The Department of Enterprise, Trade and Employment’s spend on ‘entrepreneurship and scaling’ has doubled as a portion of its expenditure.

Taxpayer-funded investment in regional development has been dramatically overtaken by direct support for entrepreneur-led small and medium-sized companies and startups , official figures reveal.

A review ahead of the Budget by the Department of Enterprise, Trade and Employment (DETE) of its capital expenditure over the period 2006 to 2020 shows that supports under the heading ‘Entrepreneurship and Scaling’, mainly from Enterprise Ireland, is now “the main focus for DETE in terms of annual investment”.

Entrepreneurship and scaling now consistently gets 33pc of the department’s annual spend, which in 2020 meant a package of loans, grants and equity of €199m.

That compares with €56m in 2006, which was equal to 17pc of that year’s industrial supports.

The 2020 tally included €34m allocated to seed and venture capital funding and €20m for high-performance start ups. 

The review looked at investment that was coming through its various agencies but not at  investments through other parts of the State, such as the Ireland Strategic Investment Fund ’s €42m investment earlier this year in the Collison brothers’ Stripe. That stake was linked to jobs via the payment company’s growing presence in Ireland. 

That’s because ISIF is part of the National Treasury Management Agency which ultimately comes under the Department of Finance. 

In contrast, the share of Government supports that were allocated to regional development was cut dramatically over the same period, falling from 30pc of spending in 2006, or  €97m, to just 6pc of the total in 2017 before recovering somewhat in 2019, when the €83m in cash terms accounted for 18pc of  investment that year.

Those dedicated regional funds are mainly made up of IDA spending on factory and office facilities to encourage foreign direct investment, traditionally a mainstay of industrial policy aimed at bringing jobs to areas.
Supports for innovation – including funding of research and development and Ireland’s contribution to the European Space Programme – has also become a significant area of annual spending.  

The paper says the shift in spending focus reflects Government policies which are aimed at the growth of SMEs and support for innovation and entrepreneurship.  

However it notes that other policy priorities, including green transition and digital transformation got consistently low shares of funding.

The data also shows the scale of various Covid supports – with capital from DETE schemes soaring last year to €1.2bn from 4470m in 2019, largely as a result of one-off aid.

Reporting: Irish Independent