TAOISEACH BRIAN Cowen will this morning launch an ambitious €500 million plan on which the Government has pinned its hopes of making Ireland the “innovation hub” of Europe.
Mr Cowen will announce details of the “Innovation Fund” at a meeting with business leaders at the New York Stock Exchange today.
The fund has been Government policy since the smart economy framework was published in 2008 but has been delayed by the recession. Before his departure for New York yesterday, Mr Cowen confirmed the scheme will commence in September, with the State investing €250 million over five years, a sum which he said will be matched by private sector investment.
It is the biggest new spending plan announced by Mr Cowen since becoming Taoiseach in May 2008. Its aim is to address the lack of a venture capital culture in Ireland and to fill what Mr Cowen identified yesterday as a significant obstacle hampering Ireland from becoming a global force in innovation.
Mr Cowen, in the speech to be delivered today, will tell his audience the fund will make Ireland “a honeypot for the best European entrepreneurs”.
Speaking on RTÉ's The Week in Politics, Mr Cowen said he wanted venture capital companies not only to invest in Irish companies but also to locate themselves here. He suggested the venture capital culture of the US, particularly California and Boston, could be replicated in Ireland.
The fund will be overseen by an advisory board chaired by Damien Callaghan of Intel Capital. It will make the first public call for “expressions of interest” in early September, through Enterprise Ireland.
Israel is the model for the plan cited most often, though Britain, Canada and Finland have tried similar strategies. By matching venture capital, the Israeli government has created more start-ups than any country in the world, and there are more companies from Israel listed on Nasdaq than from the EU, India, Japan, China, Singapore and Korea combined.
Mr Cowen will remain in the US until Wednesday. He is to meet mayor of New York Michael Bloomberg and governor of Georgia Sonny Perdue. He will also announce the opening of the first Irish Consulate in the southern US, in Atlanta.
Mr Cowen said that half the State’s investment, €125 million, would be sourced from the National Pension Reserve Fund, with the other €125 million coming from Enterprise Ireland’s innovation fund. The balance of €250 million is expected to come from venture capitalists.
“For the last two years since I became leader and Taoiseach, we have been working on getting the sort of joint venture funds that will enable businesses to access capital to grow in scale,” he said.
Mr Cowen said last night he was confident the Government could steer €3 billion in cuts through December’s budget, though he conceded the position was difficult.