Find­ing the next gen­er­a­tion of Ir­ish gi­ants

Irish Independent - Business Week - - IN PERSON -

En­ter­prise Ire­land CEO Julie Sin­na­mon tells

about the agency’s drive to help home­grown firms scale up

Mody, the for­mer IMF mis­sion chief in Ire­land, who in a re­cent speech here, cited OECD statis­tics show­ing Ire­land lagging well be­hind many ad­vanced economies when it comes to the per­cent­age of GDP spent on R&D ac­tiv­ity.

He said re­dress­ing the prob­lem will re­quire “ex­ten­sive in­vest­ment in ed­u­ca­tion” and “cre­at­ing an eco­nomic en­vi­ron­ment in which do­mes­tic com­pa­nies in­vest 2pc-3pc of GDP” in R&D. “The one fea­ture in which Ire­land is very much like what used to be called the eu­ro­zone pe­riph­ery is it’s got a very low in­ter­nal in­no­va­tion ca­pa­bil­ity. And growth will be­long in the next half cen­tury to those who have in­ter­nal in­no­va­tion ca­pac­ity,” Mr Mody said.

A na­tive of Co Down, Ms Sin­na­mon has busi­ness in her blood. Her fam­ily was in­volved in the poul­try busi­ness, but she ended up as some­thing of an FDI ‘lifer’.

She did a de­gree in busi­ness stud­ies at the Univer­sity of Ul­ster, and then came to Dublin to do a place­ment for First Na­tional Bank of Chicago in the late 1970s, a “fairly tough time” in North­ern Ire­land as she puts it.

She loved Dublin, and was “amazed” at the level of for­eign di­rect in­vest­ment south of the Bor­der.

Af­ter do­ing a the­sis on multi­na­tional de­ci­sion-mak­ing be­tween North­ern Ire­land, Scot­land and the Repub­lic of Ire­land, she came back to Dublin to work for Trin­ity Bank, be­fore join­ing the IDA when it was on a re­cruit­ment drive.

There, she worked mainly with food com­pa­nies, in­clud­ing Mon­aghan Mush­rooms, Rye Val­ley and Green Isle, and that ex­pe­ri­ence made her want to stay on the ex­port­ing side of the house when the IDA was split up and En­ter­prise Ire­land was ul­ti­mately born.

The job she’s in now has many dif­fer­ent strands to it: work­ing with client compa- nies to boost in­no­va­tion, com­pet­i­tive­ness and di­ver­si­fi­ca­tion; work­ing with De­part­ments and other State bod­ies to make sure they are all singing off the same hymn sheet; hold­ing speak­ing events to in­form the pub­lic; and trav­el­ling to for­eign coun­tries on trade mis­sions.

She’s just back from one such mis­sion to China, where an Ir­ish del­e­ga­tion at­tended the world’s largest trade ex­hi­bi­tion. Busi­ness Min­is­ter Heather Humphreys was in at­ten­dance too – some­thing which Ms Sin­na­mon says makes a big dif­fer­ence in Asia in par­tic­u­lar.

Ms Sin­na­mon’s work­ing re­la­tion­ship with Gov­ern­ment is good, but that doesn’t mean she can’t point out ar­eas for im­prove­ment. The tax treat­ment of en­trepreneur­ship has long been crit­i­cised, and Ms Sin­na­mon says we have fallen be­hind the UK in that re­gard. One area that’s of­ten zoned in on is en­tre­pre­neur’s relief from cap­i­tal gains tax, where the UK has a far more gen­er­ous sys­tem.

“We com­pare our­selves a lot with our near­est neigh­bour and I think the UK at this stage has a more at­trac­tive pack­age of in­cen­tives in the tax side for grow­ing com­pa­nies than we have,” Ms Sin­na­mon says, adding that she recog­nises that the Gov­ern­ment has in­di­cated its in­tent to make changes in this area.

“It’s some­thing which I see would help to fur­ther ac­cel­er­ate the growth of Ir­ish com­pa­nies if you had a strong pack­age of tax in­cen­tives to sup­port that growth.”

An­other area Ms Sin­na­mon wants to fo­cus on is com­pet­i­tive­ness. Pres­sures on labour are see­ing some com­pa­nies pay more for skills than they might oth­er­wise do, while hous­ing costs are putting pres­sure on wages too, she says.

Hence En­ter­prise Ire­land’s fo­cus on ‘Lean’ pro­grammes, de­signed to boost a com­pany’s ef­fi­ciency.

Mak­ing plans for deal­ing with Brexit is an­other im­por­tant day-to-day ac­tion.

There’s been a raft of sur­veys and re­ports in­di­cat­ing that many Ir­ish busi­nesses had their heads in the sand on the is­sue, but Ms Sin­na­mon says the mes­sage has got­ten through.

“When we did our in­ter­na­tional mar­kets week in 2017, only 38pc of the peo­ple in the room – and those were the peo­ple who were there to diver­sify – said they had taken any steps to pre­pare for Brexit. We had a mar­kets week about five weeks ago and that fig­ure had gone from 38pc to 85pc... we’re cer­tainly see­ing com­pa­nies mov­ing from the de­nial phase to re­al­is­ing they have to have a plan”

To achieve more Ir­ish busi­nesses of scale, more in­dige­nous IPOs will be needed.

It’s dif­fi­cult to achieve this though, when en­trepreneurs are of­ten heav­ily in­debted and get a chance to lift the bur­den when a trade­sale buyer comes along with a big cheque.

An in­creas­ing num­ber of En­ter­prise Ire­land’s startup clients are set up by peo­ple who are on their sec­ond com­pany, hav­ing sold out of their first and then com­ing back to the ta­ble with more ex­pe­ri­ence, which helps build a big­ger, stronger com­pany sec­ond time round.

“I would like to see more trade sales at a later stage in the life cy­cle of a com­pany... the peo­ple who buy the com­pany are very of­ten the peo­ple who re­ally make the good re­turn on it be­cause the com­pany has sold out at an early stage.

“And if [the en­tre­pre­neur] just held on longer they would be able to get a bet­ter re­turn for the risk that they took at the early stage of the com­pany.

“That re­quires in­vestors to come along and when they’re com­mit­ting eq­uity to a com­pany to al­low the peo­ple who started the com­pany to take a bit of money off the ta­ble, to clear their debts, to recom­mit and to be able to stay in longer and build on their ex­pe­ri­ence and build a stronger com­pany.”

Af­ter that, she says, the IPO op­tion can come into view – with sec­tors like medtech and soft­ware among those with the po­ten­tial to pro­vide the next gen­er­a­tion of big Ir­ish com­pa­nies. Boost­ing fe­male en­trepreneur­ship is a pri­or­ity too. Ms Sin­na­mon says that women ap­pear to be more in­flu­enced by role mod­els, so the agency is try­ing to put more spot­light on suc­cess­ful fe­male busi­ness­peo­ple.

“Con­fi­dence and am­bi­tion are is­sues – the lack of con­fi­dence, and that isn’t just ob­vi­ous in the en­tre­pre­neur­ial side it’s ob­vi­ous in terms of women in the work­place go­ing for­ward for pro­mo­tions,” she adds, say­ing that child­care is­sues and hav­ing fewer fe­males work­ing for ven­ture cap­i­tal funds in gen­eral can also have an im­pact.

The agency has had good suc­cess in this re­gard. In 2011, 7pc of its ‘high-po­ten­tial’ star­tups had a fe­male in­volved. Last year the fig­ure was 28pc. It’s sub­stan­tial progress, and well ahead of many coun­tries, but more is needed to help Ire­land ac­cess the largest tal­ent pool and meet Ms Sin­na­mon’s tar­get of hav­ing more in­dige­nous com­pa­nies of scale.

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.