Reasons to be Optimistic...

Economists, those practitioners of the gloomiest science, talk in terms of cycles. Basically, countries go up and down anyway, even without depressions of the kind we are living through at the moment. And various mechanisms are used to calm or stimulate an economy on its way up or down. Sometimes, though, things get more complex.

One of the factors that drove the later Celtic Tiger boom was that the Irish economy followed the American and British cycle rather than the Continental European. So, when everyone else in the eurozone needed low interest rates to raise the game, we should have had high rates to calm things down. Instead, additional fuel went on the fire with what are now revealed to be disastrous results.
But there may be other cycles we should be watching for alongside the economic ones, in particular to do with confidence and optimism/pessimism.
For sure, these are hard times for optimists and once again we seem to be out of synch – when we needed pessimism to dampen down the hysteria, we had unbridled Galway-races-champagne-Charlie-where’s-me-chopper optimism. Now, when we need collective self-belief and optimism, we have nothing but gloom.
In such dark days it’s easy to forget just how inventive and enterprising we actually are.
Some stuff we know about – like U2. And naysayers who think the arts and entertainment industries should be cut back should do a simple sum on the numbers who came to Dublin for their concerts – many from other countries – and what they spent. It isn’t just about what it costs, you know.
But other stuff is a bit less public. To take one example, newspapers have recently described how Professor Richard Butler’s team of scientists in NUI Galway has developed a molecule of seven nitrogen molecules. Not much use to you or me perhaps, but it has been much sought after and may have huge potential in energy production.
Or there’s Aidan Linnane, now based in Australia, who has worked out how to change the colour of lobsters and it might be worth €50 million…
Why, you might ask. Well, as a recent article by Jeremy O’Brien in the Irish Times describes, the Australian Southern Rock Lobster (formally known by the very Irish moniker of Jasus edwardsii) is white, but Chinese consumers prefer red and Linnane can turn them from one to the other.
The details aren’t of great interest here. The important point is the ingenuity and the potential earnings. And there are hundreds of others across a whole range of domains. Irish designers and creatives have also flourished in video and computer-driven games.
And it extends into multi-nationals too. One of the reasons why certain big foreign firms stick around in Ireland is that they get such significant added value from problem-solving staff. You don’t hear people say it much these days but, in fact, when we’re good we’re very good indeed.
But there’s a deep, nagging questi – why aren’t we doing more to build on this, and I mean way beyond rhetorical flourishes like ‘the Smart Economy’? As well as adding value to others’ creations, we should be developing and producing and marketing our own.
Just how difficult this is going to be in a depressed society with little history of building knowledge enterprises from the ground up can be seen in a short news item by Kathryn Hayes, again in the Irish Times, on teenage entrepreneur John Collison from Monaleen in Limerick.
He got eight A1s in the Leaving Cert. Bright guy, clearly. But he’s also the fella who, with his brother, set up the software company Auctomatic while in Transition Year. It manages eBay accounts for high-end users.
Quite an achievement… but the teenagers were refused funding in Ireland and Auctomatic developed with backing from private investors in Silicon Valley…
Why does this not surprise me? In sports you’ll often hear people say ‘if you’re good enough you’re old enough’. But not in enterprise in Ireland, it seems.
What’s missing here? We’ve already done very well with applying foreign direct investment. And we punch way above our weight in pharmaceuticals. We’ve also produced a range of very successful Irish multinationals. We do well in music too. And we’re really good at ideas in general.
So why don’t we have the enterprise culture to take the ideas forward? Why is it that we think and do best when we do it for others? Why haven’t we developed Silicon Valley East?
There are obvious targets – for a start, there are too few entrepreneurs in Irish politics and too many teachers. The old saw still holds – those who can do, those who can’t teach… But, more significantly, the financial backing that should be there simply isn’t. Compared with American banks, our institutions are timid and withdrawn. They do not want to take risks.
Of course, to their (now public) embarrassment, that’s just what they did in the crazy days but, predictably, only on property. Now, as we need them to take a different, edgier kind if risk, what a shame they’re at a different point in the cycle…