Cork Chamber has been collaborating as the Irish project partner on the Interreg Europe RATIO* project since its initiation in 2016 with a specific focus on the identification of actions to support innovation in rural based SMEs. In collaboration with our regional project stakeholder group, we have developed a set of recommendations to support and diversify the current operating environment. We grouped these recommendations into three main opportunity areas

1 Clusters and Collaboration 2 Human Capital 3 Access to Finance

In brief, we believe there is a strong case developing a strategic framework for clusters via a National Cluster Policy. We highlight the value-add of supported, collaborative business networks at local level and propose the increased emphasis on these, and their importance in connecting with more centralised networks. We also emphasise the opportunity of further developing the Enterprise Centre (E Centre) network offering, to increase their effectiveness in meeting the needs of SMEs.

A key point identified in the regional analysis was the capacity of rural based SMEs to attract and retain people with valuable skills. Discussions with stakeholders highlighted the importance for regional growth, innovation and competitiveness of policies and practices to help businesses attract, retain and develop a talented workforce. Currently, the LEO network offers considerable support for skills development,

particularly in the area of business skills through training and mentoring. Other training supports are available through the Skillnets programme.

However, to complement these supports, it was concluded that ancillary actions are needed, for example targeted communications focused on the attractions of the rural areas in terms of quality of life. This, and the potential associated with developing HR focused training courses via the LEO network for SME’s to improve recruitment, retention and incentivising of employees is included within the recommendations for consideration.

Finally, the issues associated with accessing alternative and emerging

sources of finance for entrepreneurship were at the forefront, particularly on getting high potential start-ups investor ready. With this we are proposing the development of training, advice and mentoring supports that prepare SMEs for private equity investment, with a particular focus on business pitching.

We believe that in collaboration with our regional stakeholders we have developed a set of practical recommendations that have the highest long-term value to the continued development and strengthening of an innovative and competitive SME culture.

*The RATIO acronym stands for Regional Actions to Innovate Operational Programmes (RATIO) involves partner organisations from Spain, Portugal, Latvia, Germany, Czech Republic, Poland, Italy and Ireland.

Issue 2 2018

Cork Chamber Economic Bulletin contact:Michelle O’Sullivan, Public Affairs Executivee: michelle@corkchamber.ie / t: 021 4530132

sponsored by

Supporting Innovation in SMEs

RATIO European Project Partners visit the Ludgate Hub, Skibbereen.

CorkChamber.ie

Economic TrendsSurvey ResultsQ120

18

The first Economic Trends Survey of 2018 reflects the business experiences of Cork Chamber members over the course of January, February and March. The survey gathered information on the financial experiences of Cork Chamber member organisations, and also member opinions on workplace inclusion and diversity, policies and progress.

In Q1 2018, we see business confidence being reported at 91%, even though a decrease on the most recent surveyed figure of 95% it is very positive and interestingly mirrors that reported for Q1 of 2017. Alongside this we see the continued consistency amongst members when asked about overall confidence in the Irish economy, with 46% reporting more confidence, showing no significant deviation across recent surveys.

Inclusion and diversity in the workplace is a particular focus for Cork Chamber as we start out in 2018 with a greater emphasis on this. It is encouraging to report the efforts of members in this area and via their day to day practices with 72% supporting flexible working hours (also noted as one of the main challenge to inclusion and diversity), and 74% of those surveyed highlighting the promotion of continuous professional training and education opportunities.

There is definitely progress to be made especially when it comes to provision of childcare supports/ facilities with a large number of members noting the prohibitive costs of childcare as a barrier to lower income households taking up employment opportunities. We are acutely aware of this as a persistent challenge to business as well as from a socio-economic perspective and we are committed to being part of the change in addressing this challenge.

Executive Summary

BUSINESS CONFIDENCE

Business confidence remains high at 91%, comparing well with the 95% reported for Q4 2017.

Not

91% 9%

RESPONDING BUSINESSThe responding businesses represent a broad cross section of business sizes.

Sole Trader

MicroEnterprise(2 - 10)

Between11 - 50

Between51 - 100

8% 28% 8%

Between101 - 200

9%

Over201

14%33%

5%Transport

16%Tourism, TravelCulture and Arts

3%Multisectoral

8%Construction

3%Science andTechnology

15%Industry/Manufacturing

50%Services (Including Financial)

Representative Respondents

They also represent of a broad range of sectors.

The % reporting an increase in turnover and net profit for Q1 2018 is down on the previous quarter reported at 65% and 54% respectively, however there is a strong 70% reporting an expected increase in net profits for the 12 month ahead.

14% 17%

44%39%42% 44%

Turnover

Resp

onse

Per

cent

%

Decrease No Change Increase

TURNOVER AND NET PROFIT ESTIMATIONS AND 12-MONTH PREDICTIONS

1. Brexit, & Skills Availability2. Changing Consumer Spending/

Reduced Orders3. Cost Competitiveness

Threats to Business GrowthTOP

The Q1 survey saw the re-emergence of Brexit as the number one threat to business, alongside skills availability. In the previous Q4 2017 survey, the Top 3 threats reported were Cost Competitiveness, Availability of Housing/ Rental Accommodation for Employees and Skills Availability.

Inclusion & Diversity in the Workplace

CONFIDENCE IN THE IRISH ECONOMY

The sentiment surveyed for Q1 2018 is similar to that reported in Q4 2017, which had 48% reporting a more confident sentiment.

“As opposed to discussing D&I in terms of being a problem, change the dialogue

more to the benefits and successes of D&I”

“The main point is to ensure constructive discussions are live in the organisation”

“Lack of females applying for certain types of roles, apprenticeships, operations and

maintenance”

9%

45%Same

46%

Engineers (across a range of disciplines) is the No. 1 Difficult to Fill Vacancy, consistent with recent surveys.

66%

Increase

Decrease

Stay the same

6%

28%

45%

Increase

Decrease

Stay the same

3%

52%

EMPLOYMENT OUTLOOK

70%

30%Yes

No

Number of businesses with vacancies advertised currently

Expected changes to employee numbers over the next 12 months

Change to employee numbers over Q1 2018

Yes

No 43%

57%

Responding companies with active policies

72%Flexible Working Hours

60%Work From Home Options

3%Childcare Facility/Support

28%Employee Assistance Programme

74%Continuous Professional Training & Education Opportunities

36%Health & Wellbeing Programme

34%Education For Inclusion & Diversity In The Work Place

Of those we asked which policies are supported currently:

41%

62%

14%24%21%

38%

Equal Pay For Equal Work Flexible Working Hours

Res

po

nse

Per

cen

t %

Agree Disagree Neither Agree nor Disagree

47%

22%31%

Remote Working Options

45%

18%

37%

Education For Inclusion & Diversity

51%

13%

36%

Access To Childcare

We asked members what the significant challenges are, here’s what you told us.

“As a country and city in particular, we need to spend seriously on transportation infrastructure”

Paul Dennehy, Arachas Corporate Brokers

“Tax harmonisation for e-commerce as retailers in Ireland are at a disadvantage to countries with an e-commerce platform whose costings are lower, and whose VAT rates are less than those in Ireland”

Patrick Leader, Leader Menswear

“Regional development is crucial as it has social as well as economic benefits”

John Finn, Treasury Solutions

“Public infrastructure - a lot of productivity is lost through poor infrastructure in the greater Cork area” (Anonymous)

YOUR THOUGHTS

We thank members for their valuable input. The work of Cork Chamber is shaped by you and for you, and your participation is key in guiding our focus as we promote and advocate for an ever-thriving Cork region.

As part of the recent survey we asked members about their organisational experiences and while there are persistent challenges it is encouraging to note the engagement with the topic and efforts ongoing.

Headline Comments:

Cork Chamber - Economic Bulletin

At the heart of business in Ireland

© 2018 KPMG, an Irish partnership

3455_Cork_Chamber_Island_Advert_210x60mm_Jan18.indd 1 10/01/2018 10:17

KPMG is committed to sharing the very best business insights on how to build, grow and transform a business. KPMG Private Enterprise has a long and proud history of working with entrepreneurs in Munster and indeed throughout Ireland, helping them to move through the various stages of the development of their businesses, from the early days to scaling up. According to KPMG’s Cork based partner Michael Lynch, “We’re always looking for new ways to share insights and business success stories and that’s what led us to launch the KPMG Inspire Series.”

With this in mind, the first Cork Inspire Series event takes place in June featuring entrepreneur Mark Little. Mark started his career in RTE and then sold his Storyful business to News Corporation. He’s now CEO of Neva Labs and intends to use the latest artificial intelligence (AI) to restore “truth and trust” to the distribution of information at a time when tech companies have been criticised for their role in the spread of “fake news”. KPMG’s Michael Lynch notes that “There’s a real hunger amongst our clients to share and learn more about

building and growing a business in a fast changing world and we’re delighted that Mark Little will be joining us in Cork in June for our first Inspire Series in the city.”

Previous speakers in the series have included Nick Wheeler, founder of online shirt retailing success story Charles Tyrhitt and more recently, Professor David Robertson - a senior lecturer at the MIT Sloan School of Management. Robertson is the award-winning author of Brick by Brick: How Lego Rewrote the Rules of Innovation, which describes the company’s near bankruptcy and subsequent spectacular recovery.

KPMG partner Michael Lynch concludes that Irish businesses are naturally innovative. “Irish businesses have had to be innovative – post crisis in particular they had to really think about every aspect of what they do and in many cases the results are hugely impressive. We hope to help that process further by sharing more insights at the Inspire Series in Cork in June.”

Build, Grow, Transform – The KPMG Inspire Series comes to Cork

Jobs

JanuaryNK Communications announced 25 new positions in Cork and Limerick Data Centre development taking shape in Little Island as joint venture between JCD Group and US firm T5 Data Centres announced

FebruaryIT firm Ergo brings 100 new jobs to Cork and Dublin

50 new jobs @ Financial Services provider Apex Fund Services

200 new jobs @ Clearstream Global Securities Services

March50 new jobs @ Cyber Security firm Keeper Security, opening of new EMEA office

70 new jobs @ Pilz, opening of new software development centre

Q1 2018