Oireachtas Joint and Select Committees

Tuesday, 25 February 2014

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Strengthening the Start-up Community: Discussion

2:40 pm

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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I have a few questions. I know this is not Government policy but it is a recommendation and part of our job is to provide a forum to air it and to adopt the parts of it we believe in and push them through as a committee. Mr. Daniel Ramamoorthy mentioned co-working spaces and that practice is in operation in the voluntary sector where centres have been set up in a few places. People share the space and use hot desks and it works out very well. We have had a big problem in many of our town centres around the country and they would be ideal places to locate co-working places or centres for enterprise or entrepreneurs to revitalise town centres. That is an idea we could examine as a possible solution to other problems as well and we should do that.

We talked about the failure rate in businesses earlier. In Ireland, we often celebrate failure but, apart from that, some of us are nearly afraid of it. At the first meeting I attended of an enterprise board, which will now become a local enterprise office, the annual accounts were being reviewed and the chief executive officer at the time was celebrating that the success rate of 97% was so high. I was new to the board and I said that I had a problem with that. There was something wrong because the failure rate was too low, yet all the board members were delighted that it was so low, but that was a mistake. How do we change the culture, through Government agencies and bodies, of what is an acceptable failure rate? If it is too low, there is something wrong and if it too high, it is taxpayers' money that is involved. We need to change the culture whereby it is fine to have a healthy percentage of failures, or else enterprises will not get a chance to develop. Sometimes when one watches episodes of "Dragons' Den" one would get depressed - we should give those entrepreneurs a chance and throw them a few euro. If we do not give entrepreneurs a chance, we will not have enough enterprises. When it comes to spending taxpayers' money, that is a culture we have to change because people working for Government are often afraid to spend the money in such a way because they have to answer for it. That culture needs to change. I would like to hear Mr. O'Sullivan's thoughts on that.

I was delighted that the group's report recommended the JobBridge initiative and I think it was said that it could be increased tenfold. I understand that some people have a concern about it. It does not work perfectly in every situation and it will be abused. It is similar to every scheme in that there will be abuse of it. We cannot, however, stop introducing good initiatives because of that. In the context of reconsidering any of these policies, I presume the group will be engaged in ongoing work here, and I hope it will, during our review of youth unemployment. The part-time jobs initiative that was in place in the early 1990s was mentioned on a number of occasions. Under that initiative, the recipient could use the money they got from the State, their social welfare benefit payment, and work for ten, 11 or 12 hours or whatever period of hours their benefit payment covered in terms of the going rate for the job concerned. If they worked as an engineer in the local county council and the going rate was €20, they would have worked for ten hours for their social welfare payment. No one could have accused them of being paid below the going rate. That is another such scheme we could consider because it got people back to work. It might be a solution to give people part-time jobs throughout the public service to get them back to work and they could also be trained. That is another initiative we should consider. I would like to hear Mr. O'Sullivan's thoughts on that also.

Mr. O'Sullivan specifically mentioned a youth fund and I think he said that the local enterprise offices and the micro-enterprise scheme should consider setting aside a certain amount of money for youth entrepreneurs. Could he elaborate on that? It is a subject we discuss a good deal at this committee, namely, specifically setting money aside to be targeted directly at that age group.

There is reference in the report to protection for the self-employed and that those who take the risk often felt that the State does not help. In fairness, social welfare benefit is available to a household that has no other income but if one is living with a partner who has a job, a self-employed person will not get any help in terms of social welfare. That is a deterrent because people feel there is no safety net for their families or themselves. What does Mr. O'Sullivan think we should do to improve that or how quick should bring in a measure in that respect?

There was a good deal of reference to community involvement and I presume Mr. O'Sullivan would welcome social enterprise and that all these initiatives should be available to social entrepreneurs. If I am wrong on that, he can correct me.

Mr. O'Sullivan's group said that we should move to a mentoring model, with 80% unpaid and 20% paid. I can see the benefits in that and I would nearly agree with it. This goes back to sport where many clubs have a coach and a trainer. I used to argue in my club 20 years ago when we only had a trainer that we should also have a coach. Any of the great clubs now have both. Do enterprises need a business coach who would go through the basics of running a business and also a mentor who will reflect the entrepreneurial spirit and bring in the drive that is needed in the enterprise? Many businesses have an idea but do not have the know-how of the basics of running a business, employment law and managing the accounts, and that might not be the job for the mentor or vice versa. Perhaps there is room for both, or does Mr. O'Sullivan believe that such free mentoring should cover all that? Many enterprises have a great idea and the business but do not know how to run a business and that can be a problem as well. I would like to hear Mr. O'Sullivan's thoughts on that.