Fear of failure ‘is stunting Irish entrepreneurship’ as memories of economic crisis linger

Report finds Ireland to be the best country in Europe for offering business owners a second chance

Almost three quarters of young would-be entrepreneurs are too scared of failure to start their own business despite Ireland being deemed the best country in the EU for offering business owners a second chance.

Ireland came out on top in two of the 10 areas assessed by the European Commission in the context of available supports for SMEs.

In addition to ranking above our European peers in terms of import and export activity, or internationalisation, the Irish business culture and environment is also the most accommodating to entrepreneurs who have gone bankrupt and are looking to set up a new firm.

The Commission report which gauges progress in implementing the Small Business Act (SBA) for Europe, describes Ireland as “one of the most SME-friendly environments in the EU” and ranks the country above the EU average in six SBA areas.

Deficiencies in the financing environment are again highlighted, however, with access to funding remaining “a major challenge for many Irish SMEs”.

Alternative non-bank financing requires stronger support in the form of loans and equity financing, such as peer-to-peer financing; seed capital and crowdfunding.

The report’s positive findings, particularly around offering entrepreneurs a second chance, are somewhat contradicted by research released yesterday.

Concerns over the Irish bankruptcy environment, along with concerns over the broader Irish economy, was cited as the biggest concern among a 1,000 respondents.

Despite the fact that more than half of all Irish adults have considered setting up their own business, 70% of adults are afraid to do so, according to the report.

Commenting on the findings, National College of Ireland business school dean, Jimmy Hill said the country’s traumatic recent economic history is a likely explanatory factor driving the higher than average fear of failure.

“The fear of failure is closely related to the fear of financial loss or ruin.

"Irish views have inevitably been impacted by the recent economic crisis which saw many homes repossessed, massive job losses, pay cuts and economic ruin for many, not just entrepreneurial businesses,” said Mr Hill.