By Chris Armstrong.
For me the definition Innovation is the ability to use new technologies to disrupt old ways and bring about positive change for people and business. Alas while we read all the great news and PR about innovation in Ireland the facts tell us a different story. Firstly if you want to measure real innovation then one must measure the number of Irish patents issued. A small number of firms in Ireland are responsible for the majority of patent applications. Approximately 0.2% of firms in Ireland account for 77% of applications between 1999- 2013. How many of these were due to claim tax and royalties?
Like we have multinationals creating "leprechaun economics" that distort our GDP figures we have also "leprechaun innovation" which misleads us into thinking we are leaders in the knowledge economy. I recently attended MWC 17 Barcelona, the global mobile event of the year and Ireland had only a tiny proportion less than 1% of the total companies exhibiting at the event. If we want innovation we need to dramatically pump up the Ph.D's and funding in our 3rd level colleges and focus on areas that we can become world class leaders, food, green energies and new cloud services. I would have added Fintech but with government controlling 99.9% of AIB they wont want real banking disruption at home.
Recently I learned that Enterprise Ireland won't fund companies that are building platforms business models. They simple wouldn't have backed a Stripe (Irish) nor would they have backed a Twitter, Skype or LinkedIn or What's App all of which are now global platforms.
One of the biggest reasons Ireland is not the best little country to pilot early innovation is in fact Government and the way we organise (civil and public services) and how run things and of course the legal barriers. In Ireland, government has way too much influence in the economy and it has been increased ever more dramatically after the crash. Too many people make quite a nice living depending on government services and I'm not talking about the unemployed or spongers, I'm taking about the way our politics works, quangos, grants and planning laws. These groups have so much lobby power that they will block, hinder and obstruct new innovative services. Too many suckle on the hind tit of the state and this creates a barrier to change or a willingness to be first to try a new service. Why ruin a good thing?
Can you imagine Ireland being the innovation leader of these early innovators such as AirBnb, Skype, Uber, Kickstarter, Hyperloop, Tesla, etc., When the state and its cronies have such a vested interest in maintaining the status quo as it does in Ireland then innovative companies will look to pilot and launch in other markets that welcome change and where the laws and supports are conducive to adoption of new ideas.
So if Ireland is to become a true innovation hub then government must butt out and back off and I cannot see this happening anytime soon. Remember Ryanair almost went under at the start because of the severe lobby pressure from Aer Lingus, DAA and the unions and its still continuing today. Tony Ryan and Michael O'Leary managed to overcome the powerful lobby groups and just look how well Ryanair have grown but it was a monumental struggle.
When it comes to developing innovation tax avoidance and profit shifting schemes we are no doubt innovation leaders but that's not sustainable! Nor is it what we want to be known for.
Alas that's the way it is and why would you want to do it any other way!
