Low private funding 'curbs growth'
IRISH businesses have very poor access to loans and other private sources of finance compared to other markets.
A study by US multinational GE says that Ireland is in the bottom quarter of 25 markets studied in terms of access to private funding, like bank loans and venture capital (funding from firms whose main source of profit is investing in other companies).
In this category it was ranked alongside countries like Argentina, which defaulted on some of its foreign debt in 2002, Nigeria and Greece.
At the launch of GE's 'Global Innovation Barometer' yesterday, junior finance minister Brian Hayes said that Europe was "obsessed" with public sector investment, compared to the US where 75pc of all business funding comes from private sources.
Mr Hayes said to rectify this Ireland and Europe must promote other investors outside of banks and the State.
He said the nature of public procurement – where businesses compete to win state-funded projects – must change as "the cheapest price is not always the best" and the benefits of the State choosing smaller companies for such projects should be considered.
There must be more public-private partnerships when it came to investing, he added.
This approach was evident in Transport Minister Leo Varadkar's recently published ports policy, which repeatedly mentioned public-private investment as a key strategy for developing Ireland's ports.
Mr Hayes recognised that private investors wanted "certainty" but said that 60pc of all appeals on denied loans by Irish banks were overturned by the credit review office.
GE, which employs 2,200 people in Ireland, says the availability of capital within a country is a key factor in determining whether innovations make it to market.
Its survey found that the rest of the world is far more critical of Ireland's approach to business innovation than we are ourselves.