Scale Ireland: startup leaders call for action in Budget 2020 with meaningful measures to support growth of home-grown innovation

Scale Ireland, an independent, not-for-profit initiative representing Ireland’s innovation-driven enterprises (IDEs) launched today with a call for targeted measures in Budget 2020 to empower Ireland’s startups and scaleups and support the growth of home-grown innovation.

In its pre-Budget submission, Scale Ireland is calling for Government action to better support IDEs, with a particular focus on enhancing access to talent and capital. Such changes will provide an important signal that it is following through on its commitment to rebalance the economy and getting behind our entrepreneurs right across the country.

Priorities for Budget 2020 include:

  1. Incentivise employees of entrepreneurial businesses by revamping the Key Employee Engagement Programme (KEEP) share options scheme
  2. Stimulate private investment in innovation by fixing the Employment & Investment Incentive Scheme (EIIS)
  3. Reward Irish businesses for investing in innovation by simplifying the R&D Tax Credit
  4. Encourage serial entrepreneurs by improving CGT

Economic imperative

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At the press launch Scale Ireland Chairperson Brian Caulfield, serial entrepreneur, investor and respected advocate for startups in Ireland, said: “While Ireland’s economy is currently performing strongly, we face significant disruption to our economic model. Brexit and global economic changes are exposing our over-reliance on FDI. We need the Irish economy to be firing on two cylinders. Let’s emulate our success in FDI with an ambitious strategy to drive the growth of home-grown IDEs of scale throughout the country.”

“Founders and the wider entrepreneurial community are looking for a strong signal from Government in Budget 2020 that it is ambitious for the growth of Ireland’s innovation-driven, home-grown enterprises, who compete on a global scale. We need to recalibrate our incentives to ensure that  we are competitive, making sure our entrepreneurs start and grow their businesses in Ireland and are not attracted to relocate elsewhere, like post-Brexit UK.

“For example, while the objectives behind the Key Employee Engagement Programme (KEEP) were laudable, the scheme is not currently workable. Startups simply haven’t been able to use it. Employee share ownership is critical to attracting and retaining talent, both international and local. Budget 2020 offers an opportunity to address shortcomings in the KEEP scheme and make it fit for purpose.”

Building on our FDI success to grow the indigeneous innovation economy

The need for Ireland to grow its indigenous enterprise base has become increasingly clear and is recognised by Government. In order to bring about this rebalancing of the economy, Scale Ireland believes that we need a more strategic enterprise policy to prioritise home-grown entrepreneurial businesses alongside FDI, in a ‘twin-track’ approach.

MIT uses the term “IDE” to distinguish these businesses from traditional SMEs. IDEs typically face negative cash-flows in the early stages of business due to heavy investment in innovation, followed by either failure or exponential growth as they service a global need. Scale Ireland uses the term ‘IDE’ to mean startups and scaleups that have innovation at their core, spanning sectors from ICT to biotech and medical devices.

These companies are an important element within a rapidly evolving, open knowledge economy. They share unique characteristics and face unique challenges. They therefore require unique policy solutions and representation.

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Liz McCarthy, Head of Scale Ireland, said: “We’re not alone in calling for many of these measures in Budget 2020. Beyond this budget Scale Ireland will be working to achieve a step-change in how our entrepreneurs are supported from a policy perspective. What is needed is a coherent framework and an ambitious package of measures that takes account of the unique profile and challenges facing Ireland’s innovation-driven enterprises.”

Ireland has the opportunity to incentivise talent from the multinational sector to bring their skills and experience into Irish entrepreneurial businesses or to set out on their own here. Equally a vibrant startup ecosystem can help attract and anchor high-value FDI investment in the country. Scale Ireland believes targeted reforms to schemes like KEEP can create the right incentives to achieve this.

Opportunity to stimulate regional development

This isn’t by any means an urban issue. Scale Ireland sees strong alignment with the objectives of Government’s flagship Project Ireland 2040 development plan: The unbounded, agile nature of IDEs is bringing high-value economic activity to every part of Ireland, spreading opportunity and reducing pressure on the major cities:

“If Ireland is serious about creating a leading global knowledge economy and really driving balanced regional development, we need to unlock the potential for the growth of IDEs right throughout the country. We’re seeing pockets of exciting startup activity emerging in regions like the South-East, South-West and North-West, not to mention the increasingly vibrant tech and medtech scenes in Dublin, Cork and Galway. As a country we have to do more to support this,” added Ms McCarthy, Head of Scale Ireland.

Funding – unlocking private investment

Availability and cost of capital is critical to the development of IDEs, particularly at the early-stage when these startups have very limited funding options open to them. It  is clear that the severe lack of seed-funding is having a real impact on businesses right across the country.

Steering Group member Elaine Coughlan, former CFO of one of Ireland’s most successful tech companies Iona Technologies said: “Ireland currently has extremely low availability of funding for seed-stage IDEs and a high cost of capital. Over the last 10 years, the UK has demonstrated that it will move the dial to support the development of British startups. It has also signalled its willingness to introduce whatever policies it may need post-Brexit to shore up its attractiveness and competitiveness.

“This adds urgency to the need to recalibrate our policy environment and incentives in Ireland, where an enhanced Employment & Investment Incentive Scheme, for example, could enable more early-stage companies to get funded, more quickly.”

By enhancing the EII scheme, over time Government could reduce dependency on direct publicly funded investment in startups, by incentivising greater investment by private capital. This has the potential to materially reduce any cost to the exchequer while also reducing the cost of capital to IDEs.

Greater ambition for Ireland’s innovators

For Scale Ireland, the goal of developing a strong entrepreneurial ecosystem in Ireland, where successful founders reinvest their capital and expertise in the next generation of startups in a virtuous cycle, will require an improved policy environment, the right incentives and a cultural shift. Scale Ireland would also like to see targeted changes to the successful R&D Tax Credit in Budget 2020 to make the scheme much more accessible for startups.

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Steering Group member Patrick Walsh, Founder of startup hub Dogpatch Labs added: “Ireland has been a global leader in incentivising FDI investment through fiscal measures. Now is the time for that same level of leadership and ambition to support Ireland’s entrepreneurs. Adoption of the targeted measures proposed by Scale Ireland for Budget 2020, which in many cases are cost neutral to the exchequer, would send a strong signal to entrepreneurs across the country and internationally of Government’s intent to get behind Ireland’s innovators.”

Renowned Entrepreneurship and Innovation Educator Joins TechInnovate at NUI Galway for 2019-2020 Academic Year

Bernie x2TechInnovate is delighted to announce that entrepreneurship and innovation educator and author Professor W Bernard Carlson will join the National University of Ireland Galway as a lecturer in entrepreneurship. During the academic year 2019-2020, he will split his time between the University of Virginia (UVa) and NUI Galway where he will teach on the MSc programmes in AgInnovation and TechInnovation.

Bernie Carlson is the Joseph L. Vaughan Professor of Humanities at the University of Virginia. He is also Chair of the Department of Engineering and Society and holds appointments in UVa’s History Department as well as the Bjoring Center for Nursing History. Bernie studied history and physics as an undergraduate at Holy Cross College, received his PhD in the history and sociology of science from the University of Pennsylvania, and did his postdoctoral work at the Harvard Business School.

As a historian of technology, Bernie has written widely on inventors as well as on the role of technology in the rise and fall of civilizations. His books include Innovation as a Social Process: Elihu Thomson and the Rise of General Electric, 1870-1900 (Cambridge University Press, 1991) and Technology in World History, 7 volumes (Oxford University Press, 2005). His most recent book, Tesla: Inventor of the Electrical Age (Princeton University Press, 2013) has been translated into nine languages. In 2015, Bernie won the Sally Hacker Prize from the Society for the History of Technology as well as the IEEE’s Middleton Award in Electrical History. In addition to his books, Bernie has filmed 36 lectures on “Understanding the Inventions that Changed the World” for The Great Courses. He is a regular contributor to Forbes.com, writing on innovation and the modern economy.

Bernie directs the Technology Entrepreneurship program in UVa Engineering which helps students and faculty develop ideas into ventures through coursework and co-curricular activities. He has served on several governing boards, including the IEEE History Committee, the Business History Conference, the National Inventors Hall of Fame, and for five years was Executive Secretary for the Society for the History of Technology. Bernie has advised a variety of companies on innovation, and for over a decade, he was a consultant to Corning Incorporated.

Now entering its fourth year, TechInnovate offers two programmes in Entrepreneurship and Innovation at NUI Galway: the full-time MSc in TechInnovation (applications now open), and the distance education/blended learning MSc in AgInnovation (with some government-funded places still available).

ICHEC Launches Ireland’s First Copernicus Hackathon on Earth Observation and Space Entrepreneurship

The Irish Centre for High End Computing (ICHEC) has today announced Ireland’s first Copernicus Hackathon, aimed at promoting the Earth Observation (EO) services sector across the country. The event will take place in NUI Galway from May 10th to May 12th 2019.

Hackathon participants will be challenged to come up with solutions for real-world problems using Copernicus satellite data (Copernicus is the European EO programme), and will compete for a range of awards, including cash prizes. The winners will be offered a place in the Copernicus Accelerator which offers a customised business development scheme for 50 visionary startups and entrepreneurs from Copernicus Participating Countries – EU, Norway and Iceland – every year. A 30-day residency to develop solutions in ESA’s innovation-focussed Φ-lab in Frascati, Italy is another of the prizes on offer.

According to Dr. Jenny Hanafin, Senior Earth Observation Scientist at ICHEC, “the space and EO ecosystem in Ireland has been developing rapidly in recent years and the first National Space Strategy is about to be published, acknowledging that this field has grown significantly. The strategy also establishes the means to support it with further growth.”

53900753_1967970259981008_3907845929218080768_o“In Ireland there is a small but growing EO services sector,” she says. “ICHEC has recently launched its SPÉir platform which aims to make satellite data easily accessible for Irish users, and promotes the use and application of EO and Copernicus data on a national basis. It’s clear that the nation has a high level of the skills required to further develop this sector – our aim is that the proposed hackathon event will help to achieve this.”

The themes for the hackathon contest represent areas where there is already significant expertise in Ireland, or significant need. These include digital agriculture, marine environment and security, unmanned aerial vehicles, energy and power, air quality and sustainable/rural/socially responsible development.

Dr John Breslin, a Principal Investigator at the Confirm SFI Research Centre for Smart Manufacturing and Senior Lecturer at NUI Galway, says the hackathon is an ideal confluence point to bring together those with complementary skills – developers and designers, entrepreneurs and domain experts – to create exciting new applications based on Copernicus EO data and services. “Ultimately, post event, we want to see more EO and space innovation-driven enterprises in Ireland,” he says, “both hardware and software, with application areas ranging from smart manufacturing of new EO/space devices to systems tackling climate change or natural disasters.”

According to Breslin, throughout the hackathon the teams will get the opportunity to test out their initial innovative ideas on others, refine those innovations through a prototype, put a plan in place to take those ideas into a viable commercial proposition, and pitch the entire package to judges.

“It’s important that people who are interested in different aspects of EO/space entrepreneurship attend the event,” he says, “including those who like to hack or make things, like developers and designers, those who like to hustle and drive business, sales and growth, and those who bring the much-needed topic-specific expertise and know-how in EO and space. Remember that a technology innovation is nothing without a customer who wants to pay for it, so it must be a needs-led innovation.”

The overall aims of the hackathon are to raise awareness of commercial opportunities and to generate potential startup, spawn-out or spinout ideas, and where possible provide support pathways to pre-commercial level for successful participants. A more general aim is to highlight the relevance of Copernicus data beyond the space and ICT sectors, through the publicity generated by the event.

“To achieve these aims, we have invited a number of organisations to join us as partners for the event,” says Hanafin. “These partners will allow us to leverage a range of skills that will be important in organising a successful, exciting event, promoting it to the relevant people, and supporting successful participants to take their hackathon ideas to the next level.”

“We are aiming for 50-60 participants to take part, with skills in EO, GIS, thematic areas – like agriculture, marine, drones – data analysis, data visualisation, app development, web service development, graphic design, programming, project management, entrepreneurship and business development. We encourage anyone with any of these skills to register and take part, as it will be an exciting and fulfilling event.”

Alongside ICHEC the event partners include TechInnovate, Baily Labs, the Department of Geography at University College Cork (UCC), the National Centre for Geocomputation at Maynooth University (MU), the National Centre for Marine and Renewable Energy (MaREI), the Office of Public Works (OPW), Teagasc, ESA Φ-lab, ESA Space Solutions Centre Ireland, Údarás na Gaeltachta, and the National Digital Research Centre (NDRC).

The event takes place in NUI Galway from May 10th to May 12th. Registration is now open via the website. For further information, please contact cophackie@ichec.ie, check out the Facebook event page, or follow on Twitter @CopHackIE.

Announcing VC funding, CitySwifter plans to expand and double its workforce in Galway

CitySwifter, the Galway-based tech company that improves the efficiency and service quality of urban public transportation systems, is announcing the closing of a major funding round led by Irelandia Investments, ACT Venture Capital, Mike McGearty (former CEO of CarTrawler), and other notable Irish transport entrepreneurs. CitySwifter is also supported by Enterprise Ireland and has received funding from the Western Development Commission‘s Western Investment Fund.

The round was fuelled by traction in the UK market, with a number of the largest publicly listed, UK-based multinational transport companies signing up to the service. Coupled with that interest is the growing change in the public transport industry towards providing consumers with smarter transportation through technology. CitySwifter has already analysed data and optimised urban bus networks in eight of the UK’s largest cities, and with this investment they are on track to become the leader in “data-driven decision making” for bus networks globally.

Alan and Brian, CitySwifter, GalwayCitySwifter uses Big Data and Predictive Analytics to optimise high-frequency, urban bus networks. Bus companies around the world have only three timetables on average (Monday-Friday, Saturday and Sunday), despite constant fluctuations in passenger demand, journey times and average speeds. This results in bus companies constantly over- or undersupplying the market. Using its advanced technology, CitySwifter is able to create an improved supply and demand equilibrium, with accurate capacity predictions and vehicle requirements optimisation. This solution generates measurable improvements in efficiency, and reduces the costs associated with providing the highest-quality public transport service in large cities.

Brian O’Rourke, co-founder and CEO of CitySwifter stated, “We’re delighted to close this venture capital funding round with participation from some of Ireland’s most experienced entrepreneurs and investors. Beginning with expansion beyond the eight cities in the UK where we have successfully scaled our operations, this funding gives us an opportunity to grow and continue to help large public transportation companies and authorities globally to revamp bus networks for both business and passenger level service improvements”.

Alan and Brian, CitySwifter, New YorkMike McGearty, former CEO of CarTrawler, has invested in CitySwifter and has also been appointed as Chairman of the Board. He vocalised his support for CitySwifter stating, “CitySwifter has the potential to be one of Ireland’s next big success stories on the Irish tech scene. They already have an impressive list of major UK clients and advantageous changing market trends on their side. Alan, Brian and the rest of the early-stage team have got the required domain knowledge, technology expertise and focus on execution to drive the business forward through the next phases of growth”.

The company plans to recruit tech and commercial talent from around the world to join them in their Galway headquarters where the company intends to double headcount from their current team this year by hiring 12 new employees. The ideal candidates would work with high-level software development or data science. CitySwifter is also working towards opening offices in London and New York.

For more information on careers with CitySwifter, see here: https://cityswifter.com/careers.php

Galway City Innovation District secures €2.5M for follow-on to the PorterShed from Regional Economic Development Fund

Minister for Business, Enterprise and Innovation Heather Humphreys TD recently announced the results of the €29.5 million second round of the Regional Enterprise Development Fund (REDF), an open national competitive call to support regional projects. The not-for-profit Galway City Innovation District CLG, operators of the PorterShed, were announced as one of 21 successful projects out of 77 applicants, with funding of €2.5M secured to provide a second building incorporating coworking space, private office space and event space for scaleup technology and medtech companies. The project aims to support 780 jobs directly and indirectly over its funding lifecycle.

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Niamh Costello, Maurice O’Gorman, Mary Rodgers, John Breslin and David Cunningham from the Galway City Innovation District, as they welcomed the funding announcement. Photo: Andrew Downes, XPOSURE.

Announcing the successful second round Galway applicants of the REDF, backed by the Government’s Project Ireland 2040, Minister Sean Kyne TD said: “These projects have been selected because of their clear potential to drive innovation and creativity in Galway and the West, and encourage, nurture and sustain startups and employment which is fundamental to a successful economy and healthy society.”

Mary Rodgers, Innovation Community Manager at the Galway City Innovation District said: “We are delighted to have received significant REDF funding from the Department of Business, Enterprise and Innovation, through Enterprise Ireland, to complement our existing PorterShed offerings for startups with this much-needed facility for scaleup companies to grow and create jobs in Galway.

“This second building will boost the existing innovation, entrepreneurial and startup ecosystem in Galway and support a geographically balanced and integrated approach to economic and social development in the West of Ireland. It will also act as a fast-landing site for incoming FDI companies, with three companies lined up already.”

Barry Egan, West Region Director, Enterprise Ireland said: “Supporting enterprises to build scale and expand reach is a key focus of Enterprise Ireland, and the Regional Enterprise Development Fund helps us to further drive growth in key sectors in the West of Ireland, particularly in the context of Brexit. Along with the Páirc na Mara project, these projects will contribute significantly to supporting scaleups and job creation in Galway City and County.”

Opened in May 2016, the Galway City Innovation District’s PorterShed, backed by AIB, has over 100 seats, and is currently home to 38 startup companies. The PorterShed has supported the creation of 660 jobs. 15 companies have graduated from the country’s first regional accelerator, NDRC at PorterShed, and 525 events have been held in the space. It also contributes an estimated €15 million per annum to the local economy.

Opportunities and Challenges for the Irish App Economy

On the RTÉ Nine O’Clock News last night, I spoke about app economy growth areas like AR and video in a piece with Will Goodbody on the opportunities and challenges for the Irish app economy. But just how important is the app economy to the overall economy in Ireland, and what do we need to do to continue growing it?

According to a recent report from US think tank PPI, Ireland is punching above its weight in the European table for what is called “app intensity”, or the percentage of jobs in the app economy to all jobs: the number for Ireland is close to 1%. Of the 2-and-a-quarter million jobs in Ireland, that’s about 20,000 people, and that figure of app economy jobs in Ireland increased by 5,000 since just last year. Ireland has performed well in comparison to other countries, and had the third highest growth in Europe in terms of app economy jobs, up 33% from 2017 to 2018.

We can thank the development of strong innovation ecosystems and startup communities in our capital and regional cities over the past five or more years, and the country’s third level institutions and research centres continue to produce talented graduates to work in the core areas of app development, computer engineering and software security, which are further supported by indirect and spillover jobs. However, the Director of Ibec’s Technology Ireland group, Una Fitzpatrick, has cautioned that there is a skills shortage happening, and a serious pinch point is on the way over the next couple of years if this is not addressed.

It is fair to say that apps have radically transformed the way we live and work. The first App Store opened just over 10 years ago in July 2008, and because anybody with decent coding skills could create an app, we had all kinds of creative people imagining what could be done with the combination of internet-connected, location-aware, touchscreen multimedia devices that are almost always within hands reach. All of the tasks that typically took hours or days, from booking holidays and buying presents, to paying bills and arranging meetings can typically be done in minutes, with a greater range of options available. Also, new tasks that were not really possible before can now be performed: preheating your home or car from your phone; getting real-time information on nearby transport options; or live streaming a birthday party to your family and friends.

The novelty of apps may have worn off, but it is becoming harder and harder to imagine life without them. We increasingly expect there to be an app for everything, whether it’s the services we already use or new ones we are still imagining. There’s still lots of room for new innovations, for example, there has been a recent increase in the adoption of digitally enhanced reality or augmented reality apps. Last year, another big growth area for apps was streaming video: this led to an increase of over 85 percent in consumer spend on iOS, and over 70 percent on Google Play. Most people have multiple video apps to access various free and paid services: two thirds of people in the US have two or more video apps.

Globally, mobile app spend is at about €94 billion ($110 billion) this year, up by a factor of five from just five years ago. (In 2013, as part of the Eurapp project I led, we had forecasted a growth from €20 billion to nearly €70 billion in 2018.) Total mobile commerce is apparently 10 times larger, and will continue to grow into the trillions. As regards jobs, PPI gives an overall 2018 figure of 2.1 million app economy jobs in Europe, using a conservative estimate of two indirect or spillover jobs for every app job. In the literature, this multiplier effect can go as high as 5 or even higher, potentially yielding over 4.2 million app economy-related jobs.

However, there are certain risks to the Irish app economy and we need to continue to support this growth sector in Ireland. There are a number of things we can do. The first is to address the skills shortage highlighted by Technology Ireland and others, by making sure we produce sufficient numbers of tech graduates to meet the increase in demand, but also by attracting more technology talent to the country. This aligns to Tech/Life Ireland, a national initiative to brand Ireland as a top destination to pursue a career in technology, and I’ve recently joined its steering group.

Secondly, we need to make sure that technology startups have the requisite mix of engineering, design and business know-how to succeed, as encouraged by programmes like TechInnovate at NUI Galway. For the small app company in Ireland, there are various business challenges: competing with free or lower price apps from larger competitors; the cost of acquiring customers; getting access to capital and finance; and then there are the revenue sharing requirements from the big US platforms and having to compete with higher US salaries for mobile developers and engineers. Many app company founders have strong computing skills, but they often lack the entrepreneurial skills to develop successful enterprises driven by their innovations. In an increasingly competitive (app) marketplace, we need to make sure that our tech savvy founders also become business savvy and can truly understand their target customers’ priorities as well as the technology’s potential.

New NUI Galway Masters Programme in Agricultural Innovation & Entrepreneurship is Open for Applications

NUI Galway has announced that applications are now open for 20 places on a new Masters in AgInnovation (Agricultural Innovation & Entrepreneurship) course. The one-year distance education entrepreneurship development programme aims to fill the gap in entrepreneurship/intrapreneurship skills for people working in the agricultural technology sector and agricultural ecosystem in Ireland.

The new course is targeted towards employees working in key ecosystem stakeholder companies including micro, small, medium and large agricultural technology and agri-food companies, and farmers. The primary aspects of the programme include agricultural needs finding, design thinking for the agricultural sector and disciplined entrepreneurship skills development.

Particular consideration is given to helping course participants address:

  • Challenges around commercialising innovations (ideas and technologies).
  • Business constraints and guidelines (margins, compound annual growth rate, lifetime value and cost of customer acquisition).
  • Other difficulties related to getting new agricultural products to sizeable markets.

AgTech4The one-year programme is delivered through a distance education model which provides the learner with flexibility in choosing when and where they wish to study, and allowing them to continue to engage in their day-to-day activities within the agricultural domain. For industry employees, 10% of the fees will be paid by their employer.

Dr Paul Flynn, Lecturer and TechInnovate Programme Manager at NUI Galway, says: “The aim of this course is to teach people how to identify areas for innovation specifically within the agricultural domain, and to create innovation-driven enterprises or new business units within an existing company. This Masters in AgInnovation aims to support the emerging agricultural startup innovation pipeline in the years ahead.”

The arrival of US agricultural-focused venture capital firms in Ireland is recognition of the potential for innovation in the agricultural technology domain. Ireland’s Strategic Investment Fund (ISIF) has committed €20 million to an investment fund managed by Californian venture capital firm Finistere Ventures, targeted at making Ireland the ‘Agtech Island’. Missouri-based venture capital firm The Yield Lab opened one of the first Irish-based agtech accelerators in Galway in 2017, further recognising the requirement for a structured approach to scaling innovation-driven responses to validated agricultural needs.

According to Dr John Breslin, Senior Lecturer and TechInnovate Programme Director at NUI Galway: “This is a timely initiative because there needs to be more agricultural technology innovators in companies and startups who can avail of the early-stage supports, and then scale up to avail of the bigger funds. 2018 is the year to accelerate the agricultural innovation ecosystem in Ireland.”

The AgInnovation course is supported by Springboard+ and funding that was recently announced by John Halligan TD, Minister of State at the Department of Business, Enterprise and Innovation and the Department of Education and Skills.

To apply, please go to http://springboardcourses.ie/details/6275