Executive Summary

Over the last 18 months, the COVID-19 pandemic has put considerable strain on societies across the world. In 2020, global economic output is estimated to have fallen by between 3.25% - 3.4%, which represents a far larger shock to economies than the recession in the wake of the global financial crisis. In the case of Ireland, the impact on economic output has been cushioned by multinationals based here, with real GDP growing by 3.4% last year. However, strong export growth, which was largely accounted for by a surge in pharmaceutical exports and continued strength in the IT sector, masked a decline in domestic demand as the economy was impacted by the pandemic. The level of State support over the course of the year was substantial to insulate businesses and workers from the worst of the pandemic. The cost to the State over the course of the year was €25bn which included €8.8bn of income supports via the Employee Wage Subsidy Scheme, its precursor the Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment.

The 2020 strategic plan for the Department was, therefore, impacted significantly with the onset of the COVID-19 pandemic. While the focus on Brexit preparedness continued as a major priority, the Department responded from an early stage across all aspects of our remit to support business during the pandemic. This included sectors in which the Department has not traditionally been involved and we engaged broadly in all areas possible to support business and the national effort. The Department played a major role in helping businesses during the crisis, by sustaining viable enterprises and jobs and giving companies extra assistance to reopen and stay open. On our regulatory remit, the Department worked to provide certainty and administrative flexibility for companies and measures were introduced to assist firms in responding to the challenge covering company regulation, health and safety, and workplace relations.

The Department also provided extensive economic analysis and advice to Government and worked closely with other Government Departments on a range of schemes to support business and wages, including the Temporary Wage Subsidy Scheme, the Pandemic Unemployment Payment, the Employment Wage Subsidy Scheme, the Restart Schemes, and the COVID-19 Restrictions Support Scheme other sectoral supports.

During 2020, the Department’s work entailed:

Assisting enterprise through stakeholder engagement, undertaking of analysis to assess the impact of the pandemic on the economy and through the development of a suite of initiatives including financial and non-financial measures and regulatory supports. Developing policies for workplace safety to provide assurance to employers, employees and customers and to enable businesses to remain open and to reopen safely during certain periods of the pandemic. Ensuring full continuity in the operations of the Department and enhanced delivery of its services, using technology to seek efficiencies and improve customer service.

Driving innovation to assist companies in responding to the pandemic with innovative products and solutions and in support of the national effort. Continuing extensive work to ensure a coordinated and coherent approach to Brexit across the Department and its Offices and Agencies including engagement across Government on Brexit readiness in preparation for all Brexit outcomes, including a no - deal. Future-proofing the economy and society for the twin transition to a sustainable low carbon economy and the acceleration of digitalisation. Working with our enterprise development Agencies, leading on creating and sustaining high quality enterprise and employment. Maintaining close and mutually beneficial relationships with the EU, the UK, and globally. C O VID- 19 RES P O NS E - A S S IS TA NC E FO R BUS INES S Working closely with our Offices and Agencies, our colleagues across Government and enterprise stakeholders, the Department participated in many cross-government groups to address key risks arising in the context of COVID-19. In the very early days, we supported the procurement and distribution of PPE and supply chain issues arising from the impact of the pandemic. A wide range of new policies and enterprise advisory and funding schemes were developed by the Department, agreed by Government and delivered rapidly. This included a suite of funding and advisory schemes for business, including new grant, liquidity and loan financing schemes to assist impacted businesses during the pandemic. Regulatory and legislative amendments to support companies were agreed and enacted, while major work was completed in relation to health and safety in the workplace.

Stakeholder Engagement The Department launched a new Enterprise Information Centre, a dedicated resource for information on the wide range of assistance available to business. The Unit was set up in March to deal with queries in relation to COVID-19 and was expanded to include Brexit information. The Centre responded to over 11,200 calls and emails in 2020.

The Retail Forumcontinued its focus on the developmental needs of the sector in 2020 and intensified its work on Brexit preparedness, including in the mitigation efforts necessary to minimise disruption to food supply chains and the impact of COVID-19 on the sector.

The Enterprise Forum on Brexit and Global Challenges, with representatives from the key business sectors and representative organisations, acted as a strong advisory body to the Department and met regularly throughout the year.

A new SME Growth Taskforce was established in 2020 to provide a platform for structured engagement between entrepreneurs, business representatives and Government in the delivery of a National SME and Entrepreneurship Growth Plan, which will map out an ambition long-term strategic blueprint beyond COVID-19.

The Labour Employer Economic Forum (LEEF), a forum for high-level dialogue between government, union and employer representatives on labour market issues provided invaluable information and advice, particularly in relation to workplace experience and health

and safety. Participants in this process included Ibec, the Irish Congress of Trade Unions, Chambers Ireland and the Construction Industry Federation.

A stakeholder engagement event for the National Economic Planwas convened by the Tánaiste in October to exchange ideas on the National Economic Plan, which will set out the Government’s guiding priorities and policy objectives for a sustainable recovery. The event was structured around three breakout sessions, addressing building resilience across our enterprises and sectors; an inclusive and balanced recovery; and future proofing our economy and society.

During 2020, the Department rolled out numerous focused communications campaigns on COVID-19 Business Supports, the Shop Safely Campaign and the Work Safely Protocol.

A new voluntary Code of Conduct between landlords and business for commercial rents, developed in consultation with relevant stakeholders, including Ibec, Retail Excellence Ireland, Chambers Ireland, Dublin Town and Irish Institutional Property, was published on 1 October 2020. The Code sets out a structured approach for engagement between both commercial landlords and tenants, based on their mutual interest in continuing to work together. Economic Analysis Extensive modelling and analysis were undertaken and three papers on Economic Considerations for Reinstating Economic Activitywere developed by the Department at phases one to three of the Roadmap for Reopening Society and Business. These papers were developed in conjunction with the Department of Finance and the Department of Public Expenditure and Reform and provided an assessment of the economic impact of the COVID - 19 pandemic.

Financial Supports The Future Growth Loan Scheme expanded in July 2020 to bring the total lending available under the scheme to €800m for eligible Irish businesses and the primary agriculture and seafood sectors to assist strategic long-term investment.

The SBCI-COVID-19 Working Capital Schemewas introduced in March 2020 as an immediate response to the liquidity challenges facing COVID-19 impacted SMEs and small mid-caps at the onset of the pandemic. Together with the Brexit Loan Scheme, €337.5m of lending has been made available to help the liquidity needs of SMEs, as of the end of 2020, through these two loan schemes. A further expansion is in progress to bring available lending up to €500m.

In March 2020, Microfinance Ireland responded quickly to the impact of COVID-19 with its COVID-19 Business Loan with reduced interest rates. It approved €27.4m in loans assisting 2,972 businesses, more than four times its loan level in 2019. In November, Microfinance Ireland also launched its Brexit Business Loan. The Microenterprise Loan Fund (Amendment) Act 2020 was passed through both Houses of the Oireachtas allowing for greater equity funding from the Government and for the Strategic Banking Corporation of Ireland (SBCI) to become a lender to Microfinance Ireland.

The COVID-19 Credit Guarantee Scheme was devised, legislated for and signed into law by the President in July to respond to Irish business needs for additional liquidity and to give stability to the SME lending market. With no portfolio cap and a state guarantee of 80 percent, loans of up to 5.5 years and €1m are available at reduced interest rates. After less than 4 months in operation, 1,890 businesses had drawn down funding worth over €98m by year end. This represents more than a 600% increase on the €14.8m drawn in the entirety of 2019 under the Credit Guarantee Scheme.

The Sustaining Enterprise Fundhelped to sustain business so that they can return to viability and contribute to the recovery of the Irish economy. Funding of €124m under the Sustaining Enterprise Fund helped sustain 418 companies and 17,710 jobs across the country.

Working with the local authorities, €685m was made available with over 108,000 grants through the Restart Grant and the Restart Grant Plus. This contributed towards the cost of re-opening or keeping a business operational and re-connecting with employees and customers.

Almost 1,000 companies were provided with funding to develop a robust financial plan through the COVID-19 Business Financial Planning Grant.

To develop their online presence through the Online Retail Scheme, 330 retailers were provided with grants in 2020, totalling €11.8m,

Schemes and programmes to deal with the changing external environment ensuring that they helped business in tackling existing and emerging economic challenges for business continued to be developed and adapted. The Business Continuity Voucher scheme, introduced in March 2020, provided vouchers for companies and sole traders to develop short-term and long-term strategies to respond to the initial COVID-19 pandemic and to plan for eventual recovery and reopening of the economy. The Trading Online Voucher Scheme offered skills training, mentoring and financial assistance to help small and micro - businesses to develop their ecommerce capability. The Microenterprise Assistance Fund targeted those micro enterprises that could not avail of existing government measures.

Regulatory Supports The Companies (Miscellaneous Provisions) (Covid-19) Act 2020 was enacted on 1 August 2020 and makes temporary amendments to ensure that 240,000 companies and 950 industrial and provident societies in Ireland can hold their Annual General Meetings and general meetings by electronic means. It also makes provision in respect of business solvency by increasing the period of examinership to 150 days and increasing the threshold at which a company is deemed unable to pay its debts to €50,000. DEVELO P ING P O LIC IES FO R WO RKP LA C E S A FETY The Department, in conjunction with NPHET, conducted a survey in May to determine business capability and capacity to physically implement COVID-19 prevention measures in the workplace. This provided insight into the needs of businesses seeking to enforce COVID-19 public health guidelines.

As a result of the Public Health restrictions imposed due to the COVID-19 Pandemic, a Government decision to partially reopen the economy from 18 May 2020 was accompanied by the introduction of the Return to Work Safely Protocol. The Protocol set out in a clear and comprehensive way, the steps and processes that businesses needed to take to mitigate the spread of COVID-19 in the workplace. It was developed on a collaborative basis, led by the Department and involving the Health and Safety Authority, the Department of Health and the HSE. The members of the Labour Employer Economic Forum were also heavily involved in working on and agreeing the Protocol.

The Protocol was revised and relaunched as the Work Safely Protocol in November 2020, still containing information and practical advice on a range of topics such as the management and control of outbreaks, selection of hand sanitisers, wearing of masks, ventilation of workplaces and symptoms. The revision brought together knowledge developed in these areas as the pandemic continued and it was considered important that the guidance reflected the most up to date public health advice available.

The Health and Safety Authority has acted as the lead Agency in co-ordinating compliance with the Work Safely Protocol. It has been helped in this role by inspectors from a range of other Government Departments and State Bodies (Workplace Relations Commission; Environmental Health Officers; Department of Agriculture, Food and the Marine; Department of Education; Sea Fisheries Protection Authority and Tusla). Over 24,000 COVID-19 inspections on compliance with the Protocol were carried out between May and the end of December 2020. This provided an assurance to employers and enabled businesses to remain open during the period of the pandemic.

The National Standards Authority of Ireland produced a suite of useful resource documents and guides to assist SMEs, particularly those in the retail sector, to get up -andrunning in advance of society reopening. These are easy to follow guides and provide clear steps on how retail operators can make their premises, staff and customers safe in a post- COVID environment. These included the COVID-19 Workplace Protection and Improvement Guide; the COVID-19 Retail Protection and Improvement Guide; and the COVID-19 Shopping Centre Recovery and Improvement Guide.

DEP A RTMENT’S O P ERA TIO NS IN RES P O NS E TO C O VID - 19 The work of the Department was significantly impacted by the COVID-19 crisis, with the Department shifting at short notice from a predominantly office-based operating model to full remote working for all but a minority of staff who were needed on site. This involved the successful deployment of over 800 staff, using a mix of laptops and desktops, to remote working. In addition, video conferencing services were ramped up substantially to facilitate ongoing collaboration between staff, particularly in light of significant increases in many workloads in response to the crisis.

The Department also responded early and quickly by redeploying many staff to other areas within the Department to ensure existing services and emerging areas of critical need were, and are, being appropriately supported.

In March 2020, the Employment Permits Sectionimplemented a COVID-19 contingency plan to ensure that the employment permit regime could continue to operate throughout the crisis with operations moving to a fully remotely environment. Operational practices were

adjusted to replace the paper-based elements of the service to allow for a fully online process. Agreement was reached with the Immigration Service Delivery in the Department of Justice to introduce, on a temporary basis, a type of ‘e-employment permit’. Employment permit applications from medical personnel were prioritised with over 4,490 granted from mid-March to the end of 2020.

At the Virtual Recognition Event for the Civil Service Excellence and Innovation Awards to formally recognise and showcase the initiatives developed in response to the COVID-19 crisis in a challenging and fast changing environment, the Department’s selected project was the Contingency Plan to Ensure the Continuation of Ireland’s Employment Permit System. The Offices of the Department submitted the WRC Remote Working Information and Customer Service lo-call phone service, and the Labour Court Virtual Courtroom. Other innovative projects included the Enterprise Information Centre and Remote Video Interviews.

Astaff survey conducted in June provided up-to-date data on staff needs and allowed for responsive actions to be taken. A COVID-19 Working Group was established to oversee progress on initiatives/activities related to Equipment and Ergonomics, Managing Staff Remotely, Health and Wellbeing, Communications for Teams and Remote Working now and in normal times.

DRIVING INNO VA TIO N Driving innovation for enterprise, and internally, continued as a priority in 2020.

Knowledge Transfer Ireland created a dedicated COVID-19 Non-Exclusive Royalty-Free (NERF) Licence, that is aimed at speeding up the dissemination of critical COVID-19 related intellectual property from Irish Higher Education Institutions to companies. The COVID-19 NERF provides cutting edge IP free of charge to organisations engaged in critical research and development activities for the sole purposes of diagnosing, preventing, containing, treating and/or minimising the impact of the virus.

During the year, the COVID-19 Products Scheme was developed under a European Commission Temporary Framework, allowing additional aid to be granted by EU Member States to companies developing or producing medicinal products used in the fight against COVID-19. The Products Scheme, which is delivered through IDA Ireland and Enterprise Ireland, allows for up to €200m in targeted State assistance to facilitate the research and development of COVID-19 products. These enable the construction or upgrading of testing and upscaling infrastructures that contribute to the development COVID-19 relevant products and assist the production of products needed to respond to the pandemic.

A total of 62 applications were received under Call 3 of the Disruptive Technologies Innovation Fundwhich will be evaluated for funding in 2021.

During 2020, 936 collaborative projects between companies and Irish Higher Education Institutes were helped by Enterprise Ireland as part of driving an increased focus on business development.

Within the organisation, through our ‘Innovate@ETE’ group, staff are encouraged to make positive changes to how we work and to the working environment. A Virtual Recognition Event for the Civil Service Excellence and Innovation Awards was held to formally

recognise and showcase the initiatives developed in response to the COVID-19 crisis in a challenging and fast changing environment.

In our adoption of the Declaration on Public Service Innovation, we continued to promote a culture of innovation in our organisation. As part of the Decade of Centenaries commemorations, we organised ‘The 23 Kildare Street Talks - The Countess,Casualties and The Civil Service’, a series of short lectures on the revolutionary period between 1919 to 1923.

The Department continues to play a central role in leading Action 6 of ‘Our Public Service 2020’ with the aim to ‘Promote a Culture of Innovation in the Public Service’. Secretary General Dr Orlaigh Quinn and Enterprise Ireland CEO Julie Sinnamon act as designated leads, and Assistant Secretary Pauline Mulligan is the Action’s Sponsor, chairing the Action 6 team comprising sectoral experts across the Public Service.

P REP A RING FO R BREXIT In 2020, the Department continued its extensive work to ensure a coordinated and coherent approach to Brexit across the Department and its Offices and Agencies including engagement across Government on Brexit readiness in preparation for all Brexit outcomes, including a no-deal. This included intensive engagement with the Department’s stakeholders to assist businesses to get Brexit ready by end 2020. This work involved Ministerial engagement through key stakeholder groups such as the Enterprise Forum on Brexit and Global Challenges and the Retail Forum as well as with the Department’s enterprise and regulatory Agencies.

A C C ELERA TIO N O F DIGITA LIS A TIO N Ireland rose to 6th place on EU Digital Economy and Society Index 2020 and 1st place on integration of digital technology and is the fastest growing digital frontrunner on the index and a key measure of national competitiveness. The first national platform legislation - the Platform to Business Regulation - was signed into law in July 2020 via S.I. No. 256/2020 - European Union (Promoting Fairness and Transparency for Business Users of Online Intermediation Services) Regulations 2020. The Competition and Consumer Protection Commission has been designated as the Irish enforcement body for the Regulation.

Comprehensive national cross government submissions were developed on the EU Digital Services Act and the Digital Markets Act packages and reflected in the EU Commission’s proposals.

A comprehensive cross government national submission was developed on the EU Artificial Intelligence Whitepaper and in line with other digital frontrunner Member States.

Work commenced on the development of the national Artificial Intelligence (AI) Strategy which will be launched in mid 2021. The Strategy will outline a vision for Ireland to be an international leader in using AI to the benefit of our population, through a people-centred and ethical approach to AI development, adoption and use.

TO WA RDS A S US TA INA BLE LO W C A RBO N EC O NO MY The Department actively engaged with the Government’s Climate Action Plan 2019, its governance processes and has monitored progress and provided input into the development

of the economy-wide Long-Term Strategy outlining Ireland’s net-zero 2050 target. It committed to further Departmental and cross agency climate actions for the interim period to the development of Climate Action Plan 2021 and work commenced on the contributions from the Department to Climate Action Plan 2021.

The Department participated in discussions with the European Commission on the enterprise aspects of the Commissions reference scenario which will form the basis of Ireland’s national effort-sharing target following the increase in EU ambition to reduce greenhouse gases by 55% by 2030.

Research was undertaken into technologies that could be adopted in specific sub-sectors of the manufacturing sector to reduce emissions and in the context of the development of sectoral targets, analysis was conducted to quantify CO2 abatement if investment in these technologies occurred over the period to 2030. It progressed the Department’s actions from the Climate Action Plan 2019 regarding those applying to the food/drinks and cement sectors and inputted to the quarterly published progress reports on the Climate Action Plan on actions including those undertaken by IDA Ireland, Enterprise Ireland, Science Foundation Ireland and NSAI. Throughout the year the Department provided analysis and policy input into matters relating to climate action policy and ensured consideration of competitiveness impacts in policy options.

S UP P O RTING JO B C REA TIO N TH RO UGH O UR A GENC IES Enterprise Ireland Job creation closely matched the performance in 2019, with 16,496 new jobs created in Enterprise Ireland supported companies. However, in a challenging year, with a significant COVID-19 impact, job losses increased to 17,368 which resulted in net job losses of 872 in client companies. Total employment in Enterprise Ireland supported companies was 220,613 at the end of 2020. 65% of total employment was outside Dublin.

IDA Ireland IDA Ireland performed strongly in 2020 with client companies creating 20,123 gross new jobs on the ground. The net gain was 8,944 additional jobs. Total foreign direct investment employment in Ireland at the end of 2020 stood at 257,394, the highest ever number employed in the multinational sector, exceeding targets set by Government contained in IDA Ireland’s Strategy – Winning: Foreign Direct Investment 2015-2019. Of the 246 new investments won in 2020, 128 (52%) were in regional locations.

Local Enterprise Offices During 2020 the Local Enterprise Offices (LEOs) focused on assisting business owners to identify the initiatives available to them to respond to this unprecedented crisis and help them keep their businesses viable. During what was a challenging year, a total of 5,585 new jobs (gross) were created by LEO clients, with a net decrease of 1,494 jobs. WO RKING GLO BA LLY The Department, on behalf of Ireland, worked closely with the European Union Commission and Member States to bring several trade agreements to a successful conclusion. On 1 August 2020 the EU-Vietnam Free Trade Agreement (FTA) entered into force, following its signing the previous year. The EU and Mexico on 28 April 2020 concluded the last

outstanding element covering the reciprocal opening of public procurement markets, in the negotiation of the new EU-Mexico FTA.

On 21 August 2020 the EU and US announced agreement on a package of tariff reductions across a number of US and EU exports, the first such negotiated reductions in duties in more than two decades. An Economic and Sustainability Impact Assessment of the EU- Mercosur trade deal for Ireland and partner countries was commissioned. The EU and China signed a bilateral agreement to protect 100 European Geographical Indications (GIs) in China, including Irish Whiskey and Irish Cream and 100 Chinese GIs in the European Union against usurpation and imitation. The Agreement will enter into force in 2021.

At the end of 2020, the EU and China concluded negotiations in relation to a Comprehensive Agreement on Investment that once ratified will improve market access for Irish and European investors to the Chinese market of 1.4bn people across economic sectors.

The EU also adopted an amended Enforcement Regulation that allows the EU to defend the interests of Member States in the event that a 3rd country breaches its commitments or obligations under international trade law and a WTO Dispute Panel upholds a complaint made by the injured party (EU).

O TH ER S IGNIFIC A NT IS S UES Improving terms and conditions for all workers continued in 2020. In September, the Department commenced the development of a National Remote Working Strategy with a vision to make remote working a permanent feature of the Irish workplace in a way that maximises the economic, social and environmental benefits. It was published in early January 2021.

Work is well underway on introducing a Statutory Sick Pay Scheme. A public consultation was launched on 16 November 2020 and ended on 18 December 2020.

Work on the Right to Disconnect Policy began in 2020, with the Code of Practice on the Right to Disconnect launched in early 2021.

The Low Pay Commission has the principal function of examining and making recommendations to the Tánaiste on the appropriate level of the national minimum wage and related matters. Its current work programme includes research on the transition to a Living Wage.

The first Progress Reports for the Regional Enterprise Plans to 2020 were published in early 2020. The Plans continued to be implemented during 2020 and each region submitted their Final Progress Reports at the end of 2020 for publication in early 2021.

Under the Regional Enterprise Development Fund, a further 26 collaborative and innovative projects were awarded over €45m in funding in 2020. This brings the total number of projects funded under the Fund to 68, with €100m in approved funding across the three calls to date. Under the new Border Enterprise Development Fund, 11 projects were approved funding of over €17m in 2020.

The third report from Balance for Better Business was launched by the Tánaiste in December 2020. The report shows that encouraging progress is being made in some areas and that the gap between Ireland and the European Union average for women on boards

has continued to narrow, from 8% in 2018 to 1.2% in 2020 with Ireland now ranked in 13th position, compared to 17th in 2018.

The General Scheme of the Sale of Tickets (Cultural, Entertainment, Recreational and Sporting Events) Bill 2020 was approved by the new Government for drafting on 29 September 2020. The Bill’s main provision is a prohibition on the sale or advertising for sale of tickets or ticket packages above their original sale price for events in designated venues with a capacity of 1,000 or more. It includes also a ban on the unauthorised resale of tickets for matches and events taking place during the EURO 2020 football championship.

Focus on Sectors 2020 was published in August 2020. This series of sectoral reports that present concise overviews of 16 key sectors of the economy to assist horizontal oversight of economic performance across these sectors and a platform to facilitate cooperation. The 2020 reports identify some initial indications of the impact of COVID-19 on these sectors.

Figure from page 18