MNC instability forces government to back small businesses
There was some welcome news for small businesses on 23 May when Peter Burke, Minister for Enterprise, Tourism & Employment announced the establishment of a dedicated Small Business Unit.
Based in the Department of Enterprise, Trade & Employment, the unit will (in the Minister’s words) “ensure the perspectives of small businesses are considered across Government before new legislation or regulation is introduced”.
It will also oversee the simplification of information and access to grants and supports for businesses though the National Enterprise Hub and ensure Local Enterprise Offices are properly resourced to help small businesses.
This is clearly good news for a large chunk of channel businesses who fall into the small business bracket, although it’s probably worth noting that the government seems happy to flit between the definitions of small business and SME (under 250 employees), as you will see later.
As in so many walks of life, the big names may get the recognition but the smaller ones are doing a lot of the work as well.
This is also good news for many customers of IT channel businesses because they too, are likely to be in the small business category. And there are an awful lot of small businesses in this country. According to the most recent CSO statistics (from 2022), quoted in the Irish government press release, SMEs accounted for 99.8% of all enterprises and 69.2% of persons employed. They contributed two-fifths (41.5%) of total turnover and 34.8% of gross value added (GVA).
No wonder Minister Burke was so effusive in his praise: “Small businesses employ two-thirds of our population and keep our local communities and economies vibrant and strong. Government must recognise this, and ensure we are providing the support that SMEs need to run their businesses successfully and continue to provide vital employment and economic benefit across the country.”
Of course, those figures also serve to highlight the huge contribution that larger companies, including foreign multinationals, make to the Irish economy. Consider that only 0.2% of all enterprises employ 30.8% of workers, contribute 58.5% of total turnover and 65.2% of GVA.
This may be why, despite the fanfare, the government is only launching a Small Business Unit now. When so much of your turnover is dependent on a small number of very large companies, it’s only natural to spend more time, effort and resources facilitating them.
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The question is just how effective the small business unit can be if the outsized effect of larger companies on the Irish economy continues to draw attention away from smaller companies. The drama and uncertainty created by President Trump’s tariff threats, for example, shows just how widely the presence of US multinationals can distort the country’s economic strategy.
We have to hope that the “vital employment and economic benefit” that small businesses provide across the country that “keep our local communities and economies vibrant and strong” continue to be recognised for their contribution in these increasingly unsettled times.
There’s an argument for putting more emphasis on the development of small businesses in Ireland precisely because of the uncertainty surrounding the multinationals. It’s highly unlikely the situation regarding US companies is going to stabilise any time soon. Perhaps that’s why the government has chosen to establish the Small Business Unit at this point in time.
Circumstances may well force the government to devote some of the time and effort it has lavished for so long on the very large companies to smaller businesses. Perhaps it will become more proactive and committed to small businesses in Ireland. Let’s hope this is more than just a repackaging of what’s already there in a knee-jerk reaction and a token gesture.
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