Ireland and Models for Entrepreneurship

My law professor colleague Gordon Smith, who is on the faculty at BYU, writes and teaches and blogs about corporate law and entrepreneurship. Prompted by a story in the New York Times, he posted the following today about Irish entrepreneurship:

"The NYT suggests that Ireland's recent entrepreneurial success is the 'culmination of nearly four decades of government policies.' Here's the formula:

The government rewrote its tax policies to attract foreign investment by American corporations, made all education free through the university level and changed tax rates and used direct equity investment to encourage Irish people to set up their own businesses.

In addition, there was the fact that Ireland is a member of the European Union. What, exactly, has the EU contributed?

One reason for many changes in Ireland is its membership in the European Union, which has brought new perspectives and regulations from its governing councils in Brussels.

New perspectives and regulations? 'Perspectives' seems to refer to the fact that some Irish entrepreneurs are transcending Ireland's borders. Of course, that is not just a matter of perspective, but a matter of free movement of goods and services across EU member state borders.

The EU 'regulations' referred to in the story aren't new rules designed to promote entrepreneurship, but rather new rules that, for example, aim to improve worker health and safety, thus creating business opportunities for compliance firms. One firm's burden, another firm's treasure.

Of course, all of the EU benefits inure to every member state, so what makes Ireland special? Is it really just a matter of reducing taxes, providing free higher education, and making direct government equity investments? This paper suggests a more complex answer for Ireland:

Regional transformation through technology-based entrepreneurship cannot be easily measured by solely by 'tangible' resource input factors such as access to seed capital or telecommunications infrastructure. Instead, it is important that policy makers need to recognize the importance of fostering a 'bottom-up' approach towards technology-based entrepreneurship especially the role of 'intangibles' such as role models, culture towards risk and failure, and leadership in stimulating technology based entrepreneurship in regions.

I am not trying to suggest that the academics are spot on about Ireland while the NYT reporters are hopeless simpletons. But I believe that finding the root causes of entrepreneurship is a difficult task. In the end, I tend to give more credit to the accounts that describe a stew with many ingredients than the linear cause-and-effect stories."

Pittsburghers, take heed.