Exceptional increase of €1.275 billion in new exports for Irish companies

High productivity growth sustained by Enterprise Ireland supported companies

Enterprise Ireland Annual Report 2005: All targets met or exceeded

Enterprise Ireland published its Annual Report and Accounts 2005 today (Tuesday, 20 June).   Speaking at the publication of the report, Pat Molloy, Chairman of the Board of Enterprise Ireland said: "The development of an innovative, internationally competitive enterprise sector in Ireland is central to the future growth and prosperity of the Irish economy and Irish society.  Irish companies make a significant contribution to the Irish economy spending over €16 billion annually on payroll and Irish sourced goods and services.   I am delighted to announce that Enterprise Ireland has met and in many cases exceeded the ambitious targets it set for 2005".

Frank Ryan, Chief Executive Officer, Enterprise Ireland, said it was an exceptional year for client companies.  He said: "Irish companies performed very strongly in 2005, achieving a €1.275 billion increase in exports.  That is a rise of 7.2% on last year, bringing total exports to €10.7 billion.  This success reflects the commitment of Irish companies to use research and innovation to compete on quality in global markets."

He continued: "Client companies continue to develop a deep understanding of the needs of overseas customers and of how best to exploit new market opportunities.  Their exporting success is grounded in their ability to produce sophisticated, high value products and services for their customers in global markets.  This ability is directly linked to advancements in innovation, research, productivity, management and entrepreneurship.  I am greatly encouraged by the fact that Enterprise Ireland supported companies continued to sustain high productivity growth at 7%".

This success comes in the first year of a three-year plan set out by Enterprise Ireland in its new strategy: Transforming Irish Industry 2005 - 2007.  Significant progress was made in 2005 against targets set for Enterprise Ireland over the three years.

Performance against targets:

• €3 billion in new export sales by year-end 2007 - €1.275 billion was achieved in 2005.
• Increase to 596 the number of firms engaged in meaningful R&D (€100,000+) by 2007 - 515 companies are now engaged in meaningful R&D.
• Increase to 42 the number of firms engaged in significant R&D (€2 million+) by 2007 - 33 companies are now engaged in significant R&D.
• Support the creation of 210 new high potential start-up companies nationwide by year-end 2007 - there were 75 new start-ups in 2005.
• Drive export readiness by implementing Productivity and Competitiveness Improvement Projects in 300+ firms by year-end 2007 - projects were funded in 39 companies in the last two quarters of 2005, following the launch of the Productivity Improvement Fund.

Mr Ryan said: "This new strategy implements the Government's Enterprise Strategy Action Plan and re-positions Enterprise Ireland to give stronger support to our clients both individually and collectively.  The targets are ambitious and challenging for our staff and clients.  We are now a third of the way through the strategy and the results show that staff have devoted great energy, skill and dedication to assisting clients to achieve success."

The new strategy also highlights key growth sectors: Food & Retail Consumer Markets; Industrial and Lifesciences Markets; and Software, Services and Emerging Sectors.  In addition, it strengthens the emphasis on industry-led research projects - two such projects began in 2005 in the Power Electronics and eLearning sectors - and it strengthens the commitment to building strong sales skills in client companies - the International Selling Programme was launched during the year.

Enterprise Ireland focused its efforts on five key areas of activity: Achieving Export Sales; Investing in Research and Innovation; Competing through Productivity; Starting and Scaling companies; and Driving Regional Enterprise.

Review 2005

• New export sales rise by €1.275 billion bringing total exports to €10.7 billion, a growth of 7.2% on 2004.
• Enterprise Ireland supported 167 significant investment projects.  Of these, 103 investments were in projects outside Dublin and 55 were located in the Border, Midlands and West region. 
• Total Enterprise Ireland financial commitments to companies in 2005 were €72 million. 
• Total sales, including domestic, up 6.5% to €25.8 billion.
• 74 first time exporters.
• Strongest market -Northern Europe up 6.4% to €6.2 billion.
• Strongest sector - Food & Retail Consumer Markets with €7 billion in exports, up 6.4%.
• Highest growth sector - Software and International Services up 9.1% to €1.5 billion.
• 157 companies established a new market presence in overseas locations.
• 187 client companies exported to new markets.
• 75 new start-up companies were established.
• Productivity average across all sectors at 7.0%.
• New jobs created amounted to 11,661 and a net decline in employment of 734 was reported.

Achieving export sales

The impressive €1.275 billion increase in new exports led to a growth of 7.2% in overall client exports to €10.7 billion.  Northern Europe continued to be the largest market with €6.2 billion in exports, up 6.4%.  The United Kingdom remained the largest single export market worth €4.8 billion, up 6.1%.  Exports to The Americas grew by 13.6% to reach €1.2 billion.  The largest export growth market was Asia with an increase of 14.6% to €564 million.

Key industry sectors showed strong growth: Software, Services and Emerging Sectors grew 9.1% to €1.5 billion and Industrial and Lifesciences Markets grew 8.5% to €2.2 billion.  Food & Retail Consumer Markets continues to be our largest export sector, achieving €7 billion in exports, up 6.4%.

Enterprise Ireland actively supported 187 companies entering new markets, 74 of which were first time exporters.  In addition, 157 client companies established an overseas market presence during the year.  A total of 7,384 client/buyer meetings took place across all sectors and markets.  Clients also participated in 18 overseas trade missions, 29 international trade fairs and 27 inward buyer missions to Ireland.

During the year the overseas network was re-structured into one division - International Sales and Partnering - covering five regions worldwide.  Other changes included the re-positioning of staff and skills upgrades to meet the widening technological and global needs of Irish exporters. The remit of our international staff was also broadened to include assistance to companies in accessing venture capital and technology transfer opportunities in global companies.

Investing in research and innovation

Sustained export growth is grounded in a strong commitment to innovation through R&D.  By year-end, 515 companies were involved in meaningful R&D (over €100,000 investment) and 33 were involved in significant R&D (over €2 million investment).  Enterprise Ireland's support focuses on three main areas: In-company R&D; Commercialisation of Research and Collaboration; and International Science & Technology.

In 2005, €45.6 million was approved in support of 156 in-company R&D projects.  Through the Commercialisation Fund, expenditure of €23.4 million was approved in support of applications-driven research and the Innovation Partnerships Initiative supported 79 company-college collaborative projects.  In addition, €10 million was secured for Irish industry under the Sixth Framework Programme, an EU fund supporting R&D among industry and research organisations across Europe. Irish firms also won contracts in excess of €4 million with the European Space Agency.

Competing through productivity

Advances in productivity levels are essential to staying competitive in world markets and crucial to the success of Irish industry. Enterprise Ireland works closely with clients to enhance their competitiveness and in the second half of 2005 launched the Productivity Improvement Fund.  In less than six months, 39 companies, 85% of which are located in the regions outside Dublin, had begun projects to increase their competitiveness.  In total these projects involved €8.5 million from the Fund, matched by company investments of €25 million.

In addition, Enterprise Ireland worked in collaboration with educational, professional and trade bodies to support productivity programmes ranging from benchmarking, supply chain management, eBusiness and environmental productivity.  This support includes assistance in building the management capabilities of client companies through initiatives such as the International Selling Programme, launched in 2005, and the Mentor Network which was expanded to include international advisers.

Starting and Scaling companies

The creation and development of Irish-owned enterprises is essential in order to sustain and grow Ireland's economy.  Enterprise Ireland's strategy has a sharp focus on growth opportunities for individual clients and targeted sectors.  This includes innovative start-up companies, established clients with high growth potential and small and medium sized enterprises with the capability to grow to scale - achieving at least €20 million in turnover.  Seventy-five new start-ups were supported in 2005, across all sectors, and 59 existing start-ups secured key international first reference contracts.  Established clients contributed strongly to the impressive export results.

Enterprise Ireland also worked intensively with 40 SME clients to maximise their potential to grow to scale and four achieved worldwide sales of over €20 million for the first time.  Seven of the companies in the Scaling portfolio, three more than target, embarked on major investment projects.  Such investments of over €1 million are key contributors to long-term growth. Enterprise Ireland is the first state agency to implement a formal process to encourage the growth and development of large-scale indigenous companies over the long-term.

Driving Regional Enterprise

A key priority for Enterprise Ireland is to support and promote balanced regional development.  This involves working closely with State and industry partners, educational bodies and innovative companies to foster corporate growth and regional prosperity.  This activity focuses on supporting start-ups, encouraging enterprise support networks for new and established clients and promoting entrepreneurship.

Thirty-four of the 75 new start-ups in 2005 are located outside Dublin and 17 are in the Border, Midlands and West region.  Over €34 million has been approved for 137 projects building new or extending existing Community Enterprise Centres.  Three new centres and one extension were completed in 2005 and a new €7 million programme of development was approved for 2006-2008.

Enterprise Ireland has also invested over €38 million in incubation centres in 16 Institutes of Technology throughout the regions to strengthen links between academia and industry and to provide space and support to entrepreneurs.

In 2005, Enterprise Ireland supported 167 significant investment projects (over €150,000).  Of these, 103 investments were in projects outside Dublin and 55 were located in the Border, Midlands and West region.

Concluding his statement Frank Ryan said: "Feedback from our clients indicates that export growth continued during the first half of 2006 and our own research shows a strong purchase order pipeline for the remainder of the year.  We continue to see an increasing number of entrepreneurs seeking to establish high growth potential start-ups in a variety of sectors.   World economic conditions remain challenging for our clients and we will continue to adapt our support to their changing needs both at home and internationally".

Full details of Enterprise Ireland support and activities can be found on our website www.enterprise-ireland.com and in our Financial Products brochure.

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