VC backed firms have helped to create 66,000 jobs over a decade

By Business & Finance
11 April 2014

Minister Bruton says that Government commitment of €175m can be leveraged by VC industry up to €700m. 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 last night by 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 VC 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.

“The UCD findings endorse the Government’s recognition of the importance of VC in helping to create indigenous high level jobs. We have committed, through Enterprise Ireland’s Seed & Venture Capital Scheme 2013-2018, up to €175m as a cornerstone investor to VC funds. We anticipate that the VC industry will leverage this commitment by an additional €525m in funding from the private sector, which will mean a total of €700m available for investment over the lifetime of the scheme.

“There is no doubt that VC 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 VC nvests 94% of funds in knowledge based companies. This is the highest technology rating in Europe where the average is 32%.”

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).

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 and 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.