Red tape still an obstacle to growth for SMEs

A new study of more than 300 small and medium-sized enterprises (SMEs) indicates that a third of small business owners still feel the regulatory burden in Ireland is too big an obstacle to growth, recruitment and innovation.

The survey, commissioned by corporate law firm, LK Shields, also shows that the vast majority of Irish SMEs feel the overall cost of red tape regulation is too high and must be addressed.

A comprehensive 87 per cent of SMEs surveyed felt a new process is required to reduce the cost burden.

David Williams, head of financial services, LK Shields, said: “We acknowledge and support the necessity of robust regulation in all business sectors, but we also firmly believe that much greater efficiencies can be achieved without letting regulatory standards slip, particularly when it comes to the administrative burden of compliance.

“Our Red Tape Survey will hopefully spark much-needed debate and action to resolve the issues highlighted.”

LK Shields said they commissioned the survey to provide a clearer understanding of how compliance obligations and red tape affects Irish businesses.

The report surveyed SME owners across all sectors, including the service, retail, finance, manufacturing and construction industries, employing more than 250 people. However, the vast majority of respondents came from those employing between 25 and 99 staff.

Of businesses with less than 100 staff, 70 per cent believe there is too much red tape involved in doing business in Ireland. However, for companies with more than 100 staff, the figure is much less at around 47 per cent.

Around two-fifths of SMEs with fewer than 100 employees acknowledge the need for regulation, but this acceptance rises to more than two-thirds (68 per cent) among larger companies.

Date published 16 Nov 2015 | Last updated 16 Nov 2015