Can govt policy change the culture of entrepreneurship?

southsiderosie

I was reading some letters to the editor in the Economist, and this one stood out:

SIR – British tech clusters will never flourish until the nation envies (or at least respects) its boffins. In Silicon Valley the only thing more embarrassing than admitting you are a banker is that you haven’t started your own company yet. Geeks, boffins and bootstrapping entrepreneurs are revered above all others.

Granted, there were several other explanations for why tech clusters and development lagged behind the US, but this one jumped out because I think many people on this forum have pointed out this very dynamic: there does not seem to be a strong culture of entrepreneurship in Ireland.

Given the Irish government's yammering about the knowledge economy and job creation, is this something that policy can address? And, perhaps more importantly, is this something that can be addressed in a way that is cost-neutral - i.e. doesn't involve shoveling money that the country doesn't have anyway at half-baked ideas, quangoes, or the usual ineffective wastefulness?

Perhaps one thing the government could do to foster entrepreneurship is make it easier to file bankruptcy and start over again (I know there was talk of this, but I'm not sure if the laws have changed). But what, if anything, can change the culture of entrepreneurship?

squod

Campus programmes like those in DCU have done well OP. Setting up a business should be academically awarded and the entrepreneur should be able to remain close to the college he/she graduated from IMO.

Lecturers could provide more practical help for the transition from graduate to businessman. Keeping students under their wing like.

Liam Byrne

I think the first thing they could do to make Ireland entrepreneur-friendly is to do away with the ridiculous situation whereby if your own business goes bust you get no dole; it certainly adds to the riskiness and makes you consider a wage-paying job ahead of going solo.

ei.sdraob

Second thing to do is to not penalise people who start companies by removing a large chunk of their tax credits.
Proprietor directors loose the paye/prsi (whatever its called) tax credit even if they pay it, this is seen as kick in the teeth and I could never understand the rationale for this.

Lecturers could provide more practical help for the transition from graduate to businessman. Keeping students under their wing like.

There is a world of difference between academia and business, and yes I worked on "university<>company<>enterprise ireland" partnership before and seen how these work out

ei.sdraob

Another idea is not to require accounts to be submitted for companies with turnover of under 100K, it costs about 1.5K a year to get an accountant to do accounts and more importantly (and required by law) stick their signature on it

Tho I suppose the army of accountants this country has would not like that at all.

edit: To answer OP, what the government can do is get the hell out of the way (subsidising one company over the other is distortive, and agencies like EI suck at it), cutback on beuracracy, and provide infrastructure.

Permabear

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TimTim

Permabear wrote: »

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But isn't that the case nearly everywhere? The majority of people like their regular 9-5 job with a payslip showing up at the end of the month.

Running your own business requires a passion and determination that the average person doesn't have.

Changing govt policy can reduce some of the overhead and paperwork burden that comes with running a company but do we really want to lower the bar to entry so that the people who were not motiviated to put the effort previously can now suddenly start their own company?

thebman

TimTim wrote: »

But isn't that the case nearly everywhere? The majority of people like their regular 9-5 job with a payslip showing up at the end of the month.

Running your own business requires a passion and determination that the average person doesn't have.

Changing govt policy can reduce some of the overhead and paperwork burden that comes with running a company but do we really want to lower the bar to entry so that the people who were not motiviated to put the effort previously can now suddenly start their own company?

Yeah but companies have to hire people and if they all go for state jobs then who are the private companies supposed to hire?

I think private sector companies sometimes shoot themselves in the foot on this one though as with no such thing as a permanent job anymore in many sectors, it means they can't compete with state jobs in that respect and must pay higher wages as a result.

For example, in technology companies, even though multi-nationals can move out in the morning, they are seen by many as more secure jobs than working for a small Irish company and part of this is they go out of their way to do things by the books and as such can offer lower wages as people feel safer having a job there than in a private company.

Some of the answer in this respect is for Irish companies to treat staff better when they do run a company. Not all private companies are like this but I've heard some horror stories from friends and people I know working for large companies have said they are tempted by the higher wages outside the big companies but wouldn't move when they hear such horror stories.

Basically employees move on rather than deal with being treated badly so these companies just continue with their high staff turn over strategies and convince themselves that it is normal when in reality they are probably doing something wrong in many cases (at least where it is just a poor job which you'd expect high turn over in).

The answer isn't always about pushing for the state and multi-nationals to stop offering such attractive employment conditions and in most cases, it isn't about cost, it is just attitude that causes the problems.

paul71

ei.sdraob wrote: »

Another idea is not to require accounts to be submitted for companies with turnover of under 100K, it costs about 1.5K a year to get an accountant to do accounts and more importantly (and required by law) stick their signature on it
QUOTE]


The audit exemption is a turnover 1.5 million, 50 staff, assets of 1.9 million. If you have been advised by an auditor that you require an Audit with a turnover of 100k, you need to challange him on this advise, possibly report him/her to his/her relevent governing body and change auditor/accountant or submit the annual companies office return yourself.

ei.sdraob

paul71 wrote: »

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I am not talking about audit, I am talking about the requirement to do and file accounts which requires hiring an accountant

Permabear wrote: »

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Well with the benefit of hindsight, dont you think they were correct (unfortunately) and such decisions are quite logical? If anything the last few years would be teaching school leavers is to get into the public service if they can.

Permabear

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paul71

ei.sdraob wrote: »

I am not talking about audit, I am talking about the requirement to do and file accounts which requires hiring an accountantQUOTE]


Then you are overpaying, you don't need an accountant at a fee of €1,500 to prepare accounts for a business with 100k turnover. A decent book-keeper at a rate of €10 to €15 per hour would do it in about 2 days, and you have no requirement under any law for a sign off as you stated.

thebman

Local councils could reduce rates for businesses. It is like they are trying to kill Irish businesses. Local councils need to cut their own costs massively and have no idea how to run themselves on a budget by the looks of things.

PositiveSpin

I think the universities could do a lot better encouraging entrepreneurship. I remember being amazed talking to engineers that they never had a 'starting your own business course'. As business students we did but lets be honest all business students are going to come up with in terms of a new business is a consultancy and we don't need more of them.

It's the technical students who need to be taught the basics and encouraged to go for it. They could also try and team engineers up with business students so that they have experience working cross functionally.