Speech by the Taoiseach, Mr. Brian Cowen, T.D., at the Launch of Innovation Fund - Ireland at the New York Stock Exchange on Monday 12 July, 2010
Ireland has faced the global economic and financial crisis head on. We are coming through this difficult period. We have returned to economic growth and the outlook is positive.
But I don't want us to come through it, merely surviving as best we can. I want us to come through the recession with a capacity to provide our citizens with enhanced opportunities and living standards.
We have a clear vision and it is guiding our thinking and actions through this difficult period.
I know where I want Ireland to be.
In the aftermath of the global crisis, a new economic order will emerge. We will face renewed competition from both east and west. I want Ireland to be positioned to take full advantage of the opportunities that will be presented.
Restoring Ireland's cost competitiveness and simply waiting for global demand to pick up will not be enough. Innovation, in both the production and use of ideas, technology and processes, across all areas of economic activity is crucial because it drives productivity growth and, consequently, economic growth.
In December 2008, I launched the Government's medium-term economic framework - Building Ireland's Smart Economy. This contains five key action areas for driving productivity growth and innovation across all sectors of the economy, public and private.
The Ireland of the future will be a smart, high-value, export-led economy. It will have some of the world's leading research-intensive multinationals, a number of which will be Irish-owned. It will be a centre for advanced manufacturing. It will have thousands of innovative small and medium enterprises. These companies will be creating the products and services of tomorrow for a world market.
To position Ireland as a Global Innovation Hub, we must make Ireland:
- the best place in Europe to turn research and knowledge into products and services;
- the best place in Europe to start and grow an innovative company;
- the best place to relocate or expand and scale an SME; and,
- the best place in Europe for research-intensive multinationals to collaborate with each other and with clusters of small companies.
If we do this successfully, the Innovation Taskforce has estimated that in the order of 120,000 new jobs could be created by 2020.
And Ireland can do this: many of the world's leading multinationals already have operations here; we have built-up our research base over recent years; we have a very high rate of entrepreneurship; we have a young, and increasingly well-educated population, and we offer an English-speaking, business-friendly location.
But we need to re-focus and re-invigorate all parts of the "innovation ecosystem". The focus of all efforts must be the entrepreneur and enterprise if we are to deliver a step-change in job creation we need.
This view echoes many of the themes which emerged at the Global Economic Forum in Farmleigh last September - and we will be working with the new Global Irish Network to progress these ideas.
Venture capital is an essential ingredient for supporting entrepreneurs and ensuring that businesses can scale and create jobs. We know that many Global companies relied on venture financing to become multinational companies. These companies such as Google, Facebook and Staples are now household names. The first investment in Google was $100,000 and a year later there was a further investment of $25 million. This shows how crucial it is that sufficient capital is available to create a thriving high-value indigenous enterprise sector and the jobs that go with that.
Today, I am delighted to formally announce that the Government has committed funds to support a series of venture funds worth €500 million. This will be known as 'Innovation Fund - Ireland'.
Innovation Fund - Ireland is a crucial pillar of our economic renewal. It delivers on the commitment we made in our Smart Economy strategy and it was a key recommendation of the Innovation Taskforce.
Innovation Fund - Ireland is complementary to, and builds on, existing enterprise policy, incentives introduced in successive Budgets, and the detailed recommendations of the Innovation Taskforce which are currently being implemented.
The objective of Innovation Fund - Ireland is not only to increase the availability of financing for Irish firms, but to transform the market by attracting what is known as 'smart capital'. Innovation Fund - Ireland will attract leading international venture capital firms and experienced investment managers. Having located here, they will provide valuable networks for Irish companies, access to key decision-makers and important management advice.
It is important to stress, the Irish opportunity is actually a European opportunity. There is a demand for an attractive environment for entrepreneurship within Europe supported by smart capital.
The success of Innovation Fund - Ireland will not rely solely on companies emerging within Ireland but will look beyond our borders to attract the best entrepreneurs and high-potential growth companies to our shores. This will be aided by Ireland's enterprise-friendly environment and track record in attracting FDI and high quality employees.
The evidence suggests there are significant gaps in Europe in terms of funding but, more importantly, the people that go with the funding. Innovation Fund - Ireland endeavours to fill that gap by bringing VC talent to Ireland.
Innovation Fund - Ireland will result in the establishment of the European operations of a number of leading or "top quartile" international VC Fund managers in Ireland, led by senior members of their existing team. It is a key pillar in our strategy to make Ireland one of the most attractive places for entrepreneurial activity and job creation.
Ireland will become an attractive destination for the best entrepreneurs and a global innovation capital.
This has been thought through carefully. A market testing exercise was undertaken, funds have been committed by Government and I am now delighted to launch Innovation Fund - Ireland.
An initial call for proposals from Venture Capitalists will issue shortly from Enterprise Ireland.
I am also announcing today the appointment of an Advisory Board to ensure that we maintain and enhance the strategic direction, progress and performance of the Fund and assist in bringing global attention to it.
I am pleased to announce that Damien Callaghan of Intel Capital has agreed to Chair the Advisory Board and I will be announcing the names of the other members shortly. Damien served on the Innovation Taskforce so is ideally placed to advise on the operation of the Fund and whether Government policies to position Ireland as a Global Innovation Hub and the vision we set out in 'Building Ireland's Smart Economy are being achieved. I am very grateful to Damien for taking on this task.
Money is in short supply and a fundamental principle is that the State's investment should provide a financial return to the taxpayer over time, along with the other spillover benefits of enabling entrepreneurs, firms, employment and productivity growth.
Conclusion
In launching Innovation Fund - Ireland, Ireland is presenting a positive message of confidence. The foundations for economic growth are not destroyed, but are firmly in place, ready to be built on. The recovery is underway.
Not only have we come through the recession, recording one of the fastest rate of GDP growth in the OECD in the first quarter of this year, we will deliver on the step-change needed to secure sustainable economic growth through a significant increase in the level of company start-ups and job creation in innovative, export-focused sectors.
People say the best way to predict the future is to invent it. One of Ireland's best attributes is our ability to be agile and to make quick decisions to get ahead of the game. Today's launch of Innovation Fund - Ireland shows that Ireland is open for business.
ENDS.