Dr. Tom McDonnell:

I would say supporting a culture that enables failure in order to try again. A lot of innovation is about trying ideas, most of which will fail. What the State can do there is ensure no matter how many times you fail or how badly you fail, you are going to be okay. That removes the terror of failing. There is a social terror, perhaps, of failure and opprobrium, but I am referring to the financial aspect. We want to create an environment that is okay with the notion of creative destruction. Economies only grow in the long run through creative destruction, business churn and new firms being created that are more innovative or doing new things. We want to try and try and try again, which is what they do in the United States, and they are okay with it. That means bankruptcy legislation needs to be as favourable as possible to not penalise. You are not going to be punished for the rest of your life. You can try again and it is okay. The State itself needs to be willing to support serial entrepreneurs who have failed but done so in interesting ways and where it was not their fault, necessarily.

There is also the worker perspective. A just transition implies there will be job losses. That means you need to protect those workers and if you do not protect those workers of course, they will necessarily, inevitably and understandably push back against that because they are terrified their incomes will collapse. It is about having a strong social insurance system that allows workers and former employers, including entrepreneurs, to retrain and learn new skills. That means giving them a replacement income for a long enough period to go back into education, or whatever it might be, to retrain and move around. That means a significant period. Those are a few things that can be done in terms of State supports.

The Senator talked about the difference between the US and Europe. The implication is that we are not doing what the US does and that we are not competitive because the US is doing certain things better than we are. Their productivity advantages over us are mainly associated with a small number of sectors. For example, they do not do construction very well in the United States but they do tech very well. They also have a venture capital ecosystem that we do not have in Europe. A lot of our funding for business comes from banks. We do not have those funds in Ireland, the UK or wherever. We need to think about, for example, how we can leverage pension fundsen masseto provide those equity stakes. If the private sector cannot do that just yet, it implies that there is a role for the State to do it. That is the point of the Mazzucato-type model of taking equity stakes in businesses, which gives the businesses the comfort of knowing the somebody else is going in with them. It gives start-ups the seed capital to try and try again. Part of the creative destruction model is about funding the higher-level sector, including higher-level research and development, where we have enormous gaps compared to other countries. Money has to be spent while knowing a lot of these ideas - 90% to maybe 99% - are going to be complete busts. The US spends enormous amounts. It is given to the universities to just open ideas and do what they want to do. They try, try and try again at a vast scale and often for non-commercial projects initially.

Ireland's problem is that we are really small. We cannot take tens of thousands of gambles. However, what we can do is align with other small countries in different sectors at different times and in different ways to pool resources. That will enable us to take more bets and punch above our weight.