A new report claims that around 1,600 jobs have been created by venture capital backed firms in Ireland every year since 2003. This figure is made up almost entirely of high-tech companies expanding.
At 98pc, the VC-backed companies creating jobs in Ireland are almost entirely operating in high-tech fields, according to a piece of research from DCU, with ‘high-calibre jobs’ flowing.
Creating 20,046 positions since 2003, the Irish Venture Capital Association (IVCA) claims the standard of jobs is so high, and the projects they work on of such a standard, that, on average, three indirect jobs are created for each direct one, extrapolating out to a further 60,000 jobs in that time.
The DCU-run study found that VC-backed companies increased employment by 19.7pc in 2015 and by 14.4pc per annum in the three-year period from 2013 to 2015. This compares to an overall increase in employment in the economy of 3.4pc in 2015, with an average increase in employment of 2.8pc per annum between 2013 and 2015.
The high-calibre jobs are essentially high-tech, providing products and services that further down the line lead to job creation, according to IVCA.
“It’s a small cohort of companies,” explained Regina Breheny, director general of IVCA.
“There are around 150 to 200 within VC portfolios at any one time,” she told Siliconrepublic.com.
“With FDI and multinationals, the multiplier effect is thought to be a bit less than 1:1 in terms of follow-on job creation. In the VC-funded sector we think that’s more like 3:1, and in some life sciences areas as high as 8:1 or 10:1.”
The 20,046 jobs created by VC-backed firms is made up of both companies still backed in this regard (7,466), and those no longer backed (12,580). The latter cohort has either been sold on – of which Breheny says is the vast majority – with indications that job creation has actually sped up, or they are no longer in existence.
Author of the report, Dr Eric Clinton of DCU, added: “We found that VC-backed companies grow faster, create more jobs and exports and invest more in R&D than other SMEs.
“VC-backed firms are an important constituent in helping to build a knowledge economy. We found that high-tech companies account for 98pc of funds raised, which is the highest technology weighting in Europe and more equivalent to Silicon Valley.”
Irish euro coin image via Shutterstock
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