A survey of venture capital per capita suggests
that Ireland is "Europe's most entrepreneurial country." Is this a fact or a
Earlier in the week, we reported that the
European Commission's top 1,000 corporate R&D spenders included 16 Irish
companies - - which last year was a big factor in Ireland being included in a
fantasy 'Innovation Indicator.' This issue was easy to explain as most of the
companies were American and were nominally
'Irish' because of the location of their headquarters in Ireland for tax
purposes, while most or all of their R&D was not done in Ireland.
Last July we reported on an officially
Number of early-stage entrepreneurs in Ireland is low and falling
The Irish Venture Capital Association
said [pdf] in a Pre- Budget submission last September, that of course was in
a pleading mode: "The shortage of entrepreneurs has reached crisis levels as
evidenced by the findings from The Global Entrepreneurship Monitor."
"Ireland is becoming a 'development ghetto' with
high growth start-ups doing development here but building other functions e.g.
sales and marketing elsewhere. Many of these companies are becoming Irish in
name only and the opportunity to build essential skills in Ireland is lost."
On Thursday, The Wall Street Journal reported in
a blog post, that "it looked at Dow Jones VentureSource data on the
total amount of venture capital raised by tech companies in each European
country since 2003, divided by population to get the per capita figure, then
averaged it out over the 39 quarters."
Ireland's VC per capita was $279 compared with a
$69 average for 28 European countries, $1,093 in Israel and $661 in the US.
The Journal says that after Ireland, the next
nine are: Sweden, the U.K., Finland, Denmark, the Netherlands, Norway, France,
Germany and Switzerland. The bottom three are Croatia, Romania and Bulgaria.
Of Ireland’s 311 VC-backed deals since 2003, 131,
or 42%, came in 2009 or later, VentureSource says. By contrast, the UK closed
1,441 such deals, or just 34% of its 10-year total of 4,208, in the post-crisis
period. And across Europe as a whole, the past five years account for 39% of the
total for the decade.
In the 3 years 2010-2012, Irish companies
raised €850m in venture capital and the Irish government provided VC companies
with over 40% of that total.
The Irish government also provided the
VC-financed startups with significant cash and other supports.
Total permanent jobs in ICT firms supported by
public agencies grew by 2,300 from end 2009 to end 2012 while currently the
broad level of unemployment is over 480,000.
Patent applications at the Irish Patents Office
in 2012 were at the lowest since 1982 and tradeable services exports from
Irish-owned firms were at 5% (not a typo!) of headline services exports.
So lots of public funds have been available for
the high tech sector during a time of austerity. However, the limited output
metrics are not encouraging.
Liam Boogar, a commentator on the French startup
scene, told the Journal:. “I am not sure it tells us very much, and what it does
tell us isn’t that useful,” he said. “I am much more interested in looking at
how many companies start and get a successful exit. That is more interesting and
a better measure of entrepreneurial activity.”
That key data is not available in Ireland.
Irish Innovation: Evidence of science policy failure
More US VC-backed new companies fail than succeed
- - 76% of US tech companies acquired in 2012 had not raised institutional
investment (VC/PE -private equity) prior to acquisition.
Call for pension funds to invest €500m in Irish tech
firms; Bruton announces €20m VC fund
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