UCD: Ireland. VC Backed Tech Firms Central To Knowledge Economy
From Business Plus Online:
"The study said that high tech companies accounted for 84% of all Irish VC investment in 2005. This is the highest technology weighting in Europe where the average is 17%. "
23/03/07: A new report by the Centre for Entrepreneurial Studies in UCD has found that venture capital backed firms continue to provide the impetus for development of a knowledge based economy
The study said that high tech companies accounted for 84% of all Irish VC investment in 2005. This is the highest technology weighting in Europe where the average is 17%. The report finds that on average, VC backed firms are about ten times the size in terms of revenue and employment at the exit stage compared to the time of the initial venture capital investment.
It found that VC backed firms increased employment in 2005 by 39%, significantly up from 14.6% in 2004. The 2005 increase compares to an overall increase in employment in the economy of 5.1%.
This is the second in depth study into the economic impact of venture capital in Ireland to be carried out by the Centre for Entrepreneurial Studies in UCD under Professor Frank Roche and Vincent Sheehan.
Commenting on the findings, Roche said:
"At a time when we are seeing closure and cut backs by international firms seeking lower cost centres, there is little doubt that indigenous VC backed firms have an important role to play in creating high value, knowledge based jobs in line with public policy objectives. They grow faster, create more employment, export more and invest more in R&D and in sales and marketing than other indigenous firms".
Other findings included:
- Graduates represent 74% of the workforce of VC backed firms. In 2005 graduate employment in these companies increased by 25%, compared to a 15.4% increase reported in 2004.
- VC backed companies are growing fast, with revenues increasing in 2005 by 34.1% to €1.95 billion.
- VC backed companies raised €211m in 2005 compared to €242m in 2004. 34% of this capital was invested in start up and early stage companies compared to a European average of 23%.
- Expenditure on R&D by these firms increased by 33.7% in to €89m compared to an increase in BERD (Business Expenditure on Research & Development) from indigenous companies of 11%.
- Irish high tech VC backed firms are highly export focused. They export 63% of revenues compared to 33% in the case of UK software and computer companies.
While the stats are useful they are based on 2005 data. Whats the info on 2006 and 2007 up?
Certaintly 2007 doesn't look too good with VC money slackening off.