Venture capital-backed firms achieve strong jobs growth, research shows

FIRMS backed by venture capital investment have achieved strong jobs growth over several years.

Employment in venture capital supported firms grew at an annual rate of 18.6% from 2003, research shows.

The findings are based on a study carried out by UCD’s Department of Entrepreneurial Studies. “Our research finds that venture capital backed companies provide a substantial impetus to the ongoing development of a knowledge based economy,” said Professor Frank Roche. “These firms enjoy much faster jobs growth, employ more graduates, invest more in R&D and produce greater exports than the economy in general.”

The report, commissioned by the Irish Venture Capital Association in association with InterTradeIreland, was launched yesterday by Frank Ryan, chief executive of Enterprise Ireland.

“Enterprise Ireland has been a major investor in the Irish venture capital industry since the mid-1990s. Our direct investments in companies with investment from venture capital funds are key complementary investment sources for high growth Irish companies.”

Seán Gallagher, chair of InterTradeIreland’s Equity Network, said the report showed venture capital backed companies to be “important drivers of economic growth and recovery across the island.”

Peter Sandys, chairman of the Irish Venture Capital Association, warned venture capital funds are due to run out next year.

“If we are to succeed in raising much needed new capital, then the incoming Government should continue a proactive approach to the stimulation of innovation, entrepreneurship and venture capital investment.”