Cork Chamber calls for National Cluster Policy · influence and enhance our advocacy activity as a Chamber of Commerce that works for you: “Public transport for Cork City to allow

Once again, we were left in no doubt of the value of this initiative to the regional economy. Instead we were left questioning why this initiative isn’t being replicated in towns rights across the region.

In Cork Chamber, we continue to advocate for strong regional growth and are leading an EU Interreg (RATIO) project looking at ways to increase the innovation potential of rural based SME’s. One of the central findings from our project research and work with European partners, is the value of clustering to businesses in rural environments. We have strong clusters established and developing in Ireland. What we need now is the policy framework to grow, support and developthe potential of these and future clusters for Ireland. As part of our work in Cork Chamber we have been calling for the development of a national cluster policy to support enterprise throughout the country.

Clusters don’t need to be overly prescriptive in their structure, they can be fluid and evolving, adopting a structure that best suits the business sectors, skills and target geographies. Put simply, the Oxford dictionary defines a cluster as a ‘A group of similar things or people positioned or occurring closely together’. From the business perspective it can relate to a geographic concentration of interconnected businesses, suppliers or associated institutions. Let’s refer to the earlier example of The Ludgate Hub. Here we have a community that has been enabled by technology. We have a working representation of what can be achieved when strong partners come together to

invest in communities. The Ludgate Hub has unlocked the potential for people to grow thriving businesses and partnership synergies unhindered by geography and offers a unique lifestyle away from the busier urban hubs without forfeiting any professional opportunities.

Step one is the enabling connectivity and supporting infrastructure. The Ludgate Hub has high-speed 1GB connectivity making the geographical location irrelevant. In the two years since the doors opened, the hub has been instrumental in facilitating the creation of 100 direct and 140 indirect new jobs in West Cork, making it possible for persons to relocate from Los Angeles, London, Vancouver, New York, Lithuania, Estonia, Germany, Pakistan and South Africa, as well as from across Ireland.

The hub itself is now home to 23 entrepreneurs and is fast becoming a second site location for a number of businesses such

as Teamwork.com and Dublin based xSellco. Overall, it is estimated that The Ludgate Hub contributes just under €13m per annum to the local economy, contributing to a sustainable and thriving community in West Cork.

Through any lens, this is impressive, and the Board and team of The Ludgate Hub are to be commended for their vision and determination to drive the success here. What we would like to see in Cork Chamber is Government commitment and support for enabled, connected hubs across strategic locations to facilitate the talent and enthusiasm of our regions to excel.

Ultimately on a national footing we need a strong policy framework to underpin and reinforce the potential of clustering. Cork Chamber remain committed to driving this agenda, to drive smart growth for our region.

Issue 4 2018

Cork Chamber Economic Bulletin contact:Michelle O’Sullivan, Public Affairs Executivee: [email protected] / t: 021 4530132

sponsored by

Representatives of Cork Chamber recently revisited The Ludgate Hub, Ireland’s hugely successful rural digital hub in Skibbereen, West Cork.

CorkChamber.ie

Oliver Farrell, The Ludgate Hub; Anne Phillips, The Ludgate Hub; Michelle O’Sullivan, Cork Chamber; Adrienne Harrington, The Ludgate Hub; Thomas McHugh, Cork Chamber; Sharon Corcoran, Cork County Council & Adam Walsh, The Ludgate Hub

Cork Chamber calls for National Cluster Policy

Economic TrendsSurvey ResultsQ320

18

The results of the latest Cork Chamber Economic Trends Survey are in. This, the third survey of 2018 shows the experiences of Cork Chamber members during July, August and September across a range of metrics, gathering information on financial experiences and asking your experiences of skills availability and recruitment in Cork.

As the complex tapestry of Brexit negotiations continue to weave slowly, the latest sees a willingness by the EU to extend the transition period for the UK in a bid to agree a solution that is practical and practicable for Northern Ireland, while maintaining the integrity of the Union. It is no surprise that Brexit has remained as your number 1 ranked threat to business growth.

However, with the pragmatism that so characterises Cork business attitudes, we report a rise in business confidence to 96%, steadily climbing since the beginning of the year. The Cork skyline continues to unveil new cranes and activity across the City, with planning for exciting new office, hotel and apartment developments being granted or lodged, and new jobs being created weekly. As a Chamber, we are immensely aware of the need to reinforce these opportunities for Cork with the necessary supporting infrastructure. We continue at local and national level to press for investment and measures to increase the supply of affordable, quality housing and rental accommodation, and a public transport network that meets the demand and which can grow and adapt with Cork.

Skills availability, attraction and retention are key to driving the sustainability of this growth and to maximising the opportunity. To match Cork’s ambition, international marketing campaigns such as WeAreCork are aimed at furthering Cork on the international map to business and talent. Attracting and retaining the right skills and experience are part and parcel of all growth stories, and Cork is no different.

We asked members about recruitment experiences. Responses indicate that the usual routes to source talent are through word of mouth, social media advertising, LinkedIn advertising, recruitment agencies and advertising via job’s websites. Members also indicate that international talent is sought from a broad range of locations and most frequently Europe, USA, South Africa and Asia (Philippines and Malaysia). The challenges identified for recruiting from abroad point towards the housing shortage, and Cork Chamber are through our ongoing government liaison committed to achieving progress in this area. Second to this, business members highlighted the amplified promotion of Cork on the international stage. When asked on the actions which Cork Chamber could be doing to

attract talent to the region, the resounding number 1 response centred on more international promotion of Cork. Again, Cork Chamber is 100% committed to this.

Below are a flavour of comments from members and which influence and enhance our advocacy activity as a Chamber of Commerce that works for you:

“Public transport for Cork City to allow the centre of the City to compete.”

Joan Lucey, Vibes and Scribes.

“Highlight the importance of reduced taxation on work and urgent requirement for accommodation.”

John Mullins, Amarenco Solar.

“More work on EU policy, and business awareness of the policies in preparation now which will affect them.”

Elizabeth Gavin, Eur Digital Village.

Executive Summary

RESPoNdiNg BuSiNESSThe responding businesses represent a broad cross section of business sizes.

Sole Trader

MicroEnterprise(2 - 10)

Between11 - 50

Between51 - 100

8% 28% 6%

Between101 - 200

10%

Over201

20%28%

4%Transport

9%Tourism, TravelCulture and Arts

11%Construction

10%Science andTechnology

6%Industry/Manufacturing

56%Services

Representative Respondents

0%Agricultureand Fishing

4%Multisectoral

They also represent of a broad range of sectors.

BuSiNESS CoNfidENCE

Business confidence for Q2 2018 was reported at 95%.

Not

96% 4%

In the coming 12 months, 73% of members indicate an expected increase in turnover, with 65% expecting an increase in overall net profit.

8%16%

32%

52%

30%

62%

Turnover

Resp

onse

Per

cent

%

Decrease No Change Increase

TuRNovER aNd NET PRofiT ESTimaTioNS

CoNfidENCE iN ThE iRiSh ECoNomy

32%68%

Brexit and skills availability have remained firmly placed in the top 3 threats over the last two quarters. While making a reappearance during Q2 2018, the availability of housing/ rental accommodation for employees has been replaced in Q3 by managing cashflow.

RECRuiTiNg TalENT

We thank members for their valuable input. Your participation in completing the Quarterly Economic Surveys is key in guiding our focus as we promote and advocate for an ever-thriving Cork region.

Threats toBusiness GrowthTop 3

1 Brexit

2 Skills availability

3

Challenges forattracting talent to Cork

?Top 3

1 Housing Shortage

2 Low international awareness of Cork

3 Income tax rates

Reflecting the responses from Q2 2018, experienced managerial level staff from across a range of sectors has been highlighted as the most difficult to fill vacancy type.

38%

Increase

Decrease

Stay the same

8%

54%

41%

Increase

Decrease

Stay the same

1%

58%

EmPloymENT ouTlook

49%

51%Yes

No

Change to employee numbers over Q3 2018

Number of businesses with vacancies advertised currently

Expected changes to employee numbers over the next 12 months

Word of MouthSocial Media advertising

Recruitment websites

LinkedInRecruitment Companies

Companies access new talent by:

12-moNTh PREdiCTioN

Cork Chamber - Economic Bulletin

Taxing TimesFrom tax, technology and talent to Brexit and business

– Taxing Times is your definitive guide to Budget 2019.

Download your copy at kpmg.ie

Focus. Clarity. Insight.© 2018 KPMG, an Irish partnership.

4432_Cork Chamber budget ad .indd 1 15/10/2018 14:30

Jobs and development announcements

July• Paradyn to create 40 new jobs in Cork and Dublin• EY creates 520 new jobs in Ireland (across Cork,

Dublin, Limerick, Galway & Waterford)• DataStax opens first Irish office creating 30 jobs

in Cork

September• Johnson & Perrott opens first phase of €15m

dealership cluster to deliver over 50 new jobs• Conversation Piece announces partnership with

Agility Communications expecting to create 10 new jobs across Cork and Dublin

• Biomarin International Ltd announced €37m investment, creating 51 new jobs

• HealthKit announced Cork as the location for new EMEA office creating 10 new jobs

• PwC announce office expansion & intention to hire 80 new staff

• Irish law firm Matheson open new office• Tyndall National Institute announce €7m funding

from EU, creating 40 new jobs

Quarter 3 2018

Budget 2019 was delivered against the backdrop of remarkable Irish economic performance in recent years. Having endured a serious economic downturn, Ireland is now enjoying robust economic growth, reaching full employment and ending government borrowing. It is a tribute to the surefootedness of Irish policy makers and to the discipline of Irish people, that this has been achieved.

The speed of our recovery is in no small part because Ireland is a competitive place in which to do business. In his budget address, the Minister for Finance again reaffi rmed commitment to Ireland’s 12.5% corporation tax rate, which has not changed in the past 20 years. This ongoing commitment is vital if Ireland is to remain internationally competitive. Foreign direct investment has and will continue to play a huge role in Ireland’s economic progress, but what about our domestic entrepreneurs and international talent?

Many will be disappointed that the Budget failed to include any substantial measures to improve the competitiveness of Ireland’s tax regime for domestic entrepreneurs or international mobile talent. Given that entrepreneurs can and do move location based on the taxation environment, we must ensure that our tax system off ering remains competitive and supportive for entrepreneurship.

Our ongoing economic stability requires safeguarding against any downturn in foreign direct investment. Businesses could be better supported with specifi c measures such as improving the existing capital gains tax regime for entrepreneurs, and the Special Assignees Relief Programme applicable to inbound workers, and to reduce Ireland’s relatively high marginal rates of income tax. This would complement our competitive corporation tax off ering and encourage Irish businesses with Irish based owners.

Find out what the budget means for you and your business at kpmg.ie.

Budget 2019

Michael Lynch, Partner, KPMG in Ireland