Issues for the Western Region’s SMEs

The WDC recently made a submission to the Seanad Public Consultation Committee on the important topic of Small and Medium Sized Businesses in Ireland.

In our submission we highlighted that the Western Region is a predominantly rural region with 65% of the population living in rural areas (outside centres of 1,500).  Trends in the location of FDI investments, especially in the period of the recovery, have shown increasing concentration in Ireland’s cities and their hinterlands, although this year has seen greater distribution (e.g. to Sligo) as Dublin’s cost of living and housing shortages drive multinationals to seek other locations. Regardless of this however, FDI is only one element of job and enterprise growth and is not the solution for the vast majority of the Western Region.  Therefore supporting the start-up, expansion and viability of Irish indigenous SMEs is at the core of both the region and Ireland’s future growth.

Indeed the important role of SMEs in regional development will be among the topics discussed at this Friday’s Regional Studies Association Annual Conference at IT Sligo, on the theme ‘City-Led Development & Peripheral Regions’.  International keynote speakers Professor Mark Partridge (US) and Dr Andrew Copus (Scotland) will be joined by academics and policymakers from Ireland to consider how (or indeed if) a ‘city-region’ regional policy approach can really bring benefits for peripheral regions and rural areas. Register now

SMEs in the Western Region

In 2016 there were 51,574 SMEs (under 250 persons) registered in the seven-county Western Region, and only 50 larger enterprises.[1]  Next week the WDC will publish a new WDC Insights publication examining enterprise data for the Western Region.

In our submission, we noted that SMEs located in the Western Region, including those in small and medium-sized towns, villages and rural areas, face some specific challenges:

  • Small local markets and distance from larger markets;
  • Poor transport connectivity (for staff and freight) with no motorway in the Western Region north of Tuam and often poor quality local and regional roads linking to primary and secondary routes;
  • Weaker broadband infrastructure (access and speed) constraining online operations;
  • Poor mobile phone coverage for voice calls and data;
  • Difficulties in identifying and recruiting suitably qualified staff, especially at senior managerial and technical levels;
  • Lack of regional seed and early stage venture capital funders;
  • Declining populations in some areas, especially in the economically active (and higher spending) age categories;
  • Reduced activity and footfall in smaller town centres with the growth of online retail and improved transport access to larger urban centres offering greater retail and service choice;
  • Isolation and lack of networking opportunities;
  • For SMEs based around Galway city, traffic congestion can be a major constraint;
  • SMEs in Border counties and throughout the Western Region currently face uncertainty regarding the implications of BREXIT. After March 2019 there may be very significant impacts on their businesses.  These smaller businesses are most vulnerable, lacking staff and resources to change and develop in response to changes in their commercial relationships with the UK.

The submission then goes on to set out some specific policy recommendations on access to finance, recruitment and retention of suitably qualified staff and infrastructure.

Read the full submission here.

Pauline White

 

[1] CSO (2018), Business Demography 2016

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About WDC Insights

WDC Insights is the blog of the Western Development Commission Policy Analysis Team. The WDC Policy Analysis team analyses regional and rural issues, suggests solutions to regional difficulties and provides a regional perspective on national policy objectives. Policy Analysis Team Members are: Deirdre Frost, Helen McHenry and Pauline White. We will all be posting here. You can contact us here, or use our firstnamelastname at wdc.ie Follow us on Twitter @WDCInsights
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