Transcript “Women in Irish Society - how far have they come?”

“Entrepreneurial Challenge”
Prof. Anne Flynn
04/14/2005
Traditional Irish Greeting
A chairde.
Tá áthus orm bheith anseo libh agus mo
bhuiochas libh as an fáilte a thug sibh
dom.
Entrepreneurship is?


One of the cornerstones of a modern,
fully developed economy and the
lifeblood of thriving local
communities.
An important contributor to
economic growth, employment,
innovation, and competitiveness.
Structure
Global Assessment [GEM]
 Entrepreneurial Activity:
Ireland, Europe, US
 Entrepreneurship in Europe
 Entrepreneurial Challenges in
Ireland
 Closing Remarks

Global Assessment


The Global Entrepreneurship
Monitor (GEM) research program - is
a global assessment of the national
level of entrepreneurial activity.
Initiated in 1999 with 10 countries,
the fifth assessment was completed
in 2003 with 41 countries.
www.gemconsortium.org
GEM Program Objectives




Are there national differences in
entrepreneurial activity?
National consequences of
entrepreneurial activity [scope, job
creation, growth]?
Why are some countries more
entrepreneurial than others?
What can be done to enhance
entrepreneurial activity?
GEM Research Activities

Adult population surveys



National expert interviews


National teams, [18-70 per country]
National expert questionnaires


Random sample of adults, 2,000 or more
Grass roots entrepreneurial activity
Follows personal interview
Standardised national data

IMF, World Bank, UN, OECD, etc
Measures

Total Entrepreneurial Activity (TEA)
–

provides a measure of those active in
starting a new business [start up process &
owning/managing a new firm 3-42 months]
Firm Entrepreneurial Activity [FEA]
–
–
an indicator of entrepreneurial activity
among established firms
firms provide new innovations, not just
replicate existing goods or services
What is National Entrepreneurship?

People Creating New Firms

Start-up phase, before firm operational
Young firm, up to 3.5 yrs old

Entrepreneurship among existing firms

Produce market innovation, Focus on growth



National Infrastructure focuses on
adaptation
Coordinated effort, Collaboration among
major sectors, Government, research,
education, financial
Overall National Entrepreneurial Activity
Two Dimensional Classification
Low TEA
Medium TEA
High TEA
High
FEA
Hong Kong,
Slovenia
China,
Mexico
Chile, Korea (South),
New Zealand,
Uganda, Venezuela
Medium
FEA
Belgium, Finland,
Italy, Sweden
Australia, Canada,
Denmark, Iceland,
Ireland,
Hungary, Singapore,
Spain, UK, US
Brazil,
India
Low
FEA
Chinese Taipei [Taiwan],
Croatia, France, Japan,
Netherlands, Poland, Russia
Germany, Greece,
Israel, Norway, South
Africa, Switzerland
Argentina,
Thailand
Opportunity vs. Necessity
Are you involved
 To
take advantage of a business
opportunity
or
 Because
you have no better choices
for work?
Willing volunteers or draftees?
Entrepreneurial Activity




US (TEA) rate 11.9% in 2003, 7th highest.
Ireland (TEA) rate 8.1%, fore in Europe,
most entrepreneurial country in EU.
76% of Americans opportunity vs. 85%
of Irish entrepreneurs
US (FEA) rate of 2.4%, the 10th highest,
Ireland (FEA) rate 1.6%
Nascent and New Firm Rates
Entrepreneurship and Job
Creation



US - 70% [employ at least 1 person]
Ireland - 84% [employ 5 or fewer]
third only entrepreneur employed.
Most expect they will remain small.
High growth aspirations [20+ staff in 5
years time] [Ireland 16%, US 20%, Europe
5.9% ]
Entrepreneurship and Population
Profile


US: Most active [25-34] years, TEA 15.7%
men vs. 8.2% women, specialized
professional, technological, or business
degree [highest TEA 17.8% &
opportunity driven 13.3%]
Island of Ireland: Most active [35-44]
years, 12.5% male vs. women (3.7%), high
level of education.
Rates of Entrepreneurial Activity for Men
and Women
Entrepreneurship and Cultural
Values


The strength of support for
entrepreneurship among the general
adult population within Ireland is
stronger than in the US.
Ireland vs. US
– Good career choice [66% - 63%]
– High degree of status [76% - 64%]
– Positive media coverage [84% - 64%]
Personal Context of the
Population
Personal Indicators
Ireland
Northern
Ireland
UK
46%
42%
48%
54%
40%
I see good
opportunities
33%
32%
35%
31%
32%
I know a recent
entrepreneur
43%
25%
25%
39%
40%
Fear of failure *
would prevent me
starting a business
41%
40%
34%
23%
38%
*
I have the skills to
US
*
European
Average
start a business *
*
Entrepreneurship and
Financing



Av. Cost of Start-up [US $29,600 /
€26,200) Europe $53,800 / €47,600]
US - highest prevalence rate of
informal investors with 5 /100 adults
having invested in someone else's
business during the previous 3 years
Ireland - Low level of informal
investment (2.6%) are active business
angels, compared to 4.9% in the US.
Rates of Business Angel Activity
Shortcomings that Inhibit
Entrepreneurial Activity
Ireland






Small size of home
market
Early stage finance
Fear of failure
Rate of
commercialization of
research
Skills and experience
Physical
infrastructure
United States
 Reduce gender gap [1.9
men for every woman]
 Lack of financial
capabilities - acquiring
latest technology
 Stronger IPR laws to
enhance R&D
transfers
 Build sustainable
financing venues
Entrepreneurship in Europe



SME’s backbone of European economy
Conditions in Europe vs. US
Green Paper on Entrepreneurship
–
–

How to produce more entrepreneurs?
How to get more firms to grow?
Action Plan: 5 policy areas:
entrepreneurial mindsets, incentives for
entrepreneurs, competitiveness &
growth, access to finance and red tape
Entrepreneurial Mindsets



“Promote awareness of the
entrepreneurial spirit by presenting
best practice models and fostering
entrepreneurial attitudes and skills
among young people”
Educational Policy
Entrepreneurs are not a homogenous
group
Incentives for Entrepreneurs




Fairer balance between risk & reward
Tackle the negative effects of business
failures
Facilitate the transfer of companies
and amend social security systems for
entrepreneurs.
Entrepreneurship gap between Europe
& US is widening.
Incentives for Entrepreneurs





Why do fewer Europeans have what it
takes? (Eurobarometer 01/2005)
Balancing the risks: [A regular income,
Job stability, Fear of failure]
Rewards [EU - greater independence &
self-fulfillment, US - creating one's own
working environment]
Similar perceived obstacles
Good management = Success
Competitiveness & Growth



Promote access to support &
management training for
entrepreneurs from all backgrounds,
especially women and ethnic
minorities.
View immigration as an opportunity
for stronger entrepreneurship (US)
Exchange of Good Practice
Access to Finance


Improve the availability of venture
capital, business angel finance and
investments by private individuals
(US)
Continue efforts to mobilize capital to
support young, risk-taking businesses.
Red Tape




Reduce & simplify administrative
barriers & regulatory burdens
World Bank "Doing Business Survey
2005” [ease of starting a business]
EU busy pushing reforms, still lag US
US [5 days & 5 administrative steps to
start a business] vs. EU [36 days, 7.5
steps]
Entrepreneurial Challenges in
Ireland






172,000 small
businesses
60% of total turnover
66% of employment
50% of private sector
employment
80% service sector
16,000 new
enterprises are
created per annum
Enterprise Driven Society




Less employment in large companies &
public sector
Size of the domestic economy
Government foster an entrepreneurial
climate & enterprise culture
Small Firms Association of Ireland major impediments and challenges
facing the enterprise led sector &
appropriate actions
Competitiveness


Ireland’s competitive position is now in a
tailspin [4th position 2000 - 30th today!]
An expensive & less attractive place to do
business. [min wage 22% higher, insurance
costs risen 100% in 2 years, retail space Dublin
(capital city) most expensive in the world! red
tape adds 4% to product cost]


SME’s - [non-pay costs 23.7% 2002 - 2004]
“You must create wealth before you can
redistribute it.”
Skilled Workforce & Knowledge
Driven Economy

In a knowledge-based economy
– Well-supported process of life long
learning, training & up-skilling
programs
– Intellectual property system is open
and inviting
– Focus on technology transfer,
licensing, the importance of 'change'
or 'new ideas’ rather than 'R&D'
Infrastructure





Current gridlock is threatening
enterprise formation & development
Specialized body assessing planning
applications & reprioritizing projects
Liberalization & deregulation within the
energy market
Strive to have the "best in class"
telecommunications infrastructure
“Environmental accreditation”
Government Support

Comprehensive fiscal approach to
enterprise
– Retaining low corporation tax rates
(12.5%)
– Reducing inflation below 2%
– Standard rate of VAT to 17.5%
– No increases in labor costs
Regulatory Burden




“Simplicity needs to be rediscovered as
a virtue.”
Comply - An owner manager would
have to read almost one million words
per annum & complete forms running
to over 500 feet in length.
SME’s cite legislation as the most
significant problem for their business.
Cost impact analysis on businesses
Encouraging Business Start Ups




Develop an" Enterprise Culture”
Remove barriers to entrepreneurship
Availability of pre and start up seed
capital
Increase number of female
entrepreneurs
ICT & Training



Maximize the potential of ICT for
every small business & speed up the
roll-out of broadband digital access
Training objectives - driven by business
needs & Increase management
competency among small firms
Enterprise courses
Value of Sectors


“Value Added" economy
Barriers to trade within the Eurozone
“Create a business environment which
makes it possible to sustain an economic
and social shift to a high skill, higher value
added competitive environment.”

“Ahead of the Curve: Ireland's Place in
the Global Economy.”
Closing Remarks


Strong positive contributors and the
shortcomings that inhibit
entrepreneurial activity
Shared challenges in fostering
entrepreneurship
“Go raibh maith agaibh go léir .”