The Luck Of The Irish? Why Start-Ups Are Thriving In Ireland
- Research from the European Scaleup Institute found that Ireland has the highest concentration of high-growth firms (HGFs) and hypergrowers in Europe
- A business can achieve high growth status with 10% annual growth, and hypergrowth status when they experience a growth of 40% per annum
- Ireland have cultivated a hotbed for hypergrowers by providing robust startup support such as their low-corporate tax
Picture this: you’ve stumbled upon a potential multi-million Euro business idea, and now you are pondering where you want your headquarters to be located.
When you think start-up locations in Europe, Berlin might be the first to come to mind for its entrepreneurial ecosystem, value for money and access to funding. Maybe Cambridge or London with their respective Silicon Fen and Silicon Roundabout? Stockholm is home to active unicorns including Spotify, and Paris has the continent’s biggest startup hub, Station F. And haven’t Lisbon and Barcelona become the place to be for digital nomads?
But make sure you don’t overlook Ireland. Recent research by the European Scaleup Institute (ESI) reveals that an unexpected startup hotbed is being cultivated in Dublin.
According to the ESI, Ireland has the highest concentration of HGFs and hypergrowers (in proportion to overall companies in the country) in the entirety of Europe. For instance, 2.85% of Irish businesses are high-growth firms. To put this into perspective, the same figure stands at 0.84% in France and 1.13% in Germany.
How does Ireland attract start-ups?
But what is it about Ireland that makes it such an attractive spot for startups? And no, it isn’t just the luck of the Irish.
Research by Business Immigration Visas reveals that Ireland has a great environment for startups due to passing growth-promoting policies. For instance, its corporate tax rate stands at 12.5% in comparison to Britain’s 25% corporate tax rate. In 2021, the Irish government launched the Ireland Startup Visa, which allows foreign entrepreneurs to set up branches or headquarters in the country.
Hotspot nations, such as Ireland, are home to founders who are flexible and showcase an ability to move with the times, including embracing the work from home revolution. Moreover, the Irish population boasts an extremely educated workforce. According to Eurostat in 2022, Ireland had the highest share of graduates in Europe, with 45% of all adults aged 14 to 64 holding a degree.
Gary Leyden, Commercial Director of the National Digital Research Centre explained in an interview with Forbes: “Ireland has a small domestic economy, so it’s in the DNA of our founders to build globally focused ventures, and that is the hardest thing for other nations to replicate.”
Moving to Ireland
Considering these factors, why wouldn’t you expand your business to Ireland?
ESSEC Business School professor, David M. Sluss, is a contributor to the European Scaleup Monitor, a report created by the European Scaleup Institute, offering insights into the European start-up scene. He emphasises the benefits of moving to hotspot cities like Dublin but also highlights the importance of adapting to the times.
“The European Scaleup Monitor 2023 highlights ‘hotspot’ cities and ecosystems that are primed for both high- and hypergrowth firms. If your expansion to the hotspot is geared towards talent acquisition and client on-boarding or interaction, then a physical space would be appropriate and flexibly used for these ‘working from anywhere’ talent,” David says.
“Overall, it relies on an intricate balance between growing within a ‘hotspot’ and engaging talent with a ‘work from anywhere’ culture.”
His insights are not to be sniffed at. The Institute is a collaboration between some of leading academic experts in Europe, based at leading business schools and universities including: Erasmus Centre for Entrepreneurship & Rotterdam School of Management (Erasmus University Rotterdam) in the Netherlands, ESADE in Spain, ESSEC Business School in France, Luiss Business School in Italy, NOVA School of Business and Economics in Portugal, the University of Galway in Ireland, Vlerick Business School in Belgium, and the WHU Otto Beisheim School of Management in Germany.
It’s not just startups packing up their headquarters and moving to the Emerald Isle, Fortune 500 companies are also following suit. Accenture and Medtronix, both with origins in the United States, moved their headquarters to Ireland due to the booming economic environment.
William D. Green, Accenture’s chairman and CEO, explains; “Ireland offers a stable political and economic environment and has the financial and legal infrastructure to meet Accenture’s needs, both today and in the future.”
Addressing the scaleup gap
Scaling-up your business regardless of where you are on the continent is no mean feat. So, optimising your chances by placing yourself in an area that breeds success is always the way forwards.
With the European Scaleup Institute revealing that only 1.13% of all European companies can scale by more than 20% for two years out of the three-year period.
The study concludes that Ireland’s successes can be replicated across Europe, but mechanisms need to be put in place across the board to witness widespread change.
Leonardo Fuligni, Executive Director of the European Scaleup Institute explains; “We want to address what is often referred to as ‘the scaleup gap’, in which fewer SMEs are said to be able to achieve high growth in Europe when compared to similarly crowded entrepreneurial ecosystems in the rest of the world.”
And, once you’ve achieved that hypergrowth status, the next trick is to be able to repeat it. After all, no matter how successful your first business venture might be, there’s always a danger that it might be little more than a one-hit-wonder. with that in mind, taking the time to not only consider the ‘what’ and ‘how’ of your business but also the ‘where’, can only be of benefit to help ensure an enetrepreneur’s continued success.
Do you agree that Ireland is a great location for start-ups? Let us know in the comments below.
By, Plamedi Mbungu
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