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Is Ireland over-investing in IT/digital technology?
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experiMental wrote: »Getting back on topic:
If there will be such a high proportion people who will know IT-specific skills only, it will take a while to re-train some of them when some IT companies will pull out. Look at what happened during the Celtic Tiger: a lot of people were employed in the construction sector, but now they are finding it hard to adapt to the new economic situation, where there is less demand for their skills.
That comparison doesn't really hold. The fate of construction workers in Ireland is tied entirely to the Irish construction industry & economy - if that fails (as it kind of did), they have to re-skill or move to another country.
The fate of IT workers in Ireland is tied to the global IT industry & economy. I work in IT and we don't have a single Irish client and probably never will. For us to fail, the global IT economy would need to fail, or else Ireland becomes horribly uncompetitive to employ people. Given that Silicon Valley salaries are (approx.) 70 - 100% higher than here, I don't think that's happening any time soon.0 -
If he's referring to the ease with which you can open a business in Ireland, then he's right. It is exceptionally easy for firms to become privately incorporated relative to other jurisdictions, with no minimum capital requirements, not even the necessity to have a bank account, or (if my memory serves me correctly) an ID. While Ireland's lax regulation of financial institutions has not survived the financial crisis, lax regulation of incorporation has, in effect, grown even more relaxed.
Where is the evidence for these ludicrous statements?very few countries are as good at starting businesses as Ireland is.0 -
Cody Pomeray wrote: »If he's referring to the ease with which you can open a business in Ireland, then he's right. It is exceptionally easy for firms to become privately incorporated relative to other jurisdictions, with no minimum capital requirements, not even the necessity to have a bank account, or (if my memory serves me correctly) an ID. While Ireland's lax regulation of financial institutions has not survived the financial crisis, lax regulation of incorporation has, in effect, grown even more relaxed.
What nonsense, you've obviously never set up a limited company. When creating a company you have to submit this form: http://www.cro.ie/GetAttachment.aspx?id=d493d5cc-adef-41bd-ae1c-779b80ef3986
It has to be signed off on by a solicitor or other suitable legal authority and part of this is a declaration of identity of the person who wants to form the company.0 -
This "legal authority" usually amounts to a person who simply runs a company formation firm.It has to be signed off on by a solicitor or other suitable legal authority
What I am saying is that, to the best of my knowledge, the CRO do not confirm the identity of company directors. I raise this point because I am aware of a case that came before the circuit court last year whereby there was, or is, a difficulty in identifying the true identity of a company secretary, and without which a number of legal issues were (are) held in limbo.
My issue is with the lack of oversight of the CRO with regard to the identity of directors, although I may be erroneously remembering the requirements. From your link, it doesn't appear like I am. However, this is only one of the factors i recognized in what I would suggest is an overly-lax regulation structure.0 -
Cody Pomeray wrote: »This "legal authority" usually amounts to a person who simply runs a company formation firm.
What I am saying is that, to the best of my knowledge, the CRO do not confirm the identity of company directors. I raise this point because I am aware of a case that came before the circuit court last year whereby there was, or is, a difficulty in identifying the true identity of a company secretary, and without which a number of legal issues were (are) held in limbo.
My issue is with the lack of oversight of the CRO with regard to the identity of directors, although I may be erroneously remembering the requirements. From your link, it doesn't appear like I am. However, this is only one of the factors i recognized in what I would suggest is an overly-lax regulation structure.
Someone who runs a company formation firm? No. They keep solicitors on retainer for a reason.
The CRO do not confirm the identities of directors and secretaries, that's the solicitors job and just like any declared document if the solicitor is willing to look the other way you can get away with a lot.0 -
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No, the solicitor, or senile Billy the shopkeeper who happens to be the local peace commissioner (this is my actual local example) meets his acquaintance Johnny 1 who says "Billy, this is Johnny 2, will you sign his form?".The CRO do not confirm the identities of directors and secretaries, that's the solicitors job
Johnny 2 is now secretary of the company. The next day, or when the documents are filed, Johnny 2 (whose ID has never been verified) now signs away his role to a new secretary and a new director, called Johnny 3 and Johnny 4. The next available day they sign the company over to Micky and Minnie Mouse. Nobody in the CRO asks for anybody's ID along the trail, and as far as I can recall, there is no requirement for them to procure the services of a solicitor or formations agent or peace commissioner
I think my suggestion that no actual ID is required to be produced is satisfied.0 -
Cody Pomeray wrote: »No, the solicitor, or senile Billy the shopkeeper who happens to be the local peace commissioner (this is my actual local example) meets his acquaintance Johnny 1 who says "Billy, this is Johnny 2, will you sign his form?".
Johnny 2 is now secretary of the company. The next day, or when the documents are filed, Johnny 2 (whose ID has never been verified) now signs away his role to a new secretary and a new director, called Johnny 3 and Johnny 4. The next available day they sign the company over to Micky and Minnie Mouse. Nobody in the CRO asks for anybody's ID along the trail, and as far as I can recall, there is no requirement for them to procure the services of a solicitor or formations agent or peace commissioner
I think my suggestion that no actual ID is required to be produced is satisfied.
And what did I say in my last line? If the legal authority who is signing off on the document isn't doing their job right the system fails. This is accepted.
Your suggestion is far from satisfied I'm afraid. You suggested no ID need be provided, the implication being in general from your phrasing, you've now shifted the goalposts to "if you know a guy he can sort you out" which is kind of pointless since this applies to almost anything in any society that's signed off on on the word of a particular professional or office holder.0 -
Er, yeah, because with a nod and a wink, this non regulated, amateur official can sort you out without you ever producing any ID. More seriously, change of directorships require no validation.Your suggestion is far from satisfied I'm afraid. You suggested no ID need be provided, the implication being in general from your phrasing, you've now shifted the goalposts to "if you know a guy he can sort you out"
How is this anything but a blatant vindication of what I originally described as my understanding? Where is the necessity to produce any ID along the trail?0 -
Cody Pomeray wrote: »Er, yeah, because with a nod and a wink, this non regulated, amateur official can sort you out without you ever producing any ID. More seriously, change of directorships require no validation.
How is this anything but a blatant vindication of what I originally described as my understanding? Where is the necessity to produce any ID along the trail?
Change of directorship and sale of "off-the-shelf" companies are two different issues. For anyone incorporating a company who doesn't have a handy peace commissioner or whatever they'll have to go through a different legal official who will either have to know them personally to the extent of being sure of their identity or they'll have to produce ID (many solicitors will ask for it anyway as a routine thing).0 -
No, they don't have to be known to them personally. The 'friend of a friend' rule applies. This is inadequate.Change of directorship and sale of "off-the-shelf" companies are two different issues. For anyone incorporating a company who doesn't have a handy peace commissioner or whatever they'll have to go through a different legal official who will either have to know them personally to the extent of being sure of their identity or they'll have to produce ID (many solicitors will ask for it anyway as a routine thing).
I raise the change of directorship issue because it has the same effect, in fact it has an aggravating effect.0 -
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experiMental wrote: »Ryanair and Paddy Power were started in Ireland. Ford was started by an Irishman. They are all industry leaders. You have to look at the amount of industry leading countries per capita. Ireland has a high proportion of them in relation to many other countries. Look at it this way: what I mentioned here are already two industry leading companies per a country of 4.5 million.
I am also quoting this article : http://gemconsortium.org/docs/download/2432
Getting back on topic:
If there will be such a high proportion people who will know IT-specific skills only, it will take a while to re-train some of them when some IT companies will pull out. Look at what happened during the Celtic Tiger: a lot of people were employed in the construction sector, but now they are finding it hard to adapt to the new economic situation, where there is less demand for their skills.
I would say that Ryan Air and Power Power are the exception, even if very successful Irish companies, rather than the rule. There's little interest in investing on or starting entrepreneurial companies in Ireland in general.
Ireland does have some good attributes in terms of low taxes etc. but the high cost of rates, insurance, legal and other services puts me off personally in establishing a manufacturing business there.
http://www.irishtimes.com/business/sectors/transport-and-tourism/property-still-the-main-store-of-wealth-for-irish-1.1432519Property still the main store of wealth for Irish
Survey finds low levels of investment In business or financial products0 -
Aren't something like 2000 businesses a month set up in Ireland?There's little interest in investing on or starting entrepreneurial companies in Ireland in general.
The problem is access to credit, not incentive and not ambition. If anything people are becoming more reliant on self employment following the crash, they are starting plenty of new businesses but they are not being supported because the market isn't there.
If they have limited liability, it shouldn't matter who the directors are, they are separate from the company anyway. Consumers don't tend do background checks on directors, that wouldn't even be common in the majority of business to business transactions. I don't think it matters to most people.Cody Pomeray wrote: »No, they don't have to be known to them personally. The 'friend of a friend' rule applies. This is inadequate.
I raise the change of directorship issue because it has the same effect, in fact it has an aggravating effect.0 -
There are a number of important points.Sister Assumpta wrote: »If they have limited liability, it shouldn't matter who the directors are, they are separate from the company anyway. Consumers don't tend do background checks on directors, that wouldn't even be common in the majority of business to business transactions. I don't think it matters to most people.
When a company is established as an incorporated body it becomes a distinct personality, with its own constitutional and legal rights, and similarly, its own legal obligations.
1. Rights.
If you apportion constitutional rights and legal rights to a personality, those rights can encroach upon the constitutional and legal rights of citizens when the rights of one party are balanced with those of another. In short, the constitutional cake, or the legal cake gets divided up further. That's fine. But if so, can we please make sure that these legal personalities are pursuing legitimate interests, by regulating them to a more reasonable extent
(asking their directors for ID before granting them legal personality status would be a great beginning).
2. Obligations.
If we apportion obligations to legal personalities, citizens and other legal personalities have a valid expectation of those obligations being enforceable. So when a Director is pursued through the courts and the ODCE for reckless trading, or example, we should be sure that that director has not been recorded as "Mr Michael Mouse" on the company's register.
This expectation extends to shareholders and consumers. If they are to continue having confidence in Ltd. companies, they ought to be reasonably assured of a level of transparency. This transparency is vital to the interests of a dynamic, healthy marketplace.
3. Revenue & Compliance Issues
I don't think this requires too much elaboration. Listing false directors is one of the oldest (and most fool-proof) tricks in the book when it comes to tax avoidance. Similarly, what's the point in striking off a director, and preventing him from taking up a new directorship, when the guy can go back to work, and be listed as a director under a modified surname? PPS number? What PPS number? The CRO aren't interested.0 -
we need a huge investment in the fibre broadband network in rural areas.
not finance for tiny start up companies
the fact that a lot of rural businesses rely on mobile broadband through a usb stick or via satellite broadband tells you its own story
rural electrification was done more efficiently in the 1950's0 -
Sister Assumpta wrote: »Aren't something like 2000 businesses a month set up in Ireland?
The problem is access to credit, not incentive and not ambition. If anything people are becoming more reliant on self employment following the crash, they are starting plenty of new businesses but they are not being supported because the market isn't there.
If you are going to mention how many open every month you should also mention how many close every month.
Sure there are entrepeneurs in Ireland, and it probably stacks up well to some European countries, but to say it is a very entrepeneurial country or one that is flush with new and up and coming businesses, is plainly wrong. Compared to countries in Asia that I know, it doesn't hold a candle to them in terms of business creation and the number of people running their own businesses. Like you said, the environment in Ireland is not helpful in some respects, such as lack of investment (looking at the numbers it's as big a problem as credit), lack of domestic market, high costs all round, strong labour protection for workers and heavy taxation makes it easier to be an employee than an employer.
Most people in Ireland dream of becoming a professional or working in a civil service type role or for multinationals. That is the same almost everywhere to be fair.The latest issue of Wealth Insights, published by British bank Barclays, shows that Irish high-net-worth individuals hold 55 per cent of their wealth in property and just 2 per cent of it is invested in enterprise or business. Of the rest, they keep 18 per cent in cash, 16 per cent in financial investments and 7 per cent in assets such as collectables.0 -
It seems highly unlikely there aren't measures for this kind of thing, so perhaps we should inject some facts into the debate:
This graph is interesting, since it suggests we're about mid-rank for entrepreneurialism in terms of the % of adults in start-ups - but on the other hand, a high proportion of Irish entrepreneurs do it because they have no other option.
cordially,
Scofflaw0 -
Bits_n_Bobs wrote: »Ireland made two serious policy decisions that had a massive impact on our digital infrastructure;
- privatised Eircom - the market is all knowing
- beauty contest for awarding original Esat license - the state knows best and the market should not be trusted
Dysfunctional and disastrous lack of an actual 'policy'. The depressing thing is I don't see any solid policy emerging since those decisions were taken other than the usual bluffing. Thankfully they've stopped creating bloody hubs
You contradicted yourself in one paragraph there. When Eircom is finished its broadband roll out we will probably have one of the best networks in Europe. Thanks to UPC Dublin is one of the best served in fibre in Europe anyway.0 -
But back to the original point -- do we have too much IT. That's a bit like worrying about having too many factories in the UK in 1850. Sure there were recessions but factories were the future then and IT is the future now. Unless software learns to write itself, and networks install themselves, there will always be a demand for IT and it will probably exceed demand even if China comes on strong. The latter is the only real worry.0
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Cody Pomeray wrote: »No, the solicitor, or senile Billy the shopkeeper who happens to be the local peace commissioner (this is my actual local example) meets his acquaintance Johnny 1 who says "Billy, this is Johnny 2, will you sign his form?".
Johnny 2 is now secretary of the company. The next day, or when the documents are filed, Johnny 2 (whose ID has never been verified) now signs away his role to a new secretary and a new director, called Johnny 3 and Johnny 4. The next available day they sign the company over to Micky and Minnie Mouse. Nobody in the CRO asks for anybody's ID along the trail, and as far as I can recall, there is no requirement for them to procure the services of a solicitor or formations agent or peace commissioner
I think my suggestion that no actual ID is required to be produced is satisfied.
No ID is needed in the UK either. It's online. You need a PPS number.0 -
I disagree.If you are going to mention how many open every month you should also mention how many close every month.
I was responding to:
That's just not true based on my 2000-per-month figure. But Scofflaw's graph more clearly proves that this is not true on an international comparison.There's little interest in investing on or starting entrepreneurial companies in Ireland in general.
The number of businesses which fail are not relevant to the suggestion that there is little interest in investing or starting entrepreneurial companies here.
Clearly we have the interest/ ambition in entrepreneurship. Like I said, the market isn't there right now.
I am assuming you live in Asia and I don't want to get personal and I've been an 'emigrant' myself, but my experience is that there is a tendency to be overly critical of the 'homeland' by emigrants abroad. Sometimes this is justified, often it is not. Especially when it verges on applying personality characteristics to Irish people living in Ireland.0 -
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I am assuming you live in Asia and I don't want to get personal and I've been an 'emigrant' myself, but my experience is that there is a tendency to be overly critical of the 'homeland' by emigrants abroad. Sometimes this is justified, often it is not. Especially when it verges on applying personality characteristics to Irish people living in Ireland.
Wind it back, there is a tendency to be overly defensive from people based in Ireland. Just wind it back please. I am giving you my opinion that is formed from relevant experience. The claim was made that Ireland ranks highly in terms of 'entrepreneurship' and I really don't see the results of that on the ground. If the proof is in the pudding there is no pudding to be found.
I live in one of the world's most entrepeneurial nations in the middle of Asia, so it's no surprise that the piddling numbers of small and medium size businesses in Ireland wouldn't impress me. Now if you said that Ireland had better beer and whiskey would I disagree?
I grew up in Ireland and know it well, even in the boom times most people went into construction related trades in terms of running business, designing , making, developing, buying, selling houses. These were also classed as Irish entrepeneurs. The term doesn't impress me much on it's own. Ireland's export business is hugely dominated by multinational exports.
There are good numbers of people working in freelance type IT services, which could be classed as entrepreneurial I guess. Again though the IT business would be dominated by the multinationals in terms of output and earnings.
This doesn't mean that there aren't people hungry to work for themselves or do it for themselves, but their numbers don't match up with real go getter areas overseas. The lack of investment cash is a big problem, it's all there in the surveys, I've given you the link above.
It's nothing to do with looking at personalities, it's looking at the numbers, the export figures in terms of indigeneous companies. 75% of Irish exports are from multinationals. Anybody can open a company, but does that make one a businessman? Does it really mean anything if they don't really do anything? IMO it's better to look at successful companies and their record on exports.
http://www.idaireland.com/news-media/featured-news/multinationals-exports/
The numbers simply don't suggest that Ireland is a hotbed of entrepeneurial/indigeneous business activity. That doesn't mean things can't improve, and it looks like they are somewhat with a heavy weighting to food/drinks sector.
The performance of Irish companies with regards exports to Asia is abysmal. I've tried working with one or two and they just don't get it.
http://www.irishexaminer.com/business/features/real-focus-should-be-on-indigenous-exporters-234732.html
They have been very far behind the curve and scrabbling to catch up now.
Also this Irish Examiner article misses the point of why our exports didn't grow after year 2000.
It was not solely because Ireland became less competitive and FDI dropped. It's because indigenous Irish companies didn't pick up the slack! When multinationals stopped investing there was nothing else substantial domestically in terms of export oriented companies to keep the momentum going! They didn't target Asia where the real substantial growth was in the last 10 years or so.0 -
And you have been given relevant facts which go against that opinion.Wind it back, there is a tendency to be overly defensive from people based in Ireland. Just wind it back please. I am giving you my opinion that is formed from relevant experience.
Yes and I won't quote the whole post, but you go on to link to a page showing that Irish exports are dominated by MNCs. However the fact that our exports are dominated by MNCs does not lessen the fact that our rate of entrepreneurialism ranks fairly well on an international basis, even better than Germany, France and the Nordics.I grew up in Ireland and know it well, even in the boom times most people went into construction related trades in terms of running business, designing , making, developing, buying, selling houses. These were also classed as Irish entrepeneurs. The term doesn't impress me much on it's own. Ireland's export business is hugely dominated by multinational exports.
All the MNC figure suggests is that we have created an exceptional environment for export-focused MNCs. The fact that our entrepreneurialism is higher than many of our competitors remains in place.
As for the hotbed of entrepreneurialism comment. I'm don't claim Ireland is a hotbed of entrepreneurialism. I am simply suggesting we don't rank worse than our competitors when it comes to being ambitious and entrepreneurial, after you claimed that Irish people have little interest in starting a business.0 -
If there was a lot of interest in starting businesses in Ireland, one would assume there would be a network of investors and a lot of businesses!
Since there aren't either of those, what should we conclude?
You say I haven't given facts but I have actually. These are strong indicators of the business culture in Ireland.
-Only 2% of Irish high net worth individuals invest their money in enterprises
-Only 25% of exports from Ireland are from indigeneous companies
-Manufacturing and exports tailed off in the early 2000s as local 'enterprises' were not formed in significant numbers (excepting construction related activities) to compensate for the lack of FDI
Now if you are argued that the people with an entrepreneurial bent had gone into trades or domestic related activities, and later were wiped out for choosing the wrong options, you might have some point.
I was responding to Experimental's statements below, which simply do not make any sense to me! It sounds like a load of old waffle and hot air f I'm being honest. Don't get all defensive.I have noticed that Irish startups are much better at selling themselves than Silicon Valley ones. In fact, very few countries are as good at starting businesses as Ireland is. The process of starting businesses is a competitive advantage, because it's unpredictable and it can't be replicated. The methodology behind this process has no single universal format, so it's hard to teach and therefore hard to outsource. Over hundreds of years, Irish people have built up a unique entrepreneurial culture, so I wonder if the government invests in developing it further.
I'm not saying that some Irish people do not have an an aptitude or an interest in doing business, I'm just saying that there is nothing particular that would make Ireland special in terms of opening or operating businesses, especially if you look at the trade figures.
If the situation is changing and there are a lot of genuine and well run companies setting up and starting to be successful I will be the first to congratulate them!0 -
-Only 2% of Irish high net worth individuals invest their money in enterprises
THis figure seems very suspect to me. Surely at least 2% of Irish high net worth individuals became high net worth because of enterprises.
Does this figure refer to startup enterprises only?0 -
There was definitely too much focus on investing everything into property and related construction industries during the bubble.
What I'm noticing is renewed interest in investing into enterprise. People out there with money need somewhere to put it.0 -
THis figure seems very suspect to me. Surely at least 2% of Irish high net worth individuals became high net worth because of enterprises.
Does this figure refer to startup enterprises only?
The figure is from the Barclays Wealth Insights report:Irish high net worth individuals are likely to hold the majority (55%) of their wealth in property, more than in any other country globally. Only 2% of wealth is held in business/entrepreneurial interests while 18% is held in cash, 16% in investments and 7% in tangible assets and collectables.
That's according to the latest edition of Barclays Wealth Insights (Origins and Legacy: The Changing Order of Wealth Creation), a global survey of more than 2,000 HNWIs comprising entrepreneurs, business leaders and investors, which provides an in-depth study into how wealth is now being made, spent and shared across the world. The report navigates the global landscape of wealth, examining how different cultures prepare for the future and consider their legacy through wealth and inheritance planning and philanthropy.
http://www.ifsc.ie/article.aspx?idnews=199820
As to the question of the connection between earning one's wealth and the assets one keeps - entrepreneurs, by and large, become wealthy by selling their company.
The low figure for Irish investments by high net worth individuals is an issue:"The study confirms that when it comes to asset allocation, Irish HNWIs, like so many other Irish investors, continue to hold a very high proportion of their wealth in property and are underweighted when it comes to equities and other investments. The 16% of wealth held in financial investments in Ireland is half the European average of 32% and significantly lower than the US average where HNWI hold 61% of their wealth in these types of investments. As market conditions improve, there is more of a case for Irish investors to take the opportunity to reweight their portfolios."
In other words, compared to other places, little of what the Irish wealthy have is reinvested in the economy outside property. So there are few "entrepreneurial wealthy" in Ireland compared to the rest of Europe, let alone the US - the Irish wealthy are primarily rentiers.
So we may be reasonably entrepreneurial in the sense of starting companies, but those companies will find it hard to get Irish investment - a summary which would agree with my personal experience. I suspect that if the figures were available, they would also show a high proportion of wealthy people whose wealth comes from property dealings.
cordially,
Scofflaw0 -
[QUOTE=Sister Assumpta;85507041However the fact that our exports are dominated by MNCs does not lessen the fact that our rate of entrepreneurialism ranks fairly well on an international basis, even better than Germany, France and the Nordics. [/QUOTE]
Just out of curiosity, because I genuinely don't know, would these figures include all of the 1 person companies out there formed by people who choose to work as contractors?
I've worked in engineering consultancies and in IT in this country and in these industries up to half the staff are their own companies who are paid directly by the parent company. This is done on their behalf to gain a high daily rate whilst foregoing any benefits or job security.
So technically whilst these people have started their own companies I wouldn't classify them as entrepeneurs as they don't employ anyone else nor will they in the future.0 -
experiMental wrote: »As I work in IT and digital technology
That is a very, very extremely broad statement.
What area of "IT and digital technology? Perhaps that will help readers understand your point of view.0 -
That is a very, very extremely broad statement.
What area of "IT and digital technology? Perhaps that will help readers understand your point of view.
First of all, I work in a start-up that has been one year in business. Can't say any more, due to privacy reasons. Secondly, thank you all for continuing the debate. It answered every one of my questions and whatever I wondered about over-investment into IT.
So is there a way to measure objectively whether a country is over-investing into a certain area of economy? I am thinking from return on investment point of view. Judging from what I saw, return on investment from IT is very impressive in Ireland overall. But is the Irish economy balanced enough?0 -
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