KPMG: Ireland and innovation – leader or follower?
A highly competitive environment leaves no room for complacency
“We’re actively looking at ways of bringing the two sectors together for mutual benefit and there’s a lot of interest from both areas about the possible opportunities.”
He also mentions the firm’s early commitment to the Summit, formerly the Web Summit, as a sign of its intent around the innovation agenda.
“We’ve been involved from the beginning,” he says. “The success of things like the Start programme at the Summit really brings home how Dublin has become an innovation hot spot. It’s also where many of the tech companies get a real view of the funding opportunities that might be available.”
Murphy believes there’s a correlation between entrepreneurship and innovation but notes that Ireland faces some specific challenges in encouraging both.
“Irish levels of entrepreneurship have ebbed and flowed significantly over the past decade according to the Global Entrepreneurship Monitor (GEM) report,” he says. “The evidence suggests that many of our entrepreneurs have become business owners as a result of circumstances rather than ambition.”
He argues that government needs to keep its foot on the pedal to help encourage more entrepreneurship.
“Inevitably tax plays a role in the message Ireland sends out to the world about setting up and succeeding in business here. The fact remains that employees pay high rates of tax relatively early on the earnings curve. Furthermore, a successful disposal of a business incurs a far higher level of Capital Gains Tax than is the case with the UK, our nearest neighbour and competitor.”
Murphy acknowledges the competing priorities faced by government, but he contends that encouraging innovation and entrepreneurship needs more recognition.
“There are a lot of graduates out there who have great ideas and there are other talented people looking at Ireland as a place in which to live and work. Budding entrepreneurs and innovators should have a reasonable expectation that Ireland won’t tax their ideas and the fruits of their hard work more than in other countries.”
So is Ireland a leader or follower in innovation?
Murphy believes that Ireland is much more than a follower, notwithstanding the results in the EU’s Innovation Union Scoreboard.
“The innovation infrastructure and people are here, our reputation is acknowledged globally and the efforts of IDA and others have made a huge difference. Our biggest enemy is complacency.”