Have a guess what the average age is for founders of successful hi-tech companies in the United States. I reckoned about 26. Turns out it’s 39. The inspired, mega-rich, 20-somethings are, it seems, the exception (which, let’s face it, is good to hear).

The US leads the world in entrepreneurship, and Ireland is well placed to join it. We are rated by the World Bank as one of the easiest countries on earth to do business in. The International Chamber of Commerce ranks us as the 7th most open economy to trade.

We have a heap of fibre-optic cable both in the country and linking us to Europe and the US. Dublin is recognised as a global hub for web-based companies. Our quality of life makes it relatively easy to attract highly skilled foreigners (it may not feel like this for many at the moment, but Ireland last year ranked seventh in the world in the United Nations Human Development Index). And, of course, we have highly competitive corporation tax, with new tax incentives targeted at research and development.

And home-grown entrepreneurial activity has advantages over multinational corporations (MNCs). Profits tend to stay in the country, whilst those of the MNCs are repatriated to the US and elsewhere. And domestic start-ups tend to be job-rich, whereas MNCs can ramp up production and exports without the need to similarly increase employment.

This employment opportunity would particularly benefit Ireland’s youth, for whom unemployment is around 25 per cent (40 per cent for college graduates). Younger people, without families or mortgages, have more flexibility in the jobs they can take. Start-ups often require long and unpredictable hours. And with cash in short supply, many offer low wages, but compensate with shares (the guy who painted Facebook’s first office took shares instead of money and was set to cash in for $200m last year).

With so many existing advantages, and so much to gain, we should go to great lengths to create a fertile environment for existing and budding entrepreneurs.

First, we need to ensure our potential entrepreneurs are not bogged down in debt. One in four residential mortgages is now in arrears or on interest-only. For those a few years either side of 39, the number is undoubtedly far higher. Many more are working every hour they can get not to go into arrears in the first place. At least three-quarters of the people I meet of this age group could not seriously contemplate setting up new businesses because of their mortgage commitments.

The very people we need to take risks, to have modest savings to invest, to quit their jobs and live on beans while they get their companies off the ground, will, instead, focus on paying down dead money for the next 10 to 20 years. The current government approach to the mortgage crisis not only fails to solve this problem, it guarantees it. The good news is that it can be fixed. Mortgage restructures incorporating unsecured debts and using debt-for-equity arrangements would work. Ideally, equity would be released back over the long term, providing further stability. This would free up an army of people to invest, take risks, and grow new businesses.

With potential entrepreneurs freed of debt traps, a number of additional measures would help. First, we should build on existing successes.

The Government’s new venture capital fund is a great idea, but at €18m a year, it’s a drop in the ocean – it should be substantially increased. Similarly, funding for Enterprise Ireland’s ‘High Potential Start Up’ programme should be ramped up. Its current remit is to support innovative, export-oriented ventures. This should be expanded to include businesses focused on import substitution and, in some cases, domestic markets.

The County Enterprise Boards (CEBs) need to be saved. They are to be subsumed into local authorities, which bodes ill. Local authorities have deep expertise in areas like engineering, infrastructure and provision of social services like housing and libraries. They are not, however, entrepreneurial organisations, and are poorly equipped to support entrepreneurs and start-ups. The CEBs could instead be brought under Enterprise Ireland, streamlined (they’re pretty variable in quality) and then beefed up to provide high-quality, local support around the country.

Targeted training is vital, and subsidies could be provided to business schools like Smurfit to run short-term business training at prices affordable to entrepreneurs, rather than multinationals. The same should apply for intensive foreign-language courses.

Then there’s the infrastructure for entrepreneurship. A network of innovation centres should be created in towns across the country. Successful models already exist in the US and Europe. Typically, these centres offer low-cost office space and shared services like meeting rooms, kitchens and bandwidth. They offer training in business planning, product development, sales and marketing and accessing foreign markets. Crucially, they bring entrepreneurs and start-ups together, who learn from and frequently inspire each other.

The ESB’s national fibre-optic network, which is mainly unlit, should be subsidised to provide affordable, high-speed bandwidth to new and existing small and medium enterprises. The ESB currently tries to cover costs from unlit fibre, which makes sense for the ESB, but not for the country, when it leads to missed opportunities for hi-tech start-ups.

The social welfare system needs an overhaul. The Back to Work Enterprise Allowance has been watered down to the point where new businesses are expected to be profitable within two years. This is unrealistic, and should be extended to four or five years. There must be more flexibility in short-term support, and people starting businesses should have the same protection as PAYE workers if those enterprises fail.

While we’re at it, the new bankruptcy laws are still too onerous. After three years of bankruptcy, a lender can apply for ongoing payments for a further five years, essentially creating an eight-year period where trying again (critical to US success) is very difficult.

Richard Bruton is one of the most capable TDs in Dail Eireann, and an excellent choice as Minister for Jobs, Enterprise and Innovation. If we are to turbo-charge entrepreneurship in Ireland, he’s going to need the co-operation of his colleagues. Michael Noonan could force the banks to restructure mortgages in a way that frees up our potential entrepreneurs, and can provide additional funding for the venture capital fund, Enterprise Ireland and new innovation centres. Alan Shatter could tighten up the bankruptcy regime. Ruairi Quinn could work with the business schools to set up targeted, affordable, high-quality training. Joan Burton could update the social welfare model. Pat Rabbitte could look at the ESB’s fibre network.
If this sort of creative, joined-up approach were achieved, it could go a long way towards job creation in the short term, while laying the foundations for a vibrant, domestic-led economy for years to come.

This article originally appeared in The Sunday Independent on March 24, 2013.