IRELAND must encourage an entrepreneurial culture and reward risk, a senior member of the US federal agency responsible for administering programmes for small business has told a meeting in Dublin.
Mr Patrick Murphy, a Waterford born consultant who was appointed by President Clinton to the national advisory council of the US Small Business Administration (SBA), said business and government must recognise that profit is not a dirty word".
Mr Murphy, who was speaking at a seminar in Dublin organised by AIB Bank, outlined the key role played by the small business sector in the US and detailed what could be done to encourage the sector's growth in Ireland.
Taxation was central to small business, according to Mr Murphy. High taxation regimes such as the Republic's discouraged entrepreneurs, so the Government should consider introducing creating personal tax credits for job creators, he said.
The 40 per cent capital gains tax was also a major impediment to small business, according to Mr Murphy. In the US, the capital gains tax level of 28 per cent is considered as being too high, especially on the sale of productive businesses, he added.
The number of regulations which applied to small companies should be dramatically reduced, Mr Murphy told the seminar. "In the US we have dumped in excess of 100,000 pages of regulations relating to small businesses," Mr Murphy added. Excessive regulation placed a huge cost on small firms and its removal had greatly helped the sector, he added.
Mr Murphy said that Government should be slimmed and State agencies should be made more user friendly. He was "surprised" that the Irish public service was growing, as the US administration has been reduced by 8 per cent during President Clinton's term.
Encouraging spin offs from large multinational corporations would also help the sector grow, Mr Murphy said. The burgeoning Irish software industry was a perfect example of how large corporates could help create a vibrant indigenous sector.
Promoting women in business was also crucial to the sector; almost 50 per cent of all new small companies in the US were being started by women.
Mr Murphy, who previously worked for the Irish Trade Board in the US and now heads his own consulting firm, was appointed to the SBA's national advisory council almost two years ago.
The SBA, established more than 40 years ago, operates a wide number of business programmes but is best known for its loan guarantee service. Last year, it guaranteed almost $12 billion to almost 70,000 firms.
The SBA recently concluded an agreement with Forbairt - its first with a foreign state agency - aimed at promoting joint ventures and technology transfers.
