From Deutsche Bank Research report

A special report on entrepreneurship in the current issue of The Economist, lauds Israel, Denmark and Singapore, as lands of opportunity. During the construction boom, a surge in start-ups in the building sector, masked the state of entrepreneurship in Ireland and venture capital (VC) investment, was a fraction of what was channeled into commercial property overseas.

Venture capital investment of less than €200 million annually in the past decade, compared with Irish investment in commercial property of over €10 billion, including bank funding. In the same time frame, the home-grown Irish tech sector stagnated and last year, a struggling Iona Technologies, was sold to an American firm. The issue of why Irish high-tech companies cannot achieve a scalable level with high-growth characteristics, should be an issue of concern to policymakers, as the normal pattern of development is a relatively early cash-out by the promoters.

Last week, on the announcement of a research alliance between the two top Irish universities - - UCD and TCD - -  we signalled that there should be less marketing spoof on creating new Nokias and more focus on the impediments to progress. The vision of a four-mile corridor between the two colleges, an area of ground, that is among the most expensive in the world,  should prompt policymakers to look at underlying cost factors but it will likely not happen.

In recent years, the inability to develop a credible broadband system, while ramping up public R&D spending to meet the goal of becoming a "world class knowledge economy," by 2013, was incongruous.

Ireland has of course positives such as the ease of doing business according to World Bank rankings, the tax system and aspects of the education system.

In Europe, Denmark stands apart for the level of venture capital investment and  its consistent high rankings in international high-tech and competitiveness comparisons.

The amount of invested in VC varies considerably across Europe. Denmark, Sweden and the UK even have more VC than the US - -  relative to the size of their economies. Greece and the Czech Republic have the lowest VC investments. Danish VC investments -  - in particular at the expansion stage - - soared during 2005 and this surge drove Denmark to the top of the list. German venture capitalists are invested to the tune of a little less than €1.3bn (0.056% of GDP), which is only half as much as the European average in relative terms.

Deutsche Bank Research says "Who invented it? The Swiss!" is probably one of the best-known commercials in the world. And not only the Swiss company that makes "Ricola" herb drops, but everybody in Switzerland participating in the process of innovation deserves a mention. Companies and investors, politicians and those involved in education and even individual economic agents all seem to pull together to create an innovation-friendly environment in Switzerland.

One of the drivers of innovative culture is to be found in the Swiss education sector. Relatively strong performance was achieved in the number of university graduates in the fields of social science and engineering for the 20-29 age cohort. Moreover, the ratio of doctorate degrees in the 25 to 34 age cohort was relatively high, although no information is given as to the share of immigrants. Another driver of innovation is to be found in the venture capital sector. Unlike Germany, Switzerland has moved boldly - -  at least in the past - - to considerably increase its venture capital in relation to gross value added, especially for young and dynamic companies, which has given a boost to Switzerland's innovative culture.

Swiss food giant Nestlé, employs more than 3,000 researchers.

The European Venture Capital Association (EVCA), said last month, that the venture capital sector in Europe invested €15.4bn of equity capital in 2003-07. Through the late 90s venture capital investments were dominated by internet technologies and services until the 2001 collapse. Investments have increased gradually since 2003, returning to pre-bubble levels. Hi-tech (31%), life sciences (16%) and energy (11%) are the top three sectors for early stage investments. The EVCA says, that since the dotcom bubble burst there have been far fewer opportunities to realize the value of successful venture capital investments by floating the company via an IPO. With this route closed, trade sales have become the predominant way for venture capital companies to exit their investments profitably. Increasingly too, as their portfolio companies have grown, venture capital companies have found themselves owning and financing larger companies and effectively moving into the growth area of the private equity space. The venture capital industry does not expect the IPO market to re-open for portfolio companies until 2010 or beyond, suggesting a very difficult year for exiting investments in 2009.

Venture capital investment is critical for start-ups, in particular at an early stage

Deutsche Bank says between 2005 and 2006 European venture capital investments in the seed and startup early-stage segments more than doubled and were higher than in the US for the very first time. While venture capital investments as a whole have been rebounding significantly since 2003, seed and startup investments had been virtually flat. Now there has been a turnaround in this trend in Europe.

The number of firms financed in Europe fell slightly in the process. In 2006 a smaller number of companies were supplied with much more capital than in 2005: venture capitalists invested an average of over €560,000 per company in 2006 (2005: €270,000) in the seed phase and nearly €3m. (2005: €1.1m) in the startup phase.

The Economist says Israel is home to 4,000 high-tech companies, more than 100 venture-capital funds and a growing health-care industry. Innovations developed in the country include the Pentium chip (Intel), voicemail (Comverse), instant messaging (Mirabilis, Ubique), firewalls (Checkpoint) and the video pill, which allows doctors to study your insides without the need for invasive surgery. Almost 70 Israeli companies are traded on NASDAQ. The Israeli government helped by providing a ready supply of both human and physical capital. Israel has the world's highest ratio of PhDs per person, the highest ratio of engineers and scientists and some of the world's best research universities, notably Technion.

The Danish economy has traditionally been divided between big multinational companies (such as Carlsberg, a brewing behemoth) and a welter of small family firms. The government now wants to add a third economic force: start-ups with the potential for rapid growth.

The government has done everything a tidy-minded Scandinavian country can to cultivate these start-ups. The World Bank ranks Denmark fifth in the world for ease of doing business. There is a network of growth houses - - ready-made offices that provide start-ups with many of the advantages of large companies such as consulting advice, legal services and conference rooms. The government has created a public venture-capital fund, the Vaekstfonden, and is now trying to change attitudes to entrepreneurs and promoting education for entrepreneurship. Denmark is already home to about 20% of Europe's biotech companies. It also has thriving clean-technology, fashion and design industries. As a proportion of GDP, Danish companies attract more venture capital than any other European country.

Singapore�s government has invested heavily in digital media, bio-engineering, clean technology and water purification, creating huge incubators and enticing foreign scientists with fat pay packets, as well as setting up a public venture-capital fund that has in turn brought in lots of private venture capital. More than 5% of Singapore-based companies are backed by venture capital.

The government has done everything in its power to make life easy for entrepreneurs, which has earned it first place in the World Bank league table for ease of doing business. It is also trying hard to encourage a traditionally passive population to become more innovative. Schools teach the virtues of entrepreneurialism. The universities put ever more emphasis on business education and links with industry. The Nanyang Technological University (whose chairman, like that of the National University of Singapore, is an alumnus of Hewlett-Packard) offers a graduate degree in technopreneurship and innovation.

Singapore sees entrepreneurialism as a prerequisite to future growth. It has spent the past few decades climbing up the value chain from manufacturing to services and from trade to finance. Its biggest test yet may be to create knowledge industries and produce companies that can commercialise intellectual breakthroughs.

Ireland can also be among the best but in the crony capitalism system, lip service at policymaker level on the importance of promoting start-ups and entrepreneurialism,  is matched by a culture where established insiders get the cream of public sector projects.

Last December, Taoiseach Brian Cowen set out in a report, aspirations for Ireland to emulate countries like Israel, in developing what is termed a "Smart Economy."

It is hoped to set up an innovation fund and to provide incentives for entrepreneurs to move to Ireland.

It could be a good thing if attention is seriously given to rectifying many of the evident shortcomings in the Irish economy.

A recent US study says immigrants are critical to America's long-term economic health. Despite the fact that they constitute only 12% of the U.S. population, immigrants have started 52% of Silicon Valley's technology companies and contributed to more than 25% of America's global patents. They make up 24% of the US science and engineering workforce holding bachelor's degrees and 47% of science and engineering workers who have PhDs.