Fighting the FEAR factor

I think that FEAR more than anything else has dominated the thoughts of many small business owners in the past year.

The media is full of doom and gloom.

The experts are competing with each other as to who can paint the most dismal picture of the economy and our prospects going forward. These, of course, are by and large, the very same economic experts that saw none of our problems coming down the line, or if they did (and these were few and far between) predicted “a soft landing” at worst.

Being bombarded with negativity it is little wonder that the FEAR factor took over in many cases, making people inclined to:

Forget Everything And Run.

Of course as a business strategy that approach solves nothing. Increasingly people are now adopting a more sensible business oriented and realistic approach and FEAR is now been spelled differently and is becoming a strategy based on:

Focused Energy and Accepted Responsibility.

Small business owners know that thet didn’t create the current mess, but they know just as well that they are the ones most likely to extracate themselves from it. Now they are beginning to get on with the job.

The glass may, after all, be half full!

The National Competitiveness Council (NCC), which reports each year on the key competitiveness issues facing the Irish economy, has just published its Annual Competitiveness Report: The report provides an assessment of the competitiveness strengths and weaknesses of the Irish economy relative to competitor countries.

By way of lead in the report notes (as if we didn’t know) the fact that the Irish economy is currently experiencing a rapid and painful adjustment to the bursting of the property bubble, the international financial crises and the downturn in world trade, and that, in recent years, strong growth in the domestic economy, driven by housing and consumption, replaced exports as the key driver of growth. Though economic growth rates remained strong, our international competitiveness weakened as the domestic boom increased the costs of doing business here and as reforms to improve competitiveness were delayed.

But it’s not all doom and gloom. The report indicates that, despite all our problems, Ireland continues to retain a range of important competitive strengths including a young and comparatively well educated workforce, improving infrastructure, growing levels of research and development activity, a modern internationally trading enterprise base and a long track record as a successful location for overseas investors. On that last point it might well have added “depending on where you live”, because the reality is that parts of Ireland are no longer on the IDA map as far as overseas projects are concerned.

The report goes on to highlight the fact that the ability of Ireland to protect the gains in living standards of recent decades and to secure future increases rests on our ability to succeed as competitive exporters of high quality goods and services on international markets. To date, the report highlights that Irish exporters have performed relatively well. While Irish exports of goods and services are expected to decline by 3.9 percent in 2009, the OECD forecasts that OECD exports will fall by 16.5 percent. The fall in the value of sterling is seen as a major challenge, particularly for those whose prime market focus is on the UK. 

The bottom line is that the NCC believes that targeting export-led growth is the only sustainable strategy to maintain living standards and to secure long term prosperity in Ireland, and outlines a number of key areas where it believes we can become more competitive. The problem with many of these, as I see it, is that they run counter to many of the recommendations contained in the McCarthy et al Bord Snip report. The choices our policy makers and politicians make in this regard will be critical.