Business Irish

Sunday 25 June 2017

Disconnect over job numbers threatens Clune's patriot game

The founder of a rewards scheme aimed at luring foreign investors believes a truce with the IDA can save it, writes Dearbhail McDonald

Taxback founder Terry Clune. Picture: Damian Eagers
Taxback founder Terry Clune. Picture: Damian Eagers
Dearbhail McDonald

Dearbhail McDonald

Emmanuele Angione was strolling through Dublin Airport in October 2014 when a brochure was placed in his hand. The Italian entrepreneur and founder of WinMedical, a leading European wearable medical devices firm, spent his flight reading about a programme called Succeed in Ireland. Part of the ConnectIreland initiative created by Taxback founder Terry Clune, the IDA-supervised scheme offers a modest reward of up to €3,000 to members of the public, the diaspora or anyone else with connections to Ireland to introduce potential foreign investors to the idea of investing in Ireland.

Angione jumped at the chance to become one of Succeed in Ireland's almost 80,000 "connectors" that have been cultivated by ConnectIreland in 147 countries.

Within a year, Angione had convinced Alien Technology Transfer (Alien TT), a London-based consultancy to open a strategic operations centre in Dublin. Last June, Alien TT announced the creation of 19 jobs at its new Dublin office and Angione is fielding queries about relocating to Ireland from several UK-based SME's seeking to establish a European base in the wake of Brexit.

Now the scheme is lying in ruins.

The IDA and ConnectIreland are locked in a bitter dispute about the number of jobs created - the IDA says 527, ConnectIreland 1,046.

At the heart of the dispute is the IDA's verification process. The IDA has formally verified 527 jobs, but ConnectIreland claims it has not been credited for hundreds of jobs it says are already on the ground.

Financial rewards are only payable when the jobs are actually on the ground, with hundreds of connectors claiming they are owed monetary rewards for helping to create jobs that have yet to be verified by the IDA.

Several have sought legal advice on the issue.

Angione, who says he had a hugely positive experience with ConnectIreland, says the decision to shut down the Succeed in Ireland scheme is "madness".

"It is so shortsighted," says Angione who is working with SMEs in the UK and throughout Europe which are considering relocating to Ireland in the wake of Brexit. "It's stupid to shut down the programme," added Angione who lives in Dublin with his wife and two-year-old son. "So many SMEs in the UK need to access the single market now. They need to have offices in Europe and their best option is Dublin. I can't believe the short-sightedness behind the decision to shut it down."

The dispute has now escalated to the Dail.

Minister for Jobs, Enterprise and Innovation, Mary Mitchell O'Connor has ordered a review into the now-terminated programme and the parties are due to meet this week ahead of a looming formal arbitration process.

Last Thursday, a Fianna Fail TD told the Dail that ConnectIreland is delivering jobs at a fraction of the cost at which IDA Ireland is delivering jobs and asked if the Succeed in Ireland programme should be extended until that review has been completed.

"It is bringing in jobs and linking into a huge global network," said Niall Collins, Fianna Fail's spokesperson on Jobs, Enterprise & Innovation. "If we do not use every avenue we have to create employment, particularly through a scheme that creates jobs more cheaply than IDA Ireland does, we will cut off our nose to spite our face.

"There is a dispute between the operator and IDA Ireland, which is fine, but it does not merit not agreeing to continue the programme until the review concludes," added Collins. "The review could indicate that the process could be improved or changed but parking it on one side or discontinuing it would be very silly".

So, how did one of the most-feted arms of the State's Action for Jobs Programmes go so wrong?

It all started when Clune was invited to the Global Economic Forum to unveil his patriotic vision to generate more than 5,000 jobs through a success-only model to attract FDI to invest in SME's, particularly in rural areas.

Two-thirds of all of IDA-verified ConnectIreland projects to date have benefited 15 counties outside of Dublin.

Clune proposed to the Taoiseach and others at the forum a jobs scheme whereby the State would only pay ConnectIreland back when it created verifiable, sustainable jobs.

Clune ploughed €5m of his own investment funds into the non-profit scheme to get it up and running after successfully tendering to the IDA. "This doesn't make a penny and it was never established to make a penny, it's a patriotic initiative," Clune told the Sunday Independent.

Within a short space of time, the scheme leveraged huge goodwill, attracting support from the GAA, IRFU and FAI.

ConnectIreland was also supported with a stand at Dublin Airport and endorsements from high-profile business people such as Ryanair chief executive Michael O'Leary who profiled the initiative over a prolonged period in Inflight, the airline's magazine.

Clune, who met the IDA chief executive last Monday (the pair are due to meet again tomorrow) agrees that the relationship between the IDA and ConnectIreland - at its launch projected to bring in some 5,000 jobs - has morphed into a bad, albeit brief marriage.

But he still hopes to rescue the relationship before March 26 when all the programme's connectors will have to be informed their efforts are no longer required.

"Being an entrepreneur, I'm eternally optimistic that this situation is going to be resolved because it makes sense for Ireland," says Clune. "It does not make sense to close down this not-for-profit initiative."

"ConnectIreland has an enormous pipeline of companies which we are working with (952 companies in total) which will be allowed to wither and die. There are thousands more jobs which will be lost if this initiative is not continued."

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