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No Silicon Valley in Ireland… Basic policy is wrong to create a hub here.

The talk of having a Smart Economy or a “Silicon Valley” in Ireland is reaching fever pitch as the government tries to talk up recovery in hope of winning support for some of it’s programs. (Programs that will be massively damaging to the economy in my opinion.)

So I was delighted to see an entrepreneur I have a great deal of respect for, Pat Phelan, speak his mind using a simple example of why we are in dreamland about how we support startups here. I’m not sure that specific government supports are what will help though, when a whole policy revision is required. While talking about wanting to create a “Silicon Valley” here, the government has never really sought to create it at all.

What’s involved

There are a few vital ingredients to the Silicon Valley mix. Paul Graham of Ycombinator has a great article explaining it in broad terms from an American perspective.

I’m not going to go through the details of the funding issues in Ireland which are well discussed elsewhere. Most succinctly by Joe Drumgoole in his commentary on this article on Web 2 Ireland although I would contest his idea that the weather has anything to do with it. I will say though that I’m not sure the issue of cash availability is as much of a barrier as Joe believes. I believe that if more fundamental issues are addressed then the funding problems will be more easily solvable.

Getting Real

Ireland can never be or have within it a Startup Hub similar to Silicon Valley as long as it continues to have a nationalistic startup support policy.

Paul Grahams article is fantastic but as I said gives a VERY American perspective. The priority with technology hubs is the people. He speaks of 2 kinds of people, the money people and the nerds. He is of course 100% correct. What he fails to mention though, probably because it’s part of the American culture, is who the Nerd group are.

America is centred around entrepreneurialism and being the best. The idea of the American dream is a fundamental part of the fabric of society and it let’s that dream expand beyond it’s borders. This can be seen in the influx of basketball players to the NBA from China, Africa and Eastern Europe and similarly in Ice Hockey and even Baseball. No-one questions whether these guys are American only whether they are the best guys for the job.

Similarly in the entrepreneur space, VC’s in Silicon Valley don’t care where you’re from, only if you can deliver. An extension of this is the recent call for a Founders Visa to help fascilitate smoother movement of the worlds most talented startup founders into the valley. Again no one is crying about how they aren’t Americans because America loves the best, but not only that, they recognise that it’s fundamentally more important to have American companies than American executives.

The massive population of the US does mean that the preponderance of entrepreneurs will continue to be American, it’s purely a numbers game, 300 million people from an entrepreneurial culture what else could be expected.

I have as much national pride as the next guy, but do we think that the best entrepreneurs picked from around 4 million people will ever add up to the same number and quality as the best entrepreneurs picked from the US, Canada, India, Israel and other parts of Europe? Are we so deluded that we think this is realistic? I’m not saying we won’t have a few amazing home run entrepreneurs, of course we will, but nothing worth basing a consistent economic policy on.

We could have all the money in the world but as long as we are only finding, funding and encouraging Irish entrepreneurs instead of just entrepreneurs, we have as much chance of becoming Silicon Valley or any kind of hub at all as our soccer team has of becoming as consistent a performer in the World Cup as Brazil are at the moment.

I’ve suggested this to several people and the only reason given why we shouldn’t do this is fear that foreign entrepreneurs might repatriate their companies at some point along with the benefits they might have gained here. This I say is ridiculous, the cost of moving a company that has had significant growth or investment would negate any benefits to doing so. Not only that, companies tend to stick close geographically to where their investors are if we create a good investment environment for startups there shouldn’t be worries about them “leaving with all our gold”. If A Czech, Ukrainian or Indian entrepreneur has a better idea than me or can execute better than me, give him funding or a grant and let him create jobs here. As an entrepreneur I might not personally like it, but overall Ireland being a good place to start a business is a much better thing than being a good place to start a business if you’re Irish, and will lead to far better economic outcomes. We should be on a talent hunt, marketing Ireland to the world as a place to come and START your business if you are a creative entrepreneur. Not as a tax haven for large corporates with no long term interest in the country.

One social disadvantage we now have over America is the fact that we changed our Laws in 2004 so that there is no automatic right to nationality of children born here. Some might say this makes no difference, however, if I were a entrepreneur weighing my options my concern would likely not just be for myself and my current project but also for my families future. Our change away from the “Law of the land” favoured by the US means that any Non-EU entrepreneur who came here to start a business (and there are plenty of them in the States) their children would not have an automatic right to be Irish and stay here. At one stroke we fundamentally undermined ourselves as a place to start your business if you are not from an EU country. Not only that but the fact that families will not be citizens here makes it far more likely that these entrepreneurs WILL repatriate their companies at some point if they ever do come here. They are far less likely to become Irish as so many people who come here do, blending into our community and becoming part of the furniture, as Irish or even more Irish than we ourselves.

It’s not EI’s fault

Importantly I don’t blame Enterprise Ireland for any of the problems we have in our startup community. They are, in the end, only Civil Servants working within a set framework, largely with tied hands. Shouting at Enterprise Ireland DAs about how startups aren’t supported properly is about as useful as shouting at a staff member in Starbucks on College Green about the quality of the coffee or the colour of the signage.

So what could be done?

Ireland needs to implement policies at government level to attract encourage and support the needs of the best entrepreneurs in the world and if they’re not Irish at the moment then so be it. Will we need cash? Yes! but it’s useless without the fundamental principals and policies in place. Tax breaks to encourage investors in export oriented Tech startups make a damn site more sense than for investors in property companies. Companies create real growth and returns while property investment relies on bubbles for serious returns and we all now know where that leads.

Socially, my definition of being Irish isn’t so closed that I wouldn’t welcome someone coming here from India or the Ukraine to build things and create jobs and add to the richness of Irish society with their families.

I’m the son of Irish emigrant families returned home, and for me the dream of what Ireland is and can be is sharp edged, ground to a point on the millstone of several generations struggle in foreign countries, trying to get home to realise that dream.

I believe that Ireland is truly a great place to do business with great people that has lost it’s way a little. Our natural entrepreneurialism matched to our notions of freedom and opportunity, the primacy of the people and rejection of class systems can be the foundation of greatness and foster the re-birth of Ireland as an entrepreneurial hub and an economic power in it’s own right.

In order to do that though we’ll need a few politicians with the will to do what’s best for Ireland in the long term instead of what’s best for themselves. We have a real shortage of them at the moment, any volunteers?