Venture capital backed firms show 40% increase in employment
Posted: 29 March 2007
Employment in venture capital backed companies in Ireland rose by almost 40% to over 17,000 in 2005, according to a new study. The survey conducted by Prof Frank Roche, UCD School of Business, on behalf of the Irish Venture Capital Association (IVCA) also shows that revenues from these firms rose by 34% to €1.95bn in the same year.
IVCA members backed 23 new companies in 2005, and almost all (96%) were in the early stage high tech sector. According to the report, The Economic Impact of Venture Capital in Ireland, 74% of the 3,600 people employed by these companies in 2005 were graduates, an increase of 25% on figures from the previous year.
The Economic Impact of Venture Capital in Ireland 2005
Revenues in the IVCA backed high technology companies in the Republic of Ireland increased by 81.6% in 2005, reflecting a very strong domestic economy. In the same period these companies also generated exports of €239m, an increase of 6% on 2004 figures.
“Venture backed companies increased employment by 39.1% in 2005,” said Prof Frank Roche. “Compared to 14.6% in 2004, this indicates that momentum is escalating year on year.”
“A figure of 17,226 may be considered low in terms of overall employment, but it is growing fast and now represents 6.7% of employment levels in the Financial and
Business Sector,” he continued.
IVCA backed high technology companies invested €89m in R&D in 2005, an increase of 33.7% on 2004 figures, clearly showing that these companies play a significant role in the development of a knowledge-based economy in Ireland, according to Niall Carroll, IVCA Chairman.
“The story of the Irish venture capital industry has been one of growth and success and one where venture capital companies have encouraged entrepreneurship and provided support and assistance to innovative companies, mainly in the high technology sector of the economy,” he said.
The Irish Venture Capital Association, established in 1985, represents Irish based venture capital firms which account for 95% of the €1.2bn invested by Irish VCs in Ireland since the year 2000.
The study is the third annual study of the economic impact of venture capital on the Irish economy. It was conducted by the Centre of Entrepreneurial Studies in UCD during 2006. As a census of VC backed companies in Ireland, the study provides useful data for policymakers, investors and industry practitioners.