Unemployment also started to increase after 2007, when it was 4%and Luminiå£a Nicolescu, Ciprian Nicolescu ISSN 2071-789x RECENT ISSUES IN ECONOMIC DEVELOPMENT Economics & Sociology, Vol. 5, No 2a,
as in the last years, hit by the economic crisis many SMES went from the medium to small size due to the decrease in the number of employees.
/marketing approaches 17.95%20.89%22.74%24.70%15.92%24.02%14.01%15.07%Information system 9. 68%13.74%10.84%17.06%13.77%15.92%10.24%10.29%Human resources
and human resources can contribute to the improvement of the efficiency of the firm†s activity.
Furthermore, highly innovative firms were found to place great emphasis on employee development training (Laforet and Tann, 2006, p. 366),
and this is also the case in some Romanian SMES that were found to have invested in training half of their employees (24%in 2010)( Nicolescu, Nicolescu and Nicolae, 2012).
IT system Human resources 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 Luminiå£a Nicolescu
The use and the integration of the new IT technologies in the current activities of SMES, ensures the development of communication, promotion, advertising,
such as new ways of working and of organizing activities differently within the company (human resources, marketing) †ways that do not necessarily involve large investments,
Department of Enterprise, Trade & Employment Department of Enterprise, Trade & Employment 23 Kildare Street, Dublin 2, Ireland Telephone:+
provide a framework in which we bring the skills of the future into today†s workplace.
naiste and Minister for Enterprise, Minister for Science, Trade and Employment Technology and Innovation Dr Jimmy Devins Innovation in Ireland 2008 Innovation in Ireland 2008 Contents Introduction:
Partnership and Workplace Innovation 29 10 Competition and Better Regulation 31 Conclusion 33 Innovation in Ireland 2008 Innovation in Ireland 2008 1 Ireland is recognised internationally as a stable
including the development of new or enhanced products and services and the introduction of new business models, new organisational structures or new work practices.
business innovation is often incremental and built on the day-to-day expertise of employees and their thorough knowledge of customers and competitors.
and Innovation at the Department of Enterprise, Trade and Employment and the Department of education and Science.
in 2006,15. 5 percent of Ireland†s science and technology employees aged between 25 and 64 were born outside Ireland,
and dependants of these researchers to apply for work permits and, ultimately, permanent residency. The Government also provides funding for attracting researchers into Ireland through Science Foundation Ireland and the Programme for Research in Third-Level Institutions.
and it is expected to identify further measures that will entice leading foreign researchers to work in Ireland.
It also works with companies to raise their awareness of the importance of R&d in the sustainability of the enterprise,
It works closely with the research institutions to ensure that intellectual property arising from publicly funded research is protected
Better skilled and better educated employees are good for the economy as a whole and for the firms that employ them.
The agreement envisages a concerted effort by employees and employers to increase levels of workplace learning and upskilling.
Lifelong learning Education and training can no longer be seen as a phase that individuals go through before their career starts;
it must be integrated into career development, and continue throughout the working life. Adult and Further Education Programmes are targeted at providing second-chance education opportunities
and training designed for early school leavers and others who are disadvantaged educationally or lack basic skills.
The National Training Fund will provide opportunities for people already in employment to be given improved access to training,
Sean Haughey, TD, coordinates the lifelong learning agenda across both the Departments of Enterprise, Trade and Employment and Education and Science.
non formal, workplace and community settings, and is designed to ensure access, transfer and progression for learners.
National Skills Strategy to 2020 The Expert Group on Future Skills Needs report, Tomorrows Skills:
Upskilling 500,000 people in employment by at least one National Framework of Qualifications level; Increasing the participation rate in upper secondary education to 90 percent;
Improved career guidance for those in employment; Promoting the recognition of prior learning and accreditation for skills acquired outside the formal learning environment;
Government funding for upskilling those in employment has increased significantly in recent years, from â 8 million in 2004 to â 70 million in 2007.
which provides financial supports for training employees. It is focused particularly on the needs of people in low-skilled occupations.
Skillnets, which is led an enterprise support body dedicated to the promotion and facilitation of learning as a key element in sustaining Ireland†s national competitiveness.
The provision of individual learning accounts funded jointly by the State, employers and employees; Improving arrangements for employee training leave;
Tax incentives; and Brokerage systems to help companies source appropriate training. Innovating through the Structural Funds Structural funding,
and in particular, the European Social Fund (ESF), has presented always opportunities to pilot innovative approaches to upskilling, training and new employment areas.
provides a testing ground for new ways of integrating marginalised groups into the workplace and of upskilling those already in employment.
such as lawyers, licensing executives and tax experts conversant with the management of IP portfolios. Raising awareness The Patents Office is the public institution charged with implementing the national patents, trademarks, copyright and design regimes.
and it works closely with several County and City Enterprise Boards (CEBS) to raise awareness of IP issues among entrepreneurial start-up companies.
Court-appointed experts enable complex IP issues to be dealt with expeditiously. This flexible and innovative approach by the Commercial Court is consistent with Government policy of ensuring IP rights are respected fully
and least expected Services and Emerging Sectors Innovation in Ireland 2008innovation in Ireland 2008 International financial services Financial services have become more important as a source of both wealth generation and employment in Ireland.
The skills profile of immigrant workers in many cases exceeds that of the resident population. They can make a material and positive impact on future social and economic growth.
supported by the European Social Fund and Skillnets, helps alleviate this through the promotion of entrepreneurship in ethnic minorities
Essentially, this has involved the Government working together with trade unions, business and employers, farming organisations and community and voluntary bodies to determine key aspects of economic and social policy.
National Workplace Strategy Social partnership fosters innovative activities and practices to ensure the continuing transformation of the workplace in Ireland.
a National Workplace Strategy is a blueprint by the National Centre for Partnership and Performance (NCPP) aiming to transform Irish workplaces.
The Strategy takes a coherent and integrated approach to workplace development and focuses on actions to stimulate workplace change and innovation, within a social partnership environment.
The key message of the National Workplace Strategy is that the quality of Irish workplaces is critical to Ireland†s transition into an even more dynamic, highly skilled, innovative and knowledge-based economy.
In particular, the Strategy identifies the need for more organisational innovation and related improvements in workplace cultures to complement
and service ongoing innovation in products and processes. The future of work Partnership and Workplace Innovation Innovation in Ireland 2008 30 Workplace Innovation Fund The Workplace Innovation Fund helps companies build a stronger commitment to workplace innovation.
It is administered by Enterprise Ireland in collaboration with the NCPP and has three main strands: A public awareness campaign:
The National Centre for Partnership and Performance aims to bring the concept and practice of workplace innovation to a wider national audience.
Support for capacity building: This aims to enhance the capacity of the social partners to build a stronger commitment to workplace innovation and change.
Promotion of innovation at enterprise level: This focuses on companies who are seeking to leverage workplace innovation to improve their competitiveness and productivity.
The Workplace Innovation Fund is a unique opportunity for SMES to receive financial support for projects seeking to develop partnership and participation within the workplace leading to productivity improvements, improved performance and employee well-being.
This positive approach to the management of innovative change through partnership builds on over twenty years of experience that will equip Irish workplaces to deal with future challenges.
Innovation in Ireland 2008 31 Competition fuels innovation The pressure to be competitive drives innovation across the range of business practice;
and, conversely, innovation is a key driver of competitive advantage. With greater competition in markets, companies need to draw on all their entrepreneurial and innovative skills to develop new products and services,
Government and union representatives, is driving implementation of these recommendations; this is focused on five areas: taxation, health and safety, environment statistics, employment and company law. 33 h Innovation in Ireland Summary 2008 33 Innovation in Ireland 2008 Conclusion Tracking
our Progress Throughout this document, we have identified the depth and breadth of innovation activity taking place in Ireland,
OECD figures for eleven OECD countries suggest for example that â€oehigh-growth enterprises†account for between only 2 and 8 per cent of all enterprises with 10 or more employees,
Many empirical studies have shown the aggregate relationships between entrepreneurship and SME activity and economic growth and job creation.
These growth and job creation effects happen through innovation as new firm creation and SME growth increase productivity and bring new
) There is also an important link between new and small firm activity and job creation, as new and small firms take up labour released by downsizing elsewhere in the economy and increase national and local competitiveness (Neumark et al.,
Stangler and Litan (2009) for example show that from 1980-2005 nearly all net job creation in the United states occurred in firms less than five years old,
This job creation function of entrepreneurship and SME development is of great relevance to the recovery from the global financial
and services and increasing efficiency but also for meeting the job creation challenge of high unemployment. In the short to medium term there is a real opportunity for governments to use policies for entrepreneurship
and SME innovation to meet productivity and job creation objectives at the same time. There is growing, if still insufficient
One of the reasons for its arrival has been the out-sourcing of standardised production from high-to low-labour-cost countries
and entrepreneurship that have made them essential drivers of innovation, growth and employment creation. The major feature of the knowledge economy is increased the importance of knowledge as a factor of production.
This is what is seen now generally by economists to be the major factor behind the bulk of economic growth, the growth that is not due to additions to capital and labour stocks.
External ideas for innovation can come from many places †from collaborations with universities and other firms or business angels, from labour mobility among firms and organisations and from informal social capital contacts.
The implementation of new organisational methods in firms†business practices, workplace organisation and external relations can have substantial impacts on firms†competitiveness
ENTREPRENEURSHIP AND INNOVATION Â OECD 2010 29 make a major difference, such as changes in product design or packaging, product placement, product promotion or pricing.
For example, it may involve SMES in tracking competitors†actions through electronic monitoring of news and information services or the introduction of total quality management techniques on the work floor.
and data is not commonly available for non-technological innovation as a proportion of firm employment or turnover.
For example, for SMES, the use of knowledge-intensive service activities offered by consultants and other firms often brings new non-technological ideas into the firm with respect to business practices,
workplace organisation and marketing (OECD, 2010a, forthcoming. Another issue is that whereas technological innovation tends to be associated more with manufacturing,
if needed, help round up teams of engineers and other key staff from other firms. Engineers and other key staff may shift as groups,
The managed economy was a mass production society based on stable employment in large firms and a central role of unions and employers in regulating the economy and society in partnership with government.
The social contract included regulation of labour markets and a strong welfare state. The reduced power of large firms and unions,
and arguably the reduced capacity of government to raise taxes in an era of mobile capital,
and labour market flexibility increased the strain upon it. Social entrepreneurs and social enterprises such as nonprofit organisations have stepped into this breach (OECD, 2003;
At the same time many address problems of unemployment and the social problems of poor neighbourhoods. This is of great relevance in the current post-crisis context in
but is also about employment. As unemployment rates rise, it is critical that new firms are able to enter
and grow so that recent job destruction is balanced by job creation in the short to medium term.
i e. comparing innovation rates per employee not per firm (Audretsch, 1995). On the other hand, there is a strong suggestion that SMES are associated particularly with bringing forward so-called breakthrough innovations.
Furthermore, some empirical work casts doubt on a general characterisation of small firms as breakthrough innovators and large firms as incremental innovators (Chandy and Tellis, 2000.
using and interacting occurs on the job as employees face ongoing changes that confront them with new problems
labour market regulation, finance markets and intellectual property protection. OECD research shows for example how unbalanced taxes on company profits
the creation of jobs in SMES in response to an aggregate demand stimulus or targeted employment
l High-employment-growth firms. One of the contributions of new firms and SMES to the economy is breakthrough innovation.
They make up an important component of the high-employment-growth firm sector. Facilitation and support for breakthrough innovation in this group may promote both innovation
Examples of relevant policy approaches include creation of science parks and business incubators, encouraging mobility of staff between universities and industry,
but also through informal methods such as the creation of problem-solving work teams and engagement with external knowledge intensive service activity providers such as consultants (OECD, 2010a, forthcoming).
ENTREPRENEURSHIP AND INNOVATION Â OECD 2010 41 example through embedding of foreign direct investment, attraction of highly-skilled labour from overseas and building cross-national SME alliances.
They may be imparted through school education, universities and vocational training colleges. Training in SMES is also very dependent on relationships with the public sector
and there is a particular SME skills gap among older and routine workers. These problems need to be addressed.
focused on improving the welfare of individuals and communities through employment, consumption or participation. The social entrepreneur is an agent of social innovation but not the only one.
as measured by employment, are enterprises with average annualised growth in employees greater than 20%a year over a three year period and with ten or more employees at the beginning of the observation period. â€oegazellesâ€,
as measured by employment, are enterprises which have been employers for a period of up to five years,
with average annualised growth in employees greater than 20%a year over a three-year period and with ten or more employees at the beginning of the period. 2. See also NESTA (2009). 3. The OECD/Eurostat Entrepreneurship
Indicator Programme is developing internationally-comparable indicators of entrepreneurship based on this definition. Bibliography Acs, Z. and D. Audretsch (1990), Innovation and Small Firms, MIT Press, Cambridge MA.
Acs, Z.,D. Audretsch, P. Braunerhjelm and B. Carlsson (2004), â€oethe Missing Link: the Knowledge Filter and Entrepreneurship in Endogenous Growthâ€, Centre for Economic policy Research Discussion Paper No. 4783, Centre for Economic policy Research:
High-Growth Firms and their Contribution to Employment in the UK, NESTA, London. Archibugi, D. and S. Iammarino (1997), â€oethe Policy Implications of the Globalisation of Innovationâ€, University of Cambridge ESRC Centre for Business Research, Working Paper 75, ESRC
Daviddson, P.,L. Lindmark and C. Olofsson (1999), â€oesmes and Job creation during a Recession and Recoveryâ€, in Z. Acs, B. Carlsson and C. Karlsson (eds.
Challenges and Key Issues for Future Actionsâ€, Commission Staff Working Document (2007) 1059, European commission DG Enterprise and Industry, Brussels. Galbraith, J. 1972), The New
Job creation by Firm Ageâ€, Small Business Policy Branch, Industry Canada, Ottawa. Haltiwanger, J. 1999), â€oejob Creation and Destruction by Employer Size and Age:
Cyclical Dynamicsâ€, in Z. Acs, B. Carlsson and C. Karlsson (eds. Entrepreneurship, Small and Medium-Sized Enterprises and the Macroeconomy, Cambridge university Press, Cambridge.
Implications for Innovation Policyâ€, Report to the European commission, Directorate General Science, Research and development, Brussels. Malecki, E. 2008), â€oehigher Education, Knowledge Transfer Mechanisms and the Promotion of SME
Building Inclusive Economies, OECD, Paris. OECD (2002), High-growth SMES and Employment, OECD, Paris. OECD (2003), The Nonprofit Sector in a Changing Economy, OECD
UK public policy and open innovation Charles Levy and Benjamin Reid September 2011 The Big Innovation Centre is an initiative of The Work Foundation and Lancaster University.
UK Public policy and open innovation Executive summary •A financial and investment ecosystem which looks to support business as it grows,
a major initiative from The Work Foundation and Lancaster University, will examine how the UK can position itself to be a major global innovation hub in 2025.
Open innovation and its implications will be a key theme informing all the Centre†s areas of work. 4 Missing an open goal?
and new employment opportunities) then the nature of these cash flows is increasingly important for government growth and economic policy.
and investigation undertaken by the Big Innovation Centre, a groundbreaking new initiative from The Work Foundation and Lancaster University.
It is down to employees to select which internal idea to research, develop and ultimately bring to market these knowledge packages.
nuclear reactors, mainframe computers Largely internal ideas Low labour mobility Little venture capital activity Few, weak start-ups Universities unimportant Examples of industries:
PCS, movies Many external ideas High labour mobility Active venture capital Numerous start-ups Universities important Source: Chesbrough (2003) With open innovation such a widely deployed term for describing organisational activities,
which the airline works with its suppliers to promote innovation, which often saves KLM money in the long term.
Amazon has developed a world class capability for processing product information and customer preferences through its IT infrastructure and specialist staff.
and the expert staff which support it, are the key element of Amazon†s business model.
The Work Foundation, http://www. theworkfoundation. com/research/publications/publicationdetail. aspx? oitemid=290 21 Missing an open goal?
†A sequence in the adoption of open innovation, starting with customer involvement, following with employee involvement,
In reality, the blanket mandating of openness (or closedness) doesn†t work: university activities to support development of innovation,
there are fundamental and systemic issues with how such markets for knowledge and knowledge enterprises work.
The Work Foundation and Research Republic, http://www. theworkfoundation. com/research/publications/publicationdetail. aspx? oitemid=223 23 National Endowment for Science, Technology and the Arts (2010) Open innovation:
++o+XVI Organised diffusion+++o/++Education policy XVII General stimulation+++XVIII Entrepreneurship education+o o o Labour market policy XIX Aim for flexibility+o
†The new division of labour between industry, government and academia will witness less basic research inquiry being conducted inside corporate research laboratories.
As The Work Foundation outlined in a recent report to the Independent Commission on Banking,
Many organisations at this scale appear to struggle to draw value from the knowledge that leaves their organisations.
A submission from The Work Foundation to the Independent Commission on Banking, London: the Work Foundation 31 See, for example, Clausen, T. and Rasmussen, E. 2011) †Open innovation policy through intermediaries:
the industry incubator programme in Norwayâ€, Technology Analysis and Strategic Management, Vol. 23, No. 1: 75-85 37 Missing an open goal?
As noted within the recent Work Foundation report on high-growth businesses, overcoming systematic weaknesses in UK management
but as we argued in a recent Work Foundation†s report, this sector needs continued support and investment,
along with a steady increase in the supply of highly skilled labour. 33 32 Levy, C.,Lee, N. and Peate, A. 2011) Ready, Steady, Grow?
The Work Foundation 33 Sissons, A. 2011) Britain†s Quiet Success Story: Business Services in the Knowledge Economyâ€, London:
the Work Foundation, http://www. theworkfoundation. com/research/publications/publicationdetail. aspx? oitemid=287 38 Missing an open goal?
The Big Innovation Centre, a major new initiative from The Work Foundation and Lancaster University, will be driving forward this analysis and commentary.
The Work Foundation and Research Republic, http://www. theworkfoundation. com/research/publications/publicationdetail. aspx? oitemid=223 42 Missing an open goal?
The Work Foundation, http://www. theworkfoundation. com/research/publications/publicationdetail. aspx? oitemid=290 Lichtenthaler, U. 2011) †Is open innovation a field of study or a communication barrier to theory development?
The Work Foundation, http://www. theworkfoundation. com/research/publications/publicationdetail. aspx? oitemid=287 Tidd, J.,Bessant, J. and Pavitt, K. 2005) Managing Innovation:
UK Public policy and open innovation Acknowledgements This report is a publication from the Big Innovation Centre, an initiative from The Work Foundation and Lancaster University.
UK Public policy and open innovation Big Innovation Centre The Work Foundation 21 Palmer Street London SW1H 0ad info@biginnovationcentre. com www
. biginnovationcentre. com www. theworkfoundation. com Contact details All rights reserved  Big Innovation Centre (The Work Foundation and Lancaster University.
The Work Foundation, 21 Palmer Street, London SW1H 0ad. Registered address: Landec Ltd, University House, Lancaster University, Lancashire LA1 4yw.
FORFÃ S EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 1 EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS AND ENTREPRENEURSHIP 2 Table of contents Executive Summary 3 1 Background
Active Labour market Schemes in Finland 149 Appendix II: Grant Evaluation 151 Appendix III: Forfã¡s Board members 154 Appendix IV:
FORFÃ S EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 3 Executive Summary Background Programme of Evaluations for Enterprise Supports The Department of Jobs, Enterprise and Innovation (DJEI
and employment) and capability building in the areas of productivity, management and skills, internationalisation and transformational change.
the County Enterprise Boards and those programmes delivered by SFI that have a'touch point'with enterprise 2 Informed by research conducted by Indecon Consultants 4 Evaluation of Supports for Entrepreneurship
There is a positive and robust correlation between entrepreneurship and economic performance in terms of growth, firm survival, innovation, employment creation, technological change, productivity increases and exports3.
and to stimulate sustainable economic growth and job creation. Market failure involves a number of different factors.
Ireland†s Enterprise Policy Context and Challenges Relevant strategies over the period of review reflect the importance of supporting start-up companies as a means to stimulate economic growth and employment.
and high levels of employment to a situation where unemployment now stands at 14.2 per cent,
including Strategy, Finance, Research & development, Marketing, Human resources and Production. Enterprise Ireland†s funding contribution is primarily in the form of equity toward the implementation of a business plan9.
The evaluation found that the impacts from the HPSU package of supports are very positive in terms of survival, sales, exports and employment.
HPSU supported firms were shown also to be particularly resilient to the recession in terms of employment compared to firms generally.
Turnover per employee increased over the period 2004-2010 by 114.8 per cent (turnover in 2010 was circa â 256 million for all 199 HPSU clients supported over the period.
Regardless of the year of entry to HPSU, there is generally an upward movement in employment per active firm.
in that the recession of 2008 onwards has had little overall impact on employment per plant11. This compares favourably with the comparator group that saw a decrease of 10.9 per cent in employment per plant over the period 2004-2010.
A Cost Benefit Analysis (CBA) was conducted over a 7 year period for each of the 2005 and 2006 cohorts to establish the impact to the wider economy.
primarily preference shares 10 All Irish owned firms surveyed annually through the ABSEI 11 Enterprise Ireland firms started between 2000 and 2006 with 10 employees
NPRF) FORFÃ S EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 15 Work with the private sector to ensure the availability of funding from other sources for key sectors that are not appropriate for venture capital investment.
including employment, exports etc. The Department of Jobs, Enterprise and Innovation should be cognisant of the financial return to the State through EI-Partner funds28.
employment and feasibility study grants and equity. A survey of CEBS revealed that 44 per cent of management training (excluding SYOB courses)
The economic value of the CEB soft supports depends somewhat on the prevailing economic environment and unemployment levels.
In times of high unemployment, these CEB activities stimulate the use of surplus resources, creating additional wages, profits and tax revenues.
and leaves little scope to make any material savings. Accordingly it is recommended that the level of resources devoted to SYOB supports through the CEBS be maintained at least;
Rationale for interventions †Findings The period from 2004-2008 was characterised by low levels of unemployment
and a steep rise in unemployment. The need to focus on productivity enhancements, innovation, knowledge and skills acquisition,
and job creation has remained also constant, and has been reflected in government policy and enterprise supports over the entire period.
and start-ups-through from the CEB supported micro firm that generates employment, to the High Potential Start up that demonstrates greater potential for growth within a relatively short time period.
There is a positive and robust correlation between entrepreneurship and economic performance in terms of growth, firm survival, innovation, employment creation, technological change, productivity increases and exports36.
Research by the OECD shows a positive correlation between the entry rate in a given industry and average labour productivity levels37,
and to stimulate sustainable economic growth and job creation. In general, companies that emanate from entrepreneurial activity are the feedstock for future employment and growth.
The different market failures and enterprise objectives demand different policy responses. For example, information deficits may be addressed by interventions that provide information to entrepreneurs.
In periods of high unemployment, government intervention may be triggered to address the risk that some individuals may become long-term unemployed
Thus, the turnover and employment levels of new firms, export and productivity performance together with their longevity are indicators of a successful entrepreneurial performance. 1. 2 Ireland†s Enterprise Policy Context
and Challenges Relevant Government strategies over the period of review reflect the importance of supporting start-up companies as a means to stimulate economic growth and employment.
Unemployment increased from a level of 4. 5 per cent in 2004 to 13.7 per cent in 2010.
and is scheduled for completion Oct/Nov 2012 22 industry and average labour productivity levels. This should be borne in mind in terms of resource allocation to entrepreneurship programmes.
in Ireland with the capacity to sell innovative products and services in world markets Foster job creation across the regions of Ireland Promote the growth of new sectors with sustainable competitive advantage Inputs Enterprise
Increased turnover Increased employment High survival rates 26 2. 1 Evaluation Aim The aim of the evaluation is to assess the appropriateness
so for up to 6 years after hiring its first employee FORFÃ S EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 27 Potential Scaling companies;
Growth and Scaling Divisions work with the client to achieve â 1m, â 3m and â 5m, â 20m,
and services in world markets in order to foster job creation across the regions of Ireland, promoting the growth of new sectors with sustainable competitive advantage, providing for growth in exports and employment in Ireland.
The evaluation of the programme†s impact focuses on the annual levels of turnover, exports, employment and survival rates between 2004 and 2010 for all firms receiving HPSU supports between 2004 and 2006,
as well as in absolute terms), employment, and a comparatively high survival rate. From a methodological point of view, the ideal way to measure 28 the counterfactual
For employment we use the population of Enterprise Ireland start-ups from 2000-2006 with a minimum of ten employees for comparison45;
More recent policy documents emphasise the importance of returning to an export-led growth model and sustainable job creation.
turnover per employee is a more appropriate comparator metric, as absolute turnover and growth in turnover would be expected to vary dramatically between the two groups 45 Start-ups dating back to 2000 were selected as a more robust comparator group to reflect the fact that companies can be trading for some years before receiving HPSU supports FORFÃ S
1. 6 Employment 1. 9 2. 8 3. 4 Equity-Ordinary shares 11.6 10.9 7. 0 Equity-Preference shares 59.8 64.2 64.1
28,001, 699 The HPSU team works closely with the Investment Services Division of Enterprise Ireland to identify suitable third party funding for start-up companies.
Strategy, Finance, Research & development, Marketing, Human resources and Production. Financial and nonfinancial supports are provided to companies with a business strategy that encompasses all elements required for business success. FORFÃ S EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS
and the Annual Employment Survey that are published annually by Forfã¡s. There are also performance reviews that take place.
and the Enterprise Ireland overseas team works closely with companies to achieve another major milestone, getting to â 1m in sales. 2. 8 Impacts & Outcomes Turnover Total turnover for all
Total Turnover (2004,2005 and 2006 HPSUS) In terms of turnover per employee, for all HPSUS the rate of increase was 114.8 per cent between 2004 and 2010;
Turnover per Employee, HPSU clients 2004-2006 and ABSEI Comparator Group In order for a more robust comparison with the comparator group, turnover per employee is the most useful metric,
as it controls for the often low levels of employment in start-ups, overcoming some of the selection bias that arises with HPSUS (mostly new firms) vis-Ã-vis the ABSEI group (mostly established firms).
In terms of turnover per employee (Chart 2. 5), for 2004 HPSUS this climbed 145 per cent between 2004 and 2010;
2006 2007 2008 2009 2010 ABSEI Comparator Grp X as%of Sales All HPSUS 40 Employment HPSUS (2004-2006 entrants) appeared to be more resilient in employment
terms during the period of the recession than the comparator group (Enterprise Ireland firms started between 2000 and 2006 with 10 employees or over) 47.
a significant company started in 2004 with 114 employees and grew to 250 employed in 2005
Employment (2004,2005 and 2006 HPSUS) 2004 2005 2006 2007 2008 2009 2010 Employment 895 1, 711 1, 840 1, 994 2
, 169 1, 969 2, 086 Employment Yr on Yr Growth 91.2%7. 5%8. 4%8. 8%-9. 2%5. 9
Employment (2004,2005 and 2006 HPSUS) Regardless of year of entry to HPSU, there is generally an upward movement in employment per plant.
in that the recession of 2008 onwards has had little overall impact on employment per plant (Table 2. 10). 47 Start-ups dating back to 2000 were selected as a more robust comparator group to reflect the fact that companies can be trading for some years
so for up to 6 years after hiring its first employee. The chart below outlines how survival rates for the HPSU 2004-2006 cohort are consistently higher than all comparator groups †this is also true for each individual sectoral group.
employment has grown generally steadily, and survival rates are also above national average. Importantly, the proportion of overall funding committed to companies who do not ultimately survive (18.6 per cent) is lower than the attrition rate for the HPSU population (19.1 per cent;
with the development of viable HPSUS achieved that show excellent performance in terms of survival, sales, 46 exports and employment in a high number of cases.
Enterprise Ireland only funds the salary stipend of the entrepreneurs with A high Potential Start-up (HPSU) proposition, that have left employment (have been made redundant
and plan Inputs Organisation and hosting costs Promotional activities Consultant fees Outputs 18 events staged 3 times a year,
The programme is usually run 3 times a year, over 6 weekends (Friday evening and Saturday morning) by third party consultants, taking place either in Enterprise Ireland regional centres or nearby hotels.
Average salary of all enterprise Ireland employees involved was calculated and then weighted depending on the estimated time spent delivering the support.
The programme executives pre-vet the participants for each session †the aim is to restrict the number per session to 15.
as is the time commitment required on the part of Development Executives. Over the two years 44 HPSUS/pre-HPSUS have been created,
Inputs Financial commitment of â 2m in annual funding from Enterprise Ireland to the Business Innovation Centres (BICS), Projects are referred to the BICS by Regional Development Executives and Development Advisers
Projects are referred to the BICS by Regional Development Executives and Development Advisers following agreement with the HPSU Validation Unit.
average salary level was established from the employees of the agency working on the project, this figure was adjusted then by the estimated amount of time the 59 Towards Developing an Entrepreneurship Policy for Ireland,
and Consultant fees (PA. Outputs Number of participants, Number of investor ready business plans,(Phase II as proxy) Number of HPSUS.
Outcomes & Impacts Increased numbers of innovative start-ups and companies, Increased exports and employment in participant start-ups and companies, Increased numbers of business/technology ideas successfully developed and commercialised as a result of participation
This evaluation builds on the work completed by Grant in order to provide findings and conclusions on the appropriateness,
and entrepreneurs whose companies will provide the employment of the future†as a key element of supporting economic recovery and growth.
and that supporting entrepreneurs and start-ups has a key role to play in Ireland†s return to sustainable growth and job creation.
the amount of employees involved and the estimated amount of time the team spent delivering the support.
Propel Recruitment and Selection Criteria Senior manager with 5 years plus experience &/or graduate Participant proposals should have a significant market opportunity,
The selection panel is made up of strategic business development experts from Enterprise Ireland and PA Consulting.
monthly one to one sessions with industry experts, as well as financial support provided through the Commercialisation of Research & development (CORD) fund64.
The same supports were offered with some additional services available such as one to one meetings with sector experts.
Based on the participant figures above the recruitment to Phase I for both Propel One and Two was marginally below the target of 25;
Expor nts Propel O luation of th/technology employment essful develo did assess the nd provides d ain some opt ent:
increased exports and employment are difficult to measure at this point. However, one of the key deliverables for Propel is the number of participants that progress to become HPSUS.
Consultant fees. Partner HEI contribution. Outputs Number of participants †industry and academic, Sectors and technology areas covered †aligned to enterprise and research base,
Activities Sectorally based networking events, Presentations by industry experts on commercialisation strategies, growth opportunities etc, Structured networking,
and commercialised based on the Ideagen events ultimately leading to increased employment and exports. Increased take-up of supports to promote enterprise development. 82 7. 1 Evaluation Aim The aim of the evaluation is to assess the appropriateness, efficiency and effectiveness of the Enterprise Ireland Ideagen Programme.
and were unable to find new employment. As a result, significant numbers of people were engaging with Enterprise Ireland
As such collaboration with academic and/or enterprise partners is often essential to realise the full potential of innovative business ideas in terms of economic growth and job creation.
and experts on the one hand and on the other to facilitate researchers with innovative ideas to meet up with entrepreneurs who can potentially help them develop and commercialise these ideas.
Salary costs contain the average salary of all the agency employees involved which is weighted then by the amount of time the project leader estimates was spent administering soft support services such as organisation of events,
Presentations by industry experts on commercialisation strategies, growth opportunities etc; Structured networking; Brainstorming sessions; and Information sessions †enterprise and research supports etc.
Each event begins with a presentation from the industry expert from Enterprise Ireland who highlights the trends
They arrange the speakers and facilitators for each of the events and work with the Higher education Institutes
and are still in contact with their Regional Executives in Enterprise Ireland. 7. 8 Findings
the Seed Capital and Business Expansion Schemes (recently replaced by the Employment Investment Incentive scheme) and R&d tax credits as well as direct firm level interventions-aimed at supporting the emergence and development of high potential companies.
and over US$3. 1 trillion in revenue in the United states representing 11 per cent of private sector employment and 21 per cent of GDP (2010 data).
The calculation is based on the aggregation of salaries for all staff levels in the first instance.
and the number of agency employees involved in providing the support as determined by the team leader.
Potential for growing and developing business operations in terms of added value/turnover and sustainable job creation; Capacity to use funds for additional investment;
& VC fund managers and sectoral experts who are responsible for raising financing from the private sector, making all investment decisions (based on eligibility criteria) and the ongoing management of investments.
ging business experts with tional growt s to form lar e and the cre and Cumula gramme 2010 mpanies to s As such, VC a to companie s a strong ro
Over the medium to longer term, there are also real and positive impacts associated with the programme in terms of employment,
including employment, exports etc. The Department of Jobs, Enterprise and Innovation should be cognisant of the financial return to the State through EI-Partner funds107. 105 Gilson, R. J.,2003, â€oeengineering a Venture capital Market:
Training Management Development Finance Mentoring Enterprise Education Enterprise Promotion Outcomes & Impacts Increased number of Start-ups Increased number of entrepreneurs Increased employment Higher
unemployment and low economic growth in Ireland. It was recognised that micro enterprises (employing 10 or less people) could be a valuable source of employment and economic growth,
and that at that time, there was a gap in the provision of state supports to those enterprises.
Current Costs which covers employee, rent/property and running costs. It is important to acknowledge that the greater proportion of this relates to staff costs (c. 70 per cent)
Measure One Grants-which facilitate the provision of direct financial supports to firms by way of capital, feasibility and employment grants;
Measure Two Grants †which covers other costs including the provision of entrepreneurial and capability development through education, training, mentoring, awareness raising and promotion.
Employment grants to meet part of the cost of taking on additional staff. At least 30 per cent of the grants given by a CEB have to be refundable by the recipient.
8, 411,542 8, 190,364 9, 562,910 8, 879,577 7, 040,898 Feasibility 405,859 393,148 351,970 413,044 520,302 622,412 Employment 2, 169,614
Management Development, Training, Mentoring, Enterprise Education and Promotion. These supports are directed at both new and existing businesses
, 689,632 Mentoring 1, 479,388 1, 580,737 Enterprise Education 1, 155,270 978,163 Enterprise Promotion 2, 468,936 2, 512,064 Other 2, 026,008
SYOB financial assistance delivered through capital & refundable grants, employment grants, feasibility study grants and equity grants;
which may be up to â 200 per course, with reductions for unemployed persons. Each CEB provides between five and ten SYOB 112 Comptroller And Auditor-General Report on the Accounts of the Public services 2010, Chapter 28:
and analysis undertaken by AECOM consultants, December 2011 FORFÃ S EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 123 courses per annum,
The OECD has established that a large fraction of aggregate labour productivity growth is driven by what happens in each individual firm,
Secondly, at times of high unemployment, where there are unused or underused resources in the economy, start-up activity may utilise surplus resources thereby creating additional wages, profits and tax revenues.
education and training initiatives be focused on the needs in the labour market. The concept of developing entrepreneurs through education and training was echoed again in Towards Developing an Entrepreneurship Policy for Ireland, 2007.
and established firms 121 Numbers of grant applications made under each of the grant categories (capital, feasibility, employment,
498,788 Employment 1, 738,684 1, 641,673 1, 624,415 1, 920,000 1, 749,567 2, 066,978 Priming 0 0 0 0 0
The total input costs (including related staff costs) were estimated as â 1, 335,806 for 2008 and â 1, 457,518 for 2009.122 For the purposes of this evaluation,
A business employing up to 10 employees; A manufacturing or internationally traded services business; A domestically traded service business with the potential to trade internationally;
or unemployed persons where the potential for deadweight and displacement is likely to be minimal. Eligible clients are awarded a Priming Grant within the first eighteen months of setting up the business.
Employment Grants were for up to a maximum of â 7, 500 per employee and a maximum of ten employee C Training & Management Development The CEBS provide Start Your Own Business, Management Development Training and Mentoring services.
Start Your Own Business Training This training is aimed specifically at those seeking to or in the course of starting up a new business.
with reductions for unemployed persons. Each CEB provides between five and ten SYOB courses per annum, indicating that there are currently over 250 such courses offered annually on a nationwide basis 123.
ranging from business and financial planning to HR and employment law, as well as personal effectiveness and leadership management124.
Business Planning Development, Financial Planning and Management, Bookkeeping, HR Management, Market research & Promotion, Business & Employment law, Time Management & Life Work Balance, Sales and Marketing
, Taxation, Website development, Time Management & Life Work Balance, Personal Effectiveness and Leadership Management 130 half-day involvement covering basic skills or information
the vast bulk of the grants made were in respect of capital or employment projects.
Measure1 Projects by Type Business Expansion Priming Capital Employment Feasibility Feasibility/Innovation Preference shares Refundable Grant Aid Grand Total 2004 369 293
Active labour market programmes and market-driven programmes are considered also separately126. Scenario 126 The outcome of a programme targeted at entrepreneurship may be that of securing employment for unemployed persons
or helping individuals to start up a business 136 testing is used then to establish the extent to which the benefits of the SYOB Supports would exceed their costs under different deadweight scenarios.
Active labour market programmes †international review In Finland Start-up Grants (SUG) are provided by TE centres which aim to get people out of unemployment and into employment.
The grants are provided to unemployed people, who can demonstrate a solid business plan, for a period of 18 months at a rate of â 590 per month (in 2009).
The analysis found that around 80 per cent of participants were still in employment three months after cessation of the NEIS allowance.
With regard to the survival rate of businesses, there were at most 73 per cent of participants in self employment 12 months after cessation of NEIS allowance
while just 52 per cent were still in self employment 18 months after benefits ceased. The evaluation found that 73 per cent of †survivors†would have started a business without the NEIS scheme,
taking high deadweight and displacement effects into account, was an expensive mechanism for getting people into employment in terms of the cost per positive outcome (about $30, 000).
Key objectives of both schemes were to reduce unemployment and increase self employment. Evaluation of the deadweight impacts of both schemes suggests they were a success:
In conclusion and based on these preliminary investigations, business support tools to stimulate the labour market are generally a success in reducing unemployment.
However, these schemes often come at high costs, with relatively high levels of deadweight. 127 The Centre for Labour market Research.
or gaining employment without the support programme, they may have a tendency to believe that they would have succeeded without the support.
) programme UK 57%PA Cambridge Economic Consultants (PACEC)( 1993) Regional Selection Assistance (RSA) Scheme UK 21%Public & Corporate Economic Consultants
The Economic Journal, 90 (357). 1980 FORFÃ S EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 139 At times of high unemployment, where there are unused or underused resources in the economy,
however we have looked to job creation estimates for all grant aided firms as an indicator of the scale of impacts.
-which enabled us to derive an average employment for CEB grant assisted firms at 4 FTES134.
profits and tax revenues needs also to take account of the potential for labour market displacement. Our assessment has been informed by Forfã¡
profit and tax benefits should be reckoned in the context of tight labour markets135. Based on an average earned income of â 39,000 the annual value of these benefits is estimated at between â 12 million
and â 24 million depending on the level of employment created by grant aided start-up firm.
depending on a range of deadweight scenarios and average firm employment levels. Given the robustness of the mechanisms employed by CEBS in the assessment of applications of financial supports (outlined above),
and of 60 per cent is appropriate. 134 Based on 3. 4 full time employees and 1. 1 part time 135 Forfã¡
Annual Benefits-different Employment and Deadweight Scenarios (â m) Deadweight Average Employment per Firm 2 FTES 4 FTES â †000 per annum 60
Comparing the annual benefits to the fully loaded costs indicates that the least favourable scenario would mean that each firm supported would have had to deliver the employment benefits for a period of approximately 3 years
if cost benefit breakeven were to be achieved (based on 60 per cent deadweight and employment levels of 2 FTES per firm.
These calculations suggest that even allowing for a high level of labour market displacement in the period 2004-2010,
Number of Years Required to Pay back Measure 1 Support to Start-up Firms Deadweight Average Employment per Firm 2 FTES 4 FTES Years to Pay back-Measure 1 Grant (including indirect
Associated employment generated; and A brief outline of the sectoral spread. Progression to Start-up Participants of the SYOB courses are a cross-section of existing entrepreneurs who are in the start-up phase, self-employed persons, persons in employment, the unemployed,
and those outside the workforce. Table 9. 18: SYOB Participant Cohort SYOB Participant Cohort%Propensity to Start-up%In employment 38.2 54 Unemployed persons 35.8 47.5 Self-employed/proprietors 21.2 20.0 Outside the workforce
4. 8 37.5 Table 9. 19 sets out the impact of the course on participants by year they undertook the course,
Survey of SYOB Course Participants 2011 Table 9. 20 depicts the propensity of persons of different prior employment status to start a business.
Employees are most likely to start a business at 54.0 per cent, followed by unemployed persons at 47.5 per cent and those outside the workforce at 37.5 per cent.
The lowest propensity at 20.0 per cent relates to self-employed/proprietors, which includes entrepreneurs in start-up phase and
Propensity of SYOB Course Participants to Start a Business by Prior Employment Status(%)Prior Employment Status Self-employed/proprietor Employee Unemployed Outside the workforce All Propensity
With the current rate of unemployment and the existence of unused resources in the economy
Co-operation between CEBS in carrying out other administration and service functions could also ease the imbalance between the staffing of CEBS that has emerged following the moratorium on public sector recruitment.
The total headcount for CEBS declined from a peak of 151 staff in 2006 to 136 staff in 2010 mainly
because CEBS are prohibited from replacing staff by the government moratorium. When account is taken of part-time working,
the total staffing of CEBS in 2011 was 132.1 whole time equivalent staff, an average of 3. 8 whole time equivalent staff per CEB136. 136 Source:
In particular, because of reduced employment levels, labour productivity has shown a significant increase across a range of efficiency indicators.
Fà S†objectives in providing these courses relate to the labour market. If the course succeeds in bringing a person from a position of being unemployed
and out of the labour market to a situation where they are a proprietor of a business,
FÃ S has succeeded in its objective of progressing individuals to employment/self employment. Discussions with individual CEBS indicated that
Employees are most likely to start a business at 54.0 per cent followed by unemployed persons at 47.5 per cent and those outside the workforce at 37.5 per cent.
Some 46 per cent of supported firms are either providing personal and local services or are related in construction activities.
Turning to impacts on wages, profits and tax revenues, these additional impacts are likely to be relatively small in the period up to 2008, because of the low levels of unemployment and consequent high levels of labour market displacement.
This translates into potential employment levels of between 10,700 and 21,500 depending on the scale of employment in assisted firms
(and assumes employment of between 2 and 4 persons per firm). Comparing the annual benefits to the fully loaded costs indicates that even allowing for a high level of labour market displacement in the period 2004-2010,
financial aid for start-ups is likely to have paid at least its way in terms of wages, profits and taxes created.
The least favourable scenario would mean that each firm supported would have had to deliver employment benefits for a period of approximately 3 years,
or unemployed persons where the potential for deadweight and displacement is less. Any loose application of these exceptions could give rise to displacement potential.
leaves little scope to make any material savings. Accordingly, it is recommended that the level of resources devoted to SYOB supports through the CEBS be maintained at least;
which is t the funding employment that the pro employed. businesses, t han the Finn sses establish val. vival among Entrepreneur acts of the s a business r the funding.
the regardless of TS FOR STA rket Sch mployment a employment monstrate a e grant was
However, the impact on employment trends in the same period was positive. 137 www. praxis. ee/fileadmin/tarmo/Projektid/..
It provides an overview of participant views on the likely impact of the programme on sales, exports and employment growth.
and 3 other Enterprise Ireland staff making up the Propel Team Representative sample of Enterprise Ireland staff who work with HPSU/Cord
and 1 participant was on maternity leave. 23 participants completed the survey therefore a 92 per cent response rate was achieved.
for instance, using Enterprise Ireland Technical staff to complete a Technical Assessment during Phase I of the programme.
and provide training and funding as well as mentoring from industry experts, through a multistage workshop process.
The Gateway2investment programme works with entrepreneurs and/or researchers in high technology sectors that are seed past the stage and
and industry experts The High Growth Start-up Programme targets start-ups in high technology sectors and provides coaching
The Regional Attention and Action for Knowledge Circulation programme works to improve interaction and exchanges between SMES
s Publications Annual Employment Survey Forfã¡s April 2014 Costs of Doing Business in Ireland 2014 NCC April 2014 Annual Business Survey of Economic Impact Forfã¡
s March 2014 Regional Labour markets Bulletin 2013 EGFSN March 2014 Action Plan for Jobs 2014 Forfã¡
s July 2013 Global Entrepreneurship Monitor (GEM) 2012 Global Entrepreneurship Monitor July 2013 Annual Employment Survey 2012 Forfã¡
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