Support need if Dublin is to be Europe’s Silicon Valley
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What is the main topic discussed in this episode?
Breakfast Business with Enterprise Ireland on Newstalk.
What recent changes have been reported by the Dublin Task Force?
It has been a year since the Dublin Task Force reported and the changes have been incremental at best and glacial at worst. Dublin accounts for 50% of Irish GDP and pays the lion's share of income tax. But the Dublin Chamber is not happy. It wants a vast improvement in infrastructure delivery in capital markets. in the capital, reform of venture capital schemes and more support for indigenous Irish startups if Dublin is to be Europe's Silicon Valley. The man who delivered that call to arms last night was Owen Quigley, the president of Dublin Chamber and is with us. Good morning, Owen. Good morning, Joe. Tell us first, how healthy is the Dublin economy at the moment?
The Dublin economy is exceptionally healthy at the moment. We've had a wonderful few years and the economy has been propelled forward by an amazing amount of foreign direct investment. So we've been extraordinarily successful in attracting foreign businesses into Ireland. That policy, however, and our concern on it is that the tailwinds that propel that, we can no longer rely on those. They effectively become headwinds. There's a lot of things going on in the international world, as you know. our call on an indigenous business is we feel where the Dublin economy is lacking is in broad supports in the Irish economy, broad supports for indigenous business. So there's a two-speed economy going. Multinationals are absolutely flying and that is great and it's carrying along the economy.
And they're paying huge wages and all that. And there's a really, really exciting Irish indigenous ecosystem there. And a lot of it has been fed and is growing from the multinational sector. So we are in a great place right now. But you want the local businesses to do better. Yeah, we are very concerned that we have equal level of support for indigenous business as we have for international business. And that's our big call, because in the long run, we have to look after ourselves. We cannot depend indefinitely on international or overseas capital continuing just to flood into the country.
And did you get enough in the budget? Because it was supposedly a budget for business.
In short, no. We were very disappointed from an indigenous business perspective. There were minor tweaks in token measures. So there were good measures such as the increase in the R&D tax credit. But beyond that, in terms of bridging the funding gap that our startup and scaling companies have, there was little. There was an almost insulting for entrepreneurs, a minor increase in the entrepreneurs relief credit, which that does little to reward... ambitious founders who risk all trying to set up their businesses. And there was... Our big call going into the budget was to reduce the capital gains tax for investment in active private companies from 33% to 20%. And that was not... stemming from looking to look after the fat cats or anything like that.
It was to try and entice capital into early stage companies.
Because the current Irish tax regime... Prize open those wallets as well, all the accounts that are sitting there dormant.
How is Dublin's economy performing currently?
Well, there's that plus the fact that our tax regime currently treats like investing in, say, an Irish startup equally to investing in one of the Mag7 stocks. Yeah. And that totally ignores the risk and the illiquidity premiums. It just doesn't make sense. So I think we need to bridge that gap. I spoke about that last night. And in fairness to Simon Harris, he responded and he said, look, it was the first of four budgets. Now, we've heard that before, first five budgets. We've heard that sort of promise from government before.
Politics. Now, I see you want major reform in infrastructure delivery. And Sean O'Driscoll was on the show this week. He's the chair of the ESRI. And representatives of the big utilities are also on that export group. What do you want changed?
Well, the National Development Plan, as reiterated by the budget, has fantastic capital allocations and wonderful narrative.
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