Mr. Eoin Costello:

In Tel Aviv in Israel, 40% of highly qualified staff work in the research and development centres of big multinationals, such as Google and Microsoft. The fact that the large multinationals do not have their corporate venturing and research and development activities here means they do not have sufficient meaningful engagement with the start-up community. Dublin lacks a cohesive single story. Silicon Valley is known internationally as the epicentre for tech ventures, where one can get in one place the entire pathway for successfully scaling a high-tech opportunity. London is the hub for incubating financial technology ventures. Tel Aviv is internationally renowned as a hub for mobile, water and life sciences innovation. Dublin also has a skills shortage with regard to being a global tech hub. A total of 75% of ICT companies, with an estimated 4,000 vacancies, are looking for workers. Dublin has a lack of female entrepreneurs engaged in our tech start-ups. Global Entrepreneurship Monitor has found a 2:1 ratio between males and females engaged in entrepreneurship.

This combination of difficulties means it is difficult to find successful investment. After a company has gone through seed rounds and is beginning to scale up internationally, closing the round between €2 million and €5 million is very difficult in Dublin. Taking all these factors together, the result is we have low international visibility as a start-up hub. The problem with this is that it comes at a time when international competition is moving from being country-based to city-based, because cities are the real engines of our economic development.

Let us look very briefly at what we can learn from other successful start-up ecosystems throughout the world. These include many US cities, which have a massive captive population, and cities such as London or Paris which have very large domestic populations. Approximately two weeks ago I interviewed an incubation centre manager in Israel. He told me that in Tel Aviv everybody has a start-up idea and everybody is working on making it the next big thing. In Israel when an entrepreneur has a business idea he or she will begin to work on it by the end of the week. The Entrepreneurship Forum found that we must encourage entrepreneurship because we have a cultural problem with it. In Tel Aviv, because of the culture and can-do attitude, the pipeline is very large and a very large number of people have highly technical skills. Start Tel Aviv is an international competition open to 20 countries which feeds into the pipeline. With regard to infrastructure, Tel Aviv has in excess of 600 spaces available at any particular time for start-ups. This creates an output of 1,900 tech start-ups per annum. Our best guesstimate is that at present Dublin may produce up to 200 tech start-ups per annum, which means the output in Tel Aviv is ten times larger than that in Dublin.

The pipeline goes from ideation to incubation, and includes building a team, getting a product market-fit, accelerating it and raising money. Tel Aviv has 36 accelerators, including important multinational accelerators such as Google Campus and Microsoft Ventures. Israel has the largest number of NASDAQ-quoted companies in the world. Its output of 63 NASDAQ-quoted companies is greater than that of Korea, China, Singapore, India and all of Europe combined. This is what is possible with a joined-up ecosystem.

It is important that Israel has a large number of accelerators and corporate accelerators.

The reason it matters if that over time the survival and success rates of start-ups that have gone through an incubation programme are significantly higher. Everybody knows the failure rate of start-ups is high. However, through the use of an accelerator programme, this does not have to be the case. The slide now showing focuses on the Y Combinator and tech start-ups. These are US data which show that through the use of an accelerator programme, the failure rate over time is significantly lower. That is the situation in relation to a city ranked number two in the world in start-up ecosystems.

We will now look at one ranked number 20 in the world and what it is doing about this area. Startup Chile - Chile is a fairly remote part of the Earth - has set about this with real gusto. It runs an international competition which attracts more than 3,000 applications from 35 countries. Its pitch to start-ups is: "We want to transform our country. We would want you to talk to local students and entrepreneurs and imbue them real entrepreneurial spirit." It has been very successful. That is the situation at the other end of the scale.

I will now focus on the middle sector and those start-up ecosystems that want to ramp up their activities and what we can learn from them. Currently, the world's largest start-up incubator is being constructed in Paris. It will cater for 1,000 start-ups. This means ten times our current output will be going through incubation facilities in Paris, France. Mexico, which is trying to break into this space and although not currently in the top 20, is doing a great deal about that, has built a 35,000 sq. ft integrated facility. This is really important in the context of having the entrepreneurs, lawyers, financial service providers and so on all in the one space creating a dense network of connections. They are the challenges Dublin faces and what we can learn from other successful start-up ecosystems.

I would like to outline briefly the Startup Ireland track record to date and the genesis of the idea. The next slide is a founding photograph of Novara Technology which was a hosting and domains business set up in the front bedroom of my house, which was scaled up very quickly and over eight years achieved a customer base of more than 8,000 and 20 staff. It was the second largest company of its kind in Ireland. I sold that company to Digiweb for a seven figure sum. This all happened in 2009-2010 when things were very bleak. In order to give something back, I then went travelling the world and visited incubation centres and social entrepreneurship enterprises and brought that knowledge back to Ireland. When I got back, I did a masters degree at the University of Ulster and looked at how the start-up ecosystem in Ireland could be strengthened. I presented the findings of my research to the Minister, Deputy Bruton, and then took on the job at DIT hothouse incubation centre, where I am currently programme manager of the new frontiers programme. What I am trying to do in this context is implement the findings of my dissertation, namely, to bring about collaborative activities, to bring students into work with start-ups on an internship basis and to encourage students to do digital marketing, brand creation or strategic management projects for the benefit of a start-up, such that both sides win. I also hold student tours of the incubation centre. It is working. Culture change is about hand-to-hand combat. It is granular and it does work. I recently spoke to a parent of a student who is doing an internship. He told me that since taking the internship, his son has been buzzing about setting up his own start-up. Prior to doing the internship, he had no interest in start-ups.

About a year ago I reached the point where I knew this was working and that it needed to be scaled up and taken national. Following this, we as a group got together and discussed setting up Startup Ireland. I will now focus on what Startup Ireland is doing and how it is making a real difference. Put simply, Startup Ireland is working at a policy level, grassroots level and a cultural and educational level. We are reconciled to the fact that this is going to be a long-term commitment. As stated by Brad Feld, creating culture change is a commitment that will take approximately ten years.

At a policy level, I spoke at the Fine Gael Ard-Fheis in February where I made the point that we must take start-ups seriously and put them at the centre of our economic policy. I will speak at any Ard-Fheis on the topic of start-ups. I am happy to put the case for start-ups anywhere.