Why Ireland Needs an Entrepreneurship Policy

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The recent release of the Government’s ‘National Policy Statement on Entrepreneurship in Ireland’ was broadly welcomed by the business community as an important first step in enhancing entrepreneurial activity in Ireland. The document contains a vast array of actions that require to be taken and while some of the more critical assessments of the proposed actions might be deduced as being based on vested interests rather than objective analysis, all discussion on creating a stronger entrepreneurship culture in Ireland is to be welcomed.

Since the Telesis Report of 1982, the country has witnessed a variety of reports relating to Industrial Policy, some of which received limited attention from the government of the day. Indeed there have been two reports on Entrepreneurship Policy, one in 2007 which was used very sparingly, and the most recent which was published in January of this year and has been the basis for the launch of Government’s entrepreneurship strategy. What makes this document unique is that it is the first time that Ireland has ever had an Entrepreneurship Policy, it has been produced within the same calendar year as the report by the relevant advisory group (the Entrepreneurship Forum), and it will be implemented through the Department of Jobs, Enterprise and Innovation ‘Action Plan for Jobs’.

So why does Ireland need an Entrepreneurship Policy? Since 2000, the European Commission has continuously highlighted the necessity to develop much greater entrepreneurial activity within the EU and has repeatedly requested each of its Member States to create such a policy. Additionally, Ireland should be concerned about our over-reliance on Foreign Direct Investment since Irish-owned companies account for just 9.2% of total agency client exports, while foreign-owned firms account for more than 90% of exports from each of the top three industry sectors. We cannot continue to be highly dependent upon foreign-owned firms to drive our export activity and so we must create an economic scenario where a large percentage of Irish owned companies are highly innovative and export-orientated.

Interestingly, last December Ireland was named by Forbes magazine as the best country in the world in which to do business, while previously the World Bank stated that Ireland is in the top 10 countries in relation to ease of access to opening a new business. Furthermore, a Eurostat report highlighted that the attitude of Irish people towards entrepreneurs and entrepreneurship was highly positive and that the environment for entrepreneurship was very strong in this country. However, reports from the Global Entrepreneurship Monitor in recent years have repeatedly shown that our rate of entrepreneurial activity is well-below other EU and OECD countries, and that a bottleneck has developed between entrepreneurial intent and entrepreneurial activity.

The ‘National Policy Statement on Entrepreneurship in Ireland’ has sought to identify and address the key reasons for such a bottleneck, and it has also sought to engender an ecosystem into which all relevant stakeholders can contribute, as it argues that Government alone cannot create a vibrant entrepreneurship ecosystem. The document addresses in detail six key areas which are: (1) Culture, human capital and education; (2) Business environment and support; (3) Innovation; (4) Access to finance; (5) Networks and mentoring; and (6) Access to markets. The document provides an excellent contextualisation to its proposals with a realistic assessment of the current strengths and weaknesses in the ecosystem. Strategic objectives are identified for each of the key areas of activity, definitive actions have been listed to achieve the stated objectives and the Global Entrepreneurship and Development Index (GEINDEX) will be used to benchmark Ireland’s entrepreneurial performance against other countries.

But the report is not without its weaknesses and various representative groups have been highlighting some of these since the launch of the document. Certainly some underrepresented groups in terms of entrepreneurial activity would have wished to see more overt actions being taken to address the additional and distinctive challenges that they face in starting a business. Additionally, people involved in social enterprise activity will be disappointed to see that they are not mentioned but that is because such entrepreneurial endeavours do not fall within the remit of the Department of Jobs, Enterprise and Innovation as their responsibility is solely focused on commercially-orientated organisations.

Possibly the biggest challenge in the document is the need for so many other stakeholders to take action, particularly other government departments. The need for a National Entrepreneurship Education Strategy has long been mooted by a variety of people and organisations but this can only be achieved by the Department of Education and Skills. Similarly, any changes to welfare benefits require action by the Department of Social Protection and changes in tax relief needs action from the Department of Finance.

The document highlights that the Minister will establish a Steering Group to ensure the implementation of the stated actions. However, it is also critical that the Minister allocates appropriate resources within his own Department to underpin the drive towards ensuring that the goals are met and that Ireland’s position in the Global Entrepreneurship and Development Index improves year-on-year.

Ireland is already a good country in which to start a business and many of the framework conditions required to build an entrepreneurial environment are already in place. This document seeks to ensure that over time, any existing barriers or challenges to starting and growing a business will be removed and that in the near future Ireland will be internationally acknowledged as a highly entrepreneurial country. However, government alone cannot achieve this goal and ultimately it requires positive and proactive support for all elements of the entrepreneurial ecosystem for it to truly flourish and for the ultimate ambitions of the document to be realised.

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About the Author:

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

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