, Fine Gael)
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What is the maximum available under the NPRF?

Mr. Niall O'Donnellan:

The average amount is around €15 million but it involved approximately €50 million in one case. The funding is, therefore, significant. The issue is one of finding companies that will be able to absorb and add value.

Áine Collins (Cork North West, Fine Gael)
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How much funding is available under the NPRF?

Mr. Niall O'Donnellan:

There are three funds, one for debt, one for restructuring debt and one for equity. I will send the Deputy the details.

Ms Julie Sinnamon:

On the Deputy's questions on intellectual property, IP, the issues for companies trying consistently to access IP in third level or reach IP agreements and obtain licences, etc., have caused problems for some people. We launched Knowledge Transfer Ireland, KTI, in May this year, which is headed up by Alison Campbell who has considerable experience in this area in the United Kingdom. Ms Campbell has been a breath of fresh air in terms of coming in and understanding what is possible from looking at best practice elsewhere and bringing it in here. This is only now beginning to have an impact and I believe the position will improve. Many people trying to do a deal have been frustrated and concluded that it was not a proposition.

Áine Collins (Cork North West, Fine Gael)
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I understand Ireland is the only country in the OECD where one cannot draw down money for research unless one is attached to a university or third level institution. Is that correct?

Ms Julie Sinnamon:

What types of funding can one not draw down?

Áine Collins (Cork North West, Fine Gael)
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Under the current model, a company that invest a certain amount in a research project cannot draw down European funding unless it is linked to a third level institution. I understand this arises because of the policy we have adopted.

Ms Julie Sinnamon:

Higher levels of support are available through the innovation partnership programme for companies that are in a collaboration with a third level institution. However, companies can also secure funding on their own. If they decide to do something collaboratively with a third level institution, the support available to them is significantly more generous. Apart from that, there has been substantial investment in third level and we are keen to improve the return on investment to the State in this area. Having the initiative launched by Ms Campbell up and functioning properly will help achieve this objective.

Áine Collins (Cork North West, Fine Gael)
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Is information available on the return on investment in research over the past ten years?

Ms Julie Sinnamon:

We have figures on the numbers of licences that have been produced over that period.

Mr. Niall O'Donnellan:

Recently commissioned work examining the translation of research investment into commercial outcomes found that the Irish system is one of the top systems in Europe in this respect. We are achieving a high return on the money being invested in research compared to other European countries in the form of licences and spin-outs. Ireland was found to be one of the top - if not the top - country in Europe in this recently commissioned work.

Áine Collins (Cork North West, Fine Gael)
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I ask Mr. O'Donnellan to circulate that information to me.

Ms Julie Sinnamon:

On the issue of mentoring, the Deputy may have noted that the Forfás mentor programme was launched yesterday. One of the key recommendations is to set up a central database.

Áine Collins (Cork North West, Fine Gael)
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That recommendation was made by the committee.

Ms Julie Sinnamon:

Enterprise Ireland has been asked to take a lead role in this area and work will start immediately to develop the database.

The Deputy referred to Enterprise Ireland's website. The level of traffic on website is massive. In June alone, 45,000 people accessed information through the site. I asked our information technology people what is the level of complaints about access to information and they inform me they have not received any complaints. That does not mean people do not have views on the website. We would welcome some specific input. Rather than have people manoeuvre their way through the site, we are open to the idea of being able to submit questions. We have done this in respect of local enterprises offices. I will feed the Deputy's suggestion into the system. However, we receive a considerable amount of positive feedback, although I am aware that it can be difficult at times.

Mr. Tom Hayes:

On a pre-seed programme, I am not sure whether the Deputy is familiar with the new frontiers programme but I believe it ticks the box for the Deputy. Under the programme, a bursary of €15,000 is provided for a six-month incubation, during which someone can tease through his or her business proposition or idea. All the institutes of technology are involved in the programme which is run by Enterprise Ireland.

The course is pretty standard although some are individually tailored depending on the college. That might be what the Deputy is referring to. There are 150 graduates every year and between 80% and 90% of them start a business and we invest in approximately 20% or 25% of those, under the high potential start-up, HPSU, scheme, which is a fantastic return in terms of contribution to jobs. That may be what the Deputy is referring to in the context of pre-seed because no equity is taken, there are no preference shares or pay back. It is a bursary, which enables the individual to spend six months teasing through his or her business idea. They are well mentored and supported during that six month process.

John Lyons (Dublin North West, Labour)
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I thank Ms Sinnamon, Mr. Hayes and Mr. O’Donnellan for attending. I hope Enterprise Ireland will be back to tell us about another good year next year.