Wednesday, November 10, 2010

SME's are the future of the Irish Economy

The future of the Irish Economy is up for a lot of debate.  Many of the official policies of "Ireland Inc" as it is so called, focus on tapping into our great population of entrepreneurs and asking them to take all the risk, growing their businesses out of their comfort zone so that they can provide us with more jobs.

Ireland is the second highest country in Europe for business start-ups per capita - second only to our Polish cousins (GEM Report Ireland, 2008).  You may have already seen Ronan Lyons yesterday mentioning that Ireland is one of the least difficult places to set up a business - perhaps this has something to do with our entrepreneurial nation.  Another valid reason would be the infectious nature of business start-ups - if you know a self employed person, you are more likely to think of setting up a business yourself at some point in your life.  At the moment we have a lot of "necessity entrepreneurship" in Ireland - people starting up a business because they have to keep the wolf from the door.  At the same time, a lot of people are starting a business because they see a redundancy package as an opportunity.  They always wanted to be self-employed, and now they have been given a metaphorical kick in the arse to go and do so.  Before now, life (in the Celtic Tiger era) was just too damn comfy/easy to actually go out and Just Do It. 

A lot is written and spoken about at government level about the importance of helping Ireland's entrepreneurs grow as big as possible, for obvious reasons.  They want more jobs, more exports, more value for the Irish Economy.  And it's all they can shout about.  Increasing the pressure on our surviving businesses seems to me like a knee-jerk reaction to our current state of affairs rather than a well thought out one.  If we take a step back and think about this for a moment, and actually talk to the entrepreneurs themselves we might find ourselves with other options. Perhaps less risky, more cautious, reasonable options. 

Did you hear Stephen Pearce on The Last Word with Matt Cooper last Friday?  Listen back here - he spoke about the pressures he was under, trying to keep the business afloat back in 2007, 2008.  He got away from actually creating pottery - his true passion - but more importantly - his true skill set.  Stephen was under financial pressure to pay massive wage bills so was making decisions about what to "create" which were directly linked to his financial needs.  He mentioned having to make more of a particular product, not because he wanted to but because he had to.  He felt the numbers were driving the business, rather than creativity or craftsmanship - 2 reasons which inspired him to start up in the first place.  Stephen's business did extremely well - he came across grateful for the business he received from the fans of his pottery all over Ireland and beyond.  Yet at the same time he had to let his staff go and close his workshops 2 years ago, when the financial crisis hit. 

What is the lesson here?

Stephen was an entrepreneur but he had his limits.  Don't get me wrong, I know it's clear that he doesn't consider himself a businessman first and foremost, he is a potter and craftsman who runs a business, but he is an entrepreneur, and we have to be able to tap into all sorts of entrepreneurial types if we are to get ourselves out of this economic mess.  Stephen knows his own limitations now and he is going to start up his business again, grow it to a size he is happy with, and comfortable running.  If Stephen stays small, or even "Medium Sized" he will still be creating jobs, adding value to the economy and exporting (he spoke of British chains in Dundrum already signing him up for Christmas).  Surely it would be in our best interests as a country to look for more of these, less risky businesses, rather than pumping grant aid and financial assistance into businesses that might or might not work - why put our eggs into just a few small baskets, is what I'm asking?

Stephen's story is a public one, now that he has been on the national airwaves talking about it.  I have countless other examples that I simply cannot name for confidentiality reasons, but the underlying theme from all these entrepreneurs is that they do not want to take on the huge responsibility of so many people's wages.  They are real people, with real families, they understand the pressures of family life and it breaks their hearts to have to let people go in a downturn - or any time, for that matter.  Why should we put that on their shoulders, when they have the maturity and wisdom to know that they are not the best positioned person to lead such huge teams? 

I suppose what I'm trying to say here is that Less is More.  Surely if we had a substantial increase in the number of businesses with 10-20 employees rather than just one or two big success stories, we would be creating pockets of little economic stability all over the country?  Think of the spin offs. 

Ireland's entrepreneurs are great in number and in capability.  Let's trust their instincts.  Let's not force them bigger than they believe they have the capacity to be.  It will be more lucrative in the long run. 


  1. I really agree with your points. I find that what many smaller entrepreneurs are trying to do- go forward with positivity- is a great antidote to the gloom that is broadcast all over the country. We need these entrepreneurs not only for the economic potential, or the potential green/social innovation, etc, they may bring,but also for their enthusiasm and positive examples!

  2. Thanks Susan! I think that if Ireland had a more cheerful key entrepreneur (like an Irish Branson, for example...) we'd be in a great position. Entrepreneurship needs a champion - someone to encourage, motivate and remind people that failing isn't failing unless you don't learn something from it. From what I've seen Michael O'Leary only has eyes for Ryanair (something his shareholders are not upset over I'm pretty sure!) - so not appropriate for the kind of role I'm thinking of. Then Bill Cullen only gives out about how "it wasn't like this in my day..." when talking to various groups. WE need more positivity! You're absolutely right about that.

  3. Lol at the guys above spamming keywords on a nofollow blog!

    Anyway, I don't think anyone doubts that SMEs are what make up the bulk of the Irish economy. Small businesses employ far more than the large corporations. In fact, large corporations are small fish when it comes to the overall state of the economy.