Synopsis:
Entrepreneurship: Investment:
(Focus) Eunika Mercier-Laurent-The Innovation Biosphere_ Planet and Brains in the Digital Era-Wiley-ISTE (2015).pdf
and jobs without investment into new laws facilitating development of activities, such as lower taxes and employment flexibility to help bypass the Death valley. Innovation concerns all fields;
Politicians would like the immediate results of their financial investment on selected institutions; however, they have to focus on the right persons and actions.
the return on investment (ROI) is measured not. The user-driven innovation policy may improve this situation.
The five-dimensional (5d) return on investment (ROI) could be applied for better evaluation of impact MER 11.
The evaluation and management of return on investment and benefits, in particular for research, will be improved. Figure 2. 5 shows the interrelationships between main components of the innovation ecosystems.
A huge amount of public money, national and European as well, was invested through initiatives and programs such as Pôles de Compétitivité (Competitiveness Clusters) in France, Investment for Innovation Ecosystems 65 the Future
cheaper workers finder Practitioner of the e-co-innovation culture Financial Estimation of ROI (return on investment) Measuring the capacity to innovate and the of tangible and intangible benefits and values Computer user Planning,
and position the public investment where it contributes best to the growth and revitalization of the economy.
China's growth is driven entirely by exports and state-investment. The internal Chinese economy needs to be reformed
How many 94 The Innovation Biosphere investments, time and energy, are wasted just to keep people believing that politicians are motivated in creating a prosperous future?
and who know the areas for productive investment. This way may allow the policy makers to learn from the experience
and manage change through investment in skills and training. A platform Challenges and Innovation Policies 103 against poverty will support
put in place financial instruments to attract a major increase in private finance, investment in knowledge transfer and start-ups;.
the Plan of Future Investments of €35 billion was launched in 2010 and centered on higher education, research and industries of tomorrow.
ANR has also been the principal operator of the Investments for the Future program in the field of higher education and research.
and investments is holding back private-sector R&d spending. It suggests that easing overall corporate taxes
and participatory sensing of pollution. 4. 2. 2. Qatar Foundation The Qatar Foundation (QF) is an example of intelligent investment of money other than in buying cars and malls.
There are no reports on how far this investment improved economic growth, job creation and young employment and has addressed other strategic European challenges.
The Return on Investment (ROI) is applied not to research projects. The most promising projects need evaluation and visibility for a quick transfer.
S R&d, 73,112, 114,118, 125,145 recycling, 12,13, 16,43, 44,55, 91,114, 115,120, 150,151, 155,174 region, 61,86, 92,95, 113,136 return on investment, 4
(Management for Professionals) Jan vom Brocke, Theresa Schmiedel (eds.)-BPM - Driving Innovation in a Digital World-Springer International Publishing (2015).pdf
It is politically possible to redesign the framework conditions for doing business in Denmark in such a way that the investments in Denmark (FDI) increase, thus
Table 1 Smart process manufacturing business transformations (Smart Process Manufacturing Engineering Virtual Organization Steering committee, 2009) From To Results Investment in facilities Investment in knowledge-embedded
facilities Investment and management of facilities and knowledge are equally important Reactive Proactive Economic optimization is achieved by anticipation and decision,
as long as possible since the initial investment for a system is high and an implementation project is considered to be a risky endeavor.
133 innovation decisions are noted as above, complex problems under uncertainty and typically concern high risks of failure, potential lack of return on investment or even disruption or failure of entire business models (Lucas
such as the Manage enterprise risks Make insurance offer Solvency Capital Requirement processes Make insurance policy Process bark file payments Collect insurance payment Optimize investment portfolio Manage HR Manage Finance Handle insurance claim
02_Clusters are Individuals- Volume II.pdf
and division of duties in order to create internationally competitive centres of expertise To increase the attraction of regional innovation environments in order to lure international companies, investments and leading experts to the region SHOK Strategic Centres for Science,
and innovation infrastructure, improve the facilities of higher education institutes To motivate the cooperation of companies through clusters To support joint innovation investments of clusters To accredit innovative clusters ICELAND Regional Growth Agreements (Vaxtarsamningur
and investment in research and innovation in the economy ITALY Innovation Clusters Piedmont To identify firms'technological needs
and increasing the attraction of productive investments in the region 45 LATVIA Cluster Program To promote cooperation between unrelated companies operating in specified sectors and research, educational and other institutions,
e g. some of the cluster programs provide extensive budget for R&d investment, others supply budget for the development of cluster management organizations only.
e g. technical assistance or capital investments in organizations. 8. Quality labeling of cluster organizations should feature as an integral part of cluster programs 9. The program should activate competition among the clusters benefitting from the program by setting up e g. annual contests.
10_MOD_Innovation in Romanian SMEs - revised february 2013.pdf
types of innovative activities, investments in innovations, the intensity of renewing the existing products, the use of IT, the use of the Internet, etc.
the level of investment in innovative activities and about specific innovative aspects such as renewing products and using the internet and the intranet in the activities.
The level of investment in innovative activities illustrates the propensity towards implementing organizational changes that would sustain the future growth of the organization.
Table 3 and Figure 2 present the dynamics of the level of investment in innovations in the studied SMES.
Table 3. Investments in innovations in Romanian SMES in 2003/2004 2010/2011 Percentage out of total investments 2003/2004 2004/2005 2005/2006
However, while the percentages of SMES that invested small percentages (0-5%)of their overall investments remained constant over time, the ones investing larger percentages (10-20%)decreased over time.
%and over 50%of their investments in innovations was on the entire period small (less than 10%),
Another very visible change in the last two years was the doubling of the percentage of SMES that had no investments in innovations,
and after 2007/2008 the percentage of investments allocated to innovating products, processes and the organization in the SMES studied diminished further,
limits innovation and that investments can act as a constraint for SMES engagement in innovations (Chao and Chandra, 2012).
and this also affects investments for innovations. This is also the case for Romanian SMES. Figure 2. Dynamics of investments in innovations in Romanian SMES Renewing products either as new products/services or modernized products/services
as a main form of innovative activities took place in Romanian SMES at different levels.
looked at the type of innovations envisaged by SMES through their investments, and found that product innovation have received the majority of attention (Baregheh, Rowley, Sambrock and Davies, 2012).
and new managerial approaches. b) investments in innovations are limited in Romanian SMES. The economic crisis had a negative impact on them in the last few years.
Investments for innovations decreased in time in SMES, especially since the economic crisis reached Romania as well, which ended up in 2011 with almost half of SMES without any investible surplus at all for innovations. c) innovations decreased in the last few years in Romanian SMES.
marketing) ways that do not necessarily involve large investments, but a different and better organisational way of getting things done.
2008 Innovation in Ireland.pdf
We are responding to these challenges, not only by providing capital investment through the Strategy for Science, Technology and Innovation and other initiatives,
Innovation in Ireland 20083 The Government recognises the value that investment in research, development and innovation represents,
Most of this investment will go towards the implementation of the Strategy for Science, Technology and Innovation 2006 2013.
and quantity of research carried out in Europe the Lisbon Strategy set a target of 3 percent of EU GDP for research investment.
From research to the marketplace Knowledge Transfer Innovation in Ireland 2008 8 Significantly increased support for Technology Transfer Offices in third-level institutes to ensure better economic returns from R&d investment these offices
Enterprise Ireland the agency charged with the development of indigenous industry provides significant funding for R&d projects and investment in new R&d facilities through the R&d Advocate programme
Two initiatives which benefited from this investment are: The FÁS One step Up programme, which provides financial supports for training employees.
By 2008, twelve centres were receiving investment of €15 million, with plans to support a further thirty centres in the fourteen Institutes of Technology.
Maximising return on investment Intellectual Property Protection and Management Innovation in Ireland 2008 Exploitation of research resultstwo codes of practice have been published relating to the management of intellectual property arising from publicly-funded research (in whole
Irish taxation policy supports investment in emerging companies. The Seed Capital Scheme and the Business Expansion Scheme provide tax incentives for investment in start-ups and expanding businesses respectively.
The innovation future Entrepreneurship and Business Expansion Innovation in Ireland 26 Access to know-how The State has invested in a number of schemes to ensure that developing businesses have access to the information, training and advice that they need.
2010 OECD SME Entrepreneurship and Innovation Report.pdf
pervasive and generates an aggregate learning curve effect that increases the productivity of new knowledge investments.
Cross-national trade and investment have increased therefore, escalating competition and specialisation. This puts a premium on innovation.
Investments in new knowledge are seen to spill over in part to other agents, increasing their returns to innovation and driving further investment and growth.
Knowledge built up in universities, large firms and research organisations does not spill over automatically, however.
Whereas typical problems for STI-based innovation are under-investment in scientific research, lack of connections between science and industry and poor access to finance for knowledge-based start-ups,
this is still too often understood as being about investment in science and R&d policies, leaving aside the crucial issues of diffusion and exploitation of research
and investment subsidies and the improvement of productivity by helping new and small firms to carry innovations into the economy. l Access to finance.
ENTREPRENEURSHIP AND INNOVATION OECD 2010 41 example through embedding of foreign direct investment, attraction of highly-skilled labour from overseas and building cross-national SME alliances.
2011 Missing an Open Goal_UK public policy and open innovation.pdf
and with the vision of building a world-class innovation and investment ecosystem by 2025.
An IP regime which genuinely incentivises investment in innovation, including through open routes, and discourages purely defensive use of IP to block new solutions to market demands;
UK Public policy and open innovation Executive summary A financial and investment ecosystem which looks to support business as it grows,
Defining innovation and innovation investment value chains 11 Box 2: Open definitions of open innovation 13 Box 3:
But what challenges do these changes present for the national investment landscape? Is there, for example, a risk that increased corporate open innovation activities in the UK
and abroad result in a drop in overall investment in fundamental research and development by organisations in the UK?
and complicate the innovation investment and revenue-raising value chain. Following an innovation‘ecosystem'model,
which support investment in new knowledge generation, its development, and commercialisation. The open innovation paradigm creates at least the potential for a greater disconnect between knowledge creation and application or commercialisation.
Does this mean that greater levels of open innovation within corporate innovation activities will see innovation investment increasingly sourced
It considers evidence suggesting that open innovation processes are increasingly shaping the operation of innovation investment value chains,
Defining innovation and innovation investment value chains Innovation represents much more than invention or discovery. Innovation represents the creation and application of new knowledge.
Adapted from NESTA (2009) An innovation investment value chain can be thought best of as a practical mapping of how this innovation system operates for an individual innovative product
Chesbrough (2003) These models can be interpreted as two fundamentally different innovation investment value chains. Under the closed innovation model, all benefits from the innovation accrue to the single organisation,
Access to financial support for such deals through investment banking is geared often towards large firms, with advice costs unsupportable by small firms.
A major resource investment of senior managers in an SME to deal negotiation could bring down a small enterprise
which focus on commercialisation of innovation may not choose to focus investment in the UK. The UK's advertising sector offers a powerful illustration of this point.
such a shift of resources to emerging markets is a sensible commercial decision to bring innovation investment closer to growing markets.
which are at the research and early investment end of innovation value chains. Such changes may also impact negatively rganisations in the UK and therefore potentially the UK economy as a whole
UK Public policy and open innovation Chapter 4 A national approach what do increasingly open innovation investment value chains mean for the National Innovation System?
Correcting for a changing innovation investment landscape The UK's position as a predominantly knowledge-based economy in the UK makes its degree of investment in innovation probably its only source of enduring competitive advantage.
But do greater levels of open innovation across the economy threaten that overall level of investment?
'26 While it is limited a proxy for investment in innovation, we know that large firms disproportionately invest in research and development.
If industry‘can no longer be expected'to make their traditional investment, who can, or should, step up to fill the gap?
support for intramural R&d is vital to reduce the risk of downward spirals in knowledge investments
This increases the importance of schemes that incentivise private investment in innovation, not just blanket openness.
and the increasingly open innovation investment value chain model offers a perspective or a framework through
Financing investment in open innovation Formal intellectual property rights apply weakly for many areas of knowledge.
UK Public policy and open innovation A mission making the UK the best place to commercialise an idea The dislocation of innovation investment value chains also heightens the importance of another longstanding policy challenge:
but as we argued in a recent Work Foundation's report, this sector needs continued support and investment,
and b) sustained progress towards more open innovation investment value chains, will both have significant impacts on the operation of the national innovation ecosystem.
increasingly open innovation investment value chains appear to be an international feature. There is probably very little that the UK can do to stem this tide overall.
Our research has highlighted how responding to shifting innovation investment value chains will demand action on three fronts:
and growing limitations on our ability to create vale from our investments in innovation. The Big Innovation Centre, a major new initiative from The Work Foundation and Lancaster University, will be driving forward this analysis and commentary.
Measuring the UK's investment in innovation and its effects',London: NESTA http://www. nesta. org. uk/library/documents/innovation-index. pdf Nuvolari, A. 2004)‘ Collective Invention during The british Industrial revolution:
2012 Evaluation_of_Enterprise_Supports_for_Start-Ups_and_Entrepreneurship-Publication.pdf
The CBA 9 In each of the years evaluated (2004-2006) at least 70 per cent of supports had been in the form of equity investment,
and/or know mme is to w investment, acity as HPSU onth long pro n panel befo to the survey.
Leveraging private sector investment; and Developing commercially viable funds that can meet the capital requirements of high technology start-ups and scaling companies.
By the end of 2010, the total investment funding available under Schemes 2 and 3 amounted to €1. 023 billion,
805 actual investments from Enterprise Ireland partner funds were made by the end of 2010. These were made in 186 companies
The pool of VC funds available and investments made for innovative start-ups has expanded. According to EVCA data, all Irish VC firms have invested circa €963 million in Irish firms since 200019.
€2. 60 14 favourably with similar government interventions in the UK where investments between 2000 and 2009 had a leveraging effect of £1:
There has been €3 billion of VC investment in Irish SMES from 2000 to 2010 according to the IVCA22.
make sufficient investments across a range of projects to diversify risk; to make follow-on investments;
and to generate sufficient management fees to support a strong management team23. All nine of the funds established to date under Scheme 3 meet
In terms of alignment with enterprise needs, there may be scope for greater investment in the areas of clean technologies and technology based food products
Although there have been improvements in terms of VC firms'investments in Irish firms since 2000, there remains a need for The irish VC industry to continue to develop to bring it into line with international comparator countries
and in sectors aligned with the investment strategies of commercial venture capital fund managers. 21 Investments made by the Department for Business,
IVCA data included investments by angel and investors and corporation that are considered not to be VC firms 23 PWC review 24 For example,
not all companies in all sectors are appropriate candidates for VC investment. The Development Capital Fund (www. developmentcapitalfund. com) announced by the Minister in March may go some way to increasing the availability of capital for larger SMES in the food sector 25 A Cleantech fund
NPRF) FORFÁS EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 15 Work with the private sector to ensure the availability of funding from other sources for key sectors that are not appropriate for venture capital investment.
A full evaluation should be undertaken to assess the economic return through the State's investment in VC Funds
but these may not be a factor in private investment decisions; Financial institutions may be unable to accurately assess the risk of lending to small firms
and driving regional development may also have social as well as economic benefits that may not be a factor in private sector investment decisions.
receipt of HPSU equity investment per year Facilitation of company expansion, investment in specific areas (e g.
however over time this evolved into a risk-reward strategy involving state investment in the equity of high risk companies.
and the provision of upfront equity payments is particularly important to start-up companies who may encounter difficulty securing funding from the private sector in the absence of that investment.
which can be approved in a series of milestone related investments. The maximum amount that can be approved as an Innovative HPSU is €1m for HPSUS located outside the BMW and €1. 25m for those located in the BMW.
The provision of upfront equity payments is particularly important to start-up companies who may encounter difficulty securing funding from the private sector in the absence of that investment.
and encouraging a higher proportion of overseas entrepreneurs/investment in future HPSUS. 2. 5 Alignment with National Policy This evaluation centres on impacts of the programme over the period of 2004 2010,
This sum covered supports to clients in the form of equity investments, feasibility studies, training, R&d, management development, consultancy and others.
had been in the form of equity investment, predominantly preference shares. Research/R&d has emerged as the second largest component of HPSU expenditure;
In the case of equity support, supported companies are required to raise matched funding of 50 per cent from the private sector to provide 3rd party validation for the investment.
Proportion Equity Investment 2005-2011 Proportion Chemicals 7 5. 2%€ 1 749,362 6. 2%Clothing Footwear and Leather 2 1. 5%€ 175,000 0. 6%Drink and Tobacco 2 1. 5%€ 265,000
28,001, 699 The HPSU team works closely with the Investment Services Division of Enterprise Ireland to identify suitable third party funding for start-up companies.
Surviva disposals also investment nefit Analys lement the a Us was also a 6 HPSU grou e51.
HPSU supports take the form of equity injection, normally on the basis of leveraging investment through matching private sector funding.
investment risk is pooled between multiple parties, mitigating or overcoming the often sub-optimal allocation of funding by capital markets to start-up firms of this type.
but there is likely the potential to grow those numbers more, particularly in light of sustained investment by the State in innovation and the third level sector generally.
Scalability of companies in subsequent years will also be an important consideration in maximising the return on investment in HPSU clients.
Enterprise Ireland is charged also with increasing the number of investments in Inward Entrepreneurial Start up Projects by 50 per cent. 54 The RD&I suite of programmes include a number of initiatives that focus on commercialisation of HEI research
and not to investment in the entrepreneurs/companies themselves. Indirect cost estimates comprise of salaries only;
and not investment in the entrepreneurs/companies themselves. Apportioned costs to Enterprisestart 2 are €180, 000 annually.
and the recommendations provided by Grant Communications 68 6. 3 Programme Rationale Over the past fifteen years there has been significant investment in increasing the levels and intensity of research,
These investments have enhanced greatly the capacity of, entrepreneurs and businesses to engage in the development and commercialisation of innovative products, technologies and services.
and entrepreneurs so that they can develop their business plans such that they can attract investment, develop their product/service for the export market
Building on the Smart Economy strategy, the Report of the Innovation Taskforce, 2010 states that policy and investment decisions must be centred on supporting
Ahead of the Curve, 2004, Building Ireland's Knowledge Economy The irish Action Plan for Promoting Investment in R&d to 2010, Forfás, 2004, the National Development Plans, 1999 and 2006,
significant investments were being made to commercialise research outputs from the higher education sector and there was an increasing amount of research being generated that had commercial potential.
which was developed in the context of Ireland's challenging economic environment the plan emphasised the absolute need to support economic growth and stresses the importance of protecting investment in supports for enterprise and innovation for the development of the smart economy and on the key
and support investment in technology research, development and commercialisation. 7. 5 Inputs The average cost per Ideagen event was €8, 000 in 2009 and 2010.
start-up and development stages Leveraging private sector investment Developing commercially viable funds that can meet the capital requirements of high technology start-ups
and investment and aligned to the needs of the enterprise base Increased number of early stage
Venture capital Venture capital refers to equity investments made by professional investors. VC companies seek to generate high levels of returns by investing in early stage
Investors in the funds commit to provide their capital as requested by the VC fund manager for investment during that period.
The fund invests in new opportunities during its first five years the investment period and,
if required, makes follow-on investments during the later years of the fund's 10-year term.
the Seed Capital and Business Expansion Schemes (recently replaced by the Employment Investment Incentive scheme) and R&d tax credits as well as direct firm level interventions-aimed at supporting the emergence and development of high potential companies.
Leveraging private sector investment; and by Developing commercially viable funds that can meet the capital requirements of high technology start-ups and scaling companies.
and who take investment decisions on a fully commercial basis. This model whereby the State does not have an operational role in running the funds and making 73 National Venture capital Association, 2011,
NVCA Yearbook 94 investment decisions is reflective of international experience and best practise74. The State invests on a pari passu basis
and returns associated with investments. The current Scheme, 2007-2012, places a strong emphasis on stimulating
and seed funding in Ireland are companies that emerge to commercialise outputs of state investment in R&d e g.
The evidence available on the outlook for new, early stage, high growth companies suggested that there would continue to be a demand for VC investment from these enterprises at a rate similar or greater than that experienced over the preceding five years;
in being able to follow their investments and in becoming more commercially viable and attractive to investors.
patents, and VC investment, has experienced major 80 The same rationale was set out for Finland's involvement in VC funds:
The irish VC industry currently has funds available for investment at a time when lower valuations are presenting attractive investment opportunities.
However, these funds will be committed fully by 2012 and Irish VC firms will need then to raise fresh capital
and private equity investment from abroad is vital to ensure competitive and diverse venture capital funding is available to support new businesses84. 8. 4 Alignment with National Policy This evaluation focuses on the period 2000-2010,
In parallel to this enterprise strategy report, Building Ireland's Knowledge Economy The irish Action Plan for Promoting Investment in R&d to 2010 was launched in July 2004.
or very early stage investments. The report recommended that the focus of State intervention should be to support funding mechanisms and initiatives at the seed stage,
Ireland's Competitiveness Challenge FORFÁS EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 97 into the future is vital for the commercialisation of the research investments and commitments into tradable products and services or intellectual property.
therefore supports continued investment to sustain and build further the domestic VC sector. However the report is clear that this is in tandem to developing a broader and sustainable VC sector in Ireland stating that a key goal must be a transformation in the scale
The National Pension Reserve fund has announced already two investments which they have made. In addition in cooperation with Enterprise Ireland, a number of commitments have been made that are due to be announced in the near term. 98 involves using different instruments to ensure that the business environment is conducive to the emergence
The likely impact of fund investment on SME access to the capital market; Potential for growing and developing business operations in terms of added value/turnover and sustainable job creation;
Capacity to use funds for additional investment; The level of administrative expenses relative to the level of total investment. 87 A number of the funds established under the Seed
and Venture capital Scheme 2000-2006 are still open for making investments FORFÁS EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS
& ENTREPRENEURSHIP 99 These assessments are made by the Board of Enterprise Ireland with the assistance of a Seed and Venture capital Approvals Committee,
and on the investments they make in terms of the size of individual investments in companies, the company's stage of development and
& VC fund managers and sectoral experts who are responsible for raising financing from the private sector, making all investment decisions (based on eligibility criteria) and the ongoing management of investments.
which allows for initial investments and follow on capital to support company needs and realise the potential for growth.
Investment Model The irish Seed and Venture capital Scheme is run on a pari passu basis whereby the Government is a direct investor in the funds
and the investment is made on the same grounds as all other private sector investors. The State shares equally in any risk
and returns associated with investments. The advantage of pari passu is that it is driven commercially and therefore encourages market discipline,
Establishment of partner funds 24 funds have been established under Scheme 2 and 3 as set out in Table 7. 1. These funds successfully leveraged sufficient private sector investments based on the Enterprise Ireland contribution,
As of the end of 2010: 100 The fifteen funds established under Scheme 2 had made a total of 691 investments with a combined value of €345 million.
The nine funds established under Scheme 3 had made a total of 114 investments with a combined value of €80 million.
Sectors Equity Fund 2010 €17m Enterprise Equity Investment Fund Ltd. €15m Delta Equity Fund III €105m Enterprise Equity Seed Capital
Investment Fund €7m Fountain Healthcare Partners Fund I €73m European Bioscience Fund I €12 7m Seroba
*Closed for new and follow on investment**c. €67. 5m of the Atlantic Bridge Venture Fund relates to the Seed
The resou they are initi ment of fund tments made r cent of all rough invest f Investment d
being com e through Sc investments tments acco ts Per year a Capital Progts FOR STA 86 separate
me 2 and 3. artner funds e their initia investment f pany will be ke follow-on ng in the very mercially via cheme 2 have s
and 45 of th ounting 65 pe and Cumula gramme 2010rt-UPS & E €550 €80 (companies t Taken in iso s to support t al investment for follow-on
investments y early stage able and sust e been follo he investmen er cent of all tive to Dece 0 Report ENTREPRENE 0. 6m €1 14.5%)€4 through the olation,
this the develop t in a compa n financing a ubsequent fu s in portfolio es of a comp tainable. ow through nts made thr l investment ember 2010eurship 101,023. 7 425
blication Th iding the ess llowing area team format of realistic b echnology d e companies of internatio onitoring of p f Investment d & Venture C
Total VC Investments by Country of origin of the Investing Firm, 2000-2010 Source: European Venture capital Association The State commitment to the partner funds has a leveraging effect
1. Private funds invest in the Enterprise Ireland partner funds Based on the Enterprise Ireland commitment of €98 million to Scheme 2 the total investment funding available to companies reached €473
Based on the Enterprise Ireland commitment of €152 million to Scheme 3 to date the total investment funding available to companies reached €550 million by the end of 2010;
This compares positively with similar government interventions in the UK where investments between 2000 and 2009 by the Department for Business, Innovation and Skills and its predecessors,
Private funds are attracted into The irish market Data from the IVCA states that there has been €3 billon of investment in Irish SMES since 200091.
and includes investments by angel investors and corporations that are considered not to be VC firms.
It also includes some of the investments in companies through the HPSU suite of supports 92 IVCA, 2011, Report to Government,
and includes investments by angel investors and corporations that are considered not to be VC firms.
It also includes some of the investments in companies through the HPSU suite of supports.
A viable and sustainable VC and seed capital market in Ireland with greater private sector involvement and investment and aligned to the needs of the enterprise base.
The capacity to make sufficient investments (15-20) across a range of projects which diversifies the risk of investments;
The resources to make follow-on investments in portfolio companies as they grow. This is particularly important where funds are initially investing in the very early stages of a company's development as
otherwise a VC fund's stake in a company will be diluted in subsequent funding Schemes; The capability to generate enough management fees to allow the VC fund to support a strong management team
and there are indications that each of the funds will make sufficient numbers of investments to spread their risk across their portfolio
and spread of investment. They also have engaged in high levels of follow on funding. 93 Specific data on fund management
Number of Portfolio Investments: 6 plus 106 Table 8. 2: Scheme 2, 2000-2006 Scheme 2, 2000 2006 Size No. of Companies No. of FO Viable & Sustainable AIB Equity Fund 2002 €0m 2 1 N
Venture capital Ltd. €8m 7 7-Delta Equity Fund II Limited Partnership €90m 26 167 Yes Enterprise Equity Investment Fund Ltd. €15m
10 38-Enterprise Equity Seed Capital Investment Fund €7m 11 33 Yes European Bioscience Fund I €12. 7m 6 33-Guinness Ireland
and across geographies are VC investment as a percentage of GDP, numbers of investments and numbers of companies invested in.
The chart below shows VC investments as a percentage of GDP for a number of OECD members over the past decade.
The OECD data shows that VC investment in Ireland still only accounts for a small proportion of GDP
of which the Enterprise Ireland partner funds account for roughly one third. However, against this measure, The irish VC industry does show signs of viability
This is most likely a function of the relative stage in the investment cycle of the Enterprise Ireland partner funds rather than the resilience of The irish VC industry per se.
VC Investment as a Percentage of GDP, Selected OECD Member States, 2000-2009 Source: OECD Science Technology & Industry Scorecard, 2003,2005, 2007.2009,201195 95 Note:
Germany France UK Canada USA 2009 2008 2005 2000-2003 108 Data on the numbers of investments and the numbers of companies invested in by Irish Seed
However, the numbers of investments and numbers of companies invested in by Irish firms have been consistently lower in absolute terms.
Number of Investments by Country of origin of the VC Fund, 2000-2009 Source: European Venture capital Association Significant Private Sector Involvement As discussed above,
if the leveraging effects of Scheme 2 and 3 are combined each €1 committed by the State to the partner funds attracted €3 of private investment into the funds.
further private VC investment has been attracted into Irish based SMES. Alignment with Enterprise Needs A stated objective of the Enterprise Ireland Programme is to further develop The irish seed
Analysis of the sectoral breakdown of investments by number and volume of investment under the two Schemes clearly demonstrate that the Enterprise Ireland partner funds are investing in those high technology sectors where Ireland has demonstrated or emerging strengths, particularly the Lifesciences, software
No. of Investments Sweden Finland Denmark Ireland 110 Chart 8. 8: Scheme 2 Sectoral Breakdown of Investments by Enterprise Ireland Partner Funds FORFÁS EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP 111 Chart 8. 9:
Scheme 3 Sectoral Breakdown of Investments by Enterprise Ireland Partner Funds There may be scope for greater investment in the areas of clean technologies and technology based food products;
both of which have been highlighted in successive national strategies as offering significant growth potential for Ireland. There is little debate that clean technology is a high technology and high potential area.
It is likely that a review of the sectoral breakdown of investments in future years will show greater numbers of early stage clean companies attracting financing through the partner funds.
In this context, a total of 805 separate investments have been made in 186 start up, early stage and developing companies through Scheme 2 and 3. This averages out at 17 companies per annum and represents between 25 per cent
Enterprise Ireland Partner Funds Breakdown of Investments by Stage of Development Though these figures are relatively small in absolute terms,
By the end of 2010, the total investment funding available to companies under the two Schemes was €1. 024 billion
805 investments have been made through the Enterprise Ireland partner funds in 186 separate companies with a combined value of €425 million.
A review of the investments by sector shows clear alignment with the needs of The irish enterprise base.
However, there is potentially a need for greater investment in the areas of clean technologies and technology based food companies;
Leveraging private sector investment There is significant private sector involvement in The irish seed & VC industry.
Firstly, if the leveraging effects of Schemes 2 and 3 are combined each €1 committed by the State to the partner funds attracted €3 of private investment into the Enterprise Ireland partner funds.
Secondly, data from the IVCA states that there has been €3 billon of venture, angel and related investment in Irish SMES since 200099.
and includes investments by angel investors and corporations that are considered not to be VC firms.
It also includes some of the investments in companies through the HPSU suite of supports. 100 Ibid. 114 As outlined in detail above,
Furthermore, the nature of VC is that the returns arise to the State on the back of successful investments
and returns associated with investments. Data on this is not available due to commercial and confidentiality considerations102.
we looked to similar government interventions in the UK where investments between 2000 and 2009 by the Department for Business, Innovation and Skills and its predecessors,
The impacts summarised above in terms of numbers of investments and partner funds as well as the leveraging effect of the State commitment all demonstrate that the programme has been effective in delivering on its objectives in the main.
for each of the indicators, VC investment as a percentage of GDP, numbers of investments and numbers of companies invested in, the scale of activity in Ireland remains lower than in each of these countries.
VC investment in Ireland still only accounts for a small proportion of GDP, of which the Enterprise Ireland partner funds account for roughly one third.
This is most likely a function of the relative stage in the investment cycle of the Enterprise Ireland partner funds rather than the resilience of the Irish VC industry per se.
who take investment decisions on a fully commercial basis. As such, they do not favour any particular company
Venture capital Support to Small Businesses, Seventeenth Report of Session 2009 10 march 2010 104 Denmark, Finland and Sweden 116 running the funds and making investment decisions
Recommendations Ensure that any future EI partner funds are aimed at addressing the prevailing market failures in the venture capital market and in sectors aligned with the investment strategies of commercial venture capital fund managers.
Work with the private sector to ensure the availability of funding from other sources for key sectors that are not appropriate for venture capital investment.
A full evaluation should be undertaken to assess the economic return through the State's investment in VC Funds,
Capital grants to meet part of the cost of investments in capital equipment; Feasibility grants to cover the costs of investigating a new business idea
The maximum Priming Grant payable is 50 per cent of the investment or €150, 000 whichever is the lesser.
Capital Grants were for up to €75, 000 or 50%of the capital investment. Employment Grants were for up to a maximum of €7,
and will act as a catalyst for entrepreneurial activity and private sector investment in new businesses.
and/or extent of investment is impacted positively by state support. The approach adopted here is to survey estimates of deadweight from both Irish
(NI) NI 8 32%Sheehan (1993) Capital Grants to Manufacturing Firms in Northern ireland NI 59%(approx) Monk (1990) Enterprise Board Investment UK
Costs and Inflation Forfás February 2014 State Investment in Research and development 2012 2013 Forfás December 2013 Survey of Research and development in the Higher education Sector 2010/2011 Forfás
EGFSN November 2013 Business Expenditure on Research & development (BERD) 2011/2012 Forfás, CSO August 2013 State Investment in Research & development 2011 2012 Forfás August
Framework for Monitoring Public Investment in Science, Technology and Innovation and 14 Action Plans Forfás July 2013 Monitoring Ireland's Skills Supply Trends in Education and Training
for Jobs 2013 Forfás, DJEI February 2013 A Review of the Equity Investment Landscape In Ireland Forfás January 2013 FORFÁS EVALUATION OF ENTERPRISE SUPPORTS FOR START-UPS & ENTREPRENEURSHIP
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