{"id":19193,"date":"2022-10-05T19:25:23","date_gmt":"2022-10-05T19:25:23","guid":{"rendered":"http:\/\/legalblog.ie\/?p=19193"},"modified":"2024-02-05T14:18:23","modified_gmt":"2024-02-05T14:18:23","slug":"industrial-policy-background","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/industrial-policy-background\/","title":{"rendered":"Policy Background"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Early_Years\" title=\"Early Years\">Early Years<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Telesis_Report_1982_Resonse\" title=\"Telesis Report 1982 &amp; Resonse\">Telesis Report 1982 &amp; Resonse<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Response_Late-1980s\" title=\"Response Late-1980s\">Response Late-1980s<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Culliton_Report\" title=\"Culliton Report\">Culliton Report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#1990s\" title=\"1990s\">1990s<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Loans_Grants\" title=\"Loans &amp; Grants\">Loans &amp; Grants<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Other_Support\" title=\"Other Support\">Other Support<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Former_Forfas\" title=\"Former Forfas\">Former Forfas<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Sfadco\" title=\"Sfadco\">Sfadco<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/industrial-policy-background\/#Sfadco_Transfer\" title=\"Sfadco Transfer\">Sfadco Transfer<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Early_Years\"><\/span>Early Years<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In earlier decades, the IDA (established in 1949 as the Industrial Development Authority) concentrated on traditional labour-intensive industries. In the 1970s and 80s, its focus changed to more advanced technologies, including electronics, pharmaceutical and chemical industries. \u00dadar\u00e1s na Gaeltachta was established in 1979 with responsibility for industrial (and certain other policies) in Gaeltacht areas.<\/p>\n<p>Until 1981, incentives were restricted to manufacturing businesses. Initially, the principal incentives were by way of capital equipment and employment grants. 1981 legislation provided for employment grants for services undertakings in key sectors.<\/p>\n<p>Financial incentives have always included grants and subsidies. They were generally limited to a percentage of the asset concerned. Other incentives included grants for training, research and development, feasibility and craft development.\u00a0 Formerly, factories owned by state agencies were rented at reduced rates or offered rent-free incentives.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Telesis_Report_1982_Resonse\"><\/span>Telesis Report 1982 &amp; Resonse<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The so-called TELESIS report prepared for the NESC in 1982 concluded that incentives should be made available on a more selective basis. It recommended the establishment of integrated projects incorporating marketing, research and development, as well as manufacturing operations. It recommended that the Agency should favour foreign companies who are prepared to source raw materials locally and establish links with domestic firms.<\/p>\n<p>The 1984 White Paper on Industrial Policy recommended that the objectives of policy should include<\/p>\n<ul>\n<li>maximizing employment and value added by manufacturing and international services industries;<\/li>\n<li>developing strong and internationally competitive industrial sectors;<\/li>\n<li>integrating foreign industry into the Irish economy with greater linkages with industry and education.<\/li>\n<\/ul>\n<p>It recommended that higher grants be awarded to key functions, such as research and development and marketing. Incentives and advisory services should be applied selectively, concentrating on internationally traded manufacturing and services industries, including, in particular, Irish firms.<\/p>\n<p>It recommended a shift in the use of State resources from fixed asset investment to technology acquisition and marketing, with priority to be given to attracting overseas companies to perform key business functions in Ireland. It recommended steps be taken to improve the business environment in order to increase competitiveness and profitability, including improvement of education and training and enhanced work and mobility measures.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Response_Late-1980s\"><\/span>Response Late-1980s<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In the wake of the report and white paper, the Industrial Development Act 1986 was enacted, which consolidated previous legislation and gave a framework for the proposals in the white paper.<\/p>\n<p>A review of the policy emphasised the assessment of value per job, \u00a0repayment and obtaining security for repayment of grants of projects which fail or fall significantly below their agreed targets. It contemplated that a parent guarantee may be required. It recommended that in certain cases, assistance should not be given by way of grant, but by way of equity, loan guarantee or deferred grants, subject to achieving targets.<\/p>\n<p>A major initiative in the late 1980s was the extension of the low (\u201cmanufacturing\u201d) corporate rate to include international financial services, carried on out of the Dublin Docklands area, computer services, ship repair and wholesale activities by the special trading house.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Culliton_Report\"><\/span>Culliton Report<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The 1991 Culliton report recommended limitations of grant aid. In relation to international FDI strategy, it recommended the fostering of clusters of related industries, which built on the national competitiveness strategy. For domestic industries, it recommended a shift from grants to an expansion of equity and joint venture capital by the relevant State agencies<\/p>\n<p>It recommended that the Department (of Enterprise and Employment) should focus primarily on industrial policy formulation and evaluation. A new agency for the development of indigenous Irish-managed industry was recommended in order to bring together, in a more integrated way, the development and support agencies provided by a number of agencies. It recommended that there should be a separate agency which should have as its exclusive function the marketing of Ireland as a location for international mobile investment.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"1990s\"><\/span>1990s<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Following the Culliton Report, The Industrial Development Act 1993 established IDA Ireland as a separate entity. Enterprise Ireland was established to deal with domestic businesses, and Forbairt was established to focus on policy and coordination.<\/p>\n<p>The Industrial Development Act of 1993 established Forfas and its agencies, Forbairt and Industrial Development Agency (Ireland).\u00a0 The functions formerly vested in the IDA in respect of domestic enterprises and the powers and functions of Eolas were vested in Forbairt. Forfas and the agencies were enabled to delegate their functions to other agencies from time to time.<\/p>\n<p>The Industrial Development Act 1995 authorised the agencies to form subsidiaries for a particular function. Forfas was given powers to invest or loan money in any entity subject to which conditions may be specified in a scheme drawn up by it.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Loans_Grants\"><\/span>Loans &amp; Grants<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Formerly, the State-owned Industrial Credit Corporation provided loan finance for new and existing small and medium-sized businesses. This included investment finance and working capital. It later became IIC Bank plc and was later acquired by Bank of Scotland.<\/p>\n<p>The IDA has provided a range of new industry grants, training grants, research and development grants, feasibility grants and subsidies. The IDA, in common with other industrial development agencies, has the power to guarantee loans and to invest and participate in companies. These powers have since been passed to Enterprise Ireland in the domestic sphere and in part to \u00dadar\u00e1s na Gaeltachta.<\/p>\n<p>Formerly, it exercised powers to pay grants for the purpose of reducing the rent of factory buildings for industrial purposes. Rent subsidies could be paid to the landlord or tenant. IDA had power to provide interest subsidy to industrial undertakings which qualified for fixed grants.<\/p>\n<p>It had the power to provide advanced factories and serviced industrial sites. IDA Ireland holds and manages a substantial property portfolio, including numerous industrial estates and business and technology parks.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Other_Support\"><\/span>Other Support<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Legislation in 1981 extended incentives to certain services. Sectors specified by the Minister included software development, technical and consulting, commercial laboratory services, research and development services, publishing services, international financial services and health care services.<\/p>\n<p>Provision was made for employment grants which would contribute significantly to regional and national development, would be commercially viable and have prospects for growth.\u00a0 Capital grants could be made available to meet part of the cost of purchasing and leasing eligible fixed assets, which might include laboratory, other premises and equipment. In each case, a percentage of the cost could be covered. \u00a0Training grants of up to 100% were made available.<\/p>\n<p>IDA (Ireland) may designate areas for the purpose of particular incentives. Local authorities may remit up to two-thirds of the rates applicable to the premises. This may be withdrawn if the agency certifies that the undertaking has failed to observe the requisite conditions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Former_Forfas\"><\/span>Former Forfas<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Forfas was the national policy advisory board for enterprise, trade, science, technology and innovations. It was formed under the Industrial Development Act 1993 and re-absorbed into the Department of Jobs, Enterprise and Innovation in 2014.<\/p>\n<p>Forfas had \u00a0a number of separate related functions:<\/p>\n<ul>\n<li>providing independent research and advice in the areas of enterprise and employment;<\/li>\n<li>ensuring coherent policies across development agencies;<\/li>\n<li>evaluating enterprise policy interventions;<\/li>\n<li>Providing research and administrative support to independent advisory groups, including the National Competitiveness Council, the Expert Group on Future Skills needs, the Advisory Council on Science, Technology and Innovation and the Management Development Council.<\/li>\n<\/ul>\n<p>Forfas also:<\/p>\n<ul>\n<li>accredits services of the Irish National Accreditation Board in relation to calibration and testing of laboratories;<\/li>\n<li>manages the national awareness program, including Discover Science and Engineering;<\/li>\n<li>provided shared corporate services for IDA Ireland, Enterprise Ireland and Science Foundation Ireland.<\/li>\n<\/ul>\n<p>Forfas advised the minister and Government in relation to industrial policy. The chief executive officers of IDA Ireland, Enterprise Ireland and Science Foundation Ireland were board members of Forfas. Forfas was supported by an executive and full-time employees. Forfas had three main policy divisions; a Competitiveness division, an Enterprise policy division, and a Science Technology and Human Capital division.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Sfadco\"><\/span>Sfadco<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Shannon Free Airport Development Company (later Shannon Development) was established in 1959 in order to facilitate commercial and industrial enterprises within the Shannon Airport area. At first, the company pursued its objectives by promoting industrial and aviation activities in Shannon Airport&#8217;s industrial estate and tourism in the surrounding area. Later, Shannon Development\u2019s roles extended to cover the Mid-west region comprising Clare, Limerick, North Tipperary and Southwest Offaly.<\/p>\n<p>The role of the agency was reviewed in\u00a0 2005, and its functions were realigned. It was given an enhanced regional economic development role with a particular emphasis on addressing the needs of the less developed parts of the Shannon region.<\/p>\n<p>It also retained responsibility for the Shannon Free Zone industrial park. The existing enterprise support functions carried out by Shannon Development in relation to both indigenous and overseas enterprises were assumed by IDA Ireland and Enterprise Ireland.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Sfadco_Transfer\"><\/span>Sfadco Transfer<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Industrial Development Act, 2006 and 2009 provided for the transfer of shares held by Shannon Free Airport Development Company in certain entities, to Forfas and to Enterprise Ireland. The legislation also increased the maximum grants permissible, broadly to \u20ac7,500. The designated areas under the 1986 legislation were defined as Cavan, Donegal, Laois, Leitrim, Longford, Louth, Mayo, Monaghan, Offaly, Roscommon Sligo and Westmeath.<\/p>\n<p>The Industrial Development Act of 2006 provides authority for the Minister for Enterprise, Trade and Employment, now the Minister for Jobs, Enterprise and Innovation, to transfer staff in Shannon Development to Forfas. There is a statutory guarantee of their pay, conditions of service and pension arrangements, which are not to be prejudiced by the transfer.<\/p>\n<p>In 2007, Enterprise Ireland took over Shannon Development\u2019s responsibilities in relation to indigenous industry in the Midwest. Shannon Development held shares in 28 client companies and the legislation transferred the shares to Enterprise Ireland, which succeeded Shannon Development\u2019s role under various shareholders agreements and other documents relating to the investments.<\/p>\n<p>The Industrial Development Act, 2009 provided for the transfer of shares held by Shannon Free Trade Airport Development Company in certain entities to Enterprise Ireland<\/p>\n<p>Shannon Development became part of Shannon Group plc in 2014.\u00a0 To emphasise a more commercially focused property remit, Shannon Development was renamed Shannon Commercial Enterprises Ltd, trading as Shannon Enterprises.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-19193\" data-postid=\"19193\" class=\"themify_builder_content themify_builder_content-19193 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Early Years In earlier decades, the IDA (established in 1949 as the Industrial Development Authority) concentrated on traditional labour-intensive industries. In the 1970s and 80s, its focus changed to more advanced technologies, including electronics, pharmaceutical and chemical industries. \u00dadar\u00e1s na Gaeltachta was established in 1979 with responsibility for industrial (and certain other policies) in Gaeltacht [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[270],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/19193"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=19193"}],"version-history":[{"count":9,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/19193\/revisions"}],"predecessor-version":[{"id":31443,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/19193\/revisions\/31443"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=19193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=19193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=19193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}