Manufacturing Sector is Key to Ireland’s Economic Success But Brixit and Digitisation Challenges Loom Large
The Irish manufacturing sector, which contributes 25% of GDP and employs over 44,000 people both directly and indirectly, is key to Ireland’s continued economic success, according to Pat Breen TD (pictured above), Minister of State with special responsibility for Trade, Employment, Business, EU Digital Single Market and Data Protection. However, manufacturers face two formidable challenges – Brexit and Digitisation.
“Having experienced significant job losses in the early part of the recession, employment in manufacturing has increased by over 35,000 over the last five years. This growth has occurred in all sectors, from engineering and ICT, to medical devices and pharmaceuticals, food & beverages and consumer & environmental goods,” Pat Breen pointed out while speaking at the recent National Manufacturing and Supply Chain Conference & Exhibition, held at the Citywest Convention Centre in Dublin, where he outlined the challenges and opportunities facing the manufacturing sector and the Government’s Brexit mitigation measures.
The Irish manufacturing sector currently encompasses 9 of the top 10 global pharma companies; 8 of the 10 leading global automation companies; 18 of the top medical technologies companies; while half of the country’s med tech companies are Irish-owned. Furthermore, the sector now has a wide range of technology-rich Irish companies that have expanded their reach throughout the world.
Pat Breen commented: “Let me assure you that my Department, and its agencies, will continue to support the growth of the existing manufacturing base and to better position Ireland to win new investments in manufacturing into the future. This will have a particular focus on driving Ireland’s investment in innovation and its skills capabilities.”
However, Irish manufacturing companies will not only be severely impacted by Brexit but also by the advances in disruptive technologies and digitisation that are occurring at such a rapid rate. “Companies’ capacity to innovate and respond to these changes will ultimately determine their future,” he remarked.
Investments in R&D in areas that support manufacturing activities have helped Ireland to become second in world rankings for research in nanotechnologies, immunology, and animal and dairy; and third in the world for materials science. “This is no mean feat for a country of our size.”
He elaborated: “But I want to see even more of our Irish SMEs helping to drive Ireland’s economic growth over the coming decade – and we are starting from a solid base. Indigenous enterprise is crucial to the economy, with Irish-owned enterprises accounting for over 90% of businesses in Ireland.”
Digitisation of manufacturing, often referred to as the 4th industrial revolution, is reshaping the global economy. “For Ireland to remain globally competitive, it is imperative for Ireland’s manufacturing base to develop knowledge and capability in digital transformation,” Minister Breen said.
In response to the challenge, the Government is investing heavily in Manufacturing Research and Innovation, through Science Foundation Ireland, Enterprise Ireland and IDA Ireland. Indeed, two new SFI Research Centres with a specific manufacturing focus have been established in the past 12 months.
Last year also saw the official launch of the Enterprise Ireland/IDA Ireland Irish Manufacturing Research (IMR) Technology Centre – a one-stop-shop where manufacturing companies, both multinational and indigenous, can collaborate to solve big manufacturing challenges in partnership with researchers in Ireland and the EU.
“Through Enterprise Ireland, we have also made significant early investments in the manufacturing technology area including the Dairy Processing Technology Centre; and the Pharmaceutical Manufacturing Technology Centre as well as a number of engineering and manufacturing-focused technology gateways. And more is planned.” The Minister added: “Our overall objective is to support the transition both of multinationals and indigenous companies in the manufacturing sector into high value manufacturing and to embed SMEs in the national and international supply chains of companies. This is a key pillar of the Government’s ‘Innovation 2020’ strategy.”
Brexit, which he characterised as the most significant challenge facing Irish enterprise in over 50 years, “will involve long term, structural and disruptive change that will have a significant impact on how business in Ireland is conducted in the years ahead.”
The range of activities undertaken by the Department of Business, Enterprise and Innovation, and its agencies to support the broader enterprise sector has been clearly set out in the publication titled ‘Building Stronger Business: Responding to Brexit by competing, innovating and trading’. This publication is available on the Department’s website.
“For those who may not yet have begun their Brexit planning, I would urge you, as a first step, to visit our website prepareforbrexit.ie where you can get relevant tools and information needed for contingency planning,” he said.
Recently introduced Government measures include a €300 million Brexit Loan Scheme to provide support and encouragement to businesses to face the challenges and to apply new and innovative business and marketing strategies. This will be open to eligible businesses with less than 500 employees from the end of March 2018.
The Department is currently exploring the possibility of offering a development loan scheme to help businesses invest over a longer period of time. The creation of a Business Advisory Hub to help businesses make informed financial decisions is also being explored. This would build on existing supports available from bodies such as Enterprise Ireland and Local Enterprise Offices.
In addition, the Department is targeting R&D funding through its agencies to support innovation in new products and processes which firms need to compete and grow. It is investing in the pipeline of the next generation of innovators through a new postgraduate researcher programme worth €7.5 million.
“We are determined Ireland will continue at the forefront of manufacturing innovation, providing rewarding and quality employment in all regions. The manufacturing sector has demonstrated its resilience and adaptability over the last decade and continued to grow strongly, and as we face the challenges and opportunities of the digital revolution in manufacturing and of Brexit and intense international competition for investment, I have every confidence that, working together, we can continue to succeed in international markets,” Pat Breen concluded.