Mr. Karl Aherne:

The corporate venturing side is quite a new approach that large corporations are taking for innovation. Previously, most corporate innovation took place within a business but it has been realised that this does not solve the innovation gap. Corporate venturing units have been created to almost buy innovation and invest in start-ups. That has mostly taken place in the US, which is currently the home of most of those large corporations. We can tap into the great resource which the IDA has developed for us through foreign direct investment and a large number of these US corporations are now setting up in Ireland. It is the destination of choice to enter Europe and we can now build an ecosystem where those corporations can bring corporate venturing arms into Ireland. It is a second wave that will take place but we need to create the environment to make it happen.

This environment must incorporate three different areas, with one around incentivising corporations to bring the corporate venturing arms into Ireland.

There can be passive and active incentives. One such incentive could be the benefit they garner from our corporation tax rate. Perhaps we should consider encouraging them to use a very small percentage of that benefit to reinvest in corporate venturing in Ireland. It could take the form of setting up their own accelerator, investing in an existing accelerator or directly investing in start-ups in which they were interested. It would help them in filling their innovation gap and also be a very good CSR activity for them in their relationship with Ireland. It could also deflect from what could be perceived as a low corporation tax rate.

There are two other areas on which we must focus to drive it. One is regarding the founders of start-ups. It is critical that we do not punish failure, as we do at present. We do it through income tax rates and the lack of tax credits. As we have assisted farming, artists and stud farms, perhaps we might consider assisting entrepreneurs.

The third piece relates to investors. As Mr. Costello correctly said, there is a large swell of professional investment firms that are creating significant funds for investment in early stage companies, but what we are missing in Ireland are the incentives for angel investors. We are not creating the right environment for angel investment. In the United Kingdom, for example, there are the enterprise investment scheme, EIS, and the seed enterprise investment scheme, SEIS, whereby one has downside protection from an investment. If one's investment loses money, one can write off the loss against one's income tax to a maximum figure of £150,000. This is driving a huge amount of investment for seed and early stage companies. The investment available drives more founders into creating their businesses. One then ends up with corporate venturing tagging onto it to create the great synergy between the three.