Sunday 25 June 2017

Jobs market and recession fears 'dampen entrepreneurial spirit'

Entrepreneurs aren’t finding it easy to make their way in Ireland, according to a new study
Entrepreneurs aren’t finding it easy to make their way in Ireland, according to a new study
Michael Cogley

Michael Cogley

Ireland's success in attracting large corporations into the country is actually hurting the development of entrepreneurship, new research has shown.

Ireland ranks below the European Union average for its entrepreneurial potential, which has fallen since the crash.

That's according to the Amway Global Entrepreneurship Report.

It found those aged under 35 have the most positive attitude towards entrepreneurship, with men being the most positive.

The data shows the majority of third-level-educated respondents were more optimistic towards entrepreneurship than those without a degree.

The research surveyed over 50,000 people globally, including 1,000 here.

But despite generally positive perceptions, it found Ireland's entrepreneurial potential has fallen by 5pc.

The two main reasons, according to Amway, is a fall in peoples' confidence in their own ability to start a business, and a significant 12pc fall in those aged under 35 who have a desire to start their own venture.

Lingering and painful memories of the recession have made people more cautious, according to National College of Ireland professor Jimmy Hill.

But, he also noted that the availability of good jobs in sectors such as IT and finance also means fewer people are motivated to go it alone.

"Employment prospects in key industries such as IT and financial services sector have increased and there is an almost insatiable demand for talent, especially graduates.

"However, as a result of mass immigration to countries like Australia during the economic crash, there is a lack of entrepreneurial graduates available especially for industries such as research and development," he said.

For those who do set up for themselves, Amway found men are typically more comfortable searching for and acquiring new customers as a self-employed person, with 54pc of males saying it would be within their capacity. According to the study the main reason Irish people start their own businesses is to be their own boss.

Having the ability to realise their own ideas and better compatibility with family and leisure time are also major factors.

Feasibility and motivation remain an issue for Ireland, with fewer than half of those surveyed believing they have the sufficient skills to go out on their own.

The outlook on self-employment isn't strong either with just a quarter of those quizzed believing they will be more likely to have their own business in five years' time.

Irish entrepreneurs were left disappointed by this year's budget, with reforms brought in by Finance Minister Michael Noonan dismissed as "tokenism" after he failed to bring the tax treatment of the self-employed in line with other workers.

As a location to establish a business, Ireland struggles to compete in key areas including Capital Gains Tax, which is set at 33pc.

That rate was reduced in the last budget to 20pc for entrepreneurs on lifetime gains of up to €1m.

Globally more people are looking towards self-employment as a basis for work.

Amway Global president Doug De Vos said that the ability to establish a client base is also improving worldwide.

"Our research has shown that entrepreneurs start a business to work independently and find greater fulfilment in their life opportunities desired by many, especially today's millennial generation," he said.

Irish Independent

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