The general election is being fought around key issues like the need to solve the housing problem, fix the health system and ensure there is balanced growth around the country. But very little is being asked about where the billions of euro needed to tackle these issues will come from. How can we ensure, in such an uncertain and rapidly changing international environment for business, that we maintain the levels of wealth creation and employment needed to tackle these issues?
One way is to keep foreign direct investment (FDI) jobs and money coming in. We have become one of the best in the world at this.
But it is always a risky business, dependent on many external factors. So, we must also build up our indigenous business sector.
The country has improved when it comes to supporting Irish businesses, but there are still big gaps that need to be addressed.
An open letter to the next government signed by 50 entrepreneurs blasts a big hole in the idea that we are doing enough to support high-growth, innovative Irish companies.
Promoted by an organisation called Scale Ireland, it starts with one basic truth.
Not every SME or startup is the same. If I set up a small company making radio programmes or selling coffee, it is a positive thing.
But I am unlikely to create original intellectual property, achieve exponential growth and scale my firm around the world.
Traditional startups are fundamentally different to an innovation-driven enterprise (IDE), which eats up capital, devours cashflow, racks up losses at the start, and spends money trying to hire very sought-after, talented people. IDEs develop their own new products or services and when successful, can contribute enormously to the economy. Their challenges are quite different.
Government policies to support IDEs or help companies to scale up from modest beginnings need to be specific and targeted to their needs. Government agencies like Enterprise Ireland are doing a very solid job supporting indigenous firms and helping them to expand.
But if we are going to get serious about competing for international talent to set up businesses here, we need to up our game on the policy front.
Some of the most innovative, fast-growth companies in Ireland in recent years could easily have been set up somewhere else. Ireland needs to be able to compete with other countries to convince people to start up these kinds of companies here.
Take France, for example. Under president Francois Hollande, it introduced a wealth tax in 2012 of 75pc on income over €1m.
This had to be reduced to 50pc after some high-profile businesspeople moved to Belgium and it was eventually scrapped in 2015 by Emmanuel Macron.
Now, Macron is taking France in the other direction. He has introduced ambitious measures for startups, including favourable tax treatment for stock options and a fast-track visa system.
Portugal has a new political appointment to oversee startups.
The UK has moved up the startup charts, with specific measures aimed at attracting investment and talent.
Ireland features strongly in international comparisons around our share of FDI. When it comes to ease of doing business, we also do quite well. But ease of business is simply about how quickly you can do things like register a company or find a lawyer or accountant. A global survey by Forbes of the best countries for business features the UK at number one. Ireland came 11th, behind the likes of Denmark, Switzerland, Australia and Singapore, but ahead of Germany.
'Best for business' is about doing business in general, so it includes the infrastructure, policy and supports for big business too. Startups are different.
According to Scale Ireland, this country has taken a piecemeal approach to policy for startups when it comes to backing home-grown innovation.
Other countries have seen the value of attracting or retaining talent in these organisations.
In Ireland, we have seen some great home-grown success stories, in companies like Prepaid Financial Services, recently sold for €264m, or Pointy, another fintech firm sold for €160m.
We should bear in mind that Prepaid Financial Services was actually started in London by Navan man Noel Moran.
The two entrepreneurs behind Pointy could easily have gone somewhere else to build that business but decided to do it from Ireland. The problem is that we have too few of these kinds of high-growth, innovation-driven companies. Another issue is that Irish entrepreneurs often sell these businesses on relatively quickly. This would have to be taken into account in any new targeted policy framework.
Scale Ireland wants to see a workable incentive scheme for stock options, by removing the ceiling on the value of granted options. It also wants to eliminate the restriction limiting the value of allowable option grants to 100pc of salary. Elsewhere, it wants improvements to the EIIS scheme, which provides incentives for investors to put money into these kinds of firms. This would include offsetting losses they incur elsewhere, and it wants a 0pc tax rate for angel investment gains.
If you are a politician knocking on doors at election time and during a housing crisis, these kinds of policy incentives may well seem pretty unpalatable.
They involve providing tax breaks for people who are not in need of a roof over their heads.
Equally, they might ask, why give 0pc tax breaks to angel investors on their investments, when presumably they are not exactly down to their last few euro?
As far as the optics go, this doesn't look good. But if we are serious about creating a perpetuating ecosystem for investment in high-potential startups in Ireland, we are going to have to take a look at some of these measures.
We are doing OK in this area, with a half-hearted approach, but we could do a lot better.
Innovative companies can be located outside Dublin. They can attract very talented people and can become the wealth generators and employers of the future.
There is also the simple truth that other countries are doing these things anyway and Ireland could get left behind.
A good starting point for developing responsible policies in this area is to throw some political attention its way. Scale Ireland wants to see a Startup Minister and a National Startup Strategy, as well as enhancing and improving many of the schemes that are in place, but are not working well enough. This important sector cannot have it all its own way either. Tax breaks without limits; risk-free investments due to offsets; the creation of a tax system that benefits a small group of skilled workers to the detriment of everybody else. These won't fly.
But the proposals put forward by Scale Ireland don't fit into that category. They envisage improving schemes that already exist but just aren't working effectively.
There is surely scope to firstly compete with other countries for this kind of business, and secondly have an attractive system that results in a net gain for the economy, without unfairly creating elites. Politicians have to bear in mind that many of these startups will fail, even in a good system. People will be granted share options in high-risk ventures that will end up being worthless. Angel investors will lose their shirts on many ventures.
The trick is to find ways of encouraging them all to keep going as often as possible, so Ireland benefits from the ones that do come good.