Yesterday Brian Cowen launched the Innovation Fund, a €500 million startup investment fund, which will be seeded by the state and US venture capitalists (50/50 split). While the academic response was somewhat muted – Karl Whelan on Irish Economy was underwhelmed by the size of the fund. Entreprenuer, and founder of Iona Technologies, Chris Horn was very impressed. Seeing this as important as the seismic shift in the 1950’s when Ireland opened up to FDI –
I have been slightly surprised that few commentators in the general business media in Ireland have apparently appreciated the significance. In my own view, the announcement today is as immense to Ireland’s economy policy as was the 1958 decision to open Ireland up to foreign direct investment (FDI), resulting in a re-focus by the IDA and the establishment in Ireland of overseas companies such as the LEO Group and Liebherr.
He sees foreign venture capital being synergistic with the multi-national sector in Ireland
Ireland has an outstanding, and extremely highly envied, track record in attracting FDI. Whilst continuing our leadership and focus on attracting overseas multinationals, we now have a wonderful opportunity to augment this with attracting foreign risk capital. Indeed, the two are mutually synergistic: multinationals can exploit an economy of highly vibrant dynamic innovative young companies, licensing and acquiring exciting new technologies and bringing these to the global market; and young companies can exploit the channel opportunities, the exit possibilities, and dormant IP licensing available from multinationals. Further, the multinationals present in Ireland are increasingly collaborating with each other in cross-discplinary, cross-market synergies: as one senior manager told me, “the only time in the US we talk to company XYZ is in the courts; but here in Ireland we are sharing and working in ways which would be extremely unlikely to ever occur in the US..”
He sums up the scale of the opportunity, and comparitive advantage, for Ireland
I sincerely, powerfully believe that Ireland has a unique opportunity. Only Ireland has the depth and breadth of multinationals, built up since 1958: no other jurisdiction or location has this. Ireland has an international reputation as a politically stable, neutral, and friendly jurisdiction – as well as one which combines a strong artistic and literary tradition with a propensity to innovate and overcome challenges. There is an enormous global Irish diaspora – larger than the Israeli and Indian diaspora combined! – which creates immense opportunities for Irish based companies. Europe does not yet have a strong hub for commercial exploitation of innovative R&D: there is a vacuum in Europe
Job Creation Series