Recently, RTE’s lunchtime news featured a short though very informative interview with the head of investment strategy at Davy Stockbrokers.
Responding to claims that markets were getting jittery about growth in the US and global economies, he said that it was important to stand back and look at the bigger picture.
As he pointed out, the Federal Reserve is predicting growth rates of about 4 per cent in the US economy this year and next year. This was confirmed by last Wednesday’s Reuters poll of more than 600 economists which also predicted decent global growth rates of around 4 per cent in 2010 and 2010.
As the man from Davy’s said: “By any standards, that’s a pretty good outcome.”
He’s right and we all need to remain focussed on this.
Ireland is in good shape to benefit from this growth. This stands in complete contrast to what we experienced back in the Eighties, when pointless borrowing and wasted opportunities saw the world recovery pass us by.
Over the past few weeks and months I have put forward some ideas as to how we can best benefit from this growth and protect those most hurt by the recession. I don’t intend to rehash those individual proposals today. What I want to do instead is — as I suggested last week — to draw a few of the ideas together.
Across the globe, governments are attempting to foster a culture of enterprise and entrepreneurship, some with more success than others, as these are concepts you cannot introduce with a simple single piece of legislation.
We have a decent track record of doing that in the past, but it has slipped a little in recent years. The stunning growth rates of the latter part of the last decade caused many people to think that simply having a good idea was sufficient to succeed.
Success came so relatively easily that business failure almost became an alien concept: a dirty word even. Some new ventures do fail — so what? That is the nature of business. We need to get back to the reality that some new businesses fail despite the best efforts of their owners and
‘The business of Ireland is business, whether it is small or large’
that there is no shame, or blame, in that.
We have to create the climate and structure for people to be unafraid of failure. I have suggested reforms to our bankruptcy laws to help people to recover from such situations and to permit them to get back and try again. I welcome the likelihood that some of the reforms I suggested will be implemented.
It is important to stress that I am not just talking about large or medium-sized businesses. I am talking about individuals starting up as sole traders. Many of the new business owners of 2011 and the years ahead will come from the ranks of those currently unemployed.
This is why I put forward last week’s idea of diverting €0.5bn from the capital programme to pay people to do work in their local community. That money could be used to show people how they could develop local small-business ideas. The idea of working for yourself may seem daunting for some as they fear the process may be too complicated and risky. A simple guide to the process could alleviate these fears.
On the larger scale, I have focussed on the need to uncover other sound and reliable sources of credit and proposed that business owners be allowed to temporarily tap into their pension funds for working capital without penalty from the Revenue Commissioners.
I have also cited such potential growth areas as intellectual property and a start-up founders visa programme to encourage entrepreneurs with good ideas to come here.
As I said here last week: The business of Ireland is business, whether it is small or large. We perhaps lost sight of that with the concentration in recent years on property and increasingly grand construction projects.
Now we must return to doing what we did to bring the Celtic Tiger about and producing the goods and services people want to buy.