Inconsistencies in Kenny’s ‘best small country’ claim

'The best small country in the world to do business." Our Taoiseach, Enda Kenny, first asserted his global ambition for Ireland during his general election campaign in early 2011. This week Dublin hosts many technology entrepreneurs from around the world for the 2015 Dublin Web Summit.

The Dublin Web Summit was first held in 2010 and has since steadily grown. Some 30,000 are expected to squeeze into the RDS in this coming week. The summit is a further opportunity for the Taoiseach's assertion to be promoted to our international visitors. Enterprise Ireland and the IDA will be out in force for the summit's final time in Dublin before it moves to Lisbon next year for three years.

In conjunction with the move away from Dublin the organiser, Paddy Cosgrave, recently published correspondence between the Department of the Taoiseach and himself. No doubt encouraged by offers received from other international cities, Cosgrave apparently believed that the Department of the Taoiseach could co-ordinate a municipal catalogue of traffic management, hotel charges, broadband backbone and on-site wifi coverage, public building signage, airport branding, road closures and the lifting of parking restrictions.

The Department of the Taoiseach apparently took a different view, noting that while the Web Summit had not sought public subvention, nevertheless the dispensations being sought for the conference would incur costs to the taxpayer. The department felt that certain requests went beyond its public sector remit. Perhaps most of all, inappropriate precedent might be established.

In the same week, the Government presented its 2016 budget. Several commentators – including in particular Brian Caulfield, the chairman of the Irish Venture Capital Association, and a highly successful serial entrepreneur – strongly criticised the Taoiseach and his Government for a diminishing national competitiveness to attract and retain entrepreneurs. The personal tax environment, for both entrepreneurs and for staff, is increasingly regressive compared to alternative international locations in which to establish and build great companies, not least the UK and US. Competitive improvements to capital gains taxation, share options and indirect taxes were all overlooked as an opportunity to showcase Ireland as an internationally attractive location for entrepreneurs. No doubt this will all be aired by several Irish delegates this week at the Dublin Web Summit.

Entrepreneurs

While the Taoiseach asserts Ireland is the best small country to do business, he and his Government have certainly not come close to creating the best small country for ambitious entrepreneurs.

However, I personally believe that, sadly, Ireland is unlikely ever to have a competitive tax system for entrepreneurs. The State will have substantial national debt for many years to come; we continue to borrow to meet day-to-day public expenditure; and we have a societal ethos which wishes to emphasise social justice but which naturally also requires funding by the State. The tax base is still relatively narrow, and income from corporate taxation is now under threat as a result of changes to the regulation of international taxation.

Why then do so many entrepreneurs continue to choose Ireland as a base? It is clearly not because of the taxation environment, nor indeed the weather. Why do so many start-ups remain here?

In fact, Ireland is a great small country to create a new venture.

Unlike most other European locations, English is the first language and is the premier international business language. Unlike the UK, our national history aligns us with the aspiration of many other regions, and avoids a historical colonial legacy.

We have strong international flight connectivity, both European and long-haul, and Dublin is now one of the busiest European airports. Thanks to the entrepreneurial Michael O'Leary, we have deep integration with continental Europe. Ryanair has probably achieved more to unify Europe in practice than many policies from the European institutions.

Our industrial story is one of transformation from rural agriculture into high- technology and international services, including of course the agri-food sector. Consequent to a highly successful policy of catalysing foreign direct investment, young companies can meet any of a substantial number of multinationals, across many industry sectors, and all with operations here. In turn the Irish operation can nurture an enquiry from an Irish start-up to the appropriate part of its headquarters and global operations.

World class

Ireland hosts world-class literature, theatre, music, film and art, and is ahead of many alternative business locations. Of all of Ireland’s values, interdisciplinary skills – where art and science collide – flourish as a prerequisite for insightful innovation and quality of thought.

Ireland is one of the best small countries in the world to do business, due to many relatively unique advantages. Whether or not we host any specific conference in any particular year is unlikely to make a material change to our national economic momentum. Much more significant are the glaring contradictions for innovation and entrepreneurship between the aspirations and actual policies of the Taoiseach and his Government.