Wednesday 28 September 2016

It's crucial we get our policies on entrepreneurship right

Richard Bruton

Published 14/08/2015 | 02:30

'In his very first Budget, Michael Noonan made it easier for companies to operate in their first three years by extending the exemption from corporation tax'
'In his very first Budget, Michael Noonan made it easier for companies to operate in their first three years by extending the exemption from corporation tax'

Two-thirds of all new jobs in Ireland are created by one particular type of business. Despite what some people think, it is not multinational tech companies like the big names located in such numbers around Dublin's docklands and elsewhere in the country.

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Nor is it the big pharmaceutical or medical devices companies supported by the IDA in locations around the country.

And no, it is not the big Irish exporting companies supported by Enterprise Ireland either.

In fact, 67pc of all new jobs in Ireland are created by start-up businesses - that is businesses in their first five years of existence.

That is why it is so important for the Government's plans for full employment that we get our policies on entrepreneurship right.

And our entrepreneurs have proved extraordinarily resilient - even during the crash years up to 2011, with everything stacked against them, start-ups created 90,000 extra jobs in Ireland. And that was with 50pc of them failing!

Despite this performance, when we came into Government in 2011 we were well below the European average for the number of businesses starting up every year.

Since then, despite seriously constrained resources, we have been putting in place incremental steps as part of our plan to improve the environment for entrepreneurs and start-up businesses in Ireland.

In his very first Budget, Michael Noonan made it easier for companies to operate in their first three years by extending the exemption from corporation tax. Since then we have also:

Incentivised unemployed people to start businesses with a two-year exemption from income tax;

Made it easier for start-ups to raise funds by creating the Start Up Relief for Entrepreneurs, the micro-finance scheme, the credit guarantee scheme, Capital Gains Tax relief among other measures;

Avoided any increases in income tax or USC in the most difficult years, then moved as early as we could afford it to start reducing the burden of taxes on work, and Michael Noonan is now signalling that he will move to end the differences in tax treatment of self-employed people which were created by the last Government.

We need to make entrepreneurship part of our DNA, and many people both in the public and private sectors have a part to play in this. We must promote starting a business as a viable career choice, and to this end we have put in place a new national competition to find Ireland's Best Young Entrepreneur.

The education system is stepping up to the mark in providing training for the next generation of entrepreneurs, and agencies like Enterprise Ireland and the Local Enterprise Offices have put in place new schemes and supports.

Successful entrepreneurs have shown incredible willingness to get involved in everything we do. Last year we published and started implementing the first ever National Policy Statement on Entrepreneurship after a process led by Sean O'Sullivan of Dragon's Den and with major input from other successful entrepreneurs. This is a plan to create an extra 93,000 jobs from start-ups, through measures including extra funding for start-ups, more co-working and accelerator spaces, enhanced mentoring and improved entrepreneurship education.

However, this is a fast-changing area, with ever-increasing competition from other countries. There are undoubtedly areas where improvements can be made, and we will continually review and improve our supports in this area.

To that end, Michael Noonan has recently carried out a consultation process, in which he asked for submissions on the tax measures needed to support more start-up businesses.

This year's Budget will be the next step on this journey to an economy where we have 25pc more start-ups, supporting thousands of extra jobs and contributing to our overall goal of full employment.

We plan to build on what we have done so far and make the changes necessary to support thousands of extra jobs from start-ups over the coming months and - if re-elected - the coming years.

Richard Bruton is Minister for Jobs, Enterprise and Innovation

Irish Independent

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