tag:blogger.com,1999:blog-7671796277525081500.post2245249396887981470..comments2023-10-24T11:19:29.497+01:00Comments on chris horn's blog: An Irish Smart Economy: Aspiration or Reality ?chris horn @chrisjhornhttp://www.blogger.com/profile/03562424333768625107noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-7671796277525081500.post-24202555342578746862009-10-22T18:23:03.009+01:002009-10-22T18:23:03.009+01:00@David Molone
PS - I believe that the reason that...@David Molone<br /><br />PS - I believe that the reason that Enterprise Ireland favour taking equity positions, rather than grants, is that apparently equity positions allow them to get cash into a company "up-front"; for some reasons grant aid would not necessarily get the money into the company immediately..<br /><br />So equity positions may be the most effective: but then, they could be coupled with an Israeli-style "buy-back" option to get the equity back again subsequently... perhaps...chris horn @chrisjhornhttps://www.blogger.com/profile/03562424333768625107noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-20154972415006975932009-10-22T18:18:34.263+01:002009-10-22T18:18:34.263+01:00@David Molone
David, speaking as an Engineer mys...@David Molone<br /><br />David, speaking as an Engineer myself, I fervently agree that the taxation system should heavily incentivise investment - both personal and otherwise - in the smart economy, rather than traditional activities.<br /><br />I strongly believe that there should be excellent personal tax advantages to "rolling over" the wealth created from a successful exit of a smart economy company, into starting ore or more others -- this will then help foster real angel investment in Ireland..<br /><br />In Israel, companies can have the option of buying out seed equity owned by the Government/State, at cost plus normal (ie standard rates) accrued interest. This is an idea worth studying: Enterprise Ireland may take seed equity positions BUT the company could then buy them back if the company so wished, at cost plus accrued interest...<br /><br />Just my 2c worth -- these topics are being actively raised within the Innovation Taskforce (of which I am a member) but, of course, no promises...<br /><br />best wishes<br />Chrischris horn @chrisjhornhttps://www.blogger.com/profile/03562424333768625107noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-46156032101799182072009-10-22T18:02:32.631+01:002009-10-22T18:02:32.631+01:00In order to create a viable knowledge economy the ...In order to create a viable knowledge economy the government must make it attractive for experienced engineers and scientists to leave their jobs in middle-management.<br /><br />In order to achieve this the government will need to loosen the requirements on the seed-capital scheme which are so restrictive as to make the scheme useless at present for successful professionals as opposed to the recently unemployed.<br /><br />Secondly EI has to stop playing at being a VC and taking equity in companies in exchange for investment when the tax take effectively reimburses them for their "risk". The equity is better off in the hands of founders and staff. EI needs to switch to a more project-based model investing in jobs rather than double-dipping.<br /><br />The BES scheme is absurd in that the rules prevent founders from taking advantage of the scheme while Joe Bloggs can walk in off the street and get tax-relief.<br /><br />Windfalls from things like 3G spectrum auctions should be ring-fenced and reinvested in the sectors that generated them in order to sustain industries through inevitable cycles. As it stands the government has no long-term vision and has abandoned one sector after another with the result that nobody wants to study engineering or science anymore.<br /><br />It's tough to build a knowledge without engineers and scientists and without them the government is all talk and no action.<br /><br />-Davidcto_maverickhttps://www.blogger.com/profile/05844305175284393016noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-86021193625545096502009-10-19T16:22:59.586+01:002009-10-19T16:22:59.586+01:00Hi Chris,
Wish I could claim that quote as my own...Hi Chris,<br /><br />Wish I could claim that quote as my own (research turning money into knowledge, where innovation turns knowledge into money)! <br /><br />A quick google didn't turn up any source, although an alternative version that might appeal to you with your EI hat on: Science turns money into knowledge. Engineering turns knowledge into money.<br /><br />best,<br />Mary MMary Mulvihillhttp://marymulvihill.net/noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-36675458899001393492009-10-18T21:04:01.549+01:002009-10-18T21:04:01.549+01:00@Finbarr McCarthy
I guess what I wanted to emphas...@Finbarr McCarthy<br /><br />I guess what I wanted to emphasise was that viewing a company as a means to creating jobs is usually NOT the view that the company founder(s) take, even if our DETE agencies try and incent job creation, rather than wealth creation... And I think this point needs to be reinforced to our national policy makers, particularly if we really do want to make Ireland the best smart economy.<br /><br />Cloud computing is possibly an example of a disruptive event that can change an industry -- what if Ireland had been brave enough to create the term, and create the first cloud computing centres in the world, say 3 or 4 years ago..<br /><br />Mind you, Larry Ellison of Oracle, amongst others, don't view cloud computing as particularly novel - its just computers on a network -- see http://tinyurl.com/yaqcfu2<br /><br />Being successful is also about failing early, and I agree we need culturally to re-think this.<br /><br />We absolutely MUST off-shore low value activities. Because everyone else already is. So, if you want to be globally competitive and take on the best worldwide and win, you have absolutely no choice but to find the best value locations for your activities....<br /><br />Thanks for the comments!<br />Chrischris horn @chrisjhornhttps://www.blogger.com/profile/03562424333768625107noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-43213327336732766622009-10-18T20:48:23.403+01:002009-10-18T20:48:23.403+01:00Hi Chris
Thanks for posting the text of your talk...Hi Chris<br /><br />Thanks for posting the text of your talk. Using job creation (in Ireland) as a primary measurement of success is indeed a limitation, and in my view is very old school.<br /><br />I sometimes feel that our mindset hasn’t changed much over the last several decades. It feels like the eighties all over again when we were fighting to hold on to low value manufacturing here.<br /><br />Much of the next wave of innovation (and wealth) will fall from the ever increasing adoption of Cloud Computing services. I have no doubt that many new industries and opportunities will emerge directly as a result of this trend. Interestingly cloud computing is not a labour intensive industry and therefore not likely to see much financial support from bodies such as Enterprise Ireland.<br /><br />Ireland has some advantages in this market which we should be leveraging - our climate being one, we have a cool climate - ideal for cooling data centres, lots of wind - ideal for generating green energy to power the same data centres. We are also an English speaking country within the E.U. and have a well educated (and available) workforce.<br /><br />I also think that there is a cultural barrier in Ireland to business failure - where many people (including financiers) have difficulty separating a failed project with the person behind it. VC's in "The Valley" seem to take the approach that 1 in 10 will succeed, where Banks and "State Support Bodies" here tend to not consider failure as an option. I have seen a few (potentially) good ideas here shelved for the sake of banks looking for iron-clad personal guarantees from proposers.<br /><br />The one other point I wish to add is that if we can keep our innovation based in Ireland, does it really matter that much if we off-shore some of the low value efforts?<br /><br />FinbarrFinbarr McCarthyhttp://finbarrmccarthy.comnoreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-130877250584187912009-10-18T17:21:09.293+01:002009-10-18T17:21:09.293+01:00@James Kennedy
The dichotomy between wealth creat...@James Kennedy<br /><br />The dichotomy between wealth creation through company ownership, and general wealth creation through job creation, is there. And in both cases, taxation revenue is needed if weaker members of society are going to be supported.<br /><br />Wealth creation via company ownership is one of the key factors to attracting foreign nationals into the economy --- and a key factor in retaining Irish nationals in the economy rather than have then emigrate and found their companies elsewhere.chris horn @chrisjhornhttps://www.blogger.com/profile/03562424333768625107noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-45841249052165674192009-10-18T17:17:43.634+01:002009-10-18T17:17:43.634+01:00@David Kirk
First point: I don't have any mo...@David Kirk<br /><br />First point: I don't have any more data (yet) but (i) if only 8% of VC funded startups in the USA are founded directly by academics, that gives some indication; (ii) the level of royalty licenses and/or equity holding in companies, from Stanford and from MIT which I quote also give an indication.<br /><br />Second point: I generally agree. However in the lifesciences area it appears completely the reverse - patents are very common and required...<br /><br />Third point: I generally agree with this too. Sometimes, in my view, well intentioned government policies towards innovation and entrepreneurship ultimately act against the system..<br /><br />best wishes<br />Chrischris horn @chrisjhornhttps://www.blogger.com/profile/03562424333768625107noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-32126356565362878972009-10-18T01:10:03.303+01:002009-10-18T01:10:03.303+01:00Hi Chris -
Thanks for this excellent analysis. A...Hi Chris -<br /><br />Thanks for this excellent analysis. At last someone has pointed out the elephant in the room. <br /><br />Entrepreneurs 'start' to create personal wealth. Government bodies are aimed at creating employment. There is often an overlap between those two objectives but in many cases they are in conflict. I consider an ideal business to be one where there is the greatest personal income for the lowest headcount. <br /><br />If we really want to support entrepreneurs, we should be helping them how to effectively create personal wealth on a massive scale. This is the true motivation for many, many people. It is perhaps a motivation that is frowned upon here but not abroad. A side product of that motivation will be jobs and wealth for subsequent entrepreneurs whom they chose to invest in. It seems so obvious now that you have called it out. <br /><br />JamesJames Kennedyhttp://www.jameskennedy.ienoreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-48997917426366248772009-10-17T22:31:38.607+01:002009-10-17T22:31:38.607+01:00Chris, excellent, thought provoking analysis.
In...Chris, excellent, thought provoking analysis. <br /><br />In the spirit of generating discussion - I would question a couple of points. <br /><br />First. Research at Stanford had little to do with Cisco "spinout" did it? Likewise, Google? I'd been interested in seeing your analysis broken down by those companies whose IP was envisaged or created within a university program verses those companies whose founders happened to be associated with the university. <br /><br />Second. The concept of IP from R&D allows appears to be closely tied to patents. I have, and will, argue that patents for software startups are not only a waste of time and money, but actually are counter protective. I think Goigle had $120M of funding before it filled a patent. <br /><br />Third. And possibly the most likely to incur argument, I don't see any shortage of ideas (innovation) or talent in Ireland or Northern Ireland. In fact, I'd stack Ireland against many /any. I've challenged many on the question "what is preventing the next Google coming from Ireland". Curiously, the constraint is NOT ideas or people. It's the entrepreneurial ecosystem. <br /><br />Again Chris, excellent stimulating analysis.David Kirknoreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-28742500418887715712009-10-17T16:17:09.146+01:002009-10-17T16:17:09.146+01:00@Siobhain O'Dwyer
I agree a mindshift is clear...@Siobhain O'Dwyer<br />I agree a mindshift is clearly needed, and an insightful inflection point created. I'm musing a lot about various possible inflection points strategies which a government could adopt. Don't yet have a definitive position!<br /><br />@Brian O'Donovan<br />I have some TSMC like suggestions but I think it is wiser at this point to get agreement on the principles by which such projects should receive any taxpayer investment - global opportunity, not "me too" ie globally unique, probably disruptive to an industry, highly leveragable by Irish based companies, potentially for high return to taxpayer, etc..<br /><br />@Mary Mulivihill<br />I *love* your quote in your posting relating research, innovation, money and knowledge! Not entirely convinced though that taxpayer money should be used directly to support jobs, although clearly that happens now. Need sustainability,<br /><br />@Edward Phelan<br />I'm all for urgent action leading to new jobs in the short term. I think we need an inflection point created by a number of national policy initiativeschris horn @chrisjhornhttps://www.blogger.com/profile/03562424333768625107noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-75397290990261203402009-10-16T20:57:33.441+01:002009-10-16T20:57:33.441+01:00Chris, I think that a quickie innovation strategy ...Chris, I think that a quickie innovation strategy is what’s needed right now to get the ball rolling. The ipod approach, well proven technology arranged in a new and exciting way and flogged to consumers through a state aided outpost in each market across the globe. The Japanese did it in the seventies, the Koreans in the eighties.<br />Once the ball is rolling, academic research will then have something to focus on and thereby reinforce the whole process. The quick exit strategy is okay in established industrial countries like the US, but we need some scale first and we need it fast.Edward Phelanhttp://www.pacdog.comnoreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-25380650006041137642009-10-16T16:35:53.817+01:002009-10-16T16:35:53.817+01:00PS: forgot to include the link to my post:
http://...PS: forgot to include the link to my post:<br />http://marymulvihill.net/2009/10/16/research-or-innovation/Mary Mulvihillhttp://marymulvihill.net/noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-83918762807394901272009-10-16T13:43:13.434+01:002009-10-16T13:43:13.434+01:00Hello Chris,
thanks for that thought provoking ana...Hello Chris,<br />thanks for that thought provoking analysis. It set me thinking about the need for incentives to encourage an intellectual property boom, snd the differences between research and innovation, and jobs and corncrakes.<br /><br />Mary M.Mary Mulvihillhttp://marymulvihill.net/2009/10/16/research-or-innovation/noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-1970991783805721592009-10-16T08:35:12.493+01:002009-10-16T08:35:12.493+01:00Chris,
This is a really interesting article. It i...Chris,<br /><br />This is a really interesting article. It is interesting to see the Irish investment in R&D put into perspective.<br /><br />I wonder if you have any ideas about what infrastructure investment Ireland could make which would have a similar effect as the Taiwan investment in semiconductor manufacturing capability.<br /><br />I wonder if there is some form of service which could be provided via a cloud which would give a competitive advantage to the Irish digital media business? I am sure that there are expensive infrastructure items on the wish-list for bio-tech companies (but I don't know enough about this to even guess what this might be).<br /><br />BrianBrian O'Donovan (BOD)https://www.blogger.com/profile/10652457466416412942noreply@blogger.comtag:blogger.com,1999:blog-7671796277525081500.post-91562952852857955012009-10-15T16:32:24.809+01:002009-10-15T16:32:24.809+01:00Hi Chris,
Your article puts it up to all of us, t...Hi Chris,<br /><br />Your article puts it up to all of us, that's why I enjoyed it so much! <br /><br />I think one of the biggest issues is for Irish businesses to adopt from the very start the kind of business model that delivers a short-term high-value exit. That's a bit of a mindshift from where we are right now. Initiatives such as igap and endeavour are great because they expose startup to this type of thinking and expertise. I do think it would be great to share this beyond the businesses directly involved in those programmes. We need an inflection point in our thinking as well as our future focus.<br /><br />Just shared this article on ideagen's facebook site by the way, will be interested to watch the ripples.. <br /><br />I hope people are listening seriously to what you are saying, it's great stuff!<br /><br />SiobhanSiobhan O Dwyerhttp://www.wearethreesixty.comnoreply@blogger.com