The Irish have figured out that the Innovation Economy matters

As the federal and provincial governments gear up for their annual budget cycle, it is timely that at least one other country is showing us the way. Despite the CVCA’s best efforts to get our governments to take action in light of the brutal dearth of start-up and venture capital (see prior post “CVCA injects some fresh ideas into the federal elecion campaign” October 6-08), all any of us read about is the importance of the automotive branch plant, mining and forestry sectors.

And then there’s the biased reports of some of those that have been hired to advise the Ontario Government on how to fix the VC industry, for example (see prior post “This is Roger Martin, reporting from Mars” November 25-08).

Open the paper this morning. It is rife with gov’t-inspired stories about how banks should lend more, GM and Chrysler need $25 billion, the forestry sector needs government backed loans to stay competitive, etc. You will read not a word about the 600,000 Canadians who work in the information and communications technology sector, or the 400,000 that ply their trade in the balance of the Innovation Economy: areas such as bio tech, life science, clean tech, alternative energy, etc.

I guess that’s why Canada is always seen to be the land of “hewers of wood, and drawers of water”. We can’t help but reinforce the stereotype.

This from AFP:

“Irish recovery plan includes 500-mln-euro venture capital funds: PM
18 December 2008, 19:32 CET

(DUBLIN) – Recession-hit Ireland is establishing venture capital funds worth 500 million euros (730 million dollars) to help create a “smart economy” as the country recovers, Prime Minister Brian Cowen said Thursday.

Cowen was launching an economic blueprint he said was designed to make Ireland an “innovation island” and to ensure it can take advantage of a future economic upturn, after the current deep gloom.

“When this is over, there will be a new economic order and I want Ireland to be positioned to take full advantage of the opportunities that will be presented,” he said, adding: “I am clear where I want us to be.”

The funds will be 49 percent backed by the state’s National Pension Reserve Fund (NPRF) and 51 percent backed by private sector venture capital and will focus on research and development and evolving new technologies and products.

Launching the new plan, “Framework for Sustainable Economic Renewal — Building Ireland’s Smart Economy, 2009-2014,” Cowen said Ireland was facing “the biggest economic challenge we have faced in a generation.”

The former Celtic Tiger economy has been hammered by the international financial downturn and plunged into recession this year.

It has been hit by a banking crisis, a severe property and construction industry downturn, plummeting tax revenues, rising unemployment, the worst retail sales figures in 25 years and currency fluctuations.”

Our elected officials and their trusted advisors have heard about the problem for more than a year (see prior posts “Venture Capital Crisis in Canada?” March 12-08, “BNN interview on VC funding woes” October 4-07). Action time is upon us.

All Hail the Irish!

MRM