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Ireland: Why it makes ‘no sense’ for Dublin to try to become a second Silicon Valley

Friday, 29 August 2014   (0 Comments)
Posted by: Author: Jj Worrall
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Author: Jj Worrall (The Irish Times)

If you have ever inter-railed around eastern Europe there’s a good chance a tour guide or two has tried to convince you that their city is "the Paris of the East”. While many of the cities have their own charm, in reality there is no Paris of the east.

According to Tel Aviv-based IT investor Michael Eisenberg, no matter how much other cities may want to present a different image, there is no second version of Silicon Valley out there either.

Eisenberg told The Irish Times that "there is no sense” in trying to ape the achievements of the west coast centre of technology.

Head of VC firm Aleph, Eisenberg is addressing the findings of new research from Dublin-based firm Prosperity Recruitment, which specialises in the digital and web sector.

The research looks at four regions – Dublin, Israel, Manchester and Singapore – vying to be Silicon Valley ‘mark II’, with a heavy leaning towards examining the start-up and funding scene in each area.

The full Prosperity report is available from this morning from the company website. In Dublin’s case, the research indicates an IT skills shortage, access to finance and relatively high cost of labour among other factors may curtail progress of the digital sector.

Meanwhile Ireland’s 12.5 per cent corporate tax rate should be, as Prosperity co-founder Jim Murray, tells The Irish Times,”held on to for dear life”.

"I think the English language, the euro and the corporation tax [rate] as well as the accessibility to the government are seen as the plus major factors here.”

Added to that, as his fellow co-founder Gary Mullan points out, a salary survey conducted by the company (see side panels) found that there is a "5 to 10 per cent” rise in salaries over the past year in the ICT space.

Eisenberg’s homeland is, says Prosperity, "the golden child” for tech outside of Silicon Valley and in terms of the companies heading for billion-dollar status, Israel is more akin to ChinaGermany and both coasts of the US.

One only has to look at the recent case of Israeli vehicle "collision prevention” innovators MobileEye, whose IPO on the New York Stock Exchange at the start of the month raised an Israeli record of $890 million, even as the latest conflict with Gaza was raging in the background.

Combined with generous government grants to start-ups and a flourishing VC community, it has helped "technology- rich” products account for about 70 per cent of the nation’s exports.

Californian-born Jonathan Medved is chief executive at start-up investment firm OurCrowd. He believes there is "no other contender for Silicon Valley ‘mark II’ [other] than Tel Aviv, and Israel in general”.

With investment figures of "$2.2 billion” going into 650 start-ups there last year, Medved says that "this year, that looks like it will be over €3 billion despite all of the recent troubles”.

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