Export sales by Enterprise Ireland clients exceed €13 Billion in 2007
Exceptional Performance in Challenging Global Markets
"Continued Investment in Innovation and R&D Essential" Warns CEO Frank Ryan
New Focus on Internationally Traded Services
In its Annual Report for 2007 published today, Tuesday 24 June, Enterprise Ireland reported an exceptional performance by client companies in global markets with exports hitting €13.181 Billion. New export sales of € 1.445 Billion in 2007 brought total new export sales over the 2005-2007 strategy period to €4.419 Billion against the target of €3 Billion. This represents strong progress in the face of intensifying global competition and increasing market challenges. As a result, more Irish companies than ever before are building strong sustainable positions in the international marketplace.
Total employment in Enterprise Ireland supported companies was 153,670, a net gain of 1,321
Speaking at the launch of the Annual Report, Frank Ryan, Chief Executive Officer, Enterprise Ireland said: "The new export sales over the last three years have been won by our client companies tenaciously pursuing new market opportunities, intensifying existing customer relationships and opening up new markets with innovative products and services. Their exporting success is directly linked to advancements in innovation, research, productivity, management development and entrepreneurship.
"The steady growth achieved by our client companies in 2007 was made in a much more challenging global economic environment. Competition in international markets is intensifying and notwithstanding recent achievements there is no room for complacency. Exceptional effort is required over the life of our current three year strategy Transforming Irish Industry 2008-2010 to deliver the targets set.
"While the scale of the challenge for our clients cannot be underestimated there is an underlying resilience that gives cause for optimism. For example in 2007 exports to the Americas grew by 11% despite the weakening dollar against the Euro. This is a remarkable achievement during a period of less certainty and illustrates what can be achieved by client focused, ambitious companies with innovative products and services. I am confident that our clients will continue to demonstrate the leadership and investment in the innovation and research and development that ultimately lead to growth in international markets." Frank Ryan said.
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Annual Report 2007 - Summary
Achieving export sales
The ultimate intended impact of all Enterprise Ireland initiatives is to create new export sales. Key to all client interventions is the potential export sales to be secured, either immediately or in the future.
During 2005 - 2007 the strategic target was to reach €3 billion in new export sales and all elements of the organisation focused on contributing to its achievement. An integrated global team approach drove progress towards the successful attainment of the three-year target in what were more difficult international trading conditions than 2006. The 2007 figure of €1.445 billion in new export sales contributed to an exceptional overall total export sales figure of €13.181 billion.
Industry-led research and innovation
Due to clients taking up the research and innovation agenda driven forward by Enterprise Ireland, there were significant achievements against two further strategic targets in 2007, which were related to increasing the number of Irish companies engaged in research and development (R&D).
In 2005 we set out to increase to 617 the number of companies carrying out meaningful R&D (€100,000+ investment per annum) and to increase to 42 the number of companies engaged in significant R&D (€2+ million investment per annum). In 2007, 624 companies invested over €100,000 in meaningful R&D and 42 invested over €2 million in significant R&D projects.
The Enterprise Ireland initiatives that ensured this successful strategic outcome focused clients on increasing R&D investment, on driving industry-led research and on maximising the commercial potential of publicly funded research. This work also included facilitating collaboration between companies and academia and on supporting R&D in Irish third-level institutions.
In 2007, we approved €59.6 million in support of in-company R&D projects.
World-class productivity and management development
Productivity and management capability improvements are essential in helping Irish companies to reach the standards needed to successfully compete in the global market place.
In 2007 the Productivity Improvement Fund approved 157 projects. This performance contributed to the three-year total of 346 Productivity Improvement Fund approvals and the attainment of a key strategic target of supporting over 300 companies to improve productivity and drive export gains.
Enterprise Ireland continued to enhance the management capability of Irish companies by providing world-class management and leadership development programmes. The number of managers participating on significant management development programmes - programmes of over 100 hours duration - was 572 in the period 2005-2007 and provides proof of our clients' commitment and willingness to invest time and resources in developing the skills of their management teams.
Starting and scaling companies
Over the course of our three-year strategy, a key target was to support 210 new high potential start-up companies (HPSUs). Against this target 221 new HPSUs were supported, 70 of which were approved in 2007. These companies are spread across Ireland and across a range of existing and emerging sectors.
This group of highly innovative companies, targeting international markets with vision and ambition, represent the future of economic growth in Ireland. These companies will grow rapidly, generate significant sales and employment, and become engines of economic growth as international players in their markets.
Since the launch of our scaling initiative in 2005, significant progress in understanding the needs of companies pursuing a high growth agenda has been acquired both by Enterprise Ireland and the companies themselves.
In 2007 we continued to work intensively with scaling clients to help them pass target sales thresholds of €10 million, €15 million and €20 million. The number of scaling companies achieving these thresholds was particularly positive in relation to the €20 million figure, where 13 companies succeeded in hitting this target.
Nine major investments in excess of €750,000 were also approved to scaling clients during 2007.
Driving regional enterprise
With the establishment in 2007 of our National Regional Headquarters in Shannon, Co Clare, and the integration of staff from Shannon Development involved in the development of Irish enterprises in the region, Enterprise Ireland now has a significant presence in the Mid West.
A City and County Enterprise Boards (CEB) Coordination Unit has also been established within Enterprise Ireland to facilitate greater cohesion of strategic and operational activities in the enterprise development support offered to companies.
Enterprise Ireland's strategic approach to regional enterprise is centred on driving the creation of innovation based start-ups, on proactively developing existing clients in all regional locations, and on facilitating entrepreneurship and the enterprise environment in local and rural communities.
This strategic approach yielded good results in 2007. Twenty two of the 70 HPSUs approved in 2007 were located in the BMW region. Additionally, 69 per cent of financial support was approved to companies based in regions outside Dublin.
As part of the latest Community Enterprise Centre (CEC) scheme, in 2007 Enterprise Ireland approved an investment of €6.74 million for the construction of new or the extension of existing CECs, and for the employment of CEC managers.
Finance and investment
Enterprise Ireland provides financial support for the development of Irish companies by making investments in individual client projects and through venture capital funds.
In 2007, approvals to client companies totalled €135.6 million. This included support for R&D, start-ups, expansions, productivity improvement projects, management development and training.
Twenty nine major investments in excess of €750,000 were approved to client companies, with associated company investment of €319.1 million.
Total financial payments to companies in 2007 was €73.9 million. This included €23.68 million in share capital investment, €39.39 million in R&D, training and other capability building support, and €10.83 million in capital and employment support for capacity expansion.
The organisation realised €22.4 million from share sales, venture capital funds and share redemptions and a further €1.6 million in dividends from our equity portfolio.
A number of VC funds made significant progress in 2007 under Enterprise Ireland's €175 million Seed and Venture Capital Scheme. These include the €30 million AIB Seed Capital Fund, which is expected to make up to 60 investments, and the Bank of Ireland Kernel Capital Partners Private Equity Fund, which completed a first closing of €70 million. These funds extend the competitive venture capital market in Ireland and are vital in broadening access to funding for start-up, early, and development stage businesses.
On behalf of the Department of Agriculture, Fisheries and Food Enterprise Ireland administered a major capital investment fund for the Irish dairy processing sector. The Dairy Investment Fund was designed to stimulate necessary investment to ensure the long-term competitiveness and viability of the highly important dairy industry in Ireland. In 2007, the Government approved 19 capital investment projects which were awarded grant assistance of €114 million under the Fund. This investment will generate an estimated capital spend of €286 million in the Irish dairy sector.
Transforming Irish Industry 2008 - 2010
The Irish economy has changed radically in recent times. Irish businesses are operating in a globally competitive environment, and are faced with ongoing and accelerating change. To continue to grow and succeed, Irish companies must be innovative, competitive, and have the leadership capability to develop scale and sustain positions in international markets. Innovation across all aspects of business in Ireland will be central to securing the future export growth required to fuel the economy.
Consequently, we have placed innovation, leadership and growth as the fundamental themes underpinning Transforming Irish Industry 2008 - 2010, the new Enterprise Ireland strategy.
The priorities for the life of this strategy include driving innovation, stimulating the emergence and development of companies of scale, consolidating existing growth in key sectors and markets, capitalising on emerging opportunities, and helping to realise sustained and balanced regional growth.
As economies become more developed and globally integrated the services sector assumes greater importance in international trade. A core objective for Enterprise Ireland is to drive and support internationally traded services growth in emerging and existing sectors.
The new strategy sets out fresh, challenging objectives, including the ambitious target of €4 billion in new export sales. The challenges will be significant going forward, but we are confident in the ability of Irish companies to grow and to continue to win new business in highly competitive global markets. Enterprise Ireland is deeply committed to supporting our clients in all areas, but particularly through enhancing leadership and innovation capabilities - key sources of competitive advantage and growth.
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