Ireland tops Europe start-up list as one in 12 eye own firm

22 January, 2008

Almost 3,000 new companies are established her every month, helping Ireland to the top of a European list for business start-ups.

Figures released in th Global Entrepreneurship Monitor (GEM) found one in 10 adults in Ireland own or run their own business.

It also found that one in 12 are actively planning to set up their own company. With 2,700 new businesses started each month, Ireland comes top of EU countries when it comes to business start-ups, jumping three places from last year. Despite the high ranking, more still needs to be done to encourage entrepreneurial activity here, according to Paula Fitzsimons, the national co-ordinator for the GEM report.

She said despite our high ranking in Europe we still lag well behind the US. "The challenge now is not to be the top in Europe but to be up there with the US. WE want start-ups to grow as well as being sustained, this way entrepreneurs will get rewarded for the risk they take in starting their own business", she said.

The figures for Ireland show activity is up from last year with more people thinking of starting their own business. Overall, the research found that 8.2% of the adult population living in Ireland is actively planning or has recently established a new business - up from 7.4% in 2006.

Ms Fitzsimons said the failure rate of new business start-ups here is quite low. A more detailed report is being prepared on the Irish market for release in April.

The GEM report, jointly published by London Business School and Babson College in the US, looks at global trends in business start-up activity in 42 countries worldwide. The global report also found that entrepreunarial activity tended to be hightest in some of the world's poorest countries, where starting a business may be the only way to make some money. The report also said it was often wrongly assumed that new businesses has a high failure rate.

Brian Headd, chief statistician at the US Small Business Administration, found that two-thirds of start-ups survive two days and about half survive four. But the new businesses' high rate of failure "myth" may be caused by the notion that all those that close are failures, said GEM.

It found that about a third of businesses discontinued by entrepreneurs in the past 12 months had either continued in a different form or under different ownership. About a quarter of all those who discontinued a business cited personal reasons such as sickness, divorce or bereavement. The report also noted that entrepreneurial activity as being driven by the rise of the world's most international cities. Cape Town and Berlin, for instance, recorded much higher proportions of early-stage entrepreneurs than elsewhere in their countries.

Published in the Irish Examiner - Tuesday 22 January 2008