Cantillon 2013 – Entrepreneurial Reflections

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He was a banker who made his fortune through using his political and business connections to good effect, he was a speculator who made fortunes in various business dealings, he left behind a trail of debtors who pursued him with criminal charges and lawsuits, before he mysteriously vanished and turned-up unannounced in the Americas. No, this is not one of Ireland’s modern day bankers or property developers but the life story of Richard Cantillon, the Kerryman who first coined the word ‘entrepreneur’ over 280 years ago.

The 3rd Richard Cantillon Forum was recently held in Tralee and while the event took time to commemorate the contribution of Richard Cantillon to the world of economics, it was primarily focused on the future. Indeed one future vision for the country focused on the establishment of a new bank as a way of overcoming the difficulties that continue to prevail with existing banks. While support for the idea might have been muted, it nevertheless reflected to fresh thinking that was emanating from the speakers.

Another vision of the future that challenged orthodoxy was given by Constantin Gurdgiev who argued that Ireland is doing little in terms of Public Policy to Retain, Attract, Create and Enable human capital. He suggested that the 3rd level system in Ireland should be reimagined and that 3 different ‘products’ are offered to the marketplace: (1) UCD and TCD (possibly UCC) should focus on excellence in Postgraduate teaching and research; (2) the remaining universities and DIT should focus on excellence in Undergraduate teaching and research; (3) the rest of the third-level institutions should act as feeders of various kinds into these institutions. While many proposals have been made redesigning third-level education in Ireland, none have been this radical. It places the needs of the country and the customer (student) ahead of the interests of the universities and institutions and seeks to ensure that Ireland creates educational centres of global excellence.

Possibly the contribution that caused most commentary in the media was that by Fiona Muldoon from the Central Bank who stated that of the €50 billion lent to the sector by the domestic banks, some €25 billion was impaired. She further stated that much of this impaired debt was in some way related to property (either business property or loans secured again the home) and that the rate at which banks are facing up to the problem is unacceptable given that we are now five years into the banking crisis. The Central Bank is currently working with the banks to develop strategies whereby SMEs can restructure their loans and viable businesses can find solutions to their current financial difficulties. While these strategies may lack the radical imagination of other contributions, the notion of practical steps being taken to support the Irish SME sector was reassuring.

Forecasting the future is a difficult process as was highlighted by RTE’s David Murphy. His speech focused on the performance of economic forecasters in advance of the economic crisis and his analysis found that nearly all forecasters got it badly wrong (of particular concern was the performance of the Department of Finance!). He talked about the herd mentality that can exist amongst forecasters and how those offering different opinions (such as Morgan Kelly) can quickly find themselves sidelined. When it was suggested that we might be better off without forecasters if they get it so badly wrong, Murphy quoted the economist Dermot McAleese who said that “nature abhors a vacuum but what replaces the vacuum can sometimes be as empty as the vacuum itself”.

The conference was an eclectic mix of entrepreneurs, academics from a wide variety of disciplines, commentators, policy makers and support agents, all of whom were debating current economic and entrepreneurship issues that are facing the country. What was particular noteworthy was that despite the difficult topics being explored, the tone of the contributions by speakers and participants alike was very positive. Indeed, the conference was concluded by Minister John Perry inviting people to contribute to the development of a new National Entrepreneurship Policy which will be launched in Quarter 4. The public consultation process will begin shortly and interested parties will be able to offer their input through an open process.

It was the task of Brian Lucey to bring together all of the deliberations that emanated over the two days. He noted several themes: the need to start to look forward towards solutions, the desire by entrepreneurs to have coherence and clarity on state supports and advice, the need for a widening of focus from the export/smart economy to recognize the vital role of the domestic economy, the need for much greater and embedded dialogue between policy makers and policy takers, and the need for government to recognize that entrepreneurship can and does flourish outside the cities.

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About the Author:

Professor Thomas M. Cooney (B.Comm, MBA, PhD, MMII, MCIM, FIMCA)

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