This is another guest post from Joe McDonagh, lecturer in the business school in ITT.
“We need to start teaching our students about how to be entrepreneurs and that is not the same as trying to teach them to be entrepreneurs. Hopefully, though, doing the former will result in the latter.” (G.Foley, 2014).
Entrepreneurs are made, not born; but not all can be made entrepreneurs.
The ever open-minded, and non-ideological, Greg Foley has accepted my offer of a blog commenting on his recent post on entrepreneurship, in which I would like to add to some of his contentions. Successful entrepreneurs are an important part of Irish economic policy and, since the Telesis report in the 1980’s, successive State strategies have pointed to the importance of indigenous Irish businesses. Thus we need entrepreneurs to start businesses which can grow and which, ideally, can be export orientated.
All very well in theory. Very few, even many on the hard left, would speak against Irish businesses. In principle it seems fine to say that we should teach students and others how to be entrepreneurs. The problem is that many are called but few are able. It may, further, be a good idea to educate all in some way so that Irish society as a whole is more sympathetic to entrepreneurs. The problem with this idea is that Irish society is, in the main, very sympathetic to entrepreneurs, whether towards the majority who form small businesses or even towards the more “sexy” gaming, computing or technology start-ups. Most do not believe, like the former Anglo-Irish Bank head, that Irish society is bordering on the Communist; few countries have as a low a corporation tax rate or one of the most successful state enterprise bodies in the world.
So if Irish society is pre-disposed to enterprise then how should we educate Irish people in it? As with all education/training targeting is the key. Most businesses are, on average, begun by those in their thirties; the reason being that it takes until then for entrepreneurs to get life experience, get educated, get an idea, get contacts and then, paradoxically it seems when they are married and probably have young children, feel that they need to answer their inner existential dilemma and start a business. This existential dilemma comes about because the psychology of entrepreneurs involves a need to achieve, a feeling that only they can make themselves successful, and have a feeling that you really don’t want to work for anyone else anymore. So we should not just have college based courses for undergraduates but we should bring them back for refresher courses when their “inner” entrepreneur wants to express him or herself, after they have graduated.
Those are the necessary factors. The really important, sufficient, factors for success are a tolerance of risk, an appreciation of a reasonable level of risk and being able to evaluate when it’s worth taking a gamble on a business idea. Many of us, quite reasonably, want a high level of certainty in our lives. Successful entrepreneurs don’t mind uncertainty so much and they are willing to take the chance many of us just don’t want to. So that’s why we can have very many entrepreneurship courses and the amount of entrepreneurs won’t be much greater than the international average. America has a name as an enterprise culture but that’s because successful businesses there, with 300 million plus people, make so much more money than in smaller societies. Most people there, just like here, don’t start businesses.
However, if we do educate in how to: start a business, access (venture) capital, understand basic accounting and manage cash flow it may be a slow burner for some; they may be ready in a decade or two after they leave college. For those who are ready to go from college, or even prior to that, the mentoring of a big brother/sister is often very helpful. Mentors have seen much of it before and are a great help in avoiding the potholes. Also good are the college based enterprise centres with lower rents and overheads. This is the area in which government needs to help new businesses most. Commercial rates are simply too high, as inefficient local authorities seek to find easy funding from businesspeople. Finance from banks, even before the present economic slowdown, has also been hard to come by as the financial institutions- themselves very risk averse, except for loans to large developers- have traditionally not been very sympathetic to small businesses, and often exact a high price for modest financing. The market isn’t as good as it’s cracked up to be, as we saw from the poor roll-out of broadband throughout Ireland, so the government needs to get involved to supply cheap or guaranteed financing for good business ideas.
Good business ideas are the key and can be engendered in the intellectual hot house which is the third level sector which, at its best, produces critical thinkers able to produce iconoclastic ideas in every sphere. It may take years for some to act on these but clever students and lecturers working together do often produce great ideas. And it doesn’t really matter where you’re from or what gender you are or what race you have or even whether your family had a business themselves; we can all start businesses. The question is do we want to? If we provide information on how to do so, with basic legal and accounting advice supplemented with case studies of successful and unsuccessful businesses, then people can be in a much better position to make their own mind up and to take an educated gamble either now or some time in the future, when they feel the need to do so.