Mr. Eoin Costello:

I thank the Chairman for the opportunity to address the committee. I met the committee on 8 July when I updated it on the movement called Startup Ireland and the momentum and initiative we had achieved. I promised the committee I would come back and update it on our progress. I am delighted to share with it the fact that I left my job two weeks ago to work full-time in Startup Ireland. I am living on my savings but I live in great expectations of us becoming funded quite shortly because Startup Ireland has really started to gain momentum. The address to this committee was a very useful step along that road.

The reason I am here today is to talk about a major new initiative which is part of the Action Plan for Jobs 2015. It is all about a regionally balanced start-up ecosystem which capitalises on the competitive advantages and the historical legacy of industries, multinationals and the indigenous strengths we have in each of our cities and which would be unique to each city. It is not something one can impose on a city but is something that emerges.

Just to remind ourselves of why start-ups are so important, it is now empirically proven that start-ups create two thirds of all new jobs within developed economies. In a nutshell and to put our mission in Startup Ireland very simply, our goal is to make Ireland a global start-up hub by 2020. When I started to say that a year ago, people said it was nice to have a dream and to keep dreaming but we are now in a situation where this is tangible. As I go through my presentation, members will see why it is achievable.

What is the start-up of sector? A very diverse group of players comprise the start-up of sector. It is quite a new sector and has not really been considered as a kind of horizontal. It comprises technology transfer offices, the professional service providers and co-working space providers and, until very recently, these were seen as an add-on to a huge range of other projects all these providers would be doing. Now, for the first time, it is being treated as a specific agenda item in our public policy, within the multinationals and within our city and urban councils. That is very welcome because it must be treated as a new sector to start to create the density of the networks and the resources needed for it to thrive.

What have we been doing to bring together the various disparate players in the start-up sector? When I spoke to the committee in July, I invited all members to Vision2020 Dublin and quite a number of members joined us on that day in October. We brought the key stakeholders together to discuss what a strategy would look like to make Dublin a global technology start-up hub. We had some very big players in the room that day who committed to doing whatever they could to make that happen. We have now moved on to a situation where rather than just focus on Dublin, we are now looking at regionally-based start-up hubs and we have come up with a strategy as to how to do that.

It sounds fantastic and everyone is buzzing about entrepreneurship and the start-up sector at the moment. Some commentators would say there is a degree of hype and over-inflated expectations but we have to push through that to the reality. We must face the reality that our country does not appear in any of the key global start-up ecosystem rankings.

If we look at one of the reports in 2012, some of the cities are quite predictable but I do not think there is any validity in comparing ourselves to major cities which are part of homogeneous populations. London has access to a population of 70 million or 80 million and has a very accessible market. It is a very long established hub for industry and enterprise.

Two countries with similar size populations, similar size GDP and a similar landmass that are in the top 20 are Israel and Singapore. What characterises those two global start-up hubs is the sheer degree of density and velocity, which are the two defining characteristics of the success.

With regard to density, if we look at the key elements needed to start a successful start-up, an ideal journey would be for a person to go to their university and engage with the tech transfer office or PhD researchers, and really refine a very strong technology, then go to the local multinational, which would have an interface for start-ups to engage with, and then close the first deal. The person would then go down the road 5 km to the local top-class VEC, which could fund a €2 million to €5 million round, close all that, and then go to their professional service providers, who would have the skills in doing high value deals, and it would all be done in a very short period of time.

The reason that is possible is density. When there is density, then the process of going through that - the velocity - speeds up. We do not have that in Ireland. If a typical high impact start-up wants to close a deal with a big multinational or a big back-end development engineer vice president - the decision makers - they have to fly to the United States or to London. Having spent quite a bit of time in the States closing the deal, if they then want to raise a €2 million to €5 million round of venture capital funding, they have to fly to London or to Europe. Eventually, they get back to Dublin and start actually developing. We do not have the density at the moment in Ireland and, as a result, the velocity is very difficult. The committee members will all be familiar with the fact we are struggling to get scale-ups. When we look at our nearest competitor city, London, the density of the various accelerators, incubators, corporate acceleration arms and corporate venturing arms there is very impressive. We need to achieve the same for Dublin.

It is not all bad news, however. If we look at the entrepreneurship policy launched by the Minister, Deputy Bruton, the day before our Vision 2020 event in October, it is clear the Government realises and recognises there is a problem, which is the first step to solving it. Within the entrepreneurship strategy, the Minister has committed to some very clear milestones which will help to move the whole entrepreneurship agenda to a much more sustainable basis in our country. The really exciting opportunity for us to move to being a global start-up hub is the current public consultation on the replacement for the double Irish - the elimination of the current tax regime for multinationals domiciled in Ireland. This presents a real opportunity to make Ireland a global start-up hub because this will be the engine.

To take other start-up ecosystems as an example, in Israel the defence budget and the deep R&D created by that is phenomenal. Singapore has its pivotal position in south-east Asia and phenomenal access to finance. We cannot compete with either of those. However, the public consultation on the knowledge development box closes on 8 April and I would encourage all the members to make a submission on it because it is probably the most important structural reform of the fiscal environment in Ireland in the history of the State, and is a fantastic opportunity to create high value jobs in our jurisdiction. That is where the value is created. We will start to get PhDs working for the multinationals here and have a much higher headcount of people who may embark on break-outs. If we join a consultant and a PhD from a multinational together, we get a really high impact scale-up that can take on the world.

It is great for the future that the knowledge development box is in progress. However, if that is the engine for Ireland to become a global start-up hub, what are the sparks that will ignite that? When we look at Ireland and our unique characteristics, not many people realise that Ireland came No. 1 in the good country index, which was compiled from 35 indicators and measures how much the countries around the world contribute to global welfare overall. How many people are aware of that? I only came across it very recently.

To take another natural characteristic of our national identity, we will always root for the underdog and will always back David versus Goliath. Start-ups are classic underdogs, classic Davids versus Goliath. To take the authoritative text on this area, Brad Feld says that at the heart of successful start-up ecosystems is a sense of community, sharing and paying it forward.

These are characteristics which in previous lives we have shown we have in abundance.

We decided to pull all these elements together, to help differentiate Ireland internationally, draw on our natural characteristics and bring that density and velocity together in one focal point that provides the pivot around which the knowledge development box engine can really fire, the start-up gathering. The start-up gathering is a week of events, encouraging entrepreneurship and show casing Ireland's start-up sector around our country, comprising five days, five cities and five industries. In terms of the reach of this gathering, which takes place from 5 to 10 October, more than 50 events will take place. We are open to any suggestions committee members might have in terms of events they are aware of that could be aligned with that week. Our goal is to interface with at least 15,000 members of the Irish public and international visitors during that week.

We often wring our hands and say we have lost the best talent from Ireland in the past five years. A key goal of this gathering is to encourage those people who have left Ireland to come back and be part of the economic renewal of our country. Therefore, we will set up a diaspora start-up fund, raising the funding for that through a kickstarter campaign and crowd sourcing, which is one of our basic approaches to how we do many things. Through the kickstarter campaign, we will fund the flights home of from 25 to 50 people from around the world who have good business ideas, who want to come back to Ireland and be part of its economic renewal. There has never been a better time for this in terms of the supports, infrastructure and opportunity available.

In terms of where we are in the start-up gathering process, we are launching phase one on 4 March - and I invite all members of the committee to our official launch. This phase is about engaging those stakeholders who organise the events, be they a start-up weekend event or a start-up grind where a local role model talks about his or her experience in organising a successful start-up business. The theme for these events is: Start, Scale, Succeed from Ireland. Often with a process like this, perception becomes reality. If we say it often enough, there will be many more start-ups, scale ups and successes. Phase one, therefore, is about the projects we are inviting to be submitted to be featured during the week of the start-up gathering.

Phase two is about engaging the nation. We need a much higher participation rate in entrepreneurship, male and female entrepreneurship and undergraduate entrepreneurship. We need participation across the whole range. We need to get CoderDojo kids who are learning to programme to think about how they can monetise the ideas they are developing. In my former role - which I finished two weeks ago - I would talk to hundreds of start-ups a year and often the reason some of those never proceeded was because it was never the right time. With the start-up gathering, we are saying now is the right time. We are saying we have the resources and supports available and there has never been a better time to embark on entrepreneurship.

The goal of the start-up gathering is to highlight the resources available in Ireland to start-ups and to attract international high impact start-ups. The more international start-ups that locate here, the more this raises the bar for everybody. We aim to increase Ireland's international visibility, strengthen Ireland's start-up ecosystem and strengthen Ireland's talent base and entrepreneurial networks across the country. I ask committee members to help us make this a success and to help engage their networks in each of the five cities. We would be very grateful for that help. I am happy to deal with any questions members have.