Ireland Calling by John Spain
Ireland's unemployment at 14.3 percent - where are the entrepreneurs?
Posted on Wednesday, August 31, 2011 at 10:22 AM
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- Catch 22 for Irish abortion law - navigating Ireland’s rigid, Catholic influence legal framework and Savita Halappanavar’s case
- The late Baroness Margaret Thatcher had her good points
- Letters from the tax man - the mounting cost of Ireland's property tax and running the country
|Workers at Dublin's Google offices|
The most recent figure for those out of work in Ireland is for July this year, and it shows around 470,000 without a full time job. When it's seasonally adjusted this comes back to 447,000 which equates to 14.3% of the workforce.
So if you think President Obama has a problem with the "jobs crisis" in the U.S. (where unemployment in July was 9.1%), spare a thought for Ireland.
Last week in this column we were exploring some of the politically incorrect issues that have been raised about the numbers out of work here. The most contentious of these has been the suggestion that the Irish are work shy.
Of course there are many who have lost their jobs and desperately want to get back to work again. But there are others who can't be bothered.
The work shy theory suggests that the boom made the Irish lazy and gave them unrealistic expectations and a sense of entitlement to a high standard of living without having to work too hard for it. So a lot of Irish workers, especially in the lower paid sectors, are not as committed to working and to doing a good job as they should be.
And there are many who are not committed to doing any job at all. The boom inflated the level of all kinds of benefits here. and that is now acting as a disincentive. Why take a low paid job when you can get as much on welfare?
As we pointed out here last week, this is a particular problem in the hospitality sector with so many Irish hotels, bars and restaurants now almost exclusively staffed with bright young East Europeans. And this is continuing even though there are so many Irish who are claiming they can't find a job.
In manufacturing and IT industries, there is also a contradiction. The Irish economy, one of the most open in the world, was hit hard by the global downturn.
But recent figures show that our export sector is doing pretty well now; in the first quarter of this year it was up just over 9%. Our cost base has improved, and as a result many of our exporting companies are competing well in the international market.
So on two levels there are questions to be asked. In lower paid jobs, like hospitality, there appears to be jobs here for thousands of East Europeans.
In exporting companies, there appears to be something of a recovery. Yet our national unemployment level remains stubbornly high.
One explanation for this conundrum, as we pointed out here last week, is that the boom has made the Irish work shy. You can make up your own mind about that.
But there is another aspect of the Irish labor market which I believe goes to the heart of the jobs problem we face here -- we just don't breed enough entrepreneurs in Ireland.
Most of our exports, for example, come from foreign companies based here. The workforce may be Irish but the ownership and the entrepreneurship behind these export businesses is foreign. As you know, many of these businesses are American.
Why can't the Irish do it for themselves? Why is there such a difference in culture between us and, say, America, China or Japan, where so many small businesses sprout and grow, some of them developing into multi-national giants?
Why don't we have that entrepreneurial gene? Or maybe we should ask, why don't we have it when we're here in Ireland, because obviously many of us develop it when we emigrate to places like the U.S.?
Before you start ripping up this page, let me say that we do have some entrepreneurs in Ireland. An example would be the small software companies that have been started in the past 10 years or so by young Irish people, some of which are making a global impression.
But the hard fact is that such people are in a minority. The truth is that we have far fewer entrepreneurs per capita here than the other countries I mentioned do.
The reason for this lies deep in our culture and our mindset. Some people would say that on a very fundamental level it's the result of being a colony for so long.
We are used to working for other people. We are used to someone else giving us orders, to foreigners telling us what to do.
This mindset is comfortable and easy because it means we don't have to take responsibility for ourselves. Someone else will come up with the jobs and we will clock in and do the work.
If there are no jobs it's not our fault. We can always blame the government.
It may or may not be true that this attitude is buried in the national psyche. But what is definitely true is that starting a business and creating jobs is not something that we have been very good at since we won our freedom 90 years ago. That's why we are still famous for emigration.
Let me tell you a story that will help to illustrate the problem. When I was in school a few decades back, the two careers that were regarded as the most enviable were a job in the bank or a job in the civil service.
If you got either of those when you left school you were set for life, secure, respectable and with a good pension at the end. Your mother was delighted.
I decided to go the more uncertain university route and went off to study economics. Even in college this made me a bit of loser, because I soon discovered that what most of the bright sparks there were doing was one of the professions, like medicine or law.
A few people did register to do one of the new business degree courses that had recently been introduced, but that was with the intention of eventually getting a job with a giant corporation like Unilever or Shell or Coca-Cola.
Nobody -- and I do mean NOBODY -- I knew in college talked about starting their own business or joining a small start-up. The only people who intended working for themselves were the professionals like the lawyers and the doctors, the accountants and the architects. They were focused on fees, not profits.
This attitude has changed somewhat over the years, but it hasn't changed enough. Too few young people in Ireland today have any ambition to start a business, develop a new product or service. Instead, they aim to work for someone else.
This is in marked contrast to somewhere like China where, despite years of communism, everyone wants to be an entrepreneur. That's why they now have a vast manufacturing sector which produces the world's goods.
It's the same in Japan. It's even the same in troubled America, where there is a free enterprise, start-your-own-business ethos that energizes people to have a go.
But it's not the same here in Ireland, where too many people expect someone else to offer them a job and where college leavers go for the safe option.
A further consequence of this national mindset is the number of people who work for the state, either in the civil service or in state services or in semi-state companies, or in the numerous quangos that exist on state money.
I'm not saying that we don't need teachers or nurses or police. But sometimes it seems that nearly everyone here is on the state payroll in some form and that there are far too few people in the private sector that has to support all this.
And even when you look at our private sector, the attitude problem seems to persist. The paper I work for runs a weekly feature in which it interviews young people in Dublin about the clothes they wear.
One of the questions asks them what their jobs are, and the answer always seems to be retailing or marketing or something out of left field like photographic assistant. There never seems to be anyone working in a factory making something. And that tells me something.
This mindset is also behind the upbeat news stories we see here whenever a (foreign-owned) supermarket chain opens a big new store in some town or city suburb. “New Store To Create 250 Jobs,” the headlines scream.
That fact is that these jobs will facilitate the selling of things which are mostly made outside Ireland (apart from a limited amount of local fresh food produce). And that's good news?
Maybe it's an indication of how blinkered we have become. Maybe we have forgotten what it's like to create real jobs for ourselves, to have an economy that makes things. Maybe we are too reliant on FDI companies (foreign direct investment) to come in here and give us work.
The huge jobs crisis we face here won't be solved by state money or foreign companies. It will only be solved by a change in our national mindset.
We need to stop relying so much on outsiders and on the state. We need to become a nation of entrepreneurs.