Cork Chamber Economic Bulletin Issue 4 2018

Issue 4 2018

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

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 develop the 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

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

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.

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.

The hub itself is now home to 23 entrepreneurs and is fast becoming a second site location for a number of businesses such Cork Chamber Economic Bulletin contact: Michelle O’Sullivan, Public Affairs Executive e: michelle@corkchamber.ie / t: 021 4530132

CorkChamber.ie

2018

Q3

Economic Trends Survey Results

Executive Summary 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.

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.

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.

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

Joan Lucey, Vibes and Scribes.

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

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:

“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.

Responding Business The responding businesses represent a broad cross section of business sizes.

Micro Enterprise (2 - 10)

Between 11 - 50 Over 201

Sole Trader

8%

Between 51 - 100

28%

28%

6%

Between 101 - 200

10%

20%

They also represent of a broad range of sectors.

10% 6%

Science and Technology

9%

Tourism, Travel Culture and Arts

11%

Industry/ Manufacturing

Construction

0%

4%

Agriculture and Fishing

Multisectoral

4%

Transport

Representative Respondents

56%

Services

Business Confidence

recruiting talent Not

96%

Companies access new talent by:

Word

of Mo uth Social Media advert ising Linked In Recru itment Compa nies

4%

Business confidence for Q2 2018 was reported at 95%.

Turnover and Net Profit estimations Response Percent %

Decrease

No Change

Recru itm websit ent es

Increase

62% 52% 32%

30% 16%

8%

for Top 3 Challenges attracting talent to Cork ?

1 Housing Shortage

2 Low international awareness of Cork

Turnover

3 Income tax rates

12-month prediction

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

to Top 3 Threats Business Growth

Employment Outlook

1

Change to employee numbers over Q3 2018

3

8%

Decrease

38%

Stay the same

54%

Brexit

2 Skills availability

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.

Increase

Expected changes to employee numbers over the next 12 months

Confidence in the Irish economy

1%

Decrease

41%

Stay the same

58%

Increase

Number of businesses with vacancies advertised currently

Yes

51%

No

49%

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.

68% 32% 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.

Michael Lynch, Partner, KPMG in Ireland

Jobs and Development Announcements Quarter 3 2018 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

Budget 2019 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 reaffirmed 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 offering 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 specific 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 offering and encourage Irish businesses with Irish based owners.

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

Taxing Times From 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.

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Cork Chamber - Economic Bulletin

© 2018 KPMG, an Irish partnership.

15/10/2018 14:30