The level of red tape attached to State-backed funding and grant schemes in the Republic is deterring most businesses from applying while access to various tax incentives is described as poor.
A survey of entrepreneurs and founder-led enterprises by employers’ group Ibec highlighted what it said were a number of key barriers to progressing the business.
Some 57 per cent of respondents said the “red tape/bureaucracy” associated with applications for funding/grants had put them off applying while 60 per cent said the availability and access to tax incentives such as Capital Gains Tax Relief, Employment Incentive and Investment Scheme, R&D Tax Credit was poor or very poor.
Nearly a quarter described access to talent as poor or very poor while close to half said their enterprise did not have the digital skills necessary to meet their business ambitions.
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On foot of the findings, Ibec called for a streamlining of funding supports to make them “simple, accessible and granted in a timely fashion”. It also called on the Government to establish a plan to deliver sustainable digital transformation to ensure continued competitiveness.
“Our survey findings show that challenges such as increased asset and labour prices, and difficulty in accessing capital and attracting talent are all beginning to stifle innovation and growth of the domestic founder-led ecosystem,” Ibec executive director of membership and sectors, Sharon Higgins, said.
Separately, venture capital investment into Irish firms hit record levels in the first half of this year, even with a sharp slowdown between April and June.
Investment surged 21 per cent to €778.1 million in the six months to the end of June, according to new data from the Irish Venture Capital Association (IVCA) in association with William Fry. Most of that growth came in the first three months of the year, however. In the second quarter investment levels increased by only 2 per cent year on year.
“It was a strong first half overall for Irish tech companies raising funds, especially when one considers the geopolitical and economic headwinds and downturn in publicly quoted technology stocks over this time,” Irish Venture Capital Association chairman Leo Hamill said in a statement. “It remains to be seen whether the significant slowdown in growth in the second quarter... heralds a more difficult second half to the year,” he added.
Funding from overseas investors dropped 50 per cent to €152 million between April and the end of June.
