There have been a number of media stories about the government’s latest Smart Economy initative: a new innovation fund featuring public money matched by money from venture capitalists. The Taoiseach was quite bullish about this program on RTE’s The Week in Politics on Sunday night and he has announced it in a speech in New York (press release here.) The details say that it is a €500 million fund. As I understand it, this is €250 million from the Irish government spread over five years (€50 million per year) matched by private venture capital funds.
The press release tells us that this is a “major boost for enterprise development and job creation.” Well, with GDP for this year projected at €161 billion, venture capital investments of €100 million per year corresponds to six tenths of one percent of GDP. Government initiatives to develop a venture capital industry in Ireland are probably a good idea (I say probably because these initatives are often poorly implemented, in which case they’re a waste of money.) However, in the grand scheme of things, this cannot be considered a major boost to enterprise. It’s certainly not a major boost to job creation.