|Taoiseach, Brian Cowen (l) and Minister for Foreign Affairs Micheal Martin at a press conference on June 16, 2010, at Government Buildings. |
HTML clipboardAnalysis Update, Tuesday, July 13: Cowen's Innovation Fund Ireland, jobs, Irish start-ups and failed entrepreneurs
Taoiseach Brian Cowen is to launch a
€500 million “Innovation Fund Ireland” at a breakfast
meeting with US business executives at the New York Stock
Exchange, Monday morning.
The Government is to invest €250
million over the next five years in the fund to boost Irish
businesses and €250 million will be provided by venture capital
funds. Brian Cowen was speaking before traveling to the
United States for three days, to promote the fund to investors
and appear on US television networks at a time when the US has
its own debate on how to generate new jobs.
According to issued extracts of the speech, the
Taoiseach will say at the New York Stock Exchange that the fund is “a crucial
pillar of our economic renewal” and that he would make Ireland “a honey
pot for the best European entrepreneurs." He will say Ireland is a
“global innovation hub” and “the best place in Europe,” to do
Cowen will say the plan is to make Ireland the
best place for transforming research and knowledge into products and services,
for starting and growing an innovative company, for relocating or expanding a
small to medium-size business, and for research-intensive multinationals to
co-operate with each other.
“The Ireland of the future will be a
smart, high-value, export-led economy,” that will
create “the products and services of tomorrow for a world market,” the
Taoiseach will say.
The new Irish fund is modelled on the Israeli
Yozma fund which effectively created the Israeli venture capital market in
1993. Originating from a government program aimed at prompting venture
investments in Israel, over a period of three years, the group established ten
drop-down funds, each capitalised with more than $20 million. In parallel Yozma
started making direct investments in start up companies. This marked the
beginning of a professionally managed venture capital market in Israel. Today,
Yozma's drop down funds constitute the backbone of the Israeli venture market.
A thriving independent local VC industry has been
established comprising close to 80 VC funds with the total capital under
management in excess of $10 billion.
Sixty-five Israeli companies with a total market
capitalisation of over $50 billion are listed on the Nasdaq Stock Market. These
companies represent 90% of the total number of Israeli companies listed on a US
The Yozma fund began as the US high-tech boom was
gathering pace and the country had a significant R&D base in the defence
The director of Israeli high-tech incubator
programs told a committee of the Parliament (Knesset) last January that two thirds of the
seedling high-tech companies nurtured by Israel's technology incubators program
had closed down; only 61% managed to raise investment, and the firms were
defaulting on state loans granted to them.
According to figures on the period between 1993
and 2009, 444 of 1,209 companies established through the program (37%) are still
in operation, 55% continued to operate for less than three years, and just 26%
have managed to survive for at least ten years.
Finfacts will provide analysis on the new fund on
For example, there is a common misconception
about US entrepreneurs and venture capital - - the main funders of US start-ups
are bank and credit card companies.
RTÉ Television interview with Taoiseach Brian
Cowen, July, 11, 2010.