We can now be fairly certain that the new agency being established to support enterprise development will be known as Enterprise Ireland. Chaired by former Bank of Ireland group chief executive, Mr Pat Molloy, the agency will be managed by current Forbairt CEO, Mr Dan Flinter.

The stated mission of the new body will be "to help client companies develop a sustainable competitive advantage leading to increased profitable sales, exports and employment". A discussion document has been prepared by the steering group, appointed to advise the Tanaiste on the new organisation.

Given its mission it may surprise some to know that the group is untainted by private sector membership - its members are the Government Departments and the state agencies. Exporters are not represented, despite the group's recognition that significant growth in sales and employment can be achieved only through exporting. The steering group's agenda seems to be largely internal - the legislation, which is being put through at great speed, and the grading structures of the staff.

The group has made a welcome shift in its thinking in relation to the client base of the new organisation, undoubtedly reflecting the views already expressed by exporters.

Three categories of company are envisaged as constituting the agency's clients - Irish owned, foreign owned, where the foreign participation is purely financial, and foreign owned, where the Irish management has a high degree of autonomy. The logic here is that these are companies whose growth and development can be enhanced by working with Enterprise Ireland.

Companies of less than 10 employees are to be excluded and are seen as falling within the remit of the county enterprise boards. These are referred to as start-up and micro enterprises, and the logic put forward is the existence of an extensive structure involving the county enterprise boards, area partnerships, leader and business innovation centres.

Whatever about the overall logic of this approach, it is clearly flawed when applied to management consultancies, computer service and software companies. These, and other small companies trading services internationally, must have direct access to Enterprise Ireland's expertise, home and overseas.

A curious situation applies with respect to Shannon Development. The medium term plan is to transfer the functions of the new agency to Shannon Development for application within the Mid West region. Shannon Development will, therefore, replicate the Enterprise Ireland range of services. The business logic in this arrangement is not immediately discernible and it is clearly inconsistent with the Tanaiste's statements about the one-stop shop approach. Performance measurements will be put in place for the new organisation and it is proposed they will range around the key elements mentioned in the mission statement - profits, sales, exports and employment. The most important success criterion, market share, is missing - profits and sales depend directly on the question of market share.

The size of the new organisation - with employees numbering up to 1,200 and an annual budget of perhaps £200 million, is truly gigantic. Given that there are only some 3,000 exporting companies eligible for assistance, it is clear that the staffing is disproportionate to the market for the agency's services.

Serious savings must be effected - in overheads, in administration and wherever duplications occur. A number of steps must be taken urgently. Firstly, certain functions proposed for the new organisation, some equivalent of holding the horses in World War I, must be shed.

Secondly, a voluntary redundancy scheme must be offered. This must be done now. Even if this means that the start-up deadline has to be postponed, so be it. If not resolved in advance, it will monopolise months of management time as the first issue to be addressed. Government, unions and all concerned must act now.

Colum MacDonnell is Chief Executive of the Irish Exporters Association.