THE HARSH REALITY

Eddie Hobbs tells Maree Morrissey about the misconstrued state of entrepreneurship in Ireland and what lurks beneath.

Eddie Hobbs, best known for presenting RTE's hard hitting TV show, 'Rip Off Republic' and personal finance series 'Show Me The Money', is very concerned about free enterprise in Ireland. Hitting hard on start-up finance problems, old-fashioned cultural attitudes and restricted markets, the goliath of financial advice urges the Government to perfect a long-term vision and a leadership strategy to buoy this country's entrepreneurship and, in turn, its economy.

Taking on from the reputation of my famed interviewee, this comes as warning sign to all those involved in building entrepreneurship and businesses but, more importantly, to the State and public sectors.

RAISING MONEY

When it comes to raising start-up finance or accessing working capital, you'll find that the well is dry and has been for many years, despite sentiment that money is readily available. This poses huge problems and black holes for would be entrepreneurs and struggling business people who are trying to realise their business vision. Make no mistake, without ample finance, no business idea, no matter how good, will ever reach its full potential and will choke at the first sign of cash flow problems, if not funded correctly.

I asked Hobbs for his thoughts on this and he replies instantaneously with, "business people are now being hit by harsh reality." He continues, "behind the Irish entrepreneurial story is the indigenous marketplace that is foul for the small entrepreneurs starting up. Where will a young MBA-type or any aspiring entrepreneur with a business idea outside of the realm of criteria laid down by government support agencies get money to start their business? The retail banks in Ireland aren't at all interested or sometimes, capable of financing start-ups and the venture capital market is simply not interested. So you end up trying to raise the money from private investors."

Hobbs is sceptical of Enterprise Ireland (EI) saying that it has money available for business start-ups in certain sectors but the decision-making process in there almost cripples the company making the application. "Applicants are put through so many loops and by the time they get the money, the timing of the business is too late."

But Hobbs does have some advice and believes that EI should quicken the decision-making process by giving it to independent experts because small start-ups need money quickly in order to be competitive in the marketplace as timing is often everything. I ask Hobbs what the solution was and he replies, "you need to have a private capital pool where experts assess business risk and make quick decisions. Give them a quick 'yes' or 'no' but don't give them a 'maybe' that goes on for months."

ENTREPRENEURS

It's no secret that we Irish like to think of ourselves as an entrepreneurial nation and certainly recent trends shown from the GEM 2005 report (Global Entrepreneurship Monitor) continues to place Ireland as a growth region for entrepreneurial activity, but does Hobbs share this view? "Despite sentiment, Ireland is not entrepreneurial. However our economy is shaped well to allow foreign companies to come in and be entrepreneurial, like Intel and Dell, in the manufacturing sector". He continues, "look behind that and we've got a weak indigenous manufacturing base where 7% expect to expand this year. You've got a 19th century economy behind that again full of restricted practices. Then you've got a public sector service that is medieval in its productivity. In the last six years, we've had 260,000 new jobs created of which 100,000 were in the public sector. But there is no productivity increase. Where is the entrepreneur activity in the public sector? It is non-existent. We have a restricted market in electricity and gas. We've had a few examples of good entrepreneurship, for example, Ryanair for one, but where else has it been? The fact remains that we've built a very successful economy on the back of tax-breaks that give the multi-nationals the chance to set up base in Ireland. But that is not entrepreneurship."

WIPEOUT

Hobb explains, "there is a cultural attitude in Ireland that says if you fail you are a wipe-out." So, what happens to young and budding entrepreneurs of the future? "They will either go and express their talent abroad or will be sucked in by companies in Ireland who will take them on as directors and join the slower circle of development," claims Hobbs.

I ask Hobbs, how do you go about changing this fabric and he answers promptly, "unless they come out into a changed Ireland, you won't change this fabric."