10th April 2014
Almost 4,000 high-level jobs were created by indigenous venture capital backed companies in the three years to 2012 according to a report by the Centre for Entrepreneurial Studies in UCD.
Minister Bruton says that Government commitment of €175m can be leveraged by VC industry up to €700m
10th April, 2014
Almost 4,000 high-level jobs were created by indigenous venture capital backed companies in the three years to 2012 according to a report by the Centre for Entrepreneurial Studies in UCD. The study “The Economic Impact of Venture Capital in Ireland - 2012” was launched in Dublin (Thursday night) by Mr Richard Bruton TD, Minister for Jobs, Enterprise and Innovation.
The report finds that in the middle of the recession between 2009-2012, VC backed companies created 3,900 high calibre jobs. Over the past 10 years venture capital supported companies created 16,400 jobs. The report estimates that these companies support up to three additional indirect downstream jobs or a further 50,000.
Speaking at the launch Minister Richard Bruton said: “Ireland is recognised globally for its success in attracting the world’s leading technology multinationals but we must also back the creation of a vibrant indigenous base of Irish technology players. Through the Government’s Action Plan for Jobs we are putting in place a number of measures to achieve this, in particular the establishment of the €175million Seed and Venture Capital Scheme 2013-2018. This scheme aims to leverage a total of up to €700million for investment in high growth Irish tech companies.
“The findings published by UCD today confirm the importance of venture capital in helping to create indigenous high level jobs, with thousands of jobs created as a result of venture investment. I am determined that, with proper implementation of our schemes we can see thousands more created over the coming years”.
“There is no doubt that venture capital backed firms continue to provide a substantial impetus to the ongoing development of a knowledge based economy,” commented Professor Frank Roche of UCD. “Ireland’s growing reputation as Europe’s silicon island is reflected in the fact that venture capital invests 94% of funds in knowledge based companies. This is the highest technology rating in Europe where the average is 32%.”
Mr Brendan Butler, chairman, InterTradeIreland EquityNetwork added that VC backed companies generated exports of €1.5bn since 2009 and represent almost 30% of all SMEs’ share of total spend on BERD (Business Expenditure on Research and Development).
Mr Mark Horgan, chairman, Irish Venture Capital Association said that an important finding of the UCD study was the role of venture capital in stimulating entrepreneurship. “Venture capital investment helps to build companies and nourishes the entrepreneurial ecosystem. Successful Irish technology companies have spawned hundreds of start ups which has produced a new generation of serial entrepreneurs.”
Professor Roche referred to a ten-year database compiled by the Centre of Entrepreneurial Studies in UCD over the last decade. “Our analysis concludes that
venture backed companies create more high calibre jobs, are export led and grow faster. They are also highly knowledge based. That is they are responsible for significant graduate employment and R&D spend.”
The UCD report finds that the job creation performance of VC backed companies has been significantly better than that in the IT & Communications sector and in the economy generally. Venture backed companies increased employment by 19.3% in 2012 and by 10.5% per annum since 2009. This compares to an overall increase in employment in the economy of 0.06% in 2012 and to a decrease of 1.3% per annum since 2009.
Within the high technology sector the increases were 31.2% for 2012 and 13.7% per annum since 2009.
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