Re-awakening the Creative Gene - The Key to Ireland’s Economic Recovery
Co. Louth, Ireland
As we hear about more and more job losses, multinationals leaving our shores, businesses being wound up and a bulging national debt, it seems that Ireland’s future is a very bleak one indeed. You see, we went “all-in” after seeing two cards, (1) foreign direct investment and (2) construction. Sadly, when we saw the other cards on the board, this mistake became evident. However, there is a way out. There is a way to get more chips and stay in the game. That way out, is setting free the natural creativity that has long been associated with the Celtic character.
Right now, is probably the lowest point in Ireland’s economic history. Formally looked upon as the Celtic Tiger now we are viewed as one of the PIGS (Portugal, Ireland, Greece, Spain) countries. Globally, we are now known for our fiscal ineptitude. Long forgotten is our achievement as the shining light of the EU. I know it’s hard to accept, but that’s reality folks. If we do not re-calibrate our economic policy soon, we are facing a very dark period in our country’s history.
We need to create jobs, jobs and more jobs in the private sector and we must look at new ways of doing this. However, we have a trump card, something that was dormant in the Celtic Tiger era. That’s our creative ability. The era of the knowledge economy is over, the new vista is the creative economy and Irish people are hard wired for this. However, this creative gene needs to be re-awakened.
When we consider W.B. Yeats, James Joyce, Seamus Heaney, Ernest Walton, Oscar Wilde, U2, Phil Lynott, Patrick Kavanagh etc. we see that Ireland has produced a disproportional number of creative and innovative people that have come to prominence on a global level. This innate creativity needs to be focused on creating new businesses that will fundamentally change the backbone of the Irish economy.
Now, what can be done to invigorate this gene and create a business environment that fosters new innovative businesses? Unfortunately, the nuances of entrepreneurial support are all too often overlooked by policy makers. There are many factors that need to be considered and balanced. However, I will lay out what I believe can make substantial strides to bringing Ireland back from the brink. This involves two stages (1) short-medium term and (2) long term.
Firstly, lets look at the short-medium term. As entrepreneur Steve Wynn has said on US television, the main objective should be job creation. This is the only true stimulus that works. The government has the most powerful tool at its disposal to do this. This is reducing taxes and slashing red tape.
In fairness, the Irish government has made some reasonable moves regarding this. New start up businesses are exempt from paying tax including Capital Gains Tax for the first three years of operation. However the limit is a liability of €40,000. This is a step in the right direction. However, do you think it would have any bearing on a large venture capital fund’s decision making process? A country with more streamlined employment legislation along with lower staffing costs would trump this policy. All being said, I applaud the government for such a move.
An example of two industries in which Ireland has become a global leader due to smart government tax and regulatory policy has been the Stud and Betting industries. We need to take a similar approach to start-up creation in general. However, we must also be aware that a holistic approach needs to be adopted in order to encourage both business angels and venture capitalists to invest in Irish start-ups.
A lack of understanding on what’s involved in the start-up investment process has made many Irish people cynical with regard to many successful Irish financiers. However, when these men and women risk their own money on new businesses that create jobs, and in many cases, have knock on benefits for local suppliers and the broader economy, they should be rewarded more than our taxation system currently allows. To put this in perspective, in Ireland you are better off gambling in an online casino than you are investing in an online start-up. This needs to be rectified.
On the personal taxation front, the risk return relationship needs to be considered from a taxation standpoint. Basically, the more the risk you take to encourage economic development then the less you should be taxed. Not only should this apply to business angels and venture capitalists, but also employees who work for early stage companies. This change in personal taxation would encourage highly skilled people to take jobs with new start-ups. It would also create an influx of highly skilled workers.
As a result of changing the personal taxation system to recognise the risks associated with working for a new start-up, the culture will start to view entrepreneurship in a more positive light. It’s something that needs to be looked at in grater detail but it has the potential to skew the economy in the right direction.
Now on to the second stage. This is the most important part, but will only have an economic impact in the longer term. We need to change the culture and skill set of the Irish population to be more creative and start-up centric.
Our education system is not geared towards creativity and entrepreneurship. It has been constructed to create workers for multinationals. Nothing more nothing less. Unfortunately, our education system is obsolete in the current economic climate. It does not position the country for a rebound in the global economy. China, India and other Asian countries as so good at producing skilled individuals in Science and IT who can work extremely well within a structured system, we just can’t compete on this level.
The reliance of our education system on retention and regurgitation does not produce creative graduates who will start innovative new businesses. On a sub conscious level the creative is relegated behind rote learning in students brains. This is not good.
Right now, our education system is crumbling and many multinationals now believe that Irish graduates are substandard. This is because our education system has become a memory test. Students go to grind schools and develop advanced examination technique so they get excellent grades in their Leaving Cert. without fully understanding the base material. They apply the same techniques at third level. As a result, we see grade inflation at third level. The real reason behind this, is that students in Ireland are experts on exam technique but not on the core content. With the static marking schemes applied at many Irish third level institutions, the students have a field day applying their expert examination technique to take advantage of this educational loop hole.
So how can we change this. Firstly, change the Leaving Cert. and any other final exam. Evolve it into a system of project based problem solving. At the end of second level, students will have a portfolio of projects that will demonstrate their capabilities. Leave it up to the third level institutions to set any entrance tests and selection processes. They could apply an entrance exam similar to the SAT and ACT in the United States. Hey, if it works for Stanford and MIT, it will work for UCD and TCD.
The policies that created the Celtic Tiger just won’t work this time around. We should look at an interesting paper by Yanky Fachler called “Ireland-Israel: Innovation and Entrepreneurship“ which compares the economic policies of both countries. The paper highlights the importance of an entrepreneurial culture “Israel’s business culture encourages individual imagination, and appreciates the contribution of the nonconformist.”
Ireland must work to foster such a culture. Israel is the number 1 non US country that has businesses listed on the NASDAQ. Ireland must look to achieve a similar level of success on the NASDAQ and similar exchanges not only in the West but also in Asia.
We need a cohesive approach to unleashing the creative gene. This must result in measurable goals that will drive the Irish economy out of it’s current stagnation. The new marketing slogan for Ireland should become “Ireland: Where Your Ideas Get Funded.”
Feargal Byrne is blogger in chief at LostJobStartBusiness.com a website that helps people from the United States to India start a business after they have lost their job. He is an entrepreneur with experience in the software development and entertainment sectors. He holds a B.A. in Accounting and Finance and an M.B.S. in Entrepreneurship and Marketing from Dundalk IT. He is a member of the Marketing Institute of Ireland.
Feargal Byrne
CEO
213 Ard Easmuinn
Dundalk
Co. Louth, Ireland