THE FRIDAY INTERVIEW:Batt O'Keeffe, Minister for Enterprise, Trade and Innovation
BATT O'KEEFFE is 100 days into his brief as Minister for Enterprise, Trade and Innovation as he sits down to be interviewed by The Irish Times. "We've announced an average of 26 jobs per day in those 100 days," he says proudly.
The reshuffle that moved him from the Department of Education to Enterprise, and saw Mary Coughlan go in the opposite direction, saw innovation added to his title, and employment being removed. It was simply a confirmation that his administration sees innovation and the smart economy as the only show in town for Ireland’s recovery. It also confirmed that the Taoiseach expected him to take the lead on implementing the report of the Innovation Taskforce.
Just days before O’Keeffe took office, that group of senior business people, entrepreneurs and civil servants published a challenging report on how Ireland could be turned into an “innovation island” by 2020.
He acknowledges that people may be wondering when we will stop hearing talk about the Innovation Taskforce and start seeing some implementation but he is quick to list off the accomplishments and actions to date.
Some of the fiercest critics of the Government’s slow pace of implementation were the original members of the taskforce.
With the canniness of a natural politician, O’Keeffe appointed HP’s head of its Irish manufacturing sector Lionel Alexander, Iona Technologies co-founder Chris Horn and KPMG partner Anna Scally – all of whom warned the Government that it was in danger of squandering the opportunity if it did not act on the report to a “high-level implementation group” for the taskforce’s recommendations.
The committee has met once and he says will meet again before the Dáil recess.
“At that meeting we’ll be looking at the short term. We’re looking for proposals that can be done in the immediate term. After that, we are going to have to look at the capital budget because a lot of these things are going to require funding.”
He has just come from a meeting with the Taoiseach on budgets for the coming year where this was on the agenda.
“I think you can take it the Taoiseach regards this as the cornerstone of the Government’s policy,” he says. “It is his intention to have it implemented and funding will be provided for it.
“We have to find funding to bring it about because the jobs it is offering into 2020 are quite significant.”
The report suggested 117,000 jobs by 2020 was “at the lower end” of its projections, prompting critics, most notably economist Colm McCarthy, to suggest the report was pie-in-the sky stuff.
Far from failing to invest, O’Keeffe says, the Government will spend €40 billion on national infrastructure over the next six years. That is equivalent to 5 per cent of GNP which, he notes, is twice the European average.
He won’t break down where the money will go but acknowledges broadband is going to need investment.
“If we want to be the knowledge economy that we’ve set our sights on, obviously broadband is going to be central to that.”
Another key area he identifies, and which the taskforce said required urgent attention, is venture capital. He says “great progress” has been made in this area.
The Government first announced plans for a €500 million Innovation Fund to attract international VCs to Ireland back in December 2008. Since then the National Treasury Management Agency (NTMA) has been “road testing” the proposal with international investors. O’Keeffe says the NTMA had delivered its report and the Taoiseach has taken the lead on the initiative. He hopes to have “something significant” in place by the autumn. “There is quite a high level of interest,” he says.
Work is also proceeding on angel funding – investment from private individuals in early-stage companies who are not ready for VC investment. He estimates €10-15 million would be required so that the State could co-invest with the private sector.
He also says he will earmark €40 million between now and 2016 to increase the number of competence centres – which are focused on turning third-level research into concrete products – from six to 15, before his press handler quickly reminds him that such a commitment is dependent on budgets.
He highlights the need to reform the bankruptcy laws and says his Minister for Justice Dermot Ahern is drafting legislation in this regard. “I think the bankruptcy laws, when they were put in place first, it was to deal with the vagrants more than anything else,” he says. “What has happened with the downturn is that a lot of people are facing bankruptcy and the laws are just not suitable.”
As we speak, the bell sounds in his office to notify him that a vote is taking place in the Dáil.
IN OTHER COUNTRIES trying to claw their way out of the steepest recession since the 1930s, the Minister for Enterprise and Trade might have the luxury of concentrating on his brief, but in Ireland, O’Keeffe is just another TD making up the numbers of the slim Coalition majority. As a result, the interview continues as we walk across the road to Leinster House and side-step protesters concerned over the “immorality” of the Civil Partnership Bill.
With the global economic recovery gathering pace, driven by emerging economies, O’Keeffe is keen to reconfigure Team Ireland – the various diplomats and agencies that sell Ireland overseas.
Rather than simply focus on trade missions, which he admits opens doors for local Irish representatives from An Bord Bia to consuls, he wants to ensure the embassies and consulates become ongoing trade missions with local business people regularly invited in to be sold the benefits of doing business in and with Ireland.
O’Keeffe, who was a lecturer at Cork Institute of Technology before entering politics full time, could have expected to keep the education portfolio for the remainder of the life of the current administration, but he has taken to his new role with gusto.
When the interview resumes over coffee in the Dáil bar, O’Keeffe defends his party’s record. “We’ve been accused of not having a jobs strategy but obviously I’d reject that out of hand.”
As just one example, he points to the PRSI scheme which gives business a saving of about €3,000 a year in insurance costs if they hire someone off the live register before the end of this year. He is confident it can create about 10,000 jobs. O’Keeffe says the public finances first had to be put back in order and costs in the economy had to be reduced to make the State more competitive before job creation kicked in. He rattles off the statistics in a well-rehearsed manner: unit labour costs down by 5 per cent, rents and leases are down by 18 per cent, electricity is down by 5-10 per cent, while the cost of gas is 11 per cent less than the European average.
He has just met local authorities following concerns raised with him that charges to business have not fallen in line with the rest of the economy. While aware that the councils’ revenue base has been eroded, he has asked them to see what they can do to help businesses – for example, perhaps by giving businesses credits against charges for creating jobs.
The next group he intends to summon for a chat about high costs are “professionals” who, he says, have “not reduced their prices”.
NOT CONTENT TO let the Department of Finance take the lead with the banks, he has had senior management from both AIB and Bank of Ireland in to his office to discuss their level of lending to Irish businesses. So did he gave the banks a tongue-lashing?
“Straight talking, we call it,” he says with a smile. “In fairness, they seem to be responsive and they’ve indicated they’ll make the €6 billion available.” The latter is a reference to AIB and Bank of Ireland’s commitment to SME lending under the Government’s recapitalisation programme.
“We want transparency and businesses out there want us to have transparency. We want to have a paper trail so that the credit reviewer can actually establish the facts. If then, at the end of the day, banks are not performing as set out in their plans, it is an option for the credit reviewer to name and shame.”
He admits the Mazars report, commissioned by the Government and produced in conjunction with the Irish Banking Federation – which found four out of five loans were being approved – was only capturing applications that went through a formal process.
“Also someone could be looking for €200,000 and they might be offered €70,000 which wouldn’t sustain his business, but that would go down as approval.
“And any fella that went into the local branch and was told he hadn’t a chance in hell, that wasn’t recorded at all, so the true sight of what was happening was not there at all.”
Both he and his three junior ministers will meet small and medium businesses over the Dáil’s summer break to see if the situation has changed at all, but he is also conscious that the banks need to be given time to put their restructuring plans in order. “We were concerned that they were dealing with business people who were loyal customers in a dastardly fashion.”
In the meantime, he is planning a State-backed loan guarantee scheme tailored to high-tech, high-potential firms, which might have few tangible assets or collateral.
“We want to focus on those companies because those companies would have great potential into the future. This obviously has to be passed by the Department of Finance and the Cabinet before we can say we’ll have a loan guarantee scheme.”
O’Keeffe is not short of ideas and good intentions, but he is overseeing the Department of Enterprise at a time when jobs are being lost far faster than State agencies can replace them. His success will depend on whether he can secure money from the Department of Finance ahead of his Cabinet colleagues.
On the record
Name: Batt O’Keeffe.
Position: Minister for Enterprise, Trade and Innovation.
Age: 65.
Marital status: Married, with three daughters and one son.
Career: First elected in 1987, O'Keeffe has served as a TD and Senator for more than 20 years. Before his current appointment, he was minister for education and science, and before that, minister of state with special responsibility for housing, urban renewal and development at the Department of Environment, Heritage and Local Government.
He has also been as a member of Cork County Council.
Education: St Brendan's College, Killarney, Co Kerry. He attended University College Cork and graduated with a BA and higher diploma in education.
Interests/hobbies: Walking, reading and greyhounds.
