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- [00:02]
A
Hello and welcome to the next Innovation. I'm Jennifer Strong. Today we're wrapping up our coverage of south by Southwest. And in this final installment, we're featuring a conversation with two of Ireland's leading figures in the nation's tech space.
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B
My name is Robert Troy. I'm a member of the Irish Parliament and currently serve as Minister of State in the Department of Finance.
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C
My name is Jenny Melia. I am CEO of Enterprise Ireland and Enterprise Ireland is the Irish government's trade, innovation and investment agency.
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A
During our conversation, we spoke about how Ireland came to be one of the leading tech innovators in the world and what it takes to ensure young entrepreneurs have the right resources for their businesses to flourish. Let's take a listen. All right, so it's very, very nice to be joined by you both. So we're here in Austin, Texas for South by Southwest. Do you have any takeaways after these last few days? Any reflections or deeper learnings?
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B
For me, I was just really blown away in terms of the scale and the diversity of what goes on here. It's not just in relation to tech, it's across a whole range of sectors and the atmosphere, the positive atmosphere, no matter who you engage with, it's electrifying, quite frankly, and it's really good to be part of it and to have a very strong Irish presence here. In terms of Ireland House, working with our state agencies, Enterprise Ireland, the IDA Film Ireland, and again, giving people that opportunity for creativity, for innovation and to showcase as a country what we're so good at. And we're able to do that across such a broad range here at south by Southwest. So it really has been an eye opener for me and very energized going home, having been here an amazing and
- [01:55]
C
whirlwind 48 hours in Austin, I think it's fair to say, Jennifer, the couple of standouts for me, first of all, just the vibrancy of the tech sector and like the minister referred to the diversity. Second piece for me that stood out was the growth opportunities in this part of the states. And I mean like we've seen firsthand, we've seen some of our global leading companies like H&MV this morning. So they're basically work on high voltage grid solutions, but they're talking to some of the top energy players in Texas and they are already doing business in Texas and talking about the opportunities that they see. And I think the third thing for us is just probably, you know, being in Ireland House and the minister referred to Ireland House did feel like a little Bit of Ireland last night, like I was in the habit of when I was talking to people I was seeing here in Ireland, and I had to remind myself that I was actually in Austin. So I. I would actually see a lot of similarities in terms of, you know, the culture here in Austin and the ease people have in terms of how they like to do business, how they like to talk, how they like to share stories. I think we're both. We both have that storytelling, Jean and Austin and in Ardet.
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A
Absolutely. And the storytelling with music too, no doubt.
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C
For sure, the music was amazing. Yeah.
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A
How did Ireland come to be this global innovation hub?
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C
I think there's a couple of key ingredients, Jennifer. So the first is Ireland's focus on investing in education. And that actually started many years ago in Ireland with a very progressive minister who made education free for all. Because Ireland has really transformed itself from being a very rural and agricultural focused economy into a real, you know, global innovation hub, known for so many of the international tech names, but also very well known now as well for all of the homegrown Irish businesses that have made their names across the world. And in fact, you know, one example that everyone will be familiar with is in the States is Kerry Butter. And I know we're all great fans of Kerry Butter. And Kerry Butter, you know, is very much a premium Irish food product and is a real example, you know, of the food innovation in Ireland. So the first piece was our investment in education. The second piece then was our investment in building out research and technical skills. So Ireland would have the highest percentage of STEM graduates per capita in Europe. So that's graduates in the sciences, the technologies, the maths. And I'm a chemist myself by training, so I am one of those STEM graduates. And then as well as investing in the talent, we also invested in the infrastructure. So we invested in our universities, we've invested in technical hubs around the country. And those technical hubs are a really good R and D and innovation arm for our small and medium enterprises around the country.
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A
And Minister, what kind of conversations are taking place to, I would say, continue that lead or to extend it, perhaps?
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B
Well, I suppose the government is determined to build on the foundations that has been laid. And as Jenny has said, I think our success hasn't been an accident. It has come about thanks to success of government policies that have been pro business, pro enterprise. And there has been continuous investment in education and research and, and innovation. And even quite recently, the last government formed a new Department of Higher Education and Skills to really keep that laser Focus on third level and further education in the areas that's needed. There's great collaboration with industry also in Ireland. So that's the beauty of a small country, is you are able to collaborate between business and between academia to ensure that we have the right pipeline of talent that's required for the years to come and to be agile, to be able to adapt in a very quick and meaningful way. We are no longer a country that attracted multinationals. We're now a country that can actually produce multinationals. And I suppose the initial policies that attracted multinationals to Ireland was taxation. But why did they stay? They stayed because high quality workforce. They stayed because of pro enterprise policies, the access to the European market. And those multinationals have fed into our own ecosystem and have helped and support the growth of indigenous Irish firms.
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A
And what is the role? Actually it might even be helpful for a US audience to explain what Enterprise Ireland is in the first place, but what is its role in fostering innovation?
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C
So Enterprise Ireland is the government's trade and innovation agency and we're also a significant investor in technical startups. So we're actually the biggest investor in early stage startups in Europe. By deal count, about 66% of those companies are digital tech companies and about another 25, 30% are in the medical devices and the life sciences and the engineering sectors. Our role in Enterprise Ireland is to help our Irish companies to grow and to scale and to enter and compete in overseas markets. And the win for us in Ireland, Jennifer, when that happens is we see high quality jobs generated on the ground in Ireland, IP generated in Ireland. And that's very important to Enterprise Ireland. That is our north star in terms of supporting our companies to create high quality jobs. And I think the context of the really strong two way relationship between Ireland and the United States, when I see now our Irish companies establishing sites here in the US and right now the top 10 Irish companies employing more than 125,000 people on the ground here in the US you know, a lot of people mightn't be aware of that, but again, their focus here is about creating high quality jobs. And again, like Ireland, it's not just all around the innovation hubs, you know, around New York, where we are here in Austin today, San Francisco and so on. You know, it's right across many states. Ohio, Colorado are two that come to mind. South Carolina is another where I have visited some of our client companies. So we are a 28 year old agency and while we're part of the government, I always say we have to Think like a business. We have four and a half thousand companies that work with us. We have 42 international offices and seven of those international offices are in the United States, with our most recent office opened in Atlanta. And we're very proud of our team here in the States and everything that they do to build the dynamic on the ground.
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A
As a longtime business and tech reporter, it's always interesting to me to kind of, you know it. You hear the accents in the Brooklyn Navy Yard with the startups, you know, Irish folks there. You go around Manhattan, you see Fin AI everywhere, but you may not know that it's Irish. And this happens, I would say, fairly on the regular, that you realize that some company actually has Irish roots or is like Intercom, still an Irish company despite hitting a certain size in the past. I would think before COVID perhaps they would have moved maybe to the US Once they had such a portion of their employees in the US What I'm curious about, because I think, do you want everyone to know they're Irish companies? Because a lot of the time we just find out sort of by accident. So is that part of this next step is to then make sure that Americans are aware of just how important this relationship has become.
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B
I think that's where ourselves and Texas are very alike. We're very proud. Texas is very proud state. Some may say they're kind of a little like a republic in their own right. But Ireland are very proud of what we have achieved. And that's what St. Patrick's Day is partially about. I won't say it's exclusively about that. It's an opportunity for us as a government working with our state agencies to travel across the globe. In total, there's somewhat, I think, 42 or 43 Irish trade missions taking place as part of St Patrick's Day celebrations this year. Nine of those are in the states. And that is to reinforce the message of the opportunities that there are to trade with Ireland. The Irish love a problem because when they see a problem, they know that there's a solution and they want to be part of that solution. And enterprise Ireland wants to support Irish companies to be part of the solution. So we're incredibly proud of what we have achieved as companies. That there's 200,000 people directly employed in the US by Irish companies. And that doesn't take into account of those that are indirectly employed or the value in the supply chains going into those businesses.
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C
Also, again, going back to the size of Ireland, you know, we're 5.2 million people. So when our Companies start, they have to start with a global mindset. We call it born Global in terms of their thinking. Because you're not going to grow a billion dollar company by just selling to the Irish population. There aren't enough of us to buy the product or service. So I think companies very proudly wear both the Irish brand and label and the global label. From the outset, it's obvious to all
- [11:50]
A
of us a very special relationship exists between the governments of Ireland and the United States. But I don't think many of us fully understand or appreciate actually some of the history behind that. On St. Patrick's Day, with the White House, for example, or other elements. Can you break down a bit more for the listeners what this relationship has looked like?
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B
Well, I was just doing a bit of research before I came out today and I think we're somewhere like 73 years participating in St. Patrick's Day ceremonies between Ireland and the White House. 70 of the 73 years it has been the Taoiseach, the Irish leader of. The leader of the Irish government that has come over with a long standing arrangement with the President of the United States. You're celebrating your 250th anniversary of independence this year. For so much of that, the US Was seen as a land of opportunities for the Irish. The Irish came here forced through famine, forced through economic circumstances and the perilous situation our own country was in. And having come here, they helped build America. And now things have changed because Ireland is equally a land of opportunities and we are now a country that attracts people into us and to see, see what contribution they can make and what opportunities they can realize for themselves.
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A
Johnny, I would love to understand a bit more of the difference between the Irish tech startup space in Ireland versus the tech startup space within the United States. If you're able to help us kind of think about that a bit more deeply.
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C
Yeah, so I think, look, I think one of the key differences, and it's probably maybe a little bit more about the tech, the differences between the tech startup space in the US and Europe. So when we would look at the tech startup space in the US we see a country that has really scaled its startups. Jennifer. And when I look at some of the most recent data available to us, we can really see where the trajectory changes when a company reaches what I would call its five year anniversary or milestone and it really takes off in a different growth trajectory in terms of the funding available to it that has been really, really the states. And like you would see it in relation to some of the recent media releases and press announcements around seed funds of 200, 300 million. So for sure, Europe hasn't, hasn't had that level of investment for startups. But now I would think it's fair to say over the last decade has made considerable progress in catching up, but now we need to catch up on the scaling gap. And there is a huge focus now in Europe in terms of what we need to do to create our own hyperscalers. And I think so many countries are talking about AI sovereignty at the moment, digital sovereignty, security around infrastructure and the piece of technology is helping us solve some of those challenges. The minister referred to there how the Irish love to find a problem and then love to fix that problem. It was one of the lines I took from one of the really exciting panels I heard at south by Southwest this morning on energy infrastructure. And one of the comments from one of the panelists was that we are now at the most challenging time of our careers. And I thought, what a powerful statement and how exciting it will be to be part of the team and part of the generation and the industry that solves these challenges.
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A
I really love that for a few reasons, but also because it shows some of the spirit we've been talking about. Because when someone says it's the most challenging moment of my career, you could also say, gee, I'm sorry, instead of that's what an opportunity is.
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C
Yeah, no, we have more, I think of get up and go and chase it attitude for sure.
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B
But just to follow on to the point Jenny makes in terms of the availability of capital from a European perspective, there's very concrete moves afoot from the European Union to develop that issue or to address that issue. And that is the Savings and Investment Union, which is talking about deepening the capital markets, which will enable one capital market for the European Union and the ability to raise capital through the Savings and Investment Union. Ireland takes over the EU presidency on 1 July coming. And that will give us a real opportunity, I suppose, to bring those negotiations to a critical stage and to address that issue, because that is part of our challenge is the availability of capital. We have the ideas, we have innovation. But to get access to that capital has been, I suppose, dampening those innovations and has forced maybe some companies to look elsewhere for their opportunity to, I think word you use, hyperscale. But we recognize that from a European Union's perspective and work is already on afoot to address that.
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A
Are there quintessential differences, do you think, between an American company and an Irish company, something that distinguish it from the
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C
start, I don't know if I'd call them quintessential differences because ultimately, you know, a business would chase, you know, the growth opportunity that is most appropriate for it. I think one of the things I'd be very conscious of is how over the last 30, 40 years, in terms of the US companies that set up base in Ireland and how we saw real mobility of talent between those companies and our Irish companies. And that has created that flywheel effect now that has created Irish innovation leaders. And now the Irish companies are bringing their innovation back to the States. And one of the big common denominators there would be the importance of leadership income, you know, having really strong leadership teams, having good diverse teams in the boardroom, because the importance of, you know, strategic decision making when companies are navigating uncertainties, whether it's in markets, whether it's the pace of technology, whether it's the war on talent and for talent. So I think that's one of the things where the American and Irish companies, you know, they have a lot of things in common. I also think to focus on innovation, you know, America's had a strong focus on innovation as has Ireland. You know, we've a really strong transatlantic innovation corridor in terms of, you know, the exchange of talent and technical solutions. I think we have more that unites us than what differentiates us. Now, to be sure, you have a lot more people than we have at 5.2 million. So there's a lot of Irish companies, like I said, that will go global from the get go, where I'm sure there's a lot of small and medium sized American companies that never export. There's sufficient people here in the United States to buy their products and services.
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B
Yeah, one thing maybe peeling it back to innovators and startups rather than companies. And something I would be envious of the Americans is the Americans ability to start, fail, start again. And that's kind of something, maybe that inhibits the growth of Irish companies is the real fear of failure. And what will we do if this doesn't work? Whereas in America they'll celebrate it and they'll put on their thinking caps and see how can we go again. And I think that's something we need to kind of address from an Irish perspective, particularly because we are a small country, because we do need to look with a much more global lens than insulated in our own country that it is okay to fail. One of the panels today spoke about those who are investing in companies starting up, maybe from an Irish perspective, again the focus is in trying to get a guarantee of a return on the investment where something like 66 or 68% of an American investors return zero. And they don't mind that because they will invest in another one. And where there's plenty of capital you can afford to do that. But it's just one point I think we need to be cognizant of from an Irish perspective is it's okay to fail and start again.
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A
Well, it's a double edged sword with that capital. Right. Because on the one hand having to fight hard and knowing you have limited resources brings creativity, ingenuity and a number of other things. Right. And also means you might play the longer game instead of the fail fast. But it's true, this feeling of well, if this doesn't work, on to the next because there will be funding creates its own sort of.
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B
Well, I think one lady on a panel said today the second best answer to yes is a quick no.
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C
Yeah.
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B
They give you certainty to go on and plan, plan the next stage.
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A
Absolutely.
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C
I think it is a great point and again, I think it's, I think it's, it's, it's probably more again of a European issue even than just an Irish issue. There is definitely, you know, a difference in risk appetite on both, on both sides of the ocean. And in Enterprise Ireland now we have a target to create a thousand new startups by the end of 2029. And for sure some of those startups will emerge from the stories before them, you know, that haven't worked out and where companies have taken a pivot. And in fact, one of the things I've seen over the years in Enterprise Ireland is that sometimes it's not the second or the first or second startup that becomes the rock star, it's actually the fourth one. And that's because, you know, the founders have learned so much along the way and they've learned that really important art of working together and making the right decisions together.
- [21:48]
A
So what's next? What should we be watching as observers on this side?
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C
I think the first thing for me in terms of some of the really interesting trends, you know, and certainly it has just been so clear in terms of all of the discussions that I've been involved in over the last 48 hours in Texas, just the pace and power of AI and what that is going to mean. And I'm working now for, for over 30 years in the tech industry and I would have been, you know, closely involved in nanotechnology back in the 90s and the early 2000 I have never seen anything like the pace that things are moving right now. So I think it's so important that we have people upskilled in how to use AI and in terms of how we will make decisions at both government level and at senior level in companies and so on. And make sure, you know, in terms of making sure that we're making the right decisions for the workforce, but that we're enabling the workforce as well, you know, to do a better job, to improve productivity and so on. I think that's the second trend. We will see vast increases in productivity now through technology. But I think we need to be careful there in terms of how we pace it out as well across all sectors. I think we have a great opportunity now for cross cutting technologies across sectors. And again, in terms of Ireland and being such a small and hyper connected ecosystem, I think that's something now where we will bring a lot of new innovation around the world. The strength of our tech industry, the strength of our medical device industry, the focus we have on commercializing research and our focus on making all of those connections happen on the ground. I think the change in demographics, I know this is something, you know, we're very close to in Ireland and again, in terms of, you know, we already have a war for talent, you know, what is going to happen in the next 10 and 20 years and how can we use technology to help us rather than feel threatened by it? And I think the fourth for us then is climate. You know, how do we climate proof our industries? We were talking this morning again about the energy infrastructure in Texas and you know, storms were mentioned, you know, five and six years ago. We are now building out new and very expensive energy infrastructure around the world. How are we going to climate proof that and make sure it's there not just for businesses, but make sure it's there for consumers.
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B
I think the challenge for government is the ability to keep pace with industry in this area because industry moves a hell of a lot quicker than government. And that we need to regulated to a certain extent while at the same time not stifling innovation, but to ensure that we have the necessary protections in place. Because you know, when you look at going around Austin and see the driverless cars and the chaos that could be inflicted in a cyber threat or cyber security issue, we need to ensure that we have proportionate regulation, we need to ensure that our children are safe in the online world and we need to ensure that that's done, as I said, in a proportionate way. So at a national level, the Irish government just a month ago published their new digital and AI strategy and that's across governmental strategy to look at how we can best exploit the opportunities that AI present. But also at the same time, how do we ensure that we protect the most vulnerable and how do we ensure that we bring everybody along because we can't afford to leave people behind in this space and that is going to need investment in education and training and ensure that people become literate in this area where quite frankly, I would consider I have a lot to do myself to get up to speed and we need to do more.
- [25:42]
A
This has been a delightful conversation. I appreciate you both very much and your time.
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C
Thank you. Thanks, Jennifer.
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A
Thanks for listening to the Next Innovation. This series was produced by Situation Room Studios and powered by Enterprise Ireland. Investing in the next wave of innovation. Our executive producer is Christine Barata and our senior producer is Sharon Barrero. Additional production assistance by a global Situation Room. I'm your host, Jennifer Strong. Until next time.