Making Ireland the Silicon Valley of Europe

23 Sep 2011

Tech entrepreneur Bill Liao

Australian tech entrepreneur Bill Liao has come to Ireland to, among other things, invest millions in Irish start-ups. But if we want to be the Silicon Valley of Europe, he warns, there are issues around bureaucracy, education and infrastructure that need to be resolved.

An Australian of Chinese descent, Bill Liao co-founded, along with the Founder Lars Hinrichs, Open Business Club in Hamburg in 2003 as a platform for business professionals and renamed it XING in 2006. XING was one of the first Web 2.0 companies to go public and has grown to become one of the world’s leading business-to-business social networking portals.

Liao is noted for his philanthropic endeavours and is a driving force for a number of environmental and humanitarian causes, including for planting 20m sq kilometre of new trees by 2020, and has volunteered for The Hunger Project in Uganda, New York and Mexico. A diplomatic passport holder, Liao refuses to fly and instead travels by train and ferry and is behind a global citizen initiative called The Declaration of Earth Citizenship because he believes nationalism is no longer relevant.

Liao has joined Ireland-based venture capital firm SOS Ventures and has invested in Startupbootcamp, which is run by former XING CFO, Irishman Eoghan Jennings.

He has also joined forces with 18 year-old Cork technology entrepreneur James Whelton to run a nationwide initiative called the Coder Dojo, aimed at fostering software coding talent among Irish school children. Without basic coding abilities, the schoolchildren of today will struggle to find employment in the decades ahead in any number of areas.

“It horrified me when James told me that there was no computer programming courses for kids in Ireland. The course I saw that James did in secondary school was all about how to use Excel. That’s just insane.

“The Department of Education announced recently that they had just trained 50 secondary school teachers in how to programme, but they taught them how to programme in a language called SCRATCH which is for kids. My kids learned SCRATCH when they were just eight.”

Liao is anxious that there needs to be a greater understanding at a senior political level that education reform and our approach to supporting businesses needs to change. At a family level access to and understanding of the importance of maths, science and computing are vital.

I mention to him my conviction that most parents in Ireland if they found their child programming a computer they would tell the child to go out and kick a football instead.

“I’m all for a kid getting out and kicking a football,” he says. “But if the kid was sitting inside and their mum came in and asked what they were doing and the child said they were studying law because they want a law degree, there isn’t a mother in the country that is going to kick the kid out to play football. But if the child said he or she was figuring out a problem because they want to programme something, they are out the door.

“This is something we need to fix. It is the mums who have the destiny of the country in their hands. Now some of them have copped on because we’re seeing the Coder Dojos filling up fast. Many of the kids are being brought by their mothers, so there is a shift occurring.”

Changing priorities

Liao points out that aspiration in Ireland can be predicated on success in law and medicine, not technology. He notes that points at Trinity College for computing are lower than medicine and law. “That should be reversed. Ireland may need a few more doctors but frankly any doctor that gets trained in Ireland gets trained for export at the moment, and I really don’t think Ireland needs any more lawyers,” he breaks off laughing.

Liao has argued that if Ireland wants a share of the global digital economy and to be the Silicon Valley of Europe, it needs to make the country one of the best places globally to start a company or choose to base a start-up. That begins by getting rid of bureaucracy, making the most of Ireland’s powerful brand and start talking up the country’s successes.

“I still believe Ireland could be the Silicon Valley of Europe. So much so that I’ve come out of retirement and joined a venture capital firm to maximise the number of investments I do.

“Despite having had to apply three times for my Green Card, my mandate is to invest millions of dollars in start-ups in Ireland. SOS Ventures is in the process of finishing its first investment in an Irish start-up.

“Ireland has some fantastic companies, I mean really fantastic. I can see an enormous number of very good things coming and I haven’t been exposed to the whole market yet.

“Our doors at SOS for Irish companies are wide open. I am particularly interested in seeing those really early stage companies that need €50,000 to begin with and who have a really great team. I am extremely optimistic despite massive opposition.”

Liao believes Ireland could and should be more advanced in terms of the digital economy, start-up culture and education reform.

“What happened as far as I can tell is the previous Government abdicated all responsibility to the civil service. The civil service became a law onto itself in Ireland more than anywhere else. Everyone is complaining about the massive pay outs retiring civil servants are receiving. I would say fantastic! Pay the compensation and get them out the door immediately. Then you can at least get a breath of fresh air.

“If the new Government works with the next layer down and says ‘that was then but this is now’ the country has some chance of success.

“I’ve done start-ups around the world – in Silicon Valley, Australia – and I’ve been involved in at least seven IPOs at this stage and I’m allergic to lawyers and bankers. When someone introduces themselves to me as an investment banker I break out in a rash.”

Our own worst enemy

I suggest to him that so far our own enemies in terms of the digital economy have been ourselves – in failing to come up with a plan around education, infrastructure and skills, with everything working in concert.

“It’s just not what I would call broad thinking,” Liao responds. “The dots aren’t being connected.”

Returning briefly to education, Liao urges curriculum reform. “If you look at education in this country, in general it is not dissimilar from the US. In fact it tries to be more and more like the US. The US model for education is utterly broken. So to try and interact with something that is already broken is a really bad idea.

“Finland has an excellent education system. What they’ve done is said that there are no single teacher classrooms anymore. Every classroom has to have two teachers or at least two assistants and a teacher. If you have a team teaching a bigger class, then they hold each other to account. You can’t get away with crap teaching if there are at least two adults involved.

“In terms of Ireland today, let’s say there’s a 10pc bad teacher ratio – which I believe is overly generous. After 10 years in school every one will have been exposed to a bad teacher. That is unacceptable.

“Education reform is desperately needed in this country and has to be done in a way that makes sense.”

Liao schools his three children at home and is a firm believer in home schooling. “I run a social network for Irish home schoolers and there are at least 500 families doing this.”

But across the wider school curriculum Liao says that parents should be clamouring for change and shouting louder.

“Parents need to stand up and say ‘this is not okay’. We need more examples, mums have to see examples not just of the right way to do things, but what’s going to happen if things continue as they are.

“You are throwing all your kids at sectors like law with no job prospects at the end of it. Yet I could find work in about two seconds for anyone who can programme software.

“I can find work for them globally, not just here but anywhere on the planet and they could stay and live in Ireland. What other job allows you to stay in your home country and yet work globally?”

Having decided to settle in Ireland, Liao is painfully aware of the broadband infrastructure issue and is scathing at the lack so far of a meaningful next generation path.

“It’s criminal that rural broadband isn’t on the national agenda. I think that if you made sure you had high quality broadband everywhere and then advertised that fact internationally, Nama would disappear as a problem.

“When you’ve got thousands of empty houses and a huge property problem as well as skills shortages in the technology sector, to have civil servants making it difficult for overseas workers to come and live here is insane. My Green Card got rejected three times!”

Finally I ask Liao what would be his message would be to the people of Ireland and those tasked with steering the ship forward. “Rein in the bureaucrats and find the examples of great stories and promote those globally because that will attract the talent in. Ireland has a fantastic brand, use it,” he says.

“Let the crop of old servants go in the civil service and forge a partnership with the next generation down. You could be the world’s best nation, and take leadership right from where you are. It is so doable!”

Digital Ireland Forum

Bill Liao is one of the keynote speakers at The Digital Ireland Forum, a Silicon Republic breakfast event on 30 September 2011.