In a week where IBEC is talking of the economy already recovering and Fine Gael has had to admit that its own “radical” NewEra plan is based on estimates and best guesses, it is important that we continue to examine real practical and pragmatic proposals to get people back to work.
Over the last two or three weeks I have set out some new thinking on a range of ideas from exploiting intellectual property to improving the employer PRSI exemption scheme.
Some of the ideas I have been advocating are based on initiatives and proposals being pursued by other countries to lift themselves out of the same economic slump we have mow endured for almost three years.
While these ideas would have to be adapted to our particular situation here and would, need expert input, they deserve serious consideration for two simple reasons: 1. because they could deliver sustainable employment in the short to medium term and 2, many of these ideas may be implemented in those countries who are competing with us for inward investment. We cannot allow others to gain any competitive advantage over us, especially when it has become obvious that our strong export sector is our door to recovery.
A key ingredient in speeding up economic growth is the encouragement of new start-up businesses. A simple, yet exciting, proposal to accelerate new start ups is currently being considered in the USA.
The specific idea was conceived by Robert Litan of the Kaufmann Foundation and been championed politically by a Democrat congressman from Colorado – however, it is based on a scheme which has been up and running in Canada for a number of years.
In essence it offers a special ‘start-up’ visa which makes it easier for foreign entrepreneurs to start companies in America. The scheme, sometimes referred to as the Start-up Founders Visa program is garnering a lot of support in the States (www.startupvisa.com ).
While previous US visa programmes targeted only those with hard cash (usually €1million plus) this new system would give a visa to foreign entrepreneurs where they can attract either $250,000 from a U.S. venture capital firm or $100,000 from a single private investor. In addition, the new company would have to show that it was capable of generating $1 million in revenue and creating at least 5 extra full-time jobs.
Some of the biggest American multinationals: Google, Pfizer, Intel, Yahoo, DuPont, eBay and Procter & Gamble are former start-ups founded by immigrants to the US.
Unlike FG’s NewEra proposal, this is an idea based on hard research. A joint study conducted by Duke and Berkley Universities, back in 2007, found that 25% of all engineering and technology companies started in the United States between 1995 and 2005 had at least one founder who immigrated to the country. It also reported that these companies generated $52 billion in sales in 2005 and employed nearly 450,000 U.S. workers.
As with any start-up scheme, many such ventures will fail. But so what?? That is the nature of business. If the venture fails, then the entrepreneurs can try again as long as they are raising money, creating jobs, and making some sales.
While this idea may prompt some to recall the much criticised investment-based naturalisation (passports for investment) scheme which ran here from 1989 until it was abolished in April 1998, the comparison is unfair. The entrepreneur scheme is less crude capable of better monitoring than the passport scheme as it is a results based scheme.
A highly critical review of the old passport scheme did however conclude of its April 2000 Report (Para 7.7) that: “…the Government should retain the option, in the event of a changed economic or employment situation, of introducing an investment-based naturalisation scheme on a statutory basis…”
Our mantra should be “if you have a good idea, then come and create jobs here”. We have the infrastructure, the access to markets and the people. If we move now then tomorrow’s Google, Intel or eBay could be created and developed here: if we don’t then we risk seeing others eclipse us.