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Structural Instruments in Romania

Conference

Workshop no. 3 – Improving Economic Competitiveness

by Building the SME Base

Experience of Ireland

Dr Jim Fitzpatrick Managing Director Tel: +353 1 4966008 Fitzpatrick Associates, Economic Consultants Fax: +353-1-4966028 122 Ranelagh Village e-mail: jfitzpatrick@fitzpatrick-associates.com Dublin 6 Web: www.fitzpatrick-associates.com

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• SME role in Ireland’s “Celtic Tiger”

• Use of EU Structural Investments

• Some Lessons for Romania?

CONTENTS

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PRODUCTIVE SECTOR PERFORMANCE, 1995-2004

0

50

100

150

200

250

300

350

400

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Years

0

50

100

150

200

250

300

350

400

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

YearsFull-time Employment in Financial and Other International Services

Value of Manufactured Exports

Indigenous Software Jobs

Full-time Employment in Financial and Other Internationally-traded ServicesValue of Manufactured ExportsIndigenous Software Jobs

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IRELAND – NATIONAL POLICY DOCUMENTS

http://www.forfas.ie/esg/

http://www.forfas.ie/icsti/statements/tforesight/

http://www.forfas.ie/publications/http://www.smallbusinessforum.ie/http://www.irishspatialstrategy.ie/

NSSDownloads.shtml

http://www.arts-sport-tourism.gov.ie/pdfs/tourism_review_report.pdf http://www.iua.ie/working_industry/pdf/

knowledge_economy.pdf

http://www.entemp.ie/publications/science/2006/sciencestrategy.pdf

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“COMPETITIVENESS” OPERATIONAL PROGRAMMES*

1994-99 2000-06

Research, Development, Innovation

€ (%) 501 (11%)

€ (%)2,300 (51%)

Enterprise Support 3,125 (71%) 1,700 (38%) Marketing Support 552 (13%) 358 (8%)

Sea Fisheries 233 (5%) 132 (3%)

Total 4,411 100% 4,488 100%

Breakdown by Core Priority (total EU and co-financed)

* Industry Operational Programme 1994-99,

Priority of the Productive Sector Operational Programme 2000-06

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PRODUCTIVE SECTOR OPERATIONAL PROGRAMME

Priority/Measure 2000-2006 1994-1999NDP SF NDP SF

€mn % €mn % €mn % €mn % 1. RTDI 2,300 51% 240 85% 501 11% 269 26% 1.1 Education 684 15% 55 20% 1.2 Industry RTDI 1,376 31% 185 66% 1.3 Agriculture RTDI 61 1% 0 0% 1.4 Food Institutional Research 60 1% 0 0% 1.5 Marine RTDI 53 1% 0 0% 1.6 Forest Research and Development Programme 12 0% 0 0% 1.7 Environment RTDI 50 1% 0 0% 2. Industry 1,700 38% 0 0% 3,125 71% 583 57% 2.1 Indigenous Industry 440 10% 0 0% 2.2 Food Agriculture Products 165 4% 0 0% 2.3 Seafood Processing 78 2% 0 0% 2.4 Film Industry 61 1% 0 0% 2.5 Gaeltacht Areas 285 6% 0 0% 2.6 Foreign Direct Investment 670 15% 0 0% 3. Marketing 358 8% 0 0% 552 13% 99 10% 3.1 Industry Marketing 1% 0% 3.2 Food Marketing 67 2% 0 0% 3.3 Seafood Marketing 8 0% 0 0% 3.4 Tourism Marketing 200 4% 0 0% 4. Sea Fisheries Development 132 3% 42 15% 4.1 Adjustment of the Fishing Fleet 7 0% 5 2%

4.2 Supporting Measures for Fisheries Development 31 1% 18 6%0%

4.3 Renewal & Modernisation of the Fishing Fleet 95 2% 20 7% Other 0 0 0 0 233 5% 72 7% Total 4,488 100% 282 100% 4,411 100% 1023 100%

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SOME KEY PARAMETERS

• OBJECTIVES: shift from employment creation to value-added

• DELIVERY AGENCIES: mainly existing specialist state agencies

• ELIGIBILITY: generally manufacturing and internationally traded firms (i.e. exports

or export potential)

• FORMS OF FINANCE: mostly non-repayable grants, some equity (preference

shares)

• DEADWEIGHT: part of consciousness of selection committees

• APPROVAL CRITERIA: Programme Complements

• PROJECT GENERATION/SELECTION: agency development staff help applicants,

separate committees approve

• MONITORING: project level – grants payable for agreed milestones

programme level – inputs, outputs, results, impact ideally

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PRINCIPAL IRISH PRODUCTIVE SECTOR DEVELOPMENT AGENCIES - SUMMARY

NATIONAL SECTOR-SPECIFIC:

DEVELOPMENT OF THE FISHERIES AND SEA-FOOD SECTOR

WWW.BIM.IE

DEVELOPMENT OF THE FOOD INDUSTRY

WWW.BORDBIA.IE

REGIONAL/LOCAL AGENCIES

INDIGENOUS INDUSTRY ENTERPRISE DEVELOPMENT IN MID-WEST REGION

WWW.SHANNON-DEV.IE

ECONOMIC DEVELOPMENT IN IRISH-SPEAKING AREAS

WWW.UDARAS.IE

CITY/COUNTY ENTERPRISE BOARDS

SUPPORT FOR MICRO-ENTERPRISE

(-10 EMPLOYEES)

WWW.ENTERPRISE-IRELAND.COM/ STARTBUSINESS/COUNTY_ENTERPRISE_BOARDS.HTM

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SOME LESSONS

• don’t forget the SME sector

• be selective, focus on potential high performers

• separate national competitiveness from regional/local development objectives

• have good enterprise advice/support structure

• Structural Instruments not enough, need a generally entrepreneurial climate