Venture-backed firms created 66,400 jobs in Ireland over 10 years

11 Apr 20143 Shares

Venture capital-backed companies directly and indirectly created 66,400 jobs in Ireland over 10 years and close to 4,000 of these jobs were created between 2009-2012, in the midst of the recession.

The study The Economic Impact of Venture Capital in Ireland – 2012 by the Centre for Entrepreneurial Studies in University College Dublin (UCD) estimates that during 10 years, venture-capital supported companies created 16,400 jobs. The report estimates these companies support up to three additional indirect downstream jobs or a further 50,000.

The UCD report finds that the job-creation performance of VC-backed companies has been significantly better than in the IT and communications sector and in the economy generally.

Venture-backed companies increased employment by 19.3pc in 2012 and by 10.5pc per annum since 2009.

This compares to an overall increase in employment in the economy of 0.06pc in 2012 and to a decrease of 1.3pc per annum since 2009.

Within the high-technology sector, the increases were 31.2pc for 2012 and 13.7pc per annum since 2009.

Brendan Butler, chairman, InterTradeIreland EquityNetwork, added that VC-backed companies generated exports of €1.5bn since 2009 and represent almost 30pc of all SMEs’ share of total spend on BERD (Business Expenditure on Research and Development).

Mark Horgan, chairman, Irish Venture Capital Association, said 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 have produced a new generation of serial entrepreneurs.”

Europe’s silicon island

There is no doubt that venture-capital backed firms continue to provide a substantial impetus to the ongoing development of a knowledge-based economy, said Prof Frank Roche of UCD.

“Ireland’s growing reputation as Europe’s silicon island is reflected in the fact that venture capital invests 94pc of funds in knowledge-based companies. This is the highest technology rating in Europe where the average is 32pc.”

Commenting on the findings of the report, the Minister for Jobs, Enterprise and Employment Richard Bruton said the Government’s €175m investment in venture capital can be leveraged by the venture capital industry up to €700m.

“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 €175m Seed and Venture Capital Scheme 2013-2018. This scheme aims to leverage a total of up to €700m 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,” Bruton said.

Investment image via Shutterstock

John Kennedy
By John Kennedy

Editor John Kennedy is an award-winning technology journalist. He joined Silicon Republic in 2002 to become the fulcrum of the company’s news service He was recipient of the Irish Internet Association’s NetVisionary Technology Journalist Award 2005 and Siliconrepublic.com has been awarded ‘Best Technology Site’ at the Irish Web Awards seven times. In 2011 he received the David Manley Award commending him for his dedication to covering entrepreneurs. His interests include all things technological, music, movies, reading, history, gaming and losing the occasional game of poker.

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