Section 3: Developing a Conducive Environment for Entrepreneurship
3.5 Further Improving the Environment
As is apparent from the paragraphs above, the environment in Ireland is very strong in very many respects and is highly conducive to entrepreneurship. The recommendations that follow are made with a view to building on those strengthens and further improving the environment to achieve the world class
environment for starting and growing new businesses, which is incorporated in the vision.
Annual monitoring of the environment: There should be an annual monitoring of the environment as it
impacts on entrepreneurs and the setting up of new businesses, as part of the Annual Entrepreneurship
Review (see Section 6) and any impediments that may arise should be tackled in a timely manner.
Monitoring barriers to entry: The ease of entry to existing and new markets is an important factor in
understanding the level of entrepreneurship. The home market continues to be an important initial market for most new firms, even those that subsequently become international. A number of factors influence the ease of entry, for example regulations and the costs associated with market entry. Minimising the barriers to market entry and reducing the costs associated with start-up should lead to greater levels of market entry, both by new and by established firms.
The Competition Authority plays an important role in enforcing Irish and EU competition law, in evaluating mergers and acquisitions, and in promoting competition in the economy. The mandate to promote competition is particularly important to entrepreneurs, as it should ease the cost and time
required to enter existing and new markets. The Report of the Enterprise Strategy group referred to the absence of meaningful competition in key aspects of some sectors of the economy, for example,
telecommunications, transport, and certain professional services. Accordingly, ease of entry across various sectors of the economy should be monitored and reported upon as part of the Annual
Entrepreneurship Review.
Support for more new and young businesses to internationalise: The small size of the Irish market and
its physical location is a given. Accordingly, every assistance should be directed at facilitating entrepreneurs to identify potential customers in export markets and to target these from the very earliest stages of their new business. The EU Action Plan supports this view and indicates that entrepreneurial growth can be triggered by actively supporting businesses in their efforts to
internationalise.90 With this in mind, more executives within locally based agencies, such as the City and
County Enterprise Boards, should be trained to support their clients in sourcing the relevant market information that would be of assistance to them. Enterprise Ireland should work in partnership with these agencies by making more widely available that organisation’s extensive market intelligence, knowledge of sectoral trends and, where appropriate, its overseas office network. Targets for first time exporters supported by the agencies should be set and reported as part of the Annual Entrepreneurship Review.
Monitoring the financial requirements of entrepreneurs and their ease of access to finance: The
financing requirements of early stage entrepreneurs should be monitored and the availability of finance, including informal investment and other sources of equity and debt finance should be monitored on an ongoing basis.91 This should be done on behalf of the National Entrepreneurship Forum and reported as
part of the Annual Entrepreneurship Review and any gaps in the availability of financing should be addressed. Appropriate coaching/training should be available, if requested, for entrepreneurs seeking finance.
Implement the knowledge base to facilitate access to comprehensive and timely information for
entrepreneurs: When the recommendation of the Small Business Forum92 regarding the provision of an
enhanced and tailored knowledge base is implemented, it should bring about improvements in the ease with which early stage and potential entrepreneurs can assess the necessary information to set up a new business. Its timely implementation and success in this regard should be monitored and reported to the National Entrepreneurship Forum as part of the Annual Entrepreneurship Review, and any shortcomings identified and tackled. The aim should be to ensure that all entrepreneurs can easily access the
information that they need to start a new business.
90 Internationalisation does not only give access to a larger marketplace, operating in different markets can help in gaining competitive advantage over
firms based in one country only. Action Plan: The European Agenda for Entrepreneurship, European Commission, February 2004, page 12.
http://europa.eu.int/comm/enterprise/entrepreneurship/promoting_entrepreneurship/doc/com_70_en.pdf.
91 In the context of the reviews of the Business Expansion Schemes and the Seed Capital Schemes, periodic financing surveys of agency clients have been
undertaken by Forfás and the Department of Enterprise, Trade and Employment. The most recent was published in November 2006 and provides a valuable insight. This type of review does not happen on an annual basis, however.