Concerns regarding Ireland's declining competitiveness as a business environment have been expressed in the Irish Small & Medium Enterprises Association's recently published Global Competitiveness Index.

According to the ISME report, high levels of bureaucracy, a relative lack of cost competitiveness, and poor access to finance for start-ups and growing businesses has led the Republic to drop in the Index's competitiveness ranking, from 25th place to 29th.

Commenting, ISME Chief Executive, Mark Fielding, observed that:

“Over the last 10 years Irish competitiveness has eroded dramatically, dropping from being the fifth most competitive country globally to the 29th. The Government’s response to date has been pitiful, with no coherent plans or policies in place to address this emergency situation."

He continued:

“With the impact of the bank crisis having a more dramatic impact on our economy than on our competitors’, it is obvious that we need to have a comprehensive and coherent national strategy to address the ever-widening competitive gap. The latest figures indicate that not only have the Government failed to address this issue but the problem is getting progressively worse. It is as if, not only can they not see a solution but our Government cannot even see the problem”.

And concluded that:

“The lack of access to credit, the regulatory and cost environment are among the biggest immediate threats to business, further undermining competitiveness. It is vitally important that these issues are addressed as a priority or we run the risk of continuing to sabotage our competitive position at the expense of the economy, businesses and jobs. We must reverse the current competitiveness trend, so that we are in a position to compete when the world economy eventually rebounds, as it surely will.”

In terms of access to financing, another recent poll, this time conducted by the Irish Venture Capital Association, revealed that many small businesses, within the tech sector at least, are increasingly turning away from the traditional loans and credit route and towards alternative financing options such as venture capital involvement.

According to the IVCA VenturePulse survey, Irish technology start-ups and expanding businesses raised EUR76mn in venture capital investment in the second quarter of this year, up 33% from Q2 2009.

The survey looked at funding raised from domestic and international venture capital funds, from AIB and Bank of Ireland seed capital funds, from Enterprise Ireland and from private investors including angels.

The IVCA figures showed that EUR57mn of the funds raised were for follow-on or expansion investment. Of this 45% was provided by Irish venture capitalists, with 55% provided through syndicated deals by international venture capitalists.