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Dr Thomas M. Cooney Dublin Institute of Technology • • • • • • • • • 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 people) 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 (self-sufficiency) 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 workforce 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 Ireland’s demographic profile facilitated the swift pace of economic growth. Early stage entrepreneurial activity is 8.2% OECD / EU comparisons – – – – Nascent entrepreneurs - 6th New firm entrepreneurs – 3rd Early stage entrepreneurs – 4th Established entrepreneurs – 2nd 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 S&E graduates and above average results for tertiary education. Business R&D shows both an absolute and relative decline over time, falling from 0.90% of GDP in 1998 to 0.77% in 2004. Public R&D 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 R&D and innovation capabilities. (OECD Report, 2008) 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 7%;USA up 1%; Japan down 6% and China up 79% First fall in Services Exports in over two decades. Further declines for 2009 in export sales and jobs. 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) – Ireland’s 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 Department of Enterprise Statement of Strategy 2005-2007 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 sector. 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 Ireland’s Smart Economy (2008) Enterprise Strategy Group Report (2004) Small Business Forum Report (2006) Strategy for Science, Technology and Innovation 2006-2013 Towards an Entrepreneurship Policy (2007) – – – – – – Came from recommendation in Small Business Forum report Has a Vision Has a primary goal to optimise the number of start-ups Has suggested that a National Entrepreneurship Forum be established Has advocated an Annual Entrepreneurship Review Has not been adopted Entrepreneurship Education and Awareness New Venture Creation Small Business Management Growth Firms Vision 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 – 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? – Clear Innovation Policy – – – – Significant funding being allocated Low take-up of R&D 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 services 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