Cowen bids to drum up business in New York
TAOISEACH BRIAN Cowen tried to sell Ireland’s new Innovation Fund in the temple of American capitalism, the New York Stock Exchange, yesterday.“The focus of all efforts must be the entrepreneur and enterprise,” Mr Cowen told a breakfast audience of some two dozen people. He informed them that Ireland’s GDP is growing by 2.7 per cent, and vaunted the merits of Ireland’s new €500 million fund.
Over the next five years, the National Pension Reserve Fund (NPRF) and Enterprise Ireland are to provide €250 million for the scheme, which is intended to lure venture capital to Ireland. Venture capitalists are to provide the other €250 million.
“It’s about Ireland setting itself up as a place where business can be done, where start-ups can take place, where we can develop technology, life sciences and other areas, ensure that there is the sort of risk capital to help those companies scale up,” Mr Cowen told journalists on a balcony overlooking the trading floor.
One needs a tutorial in business jargon to follow the Taoiseach’s visit. “Progress” and “scale” are verbs, the latter meaning to make a company grow. “Dealflow” signifies the flow of deals.
Unlike President Mary McAleese’s visit to the stock exchange in May, journalists were not allowed to speak to breakfast guests or to accompany Mr Cowen on the trading floor. A promised list of participants did not materialise before this newspaper’s deadline.
Mr Cowen said the Government has been discussing the fund with potential investors for up to a year, and that his launch was “well received” by guests whom he described as “people from the stock exchange, people who are involved with Irish America and who are involved in business”.
“Might Irish people take exception to the Government providing €250 million to mostly foreign venture capitalists, at the very moment when it is looking for another €3 billion in cuts in public services,” I asked the Taoiseach.
“We have to invest in our country as well,” Mr Cowen said.
“We have to get our situation into a place where what we spend and what we obtain from taxpayers comes into balance . . . These are investments that we are making by which we want to get a return for taxpayers.
“There are enterprises that need venture risk capital to be made available, and Ireland has to establish itself a reputation for having that sort of financial arrangement in place as well.”
The Taoiseach again emphasised the dual necessities of cutting costs while investing in innovation in an interview with the Bloomberg business network.
Irish exports are rising 4.5 per cent this year, Mr Cowen said. “For a small, open economy like us, with a small domestic market, export-led growth is the way by which we can create wealth and increase standards of living at home and provide job opportunities. We have a well-educated work force. We are small. We are flexible. We are adaptable.”
US reactions to Ireland’s efforts have been mixed. On June 29th, the New York Timesand the Wall Street Journalpublished lengthy articles on the Irish economy. The former gave a bleak assessment of a “once thriving nation . . . struggling, with no sign of a rapid turnaround in sight,” while the Journalreported that the fall in the value of the euro will “spur Irish turnaround”.
“Despite everything Ireland has done, the markets seem only half-convinced,” says David Lynch, the author of the forthcoming book When the Luck of the Irish Ran Out, which chronicles Ireland’s transformation since the mid-1980s.
“Over the past 90 days, the yield on Irish 10-year bonds has crept up a bit as have the prices of its sovereign credit default swaps, indicating that investors remain worried about Ireland’s prospects for avoiding default.”