Monday 23 October 2017

Jobs plan is limited and won't help grow new business, say experts

Craig Hughes

Taoiseach Enda Kenny last week ambitiously pledged to deliver more than 100,000 jobs by 2016 through a wide range of measures spanning 15 departments and 36 State agencies.

And this weekend, the visit by Chinese Vice President Xi Jinping will focus on developing business opportunities between Ireland and China.

Mr Kenny admitted last week that there is only so much the State can do for private businesses, which, in effect, have to be able to stimulate themselves, with the State offering assistance -- something that has been widely agreed upon by some of Ireland's most successful entrepreneurs, who spoke to the Sunday Independent.

An entrepreneur requires a couple of things. The first thing is opportunity -- if that's not there, the rest doesn't matter. I have never subscribed to the idea that there is no money in Ireland; if the idea is good enough, you'll always find someone to invest.

I agree with the Taoiseach that the State can only do so much, and he's right. The elements are there: now we need to find the opportunity, and the State can't do that. That has to come within the mind of the entrepreneur. I think the Jobs Initiative will work. It might take some time to get up and running, but I think it will work.

What we need to see is direct taxation coupled with good incentives. They need to let us keep as much of what we make as possible, otherwise there's no incentive.

What I think we need to do is increase the rate of failures. Assume they set up 100 businesses a year and 25 fail. Well, if you relax the terms further and allow 200 businesses to be set up, at a further cost, and 80 fail -- you have a higher rate of failure and people will kick up a fuss in the Dail, but you have more businesses operating, and, as a result, more jobs.

Government wants us to set up businesses? Where to start? Well, 'just take an existing business idea and do it better'. How simple does that seem -- a look at our stock exchange will show exactly how true that is. If it's so obvious, why do we keep chasing the technology grail? We are a country of agriculture, and yet we gamble all on something we might become.

Look at the obvious areas where our education policies don't match up to our jobs aspirations -- check out our Leaving Cert maths results and then wonder about our future in technology. This week I was at the local heroes' meeting in Limerick, where cafe owner Ger Sheehan has the simple idea for Limerick: invest in the brand Limerick Ham and all the skills we once had in this area -- jobs, apprenticeships, exports, tourism; it crossed a pile of sectors, and none of them technological.

The jobs initiative actually shows no initiative. We don't need an entrepreneurial Government. We need policies consistent across government departments that allow our entrepreneurs to create jobs for themselves or others. How hard can that be?

I've mixed feelings about the jobs proposal because there's little or nothing for the local coffee shop, the local barbers or any indigenous industry. Most of the sectors they've targeted would come anyway, such as the technology sector.

There's 237 proposals outlined: some of them are old ones that were just never implemented, but what I'd like to see is just 20 of these outlined and delivered as promised, rather than having this big overambitious figure. You'd like to see if you take on a person at €500 a week that there would be a form of PRSI exemption.

At the moment there is some form of PRSI relief, but it's terribly complex and I'm not sure most small businesses know about it. Even introducing something as simple as no PRSI for the first two years would be successful.

The Government's task is to set the conditions to create jobs and foster the essential entrepreneurial climate for this. I particularly welcome the plans to cut red tape, making it easier to set up businesses and get finance flowing to SMEs which actually create jobs. Measures like the Micro Finance fund and reforms to R&D tax credits will be of great help to entrepreneurs.

However, there was no mention of issues like crowdfunding, which is now worth $2bn a year in the US. We could establish a national website to harness the power of the online community to pledge investment in new businesses.

It is a pity there is nothing on wind and tidal power. The Irish Maritime and Energy Resource Cluster estimate that the sector could create 52,000 jobs by 2030.

The success of the agri-food industry, which increased its exports by around 14 per cent last year, is very encouraging for the future.

Overall, we should make it even easier to set up business. According to the World Bank, it takes 13 days and four procedures to establish a business in Ireland. When I visited Panama some years ago I was told that the objective was to make it possible to start a new business there in just seven hours.

Sunday Independent

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