The Government’s decision to withdraw state funding from the National Digital Research Centre was surprising and should be reviewed. The NDRC was set up in 2006 as a collaboration between the State and the private sector to support technology start-ups. Since 2020 it has been managed by a consortium led by Dogpatch labs in Dublin with additional hubs in Cork, Kerry and Galway. There are five venture capital firms involved in the project.
The Government commits annual funding of €3.5 million towards the NDRC. The recent announcement by the Department of Communications that, following consultation with the Department of Enterprise, it has decided to halt funding for the programme when the current contract expires in November 2025 had prompted a backlash across the Irish tech sector. A letter, signed by more than 200 Irish tech entrepreneurs, has called on the Government to reverse the decision.
Ireland’s economy is booming largely because of record flows of foreign direct investment. But there are threats to the foreign direct investment model and a need to invest in domestic enterprises. The NDRC has been an important part of the start-up eco-system for Irish tech businesses. It provides funding, office space, training, mentoring and networking services for these new enterprises. Over the past three years, companies in the programme have created 650 jobs and raised €200 million in funding.
It appears that one of the main reasons for the NDRC decision is that the Department of Communications believes it should be the responsibility of the Department of Enterprise to continue funding the programme. However, the Department of Enterprise has objected to the move on the basis that it already runs a number of support schemes and the NDRC would create an overlap in its services.
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Perhaps there is some rationale to this, but so far there has been no convincing explanation behind the decision to end State funding. And until one is forthcoming, the move looks counterproductive and short-sighted.