The Need for an Entrepreneurship Policy for Ireland - PowerPoint PPT Presentation

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The Need for an Entrepreneurship Policy for Ireland


Dr Thomas M. Cooney Dublin Institute of Technology – PowerPoint PPT presentation

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Title: The Need for an Entrepreneurship Policy for Ireland

The Need for an Entrepreneurship Policy for
  • Dr Thomas M. Cooney
  • Dublin Institute of Technology

Background to Ireland
  • 4.2 million people
  • 92 Catholic
  • Changing demographics over the past decade (now
    11.5 non-Irish)
  • Governed by British Empire for over 800 years
    (legacy of Northern Ireland still exists)
  • Suffered serious famine in 1840s (lost 2 million
  • Became independent in 1921
  • Suffered Civil War immediately until 1922
  • Stayed neutral in World War 2
  • Mass emigration in the 1950s

  • Colonial dependency
  • Introduction of tariffs on imports
  • Foreign investment in 1960s
  • Telesis Report (1982)
  • Culliton Report (1993)
  • Task Force on Small Business (1994)
  • Economic Strategy Group Report (2004)

  • Membership of the European Union afforded Ireland
    significant regional aid, combined with ease of
    access to substantial markets
  • Consistent, long-term partnership and policies
    delivered a favourable corporate tax, fiscal and
    wage setting regime and a well-qualified
  • Global trade expanded at an unprecedented pace.
    In particular, advanced sectors such as
    information and communications technology (ICT)
    and life sciences, with which Irish economic
    growth has been closely tied, boomed through the
    mid and late 1990s
  • Irelands demographic profile facilitated the
    swift pace of economic growth.

Entrepreneurship Activity (GEM 2007)
  • Early stage entrepreneurial activity is 8.2
  • OECD / EU comparisons
  • Nascent entrepreneurs - 6th
  • New firm entrepreneurs 3rd
  • Early stage entrepreneurs 4th
  • Established entrepreneurs 2nd

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Irelands Innovation Performance
  • Ireland mixes above average and below average
    performance in many indicator groups,
  • Its good performance is due to high-tech export
    shares that are 68 above the EU average.
  • Ireland performs well on the innovation drivers,
    ranking in 8th place. This is due to excellent
    performance on the supply of new SE graduates
    and above average results for tertiary education.
  • Business RD shows both an absolute and relative
    decline over time, falling from 0.90 of GDP in
    1998 to 0.77 in 2004.
  • Public RD has grown only modestly from 0.35 of
    GDP in 1998 to 0.40 in 2004.
  • Ireland must make the transition from an economy
    where foreign investment played a large role,
    particularly in the ICT sector in order to serve
    the EU market, to an economy based on innovation.
  • These developments suggest that Ireland could be
    entering a difficult transition phase towards
    developing domestic RD and innovation
  • (OECD Report, 2008)

Irish Exports
  • Forfas Report (2008)
  • Irish exports 2007 - 11.8bn (9.25)
  • Foreign exports 2007 - 97.4bn (90.75)
  • The main points in the IEA review of 2008 were
  • Total exports (goods and services) in 2008 fell
    by 6 billion or 4.
  • Exports of goods in 2008 down 5.
  • Exports of services in 2008 down 2.
  • Market performances for 2008 UK down 6
    Euro-zone down 7USA up 1 Japan down 6 and
    China up 79
  • First fall in Services Exports in over two
  • Further declines for 2009 in export sales and

Challenges Facing the Irish Economy
  • Collapse of the property industry (reward system
    was wrong)
  • Entrepreneurial activity needs to be maintained
  • Export activity by indigenous industry needs to
    be improved
  • Innovation activity by indigenous firms needs to
    be improved
  • FDI market has become very competitive
  • Other countries such as India and China offering
    low cost economies, an ample supply of skilled
    labour, and mobile investment
  • The Irish cost base has increased substantially
    (2nd highest minimum wage in EU recent research
    highlighted problem for SMEs)
  • Irelands low rate of corporation tax being
    emulated by other countries
  • Changes in EU state aid limits place new
    restrictions on state aid for enterprise
  • Current global economic crisis is different
  • Recession world wide
  • Cross border migration muddies the water
  • Recession is more evenly distributed across space
    and sector
  • Information more widely available
  • Doing nothing is not an option, need to have a
    coherent plan

Government Plans
  • Department of Enterprise Statement of Strategy
  • Programme for Government 2007-2010
  • Keeping taxes on employment low.
  • Investing in research and development.
  • Significantly up-skilling the Irish workforce at
    all levels.
  • Developing a growing focus on the dynamic SME
  • Where possible reducing the regulatory burden
    faced by business.
  • Ensuring that employment standards are met
    throughout the economy.
  • National Development Plan 2007-2013
  • Social Partnership Agreement 2006-2015
  • Building Irelands Smart Economy (2008)

Other Reports
  • Enterprise Strategy Group Report (2004)
  • Small Business Forum Report (2006)
  • Strategy for Science, Technology and Innovation
  • Towards an Entrepreneurship Policy (2007)
  • Came from recommendation in Small Business Forum
  • Has a Vision
  • Has a primary goal to optimise the number of
  • Has suggested that a National Entrepreneurship
    Forum be established
  • Has advocated an Annual Entrepreneurship Review
  • Has not been adopted

Model of Entrepreneurship Policy
Entrepreneurship Education and Awareness
New Venture Creation
Small Business Management
Growth Firms
Target Communities
Policy Weaknesses (1)
  • No Entrepreneurship Education Policy
  • Many initiatives, highly fragmented
  • Numerous EU reports have highlighted the benefits
    of integrated policy
  • Norway, Finland and Scotland have policies that
    reach across primary, secondary and 3rd level,
    plus across government departments
  • No New Venture Creation Policy
  • Good activity
  • Advisory Group report published September 2007
  • Some want to stay top of the 2nd Division
  • No central champion
  • Frequent duplication of initiatives

Policy Weaknesses (2)
  • Small Business Management
  • Arguable that the standard of Irish management is
    very poor
  • Many have no monthly accounts
  • Following the Small Business Forum report?
  • Growth Policy
  • Low number of gazelles
  • Urgent need to grow Irish businesses
  • How do we persuade people to grow their business
    (also EU problem)?
  • Following the Small Business Forum report?

Policy Weaknesses (3)
  • Clear Innovation Policy
  • Significant funding being allocated
  • Low take-up of RD and Innovation initiatives
  • Low performers on international tables
  • Links between entrepreneurship and innovation
    policy implied in government strategies
  • No Policy for Target Communities
  • Limited availability of tailored support
  • 12.6 immigrants have their own business
  • 97 of ethnic businesses are small locally traded
  • Other target groups include female entrepreneurs
  • Need to take proactive approach

  • Deep economic crisis
  • High cost base and over-dependent on FDI
  • No co-ordinated entrepreneurship policy but lots
    of publications
  • Too many agencies (!!!)
  • What plan are we following?
  • It is a time for courage, a time for our public
    servants to be visionary and brave (e.g. free
    2ndlevel education in 1960s)
  • We need to engender a spirit of self-help
  • This is a time to be truly entrepreneurial
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