Posts Tagged ‘economy’

For the last few weeks all of my online mediums have been flooded with messages from the #occupy-whatever- movement. It started with #occupywallstreet but has since spread across the USA and into western Europe with #occupydamestreet in Dublin, #occupymanchester etc etc.

The whole movement has me banging my head off the wall in frustration. I have long espoused the need for a overturning of the current political and economical system. Every pillar of our modern societal structure is crumbling. Religion came first and politics & finance are next. We are in urgent need of a structural change unlike anything we have ever seen before but the main questions are how to effect this change and more importantly what should be the goal of this change.Change can happen in a variety of ways and is not necessarily always good. Change should not be seen as a goal in itself.

In certain ways I admire those participating in the #occupy events around the globe. At least they are getting out of their comfort zone and out on the street making a stand for something they believe in. Eager to support this I have spent the last two weeks communicating with a number a number of people involved in these events to ascertain what their goals are and how they plan to achieve these. So far none have been able to provide a clear answer. They were clear enough about what they opposed and who (according to them) the bad guys were but none could tell me what they wanted to achieve or more to the point how they planned to achieve this. It seemed very much a movement of “let’s just get together and protest and we see where it takes us”. This is not something I support.

I then looked at the way the protest was conducted to find some common ground there. Again I drew a blank. Most of the information I got on this came from this blogpost, communications with protest participants and watching video reports. What I found was an overwhelming sense of entitlement as well as an intolerance of anyone with a different opinion. Placards were rife with statements of personal hardship and demands for this to be resolved. The same story is displayed very clearly on the “wearethe99percent” website. The protestors seem to largely consist of people who are experiencing financial hardship and expect someone (the government?) to solve their problems. The number of students expressing dissatisfaction with the fact that they a) didn’t get their dream job & b) are struggling to pay off their student loan is extremely high. Again this sense of entitlement: “I studied for the job I want but now I can’t get it and I still have to pay my student loan”. There is even the odd person who states that they lost lots of money on the stock market and now they can’t pay their bills. For all this I suggest they watch the below video.

Yes, the economy is buggered and yes we are being slowly sucked dry by large unethical corporations. But do you know where the real fault lies? Not with the Lehmans or Goldman Sach’s of this world. It lies squarely with the government who allowed this to happen and who colluded with this racket creating a two-tier (if not multi-tier) society. So do not point your finger at Wall Street, the banks or large multi-nationals. Their basic premise is to maximise share value and the it’s the government of this world who let this premise run wild. We need stricter legislation to prevent this from happening again. That’s not *more* legislation but rather a basic set of regulation that will be strictly enforced. Basic regulations along the lines of “these are the rules of the game. You break them and we will shut you down”. Period. We also do not need a bigger government that creates: “a society that guarantees a society that guarantees housing,work,culture, health care, education, political participation and a fulfilled life.” (as one protestor told me).  What we need a smaller but stronger government which creates a society where everyone has an equal chances of achieving “housing,work,culture, health care, education, political participation and a fulfilled life”. Less dependence of government, not more.

The whole #occupy movement is scarily totalitarian in their demands and in their intolerance of a different opinion. At the same time they claim to represent “The 99%”. For example the #occupyPortland website states under their “About Us” section that if you don’t know what they’re about that you’re obviously ignorant or part of the 1% (the enemy). This type of positioning is polarizing in the extreme and will actually damage the chances of real change happening. I won’t even go into the support of the unions, the possible hijacking of the movement by extreme left political organisations and the fact that several of the #occupy events are openly soliciting financial support.

What we really need is an all-inclusive “people’s movement” (as much as I hate that term). We need to achieve a sweeping overhaul of the current system with less tolerance and less entitlement but more freedom. We need to move from a “give me” to a “let me” culture. We need more and more direct power with “the people”. We need more accountability both in the public & private sectors. We need less but stronger government interference in the life of its citizens. We need a government which realises that it is only there to serve the people and on behalf of the people. We need a modern version of a “Night watchman state“. We need not to protest outside buildings but inside buildings. We need to get our act together. Not tomorrow but today.

Last Monday I was watching RTE’s Frontline live discussion programme made more enjoyable with the help of Twitter live commenting. As usual the topic had to do with the results of the failing economy, the recession, the financial crisis or whatever the nom du jour is for them mess we find ourselves in. The producers had drummed up a group of unemployed people to provide audience participation and a lot of the comments where along the line of “I have worked hard all my life and now I’ve lost my job and there’s no work for me”. This is complaint heard time and time again on the TV, radio and streets of Ireland.  Coming from a family of people who have always started and run their own businesses I believe strongly in the philosophy that if there’s no jobs you just have to make your own. However it was clear from the talking heads on the panel (excluding David McWilliams) that they had no idea or inclination to do so. Hence it was a welcome surprise when someone in the audience piped up with comments that there should be more support for SME level start-ups in a more pro-active, targeted and less bureaucratic way. This person was Eamonn Blaney. His comments centered around small grant aid (25 – 50k)issued through a quick process with a minimum of red tape combined with using the glut of available (empty) office space to create an environment for where lots of start-ups can blossom and become succesful. Not 400-500 as the government suggested as a target but 1000’s of start-ups each year.

However then reality set in. I have been preaching this for over two years myself. See here & here. And I am certainly not the only one. With the Greenhouse I have set out to create an environment in which people with valid ideas would receive all the assistance required to quickly and efficiently turn their idea into a viable business. We’ve set out to counter the trend of lengthy, form heavy business development process that appear only to create a small number of “big champions” by creating a mechanism that can quickly create a large number of “medium size champions” (with hopefully also a few big ones eventually). The process applied is very hands on with active participation in the development of the start-up and it’s product or service.

I have preached the values of the process time and time again to (at this stage) hundreds of people in the public and private sector in Ireland. To what result you might ask? Well too damn little in my opinion. Yes we’ve seen the emergence of a lot of events talking all about how to start your own business but these had more to do with creating revenue for the organisers than actually business & job creation. Follow up support is largely absent from the equation.

So there we are; 3 years into the worst economic & financial crisis that this country has ever seen and we are still only talking about solutions with the only viable suggestions coming from the audience. The Irish government, and largely also the opposition parties are either clueless or incompetent. Rather than address the recession by increasing the amount of money available in the economy they have been consistently sucking it out of the private sector through increased taxation and public sector spending cuts. This money is then put into the black hole that the bank bailouts have become making it dead money. The results of their actions so far are a crippled economy and a society that can only look forward to decades of heavy taxation. And that’s the stalemate that we’re at for months now nothing has improved or even changed and the situation is gradually becoming worse.

So what do we need?  I am looking for your suggestions this time as I have a number of ideas of suggestions but would welcome active input from others…

The Irish Governments Innovation TaskForce Report was published last week. I had a read through the summary yesterday as I just do not have the time to read through the full 132 pages of the report. Now overall I am quite pleased with the report. It contains some good suggestions, seems to identify most of the issues that need attention and contains very little “stoopid stuff”. Not surprisingly the Task Force contained a good few quality people from the private sector to keep the bureaucrats in check and to give them the occasional good kicking.

Anyway I have a few comments on the content of the report:

  • The buzzword is obviously “INNOVATION” and rightly so. a lot of the current economic, financial and governmental thinking in this country (and globally) is rotten and failed. We need something fresh to lift us out of the doldrums of this recessions. However it is important to realise that innovation can *not* be created, structured or manufactured. Innovation can only be stimulated by creating the right environment and putting an infra-structure and system in place that enables innovation and that rewards it.
  • The report clearly identifies the need to stimulate and encourage companies and ventures that are “Irish headquartered and owned”. For the last few decades there has been an overdependence on FDI which more often than not led to foreign-owned companies setting up business in Ireland purely because of tax breaks, cheap labour and/or grants. The second any of these factors disappeared these companies would move to cheaper countries with lower costs. The move by Dell to Lodz, Poland is a prime example of this. Our EU membership as well as the constant expansion of the EU into “cheaper countries” will only facilitate this. Companies that are Irish owned will not be as quick to make this move and are more likely to knuckle down and fight their way through a recession.
  • It also clearly identifies the need for more and “better” risk capital. While I agree with this I would include the caveat that we need more early stage investment rather than “series B”  level investment. Relatively small amounts of funding ( +/- 50k) combined with a simple and short application process will do wonders for stimulating growth of ideas into a viable start-up. Once these viable start-ups are in place funding will “show up” there are enough private and institutional investors constantly prowling for a good opportunity. Also past the seed/angel funding stage it is more important for the government to provide a good infra-structure and access to knowledge than to provide further funding.
  • The report suggests that Ireland should “brand itself as an innovation hub”. Now while I agree that establishing an “innovation hub” would be a good thing I also think that the branding should come *after* the establishing a suitable environment and infra-structure rather than prior. Branding is mostly “smoke and mirrors” and we need actual tangible assets to create an “innovation hub”.
  • It suggest using public procurement to stimulate the development of “innovative solutions”. There are two sides to this; While this is a great way to use public spending as a direct stimulus it also has the drawback that innovation is inherently “dangerous” & risky. Innovation lacks stability. Using public funds to procure services or goods that require a certain level of performance and accountability excludes it as a means of stimulating innovation. By all means put a directive in place that more public procurement funds have to go to SME’s but I don’t think that there is a fit with innovation here.
  • “a sea change in attitudes – in public and private sectors – towards innovation and entrepreneurship, to recognise that they involve risk, and occasionally result in failure” This is a really good point and one that is often overlooked. While in some other countries it is accepted that the road to success is sometimes paved with failures in Ireland the consensus is still quite often that a failed venture is a personal failure. Nothing is less true. The saying “there is no such thing as failure, there is only the failure to get back up” still goes in my opinion. Learn from your mistakes and use them to improve your next venture! The suggestion in the report that Ireland’s’ personal bankruptcy legislation needs to be reformed is only a small step in that process.
  • A substantial part of the report deals with Intellectual Property. This is indeed a “hot” area and in my experience there is a huge under-used resource there. Most 3rd level educational institutes have a wealth of IP resulting out of academic research that is just gathering dust. The institutes themselves are quite often to rigid and protective to release this IP and VC for instance have no interest in identify in it as an opportunity. Smart teams of entrepreneurs should access (and are in some cases) this IP and use it as a basis for a venture. Again; you do not need to “own” the idea that a venture is based on. Just be the best and first to market it.
  • “we strongly support placement schemes in companies for both graduates and undergraduates”: Another very valid point. I am actually working with a number of educational institutes to get graduates & undergraduates involved in some of the start-ups that are going through the Greenhouse Incubator process. This has benefits for both parties; the start-ups have access to knowledge (and manpower) needed to get their venture of the ground and the graduates gain valid real life experience (and possibly a job if the venture is succesful). To many graduates exit our educational institutes without the slightest bit of knowledge of the “working environment”.
  • The need for broadband is mentioned again. This crops up again and again but we still do not have it. Why?
  • My last comment is that while this is a good report it is mainly filled with “what’s & when’s”. How about creating a document that deals with the “how”? Let’s work out a time-line and a set of actionables? How are we going to achieve is the next pressing issue. It’s time to end the workgroups, committees and task-forces and start transiting to action and deeds.