Why would any entrepreneur chose Ireland as the headquarters for her global start-up ?
I’m not a spokesman for the Irish Government nor any of its myriad of agencies and civil servants. But that was the question which we discussed over dinner last night, quite robustly it must be said, between members of the US based team for Enterprise Ireland (EI) and some of the 30 Irish based IT CEOs attending the Leadership For Growth programme. This one year programme is organised by EI and the Irish Software Association, together with the CLG Executive Coaching, some experienced Irish technology business coaches, and hosted here this week at the Stanford Graduate Business School from where I write this blog entry.
I think any business visitor to Ireland today will be confused by the image which the country presents. On the one hand, Ireland appears to be thriving, with evidence of strong economic growth driven by a combination of indigenous and multinational companies. Dublin, Galway, Cork and Limerick are all exciting cities, with young and dynamic societies. On the other hand, there is clearly so much which is broken. The physical transport system is still very poor indeed, with long commutes, and highways which are frequently car parks. The health system seems to be a black hole and, despite larger public investment as a proportion of GDP (currently abut 6%) than many other countries, appears to fall very far behind what is available elsewhere. Labour and housing costs are expensive. The corporate legislative environment is onerous and burdensome. Personal taxation, with the top tax band at 41% is moderate compared to other European countries but the tax band threshold is quickly reached by most professional staff.
Joe Macri, an ebullient Australian friend, and the current head of Microsoft in Ireland, spoke forthrightly recently that the sole reason that multinationals stay in Ireland is to avail of the low corporate tax rate of 12.5%. Past advantages have been eroded by international competition: it is no longer the quality of the Irish workforce, or cost competitiveness, or the telecommunications infrastructure, or anything else. If he and the American Chamber of Commerce are right, then clearly Ireland needs to grow its own indigenous companies and entrepreneurs to sustain economic growth as multinationals in due course move elsewhere.
Michael O’Leary, of Ryanair, is probably the most outstanding CEO which Ireland has yet produced. Ryanair is now amongst the most profitable and largest of the global airlines. Peter Conlon – himself a highly experienced technology entrepreneur – nominated O’Leary at dinner last night as the role model which Enterprise Ireland should adopt, and I think Peter is correct. And there are others who come to mind: Liam O’Mahony, CEO of CRH, a company which has global presence through outstanding execution of M&A; Eddie O’Connor, CEO of airtricity, ironically having far more success with wind farms outside of Ireland – such as Texas – than at home; and Liam Fitzgerald of United Drug, who has built a highly regarded company. Noticeably ablower cost, economies which the immigrant communities create, are enabling relatively easy off-shoring opportunities to globally compete with world class products, of Irish based innovation, with high value propositions.
Ultimately, the striking observation is that the most successful world class entrepreneurs based in Ireland, have done so despite the challenges: the physical infrastructure, even the physical location of Ireland, the cost challenges, and the frequently dysfunctional civil service. The Irish have historically been the “under-dogs”, and rise to the challenge. Ireland has now become culturally deeply entrepreneurial, with a deep “can do” attitude swelling in its national psyche.
I know a German CEO who relocated herself from Munich to Dublin last year to found her global company, which is based on a highly innovative and insightful use of web 2.0 social community technology. Watch out for Anna Kupka and Ammado. I suspect there will be many more like her.