Our Secret to Success: Why Tech Companies Thrive in Ireland

Why Tech Companies Thrive in Ireland

Ireland has a long-standing reputation for success in building and breeding technology companies. Established players like IBM and HP have had a strong Irish presence for decades, while more recently internet age players like Google and Facebook, and third wave companies like Uber, AirBnB, Slack, Dropbox and Stripe, have all chosen Ireland as the place to grow their businesses.

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Ireland is known for its strong and vibrant technology sector, and where tech thrives, venture capital follows. It’s a great sign, then, that the venture capital community in Ireland has been particularly active in 2015, with more than $440 million in funding raised in the first six months alone.

Significant investments have been made this year in companies across the sector, with a noticeable increase in the dollar value of some of these investments. Earlier this year AMCS, a software company serving the waste management and recycling industry, drew attention for funding of $64M, while semiconductor firm Movidius raised $32M to support R&D and hiring for its machine vision technology. Financial technology is also buzzing with activity, with Irish FinTech firms like Fenergo, which recently raised $75M and CurrencyFair, making headlines not only for its recent $14M in funding.

Ireland has a long-standing reputation for success in building and breeding technology companies. Established players like IBM and HP have had a strong Irish presence for decades, while more recently internet age players like Google and Facebook, and third wave companies like Uber, AirBnB, Slack, Dropbox and Stripe, have all chosen Ireland as the place to grow their businesses. In fact, nine of the top ten global tech companies have a presence here in Ireland as well as ten of the top ten “born on the internet companies”. In addition, Irish born-and-bred companies compete incredibly well on the international stage, most going global from a very early stage. Many are currently growing rapidly, others have been sold to global firms, and a small number have gone on to IPO.

It’s clear that, when it comes to investments in technology and a track record for success, Ireland is performing far above its weight class. What gives Ireland’s tech sector such a punch? Here are three reasons why tech companies thrive in Ireland:

  1. Talent Pool: Talent is a critical success factor for any business—and for Ireland’s tech success story. What sets Ireland’s labour pool apart is the ready availability of qualified resources with the qualities tech companies need to drive innovation. In fact, the IMD World Competitiveness Yearbook 2014 ranked Ireland as #1 in the world for the adaptability and flexibility of our talent. As the Irish Tech sector continues to thrive, this talent pool only deepens. With both home-grown successes and the increasing investment of global firms in the Irish tech space, the availability and quality of skilled tech workers increases year over year. The education system is also playing its part with 28% of all students currently enrolled in science, engineering and related courses. We also have the youngest population in Europe with 40% being under the age of 29.
  2. Lower Tax Rates: With a 12.5% corporate tax rate, Ireland’s Corporate Tax regime is a significant attractor for new and established tech firms alike. Research and development are actively encouraged through a 25% tax credit, which is refundable for loss-making corporations. The recently announced Knowledge Development Box with its lower 6.25% tax rate should also be attractive to companies doing R&D in Ireland, developing patents and copyrighted software and exploiting the fruits of that development work.
  3. Track record: Ireland has a long legacy of being an attractive place for international companies to thrive. We are now witnessing serious Irish companies being built and scaled from Ireland.

With both the domestic and international venture capital communities so active this year, and ongoing investments in such a broad range of companies, the future of the technology sector in Ireland looks bright indeed.

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About the author

Anna advises many early stage Technology and FinTech companies on the challenges around fundraising, structuring shareholding arrangements, rewarding founders and employees and growing global businesses. Anna is a founding member of the Board of the FinTech and Payments association of Ireland which was launched on Sept 14th, 2015.

Anna leads KPMG’s global partnership with Connected Intelligence (or Ci), the company behind Web Summit, F.ounders and their related US and Asian events, Collision and Rise. Anna has been recognised by Silicon Republic Women Invent Tomorrow programme as one of the 100 Top Women in STEM. She was nominated for the Woman Mean Business (WMB) Award for Women in Technology and was nominated one of the Top 30 Women in Tech in Ireland.

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