Entrepreneurship Takes Off in Ireland
By JAMES FLANIGAN
THE NEW YORK TIMES - Published: January 17, 2008
Feargal Mooney, left, is chief operating officer for Web Reservations International. Ray Nolan is the founder and chief executive officer. Web Reservations provides booking and management for hostels that cater to economy travelers.
DUBLIN — Ireland is now alive with enthusiasm for entrepreneurs, who seemingly rank just below rock stars in popularity.
For evidence, consider the Ernst & Young accounting firm’s award for Irish Entrepreneur of the Year. The award show was prime-time television fare in October. (The winner, Liam Casey, runs a business, now based in China that arranges for products to be manufactured and shipped from China to customers in Europe and the United States.)
Then there are the government-sponsored studies proclaiming that Ireland ranks third in the European Union in early-stage entrepreneurial activity. And Enterprise Ireland, an agency of the Irish government that gives fledgling small companies a helping hand, has even leased space in an office building in Midtown Manhattan to serve as an incubator for businesses hoping to expand into the American market.
The relatively new emphasis on entrepreneurs in Ireland is the culmination of nearly four decades of government policies that have lifted the economy from centuries of poverty to modern prosperity.
The change began when Ireland entered the European Union in 1973. In subsequent years, the government rewrote its tax policies to attract foreign investment by American corporations, made all education free through the university level and changed tax rates and used direct equity investment to encourage Irish people to set up their own businesses.
“The change came in the 1990s,” said James Murphy, founder and managing director of Lifes2Good, a marketer of drugstore products for muscle aches, hair loss and other maladies. “Taxes and interest rates came down, and all of a sudden we believed in ourselves.”
The new environment also encouraged Ray Nolan, who founded Raven Computing in 1989 to provide software for lawyers to keep track of billable hours. He sold that company and founded another that created software for companies to manage billing and receipts. And in 1999, he founded Web Reservations International to provide booking and property management for hostels that cater to backpackers and economy travelers.
“Hostel owners needed to keep track of people sharing rooms, and bookings for Americans coming to Dublin for three nights,” said Feargal Mooney, chief operating officer of Web Reservations. “Hostel accommodations go for 10 to 20 euro a night,” he said, or $15 to $30 at today’s exchange rates, “so booking reservations in them wasn’t profitable for the big travel companies.”
As the business grew — its 100 employees and banks of computers now handle reservations for some 50,000 hostels in 166 countries — Web Reservations was offered an equity investment by Enterprise Ireland. “But we said this is our baby, we didn’t want to give up equity,” Mr. Mooney said.
But the company, which is expanding in the United States and in China, has taken advantage of the agency’s help to open operations in Shanghai and New York. “They’ve helped us with introductions to government officials in China, and we’re in the office space on Park Avenue, expanding our systems in the States,” Mr. Mooney said.
Government help for Irish entrepreneurs grew out of an overall economic policy devised in 1987 that reduced personal taxes, said Kevin Sherry, a director of Enterprise Ireland who specializes in start-up companies.
Income tax rates in Ireland today are 20 percent on the first $50,000 of income and 41 percent on income above that. But there are value-added taxes of 21 percent levied on all goods and transactions, with the exception of health and medical services, children’s clothing and food.
The tax on corporate profits, though, is 12.5 percent, which is an incentive to own a business. And government helps out. “We have helped over 300 people or groups in the last dozen years or so,” Mr. Sherry said.
Enterprise Ireland has also put up initial capital for venture investment funds and supports research and development. “We must support new approaches, nanotechnology, biotechnology and other sciences,” Mr. Sherry said, “because we cannot succeed in the future using what got us here in the past.”
Colm O’Gorman, who teaches entrepreneurship in master of business administration courses at Dublin City University, said the government agency is at the heart of several trends. Enterprise Ireland “supports research and development at Irish companies and universities,” Professor O’Gorman said, “and it is encouraging more women to become entrepreneurs, as the role of women has changed in Irish life.”
One reason for many changes in Ireland is its membership in the European Union, which has brought new perspectives and regulations from its governing councils in Brussels.
Elaine Doorly, for example, founded Radiation Safety Ireland three years ago to advise industry on effects of radiation in building materials, scanners and other sources, an evolving field that is driven by regulation from Brussels.
Ms. Doorly runs her consulting company part time while also working as the health officer specializing in radiological protection for the University of Dublin-Trinity College, the 416-year old institution that is a leading site of Irish scientific research. She has held that post for 10 years.
“I run training courses and consult with companies that are coping with the huge variety of radiation in ordinary objects, including the many screening systems that have been put in place since 9/11,” said Ms. Doorly, who has a doctorate in physics from Trinity. “It’s a growth field but a niche industry.”
Mr. Murphy, 46, of Lifes2Good is one of the entrepreneurs who has expanded his business beyond Ireland’s borders. He qualified as a chartered accountant in the 1980s and worked in several countries in Europe before returning to Ireland in 1991 looking to own a business.
He served as financial officer for the inventor of a device that used electrical current to ease muscle pain and learned how to market such treatments by making infomercials for television stations in Europe.
He founded his company, Lifes2Good, in 1997. Using infomercials to promote micro-current pain relief and health and beauty aids, the business spread throughout Britain and the Continent and grew to 40 employees and $30 million in annual revenue. Now he is trying to expand in the United States.
“When you come to the U.S., you have to be prepared to lose a couple of hundred grand for six months without panicking,” Mr. Murphy said. His American operation also works out of Enterprise Ireland on Park Avenue.
Mr. Sherry of Enterprise Ireland said the passion behind the efforts to support entrepreneurs comes from a desire to make Ireland a better place. “We’re old enough to remember when times weren’t good. We don’t want to go back there.”
VOCABULARY:
Entrepreneurship: From Entrepreneur - A person who organizes, operates, and assumes the risk for a business venture. [French, from Old French, from entreprendre, to undertake.]
Takes Off: Move forward quickly
Seemingly: apparently, ostensibly, on the face of it
Fledgling: A young or inexperienced person (in this text it refers to a company)
Lifted: To raise in condition, rank, or esteem
Tax: A contribution for the support of a government required of persons, groups, or businesses within the domain of that government.
policies: A plan or course of action, as of a government, political party, or business, intended to influence and determine decisions, actions, and other matters
equity: The market value of securities less any debt incurred, Common stock and preferred stock
to set up: Establish, found (for this text…)
maladies: A disease, a disorder, or an ailment
Taxes: plural of Tax (see above)
interest rates: the percentage of a sum of money charged for its use
came down: (past of come down) - Become reduced in size or amount, be lowered
all of a sudden: Entirely without warning, abruptly
to keep track: Remain informed, follow the course of, keep records of
billable hours: working hours that will be charge to a client (for lawyers)
booking: reservations
hostels: A supervised, inexpensive lodging place for travelers, especially young travelers
cater: To attend to the wants or needs of
backpackers: hike with a backpack (gíria: mochileiros)
sharing: (Present Continuous of To Share) dividing
to give up: release, relinquish, resign, free (neste texto perder)
grew out: (past of grow out of) - Become too large or mature for
overall: total
devised: To form a strategy for: blueprint, cast, chart, conceive, contrive, design, formulate, frame, lay1, plan, project, scheme, strategize, work out. Informal dope out. Idioms: lay plans
Income tax: A tax levied on net personal or business income
Nanotechnology: The science and technology of building devices, such as electronic circuits, from single atoms and molecules
Trends: The general direction in which something tends to move
Coping: (Present Continuous of To Cope) - To contend with difficulties and act to overcome them
Infomercials: A relatively long commercial in the format of a television program
hundred grand: hundred thousand (neste caso algumas centenas de milhares de dólares)
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