The inaugural Magnet Regional Business Barometer has found that 61 per cent of small firms in Ireland are optimistic about their prospects in 2015. Adding in those who don’t feel overwhelmingly positive or negative about how they think their businesses will perform throughout the year, and that number swells to 87 per cent.
Government politicians constantly refer to Ireland having the fastest growing economy in Europe, and this study suggests that the recovery is now starting to trickle down to small businesses.
Magnet Regional Business Barometer, 2015
The Irish economy is said to have grown by 5 per cent in 2014 - but a growing number of bodies including the European Union and the International Monetary Fund have questioned the validity of these figures. Given the complex nature of multinational corporations' dealings in the country it can be hard to measure how the country is performing.
In this context it is a particularly interesting time to ask key personnel in Ireland’s SMEs how they feel about the economy, and where they see their companies going in the next 12 months. Magnet CEO Mark Kellett says small firms play a crucial role in the rebuilding the Irish economy:
“SMEs are not just important because of the volume of jobs they account for. It’s the nature of that employment – and the fact that it’s spread across the country; that it’s community-based; and from our perspective as a cloud telecoms provider, that the digital divide is closing and not widening. ”
He broadly welcomes the trends shown by the research, adding that, “Despite the obstacles SMEs face with high operating costs, cash-strapped consumers and banks unwilling to lend; a clear majority are upbeat about what the year ahead has in store for them. That is good news for everyone working and living in this country.”
But Kellett warns this is not true for all of the country. The border region and the Midlands in particular are less optimistic about their prospects. Magnet thinks cloud technologies could be the key to bridging this regional gap and it is helping SMEs to bring their businesses into the cloud. There is hope that the early adoption of these technologies will make Irish businesses more competitive, and that it will help to break down the “rural/regional digital divide.”
The study reflects trends that have been seen in other sectors of the economy - the most prominent being a gap between business sentiment in Dublin and the rest of the country. It is clear from the figures that Dublin SMEs have been the first to feel the benefits of an upturn. The capital scores the highest in Magnet’s Economic Recovery Index (ERI), with 55.1 per cent of businesses feeling the economy is getting back on its feet.
In the closest region the ERI figure drops to 48.7 per cent - that is the Mid-East (Meath, Kildare and Wicklow). This suggests that Dublin’s neighbours are feeling some of the effects of the capital’s recovery. Dublin SMEs are also the most likely to invest in IT infrastructure; they feel the most positive about Budget 2015; and they rank highest when it comes to confidence in the actions their local authorities are taking to help the small business sector.
Interestingly, despite these promising indicators, Dublin SMEs are not the most positive about their overall prospects in 2015. The outlook is brightest in the Mid-West area (Clare, Limerick, North Tipp), with 73 per cent of small businesses feeling good about the next 12 months. The study finds that SMEs in the border region are feeling least optimistic, with only 16 per cent of businesses telling Magnet they felt that 2015 would see improved performance.
While the report is generally optimistic, it does suggest that SMEs feel the government could be doing more to help them. Magnet found a staggering 86 per cent of these businesses think the government does not offer enough support to SMEs, with almost 70 per cent saying they didn’t think their local authorities are doing enough either.
And when it comes to representations in the Dáil, some 30 per cent of respondents admitted that they did not know who their local TDs are. There seems to be an obvious communication problem between the sector and the state - almost 90 per cent of SMEs were unaware of government business and technology grants that are available to them. The study looks at two particular technology grants and finds that only 3 and 1 per cent of businesses had successfully accessed this funding.
“Our research has shown an appetite for SMEs to grow while reducing costs this year and doing that means moving more of what they do online into the cloud. We’re here to advise business not only on the best telecoms options available but also to facilitate accessing government funding available”
As the current Government runs for re-election on a ‘growth’ platform it would do well to engage more with Ireland’s SMEs - and to spread awareness regarding the incentives that are available to small companies who want to invest in new infrastructure.
As Kellett predicts, if small Irish companies can embrace cloud technologies, regional divides will decline - and the Regional Business Barometer will hit new heights in the coming years.
Magnet will be hosting regional breakfast briefings for SMEs based on the research in both February and March. To download the research and to be included on the events mailing list see magnet.ie
This research was carried out by Amarach Research, on behalf of Magnet. The full report is available at Magnet.ie - it offers full breakdowns of these findings.
Production of this article was supported by Magnet.ie
