Our turn: Mentor in a foreign land

By SIMON COLLINS

Just down the road from what is said to be the world's biggest high-tech hypermarket, in the suburbs of Silicon Valley, sits a slice of Ireland.

Three Irish companies trying to break into the United States software market are working from small offices in a grand old converted public building.

This is one of 10 overseas "incubators" - the others are in New York, Boston, Santa Monica, Paris, Dusseldorf, Stockholm, Tokyo, Singapore and Sydney - operated by Enterprise Ireland, a government agency that is a kind of cross between Trade NZ and Jim Anderton's new Industry NZ.

"We operate like a venture capital firm," says Marina Donohoe, who moved from Ireland to San Jose three years ago to set up the Silicon Valley outpost. "We take investments in or lend to companies, and work with them to grow them and make them independent entities."

Before the companies arrive, Donohoe and her three staff research the market to check whether they have a viable business opportunity in America.

"I'm not doing them any favours without having gone through all the necessary stages to identify who they should speak with, partner with, whether their technology needs to be changed," she says.

"Then we assist with the office and work in terms of market development and identifying the new opportunities for them."

The companies pay a subsidised rent for the offices when they first arrive, ensuring that they can "focus from day one on sales and marketing, not being caught up with where they might locate, how to set up the telephone line, who to talk to from a legal perspective and so on. We take care of all that," Donohoe says.

She encourages Irish companies to move senior managers from Ireland, at least in the early stages, but also to recruit locals who know the American industry. This is expensive.

"If you are a decent salesperson here, you are just flying it. Most business development people don't take a salary of less than $US250,000 [$620,000]. That's a hell of a lot more than in Ireland!"

So far 19 companies have been through the incubator, 15 of which have established permanent bases in Silicon Valley.

Enterprise Ireland has published handbooks for Irish companies looking for business in the area, runs seminars in Ireland on the US market, and has a partnership with Stanford University to run a course for Irish companies on R&D and product management.

The agency is also establishing "Webworks" incubators for high-tech business start-ups throughout Ireland, linked to fast broadband cables.

Apart from its incubators, Enterprise Ireland runs a network of 12 Irish and 28 overseas offices, keeps a database of more than 4000 Irish companies, subsidises Irish stands at trade shows and organises roughly one trade mission a month, often led by the Taoiseach (Prime Minister) or other ministers.

Its venture capital arm usually invests on a 50/50 basis with private investors, often as part of a package that may include grants of up to 35 per cent of research and development costs and up to £Ir10,000 ($26,300) for every new job created.

The director of the agency's national informatics directorate, Seamus Gallen, also serves on Ireland's Expert Committee on Future Skills Needs, which forecasts the needs for various skills and makes sure the education system provides the necessary trained people.

When its Silicon Valley incubator opened, Donohoe says it was unique. "Now the Scottish have an incubator centre here, and the Japanese."

Enterprise Ireland

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