If not a smart economy, what?

ART6

With respects to Scofflaw who locked an earlier thread on this subject, this is not a rant. If the subject has already been done to death then I apologies. However...

We keep being told that Ireland must develop into a smart economy, but how realistic is that? We are a tiny country with a small population. Even with a much better educational system than we actually have, how many scientists, physicists, mathematicians, computer experts, could we possibly field? A few hundred at best perhaps since someone else has to actually make things and market them and provide the infrastructure.

Meanwhile the emerging major economies like China and India are hardly noted for their lack of brain power. For example, if you look at the origin of almost all household and industrial appliances from high tech electronics to the humble hair drier "made in China" is on the label. India is a nuclear power and a major producer of industrial plant and machinery.Those countries could field all of the expertise I have listed here in (probably) millions rather than a few hundreds. And they do it at a fraction of our labour costs.

In any business there is such a thing as a "unique selling point" or "USP". What is Ireland's USP? Not something we can aspire to or something we can grab out of the air as a good political catch-phrase, but something we can invest in now while we start addressing the wish list. So what is that?

I'm not sure that I know what "that" is, but we certainly need a good and professional Ireland Inc business plan, and we need to develop it, stick to it, and get in the investment to support it. We need to get our cost base way back down, and that isn't achieved by simply cutting wages. Cutting living costs has to come first, and a start would be by getting government and its outlandish costs off the back of the private sector. We need a lean and efficient government with an equally lean and efficient public service. We need to get industrial energy costs way down as well, even if that means subsidies and stopping the so called "Regulator" from jacking them up for no obvious reason. We need a lot less regulation and the implementation of EU Directives without complaint when they are damaging to our business. Conversely, we need much better financial regulation to ensure that the Finance Ministry, the banks, and the exchequer act like a company finance department concerned only with the well being of the company and its profitability.

While that is going on, we need to think carefully about where the money is coming from. In a simplistic view, the local corner shop doesn't survive by the shopkeeper selling goods to his relatives and never opening his doors to the public. We must export, not simply build houses for internal consumption, or ask the people to spend more in Tesco Ireland. So what is our USP that leads to exports and profit from outside Ireland?

One thing I realised years ago by working in the outside world is that, contrary to the views expressed many times in various Boards.ie forums, the Irish people are capable of very hard work indeed and the refusal to be beaten by any problem. How many times have I worked with British, Americans, whatever, who at five o'clock when the problem wasn't solved, wanted to go home and deal with it tomorrow, when the Irish contingent said "Feck it, let's fix the f****r"?

So is it possible that our real USP is our people? We aren't going to compete in electronics or physics or space travel, and we aren't going to become experts in making hair driers. Could we not take a page out of our history and become the Mr. Fix-it's to the world? Got a problem? We will not stop until we have dealt with it. That will require investment in trade skills, in engineering and even in high finance, but it seems to me a better bet than investing in a "smart economy".

At this point of the day I intend to go and deal with a bottle of Irish whiskey, the one thing I have confidence in defeating. I expect that Scofflaw *no offense intended -- I respect your opinions* and other will tell me what is wrong with all of this, but also please tell me what the alternative is?

Count Dooku

Main reason for China and India success is not a cheap labour, plenty other countries can offer cheap labor as well. Main reason for success apart from FDI is that their governments are not suppressing entrepreneurs by high taxes, while in Ireland lazy greedy crowd of left wingers wants to get money for nothing and don't want see wealthy anybody working outside of public services or state owned companies.
This is why Ireland never will have success in smart economy. You can have plenty of educated workforce but nobody who will organize them into successful enterprises. So far only MNC's were able to do something and only few Irish owned companies managed to achieve success.
LP/FG bluff about state bank for SME is only buzzword to win election. In reality with current cost of doing business in Ireland(rents, salaries, unionized staff, who cares about only about T&C etc) it doesn't make much sense to start new export orientated business here even with cheap credit, because very soon entrepreneur will fall into loses and it make more sense to move somewhere else with developed business infrastructure. Low corporate tax will not help, because it make more sense to pay high taxes from profits rather then low taxes from loses.
Before Ireland could offer cheap workforce for MNC's, but this is not a case anymore.
Inevitable success of Labour on next elections when whole country will have to give all disposable income in order to keep living standards and pensions of public servants make even less sense for establishing businesses independent from Irish market.
I think it is time to forget about smart economy and start think about Ireland as banama republic

johnnyskeleton

Count Dooku wrote: »

Main reason for China and India success is not a cheap labour, plenty other countries can offer cheap labor as well. Main reason for success apart from FDI is that their governments are not suppressing entrepreneurs by high taxes, while in Ireland lazy greedy crowd of left wingers wants to get money for nothing and don't want see wealthy anybody working outside of public services or state owned companies.

More important for entrepeneurs than low taxes are basic levels of support for start ups. In Ireland you are put at a disadantage right from the get go, with self employed people having to pay more than PAYE employees at the same wage. Then, there is no social welfare if it goes wrong but yet they pay almost as much in PRSI. There is no viable bankruptscy procedure if you get in over your head, the additional regulatory factors and the high costs all result in a situation whereby it is very hard to start a business. You will also face opposition from some of the big companies in state sponsored cartels here.

If you are in an enterprise friendly environment and see a gap in the market for a product you just go out, make it and sell it. In Ireland before you even get down to making it you are already seriously in the hole and will probably face severe difficulty from others.

flutered

not to forget the green energy has had a handbrake applied to it
( in my area ) no more wind energy windmills allowed, the one that is running has to do according to our planners, the gm option is blocked, with the demand for food soaring gm products woud boost our exports, if we are so concerned about it, just block it from home use, stick the cabinet in a place similar to where them bishops go to elect a leader, let them there for a month without any luxury items, if they cannot come up with a fesable method of running the country send them back, after the first three weeks without drink and thatever else they are using their brains might start to rumble a little.

MrDarcy

It's actually incredibly simple OP. The country is full of entrepreneurs, they need access to seed capital in good times and bad. There isn't a cent out there for small businesses and before anyone comes back with, "check out the Couty Enterprise Boards or Enterprise Ireland", you need to engage with these organisations to actually understand how utterly useless and political they are.

As for people not spending, that's a political issue that is caused by FF remaining in power. When we have an election, that MIGHT change...

RichardAnd

MrDarcy wrote: »

It's actually incredibly simple OP. The country is full of entrepreneurs, they need access to seed capital in good times and bad. There isn't a cent out there for small businesses and before anyone comes back with, "check out the Couty Enterprise Boards or Enterprise Ireland", you need to engage with these organisations to actually understand how utterly useless and political they are.

As for people not spending, that's a political issue that is caused by FF remaining in power. When we have an election, that MIGHT change...

A good point. Though I don't think a change of government will really make much difference, it could have a positive impact on peoples' outlook which could only be a good thing.

ardmacha

It is not a question of Smart Economy or something else. It is a case of Smart Economy and several other things. Smart Economy type activity is very desireable and we should have as much of it as we can manage. But we should also have agribusiness, creative arts, specialist manufactuing and even financial services. The property boom should have illustrated the limitations of relying on one sector, every sector has to up its game, and it should not be thought that people in one sector can relax as some other sector is paying for everything. Ireland is only 1% of the EU, all we need is 2-3% of a number of markets to make an honest living.

5live

I think the boys at the top table lost track of the real ireland. The government published the Food Harvest 2020 report and looked at a 50% increase in milk production alone. Now ICMSA i think costed a 20% increase in milk processing at E150 million so they are looking at E400 million odd to process 50% extra. Now lok at the funding from government. Approx E0. If you are a foreign company then you have access to practically unlimited(slight? exageration) breaks. But a business home grown and able to employ 10s of thousands gets NO funding? Whats that about? And i have a vested interest as i am one of the last full time(and fully employed) farmers in my area. Now i am still paying off last years bills so the idea of an additional E125000 average borrowings for relatively little financial benefits just doesnt interest me

Count Dooku

MrDarcy wrote: »

It's actually incredibly simple OP. The country is full of entrepreneurs, they need access to seed capital in good times and bad.

They need customers first,
Otherwise credit will become subsidy

MrDarcy wrote: »

As for people not spending, that's a political issue that is caused by FF remaining in power.

How high taxes imposed by Labour, when they will rule country in few months time, will increase spending?

MrDarcy

RichardAnd wrote: »

A good point. Though I don't think a change of government will really make much difference, it could have a positive impact on peoples' outlook which could only be a good thing.

We are one good "look the nation in the eye" speech away from ending all of this. People on the dole, who CANNOT spend, they will start spending when hope has been restored to this country. Those who have jobs, have the few quid to spend but are squillering it away because they are terrified of what FF are doing to this country", their fear is not real (yet), it is perceived.

What we need is action followed by results. People on the dole and people in jobs, they don't want to hear about corners being turned or moving forward or any of that bullsh*t, they want credible evidence that we are starting to get back on our feet again and that means that the man or woman signing on can have hope that they will soon be in employment again.

The solution here is actually very very simple, support entrepreneurs who create jobs and jobs will be created. It's an absolute no brainer. But no, lets not support enterpreneurs, lets support failed banks instead.

This government haven't a NOTION of how to support enterprise. They are still back in the 1990's throwing money at multinationals, which is nothing other than outsourcing entrepreneurship.

We are the bravest people on earth in Ireland, we ran the Brits, we are entrepreneurs to the bone, but if you cannot get access to seed capital then you are simply not at the races and our view of failure in this country is what has us in this place where we are afraid to support start up businesses...