Supporting Innovation
Irish founders have the potential to scale their products and services internationally. Ireland should focus on fostering a dynamic and competitive ecosystem and marketplace with the conditions to enable founders scale globally. New and existing frameworks must ensure that they are developed with a clear objective to stimulate research and development, driving technological advancements and to optimise scaling opportunities.
Championing founder companies in Ireland brings both societal and economic benefits. Government must start by addressing the economic conditions which would ensure homegrown companies retain their presence in Ireland once they have been established.
Increased investment in R&I, as well as enhanced industry-academic partnerships are essential for driving Ireland’s performance further in innovation-led sectors of the economy.
To make Ireland a global leader in innovation, current levels of public investment need to be enhanced.
By implementing these strategies, Ireland can create a robust and sustainable ecosystem for long-term entrepreneurship. This will not only retain and grow businesses domestically but also position Ireland as a leader in innovation on the global stage. Incentivising founders to stay the course as these businesses grow will turn companies into acquirers rather than acquirees, thus strengthening the cycle of innovation, business, and skills development in Ireland.
Our recommendations
- Increase public investment in R&I in Ireland. If Ireland is serious about fostering the next generation of leading businesses and maintaining a long-term reputation for an idea economy, with a society favourable for doing business, public investment needs to be enhanced. While Ireland boasts an ecosystem of talented and forward-thinking founders, our lack of public investment in research and innovation (R&I) does not meet the needs of this ambitious and innovative cohort.
- Align existing strategies in support of innovation with an overall framework for putting founders first. Meet the opportunities of our thriving founder ecosystem by ensuring our next national innovation strategy is aligned with a framework for founders and puts in place actions for Ireland to seize R&I opportunities. Technological development is fast outpacing regulatory frameworks which seek to place rules on innovation. Ireland needs a framework to ensure our founder ecosystem is agile enough to seize on the opportunities innovation provides for our competitiveness. Resist the temptation to regulate rather than enable innovation and thereby unlock the potential for Ireland to lead on the green and digital transitions.
- Increase the number of organisations who are eligible for the R&D tax credit. Keep Irish businesses innovative and competitive by ensuring R&D tax credit and schemes aimed at promoting innovation are accessible and not so administratively burdensome as to discourage take up. Take up is help back by underlying issues. Greater certainty and consistency is needed in terms of the decision-making and administration that surrounds it. Ensure Ireland’s support for founders is in line with that of other jurisdictions in relation to tax treatment. This can be done through flexible tax treatment, reduced recordkeeping requirements and upfront cash repayments as well as limited ‘advanced assurance’ for the first few times the tax credit is claimed.
- Ensure the R&D tax credit and schemes aimed at promoting innovation are accessible and not overly burdensome. This will ensure Irish founder organisations are innovative and competitive.
- Simplify the administration procedure for the R&D Tax credit. Action the R&D tax credit recommendations of the Commission on Taxation and Welfare that would see more guidance and supports introduced to facilitate greater uptake by smaller organisations.
- Ensure the taxation system enables rather than hinders innovation. Provide smaller founder organisations with the environment necessary to innovate and scale. An example of this would be a tax roadmap for SMEs, similar to Ireland’s corporation tax roadmap, providing predictability and a joined-up approach for the tax treatment of SMEs. Review the tax system to ensure it encourages rather than disincentivises long-term investment in entrepreneurship. Develop mechanisms that encourage long-term investment in ventures beyond the traditional strategy of exiting via a sale of the company.
- Re-energise investment in founders in Ireland by incentivising more Venture Capital investment. Maintain high-potential innovation in Ireland and leverage sources of longer-term investment in the Irish founder ecosystem. We welcome the recent continuation of the Irish Innovation Seed Fund Programme as another step in the right direction.