Government to consider new strategy
The Government is to consider radical new proposals to encourage the long-term unemployed to set up their own businesses. There are 12,000 disadvantaged people being helped do so through existing schemes, but the National Economic and Social Forum has called for such schemes to be streamlined and extended nationwide.
It said that the savings in social welfare and increased tax revenue would be considerable, as well as helping to combat unemployment. In a report entitled "Self-Employment, Enterprise and Social Inclusion", the NESF said that 20 per cent of budding entrepreneurs on existing schemes previously worked in the black economy.
At the launch of the report yesterday, the NESF chairwoman, Ms Maureen Gaffney, said that at present there are over 100 agencies providing assistance or advice to people wanting to set up their own business. Each of these had its own strengths, but short of visiting all of them, it was impossible for individual's to find the one most suited to their needs.
While some important initiatives had been undertaken to help marginalised groups like the long-term unemployed, women and Travellers to set up businesses, the vast majority of entrepreneurs still came from well-educated, skilled and middle class backgrounds, she said.
The NESF is calling for greater co-ordination between agencies and the establishment of "first stop shops" for entrepreneurs. The best bodies to establish these would be the County Enterprise Boards.
The NESF also wants unemployed people to be able to capitalise some of their social welfare benefits in order to finance a business. A fund should also be established to help them, where commercial lenders were reluctant to invest in projects.
According to the NESF report, 2,200 long-term unemployed and lone parents in deprived areas are availing of the Area Enterprise Allowance Scheme (AEAS) to establish their own businesses. In the Back to Work Scheme (BTWS), aimed at the long-term unemployed, 9,700 of the 18,300 participants are using it to for entrepreneurial purposes.
However, the vast majority of people taking up the schemes are men. Although men only comprise 73 per cent of the long-term unemployed, they comprise 96 per cent of BTWS participants and 88 per cent of those on AEAS programmes.
This imbalance in entrepreneurship was worse amongst the marginalised than the general population, Ms Gaffney said. On average, women set up one in five new businesses in Ireland. The EU average is one in three.
Ms Eileen Drew of Trinity College, Dublin, said fear of failure was very much a trait found amongst Irish people considering starting their own business. Lack of self-confidence and poor esteem were also significant obstacles, along with family commitments and difficulty in finding adequate financial backing. Lack of suitable workspace at a reasonable price was another serious problem.
Pilot schemes like NEST in Tallaght had been set up to help potential entrepreneurs. The project screened applicants and only about 60 per cent were successful. It aimed to establish peer groups and successful participants were expected to return and help others with advice and encouragement.
Ms Gaffney pointed out that not all new entrepreneurs would be "high-risk, Clint Eastwood types". Some would prefer to take joint ventures.
The Minister of State for the Taoiseach, Mr Seamus Brennan, said the report would be considered shortly by the Interdepartmental Strategy Group on Employment. He described the report as "important and timely".