21% drop in number starting new businesses here last year

There was a 21% drop in the number of people starting new businesses in Ireland, last year, latest figures show.

However, despite “only” 19,000 entrepreneurs establishing new start-up enterprises in 2012 — down from a total of 24,000 in 2011 — the actual quality of new firms is improving.

That is according to the latest edition of the annual Global Entrepreneurship Monitor for Ireland — which is conducted by Fitzsimons Consulting and supported by Enterprise Ireland, Forfás and the Department of Jobs, Enterprise and Innovation.

On the negative side, the report shows that entrepreneurs accounted for just over 6% of the adult population last year; compared to 8.2% in 2007 and just under 10% in 2005. Also, while the gender gap amongst entrepreneurs is closing, it is less because of an increase in female business owners, but more to do with a decline in the number of men starting their own business.

But, according to the report’s co-author, Paula Fitzsimons, the positives of the new findings far outweigh the negatives. While it is true that the economic downturn has eroded Ireland’s previous position as having the highest European percentage, per capita, of entrepreneurs; the quality of new Irish start-ups and the outlook of their owners has never been better.

According to the report, new Irish businesses are increasingly innovative and the majority are export-orientated. Ms Fitzsimons suggested that aspirations for growth are significant and are measured in expected job creation. Ambitious firms lead to more jobs, she noted; adding that while the numbers of start-ups has temporarily dwindled, the quality has improved.

Richard Bruton, the jobs minister, said that the new analysis will be “an immense help” to Government when framing future policy.

“Two thirds of all new jobs are created by start-ups in the first five years of existence. That is why we have placed entrepreneurship at the centre of our plans for jobs and growth. Through the Action Plan for Jobs, we have put in place a series of measures to support greater levels of start-up activity across the economy, including a range of new credit measures and world-class supports for small business through the local enterprise offices,” he said.