Thursday 28th January 2021
Alliance: For the benefit of our global readership, can you introduce us to Enterprise Ireland and its purpose, in particular as it pertains to SME support?
Enterprise Ireland is the Irish Government’s trade and innovation agency. We invest in the most innovative Irish companies through all stages of their growth and connect them to international customers across multiple industries.
Overall, our goal is to build successful, long-term relationships between Irish businesses and the global market. We’re proud to say Irish companies are winning business worldwide – exports from our client companies rose 8 percent in 2019 to €25.6bn – and we work relentlessly to support them with 40 offices around the world.
Our organization is one of the world’s largest seed capital investors; we made 200 investments in 2019. Pitchbook, which lists the most active global investors by venture capital (VC) deal count, ranked us first in Europe and second in the world for seed investment. We’re really proud of that and continue to focus on developing a pipeline of cutting-edge Irish companies.
The past year has of course been challenging for Irish SMEs, as it has for small businesses everywhere because of the pandemic. Our exporting businesses are resilient, however, and were robust going into 2020. This has helped them withstand the impact of COVID-19 and trade through this challenging time. We’ve seen Irish companies continue to achieve very strong international sales, driving innovation and bringing what we call the ‘Irish Advantage’ to a wide range of sectors such as medtech, high-tech construction, fintech, agritech and emerging technologies.
Furthermore, the Irish government put in place measures such as grants, liquidity finance and wage support schemes to help businesses stabilize, reset and recover during the ongoing COVID-19 crisis. We’ve had a core role in implementing these strategies and supporting Irish business.
Businesses in Ireland have also had to face the impact of Brexit, and we’ve worked to counteract it with a program to help them be even more innovative, competitive and market diversified. As a result, Irish exports to the Eurozone region in 2019 saw record growth of 15 percent to €5.6bn, while exports to North America increased by 16 percent to €4.7bn.
Alliance: Ireland has one of the lowest rates of female entrepreneurship in the OECD, and the Rose Review, which looked at drivers and solutions to the gender gap in entrepreneurship in the UK (sponsored by Alison Rose, CEO of Alliance member NatWest), identified lack of funding, affordable childcare and access to smaller networks and mentors etc. as the main drivers. What is Enterprise Ireland’s strategy to solve for this?
We have many tremendous female entrepreneurs leading cutting-edge companies and starting innovative businesses in Ireland, but we certainly see the need for more progress. We know that societal barriers affect women’s participation in the workplace, which in turn affects the rate of female entrepreneurship. We are striving, however, to champion women and to do what we can to support them in overcoming obstacles.
A key move for us was launching the Enterprise Ireland Strategy for Women in Business in January 2020. It aims to grow the number of women founding, leading and growing enterprises, and it rests on four pillars. Each of these is underpinned by specific actions, some of which we’re committed to delivering directly and others for which we’ll work to influence and collaborate with others in the ecosystem.
Bearing our international trade mandate in mind, the first pillar is to increase the number of women-led companies growing internationally.
We’re also focused on the future, working now to build gender diversity from the ground up as we see that as one of the best ways to boost the rates of female entrepreneurship over time. So our second pillar is to increase the number of women in middle and senior management and leadership roles, while the third is to promote female entrepreneurship by investing in a national network of role models to interact with and inspire future entrepreneurs.
The fourth pillar is focused on increasing the number of women-led start-ups with high growth potential. We’ve set up a dedicated team to support female founders and have issued a series of funding calls targeting women entrepreneurs and researchers from third-level institutions.
Alliance: One of the Alliance’s focus areas is fintech, because it is so key to solving for full financial inclusion of women. Our research in 2020 into “How Fintechs Could Profit from the Multi-Trillion-Dollar Female Economy” found that most investors do not yet have an investment thesis that integrates a focus on the female economy as criteria for investing. What is Enterprise Ireland’s investment thesis on investing in businesses that support the female economy?
That’s a topic on which I am beginning to lead a conversation with colleagues.
At present, we work with Irish companies at all stages of development as long as they’re internationally focused and ambitious to scale on global markets. When we invest in start-ups, we do so largely having worked with them to develop their business models and investor-ready business plans. Any time we invest, we do so based on a proven business case, the size of the opportunity and the founders’ ability to seize that opportunity.
We have many start-ups and companies with a strong female customer base, but we have yet to develop a dedicated proposition for the female economy. It’s definitely worth exploring. The Alliance’s report is fascinating and gives us a really strong framework and fresh perspectives to share with Irish fintech businesses interested in financial inclusivity and in tapping into the huge global female economy.
Alliance: Women-focused fintechs (defined in our research as those with 75 percent or more female customers) were also founded primarily by women. Two thirds of them reported that fundraising and investor bias were their biggest business challenges. What is Enterprise Ireland doing specifically to de-bias the investment process?
We’re aware that practical, real-world actions are needed to ensure fair access to investment. For example we partner with key stakeholders to drive better access to finance and funding for women at all stages on their enterprise journey.
We’re also really focused on actively targeting more women to become founders, mentors and investors. Direct support and education is crucial, so we have also increased one-to-one engagement with women-led high potential start-ups (HPSUs). We also support female founders through mentoring with experienced entrepreneurs who have already scaled businesses.
This is a work in progress, so we’re always looking for opportunities to improve.
Alliance: We know that diverse teams and inclusive organizational culture are key to solving for market gaps. What is Enterprise Ireland’s gender diversity and inclusion strategy?
We strongly believe diverse and inclusive cultures are central in addressing market gaps and in building better, more innovative businesses. As I mentioned earlier, our Strategy for Women in Business aims to promote and build gender diversity and inclusion in Irish business.
While the four pillars of this strategy are linked and interdependent, the cornerstone is our objective of increasing the representation of women in senior management and leadership positions in Irish companies. We see this as really critical to securing a stronger pipeline of future female entrepreneurs, first because international research clearly shows that companies with gender diversity in decision-making and leadership positions perform better overall.
Second, we know from our research that people with senior management experience are more likely to see an opportunity for an innovative new enterprise. They’re also more likely to have the confidence and capability to act on it, and to have better access to finance.
We’re taking concrete steps to realize this objective. These include, for example, introducing a new grant for companies we support to help them recruit part-time managers. We’re also giving companies funding and other supports to enable them to develop and implement diversity strategies in their businesses.
We’re also working with stakeholders to help Irish companies improve gender diversity on their boards, and we’re asking women managers in companies we support to participate in leadership development initiatives.
As a government body, we have a central role in supporting initiatives to build diversity. There are so many of them, including the Women in Finance charter, which industry stakeholders are developing to progress gender diversity, the education and peer events for the 100 Women in Finance NextGen Dublin Committee, and a number of schools initiatives designed to build true diversity over time.
Alliance: Blue Sky question. If you could wave a magic wand, how could Enterprise Ireland become a world leader in gender-lens investing?
We would all love a magic wand! Imagine what we could achieve. Without one, let’s look at what we’re doing now and what we would really like to achieve.
Enterprise Ireland has already done significant work in this area by introducing a Competitive Start Fund, which offers women-founded companies a €50,000 investment. It’s really working. Since we introduced it several years ago, we’ve been really happy to see a significant increase in the number of female applicants for pre-seed funding.
We’re also putting a spotlight and focus on the need to address the disparity in investment funding going to women-founded companies by requiring our investment partners to provide gender reporting on investments. And we want at least 30 percent of our annual HPSU investments going to women founders by 2025.
And if we did get that magic wand to wave, we would increase the number of women angel investors and require all investment panels to be gender balanced. We’d also see unconscious bias training given to all parties involved in making investment decisions at every stage in the process.
We’d also like to see more global seed and VC funds specifically targeting women-led companies. In parallel, we’d also like to drive an increase in the availability of ‘patient capital,’ as we understand that the sectors in which women often operate can require longer investment terms than are typically available through standard seed and VC funds.
About Enterprise Ireland: Enterprise Ireland is the Irish State agency that works with Irish enterprises to help them start, grow, innovate, and win export sales in global markets. Enterprise Ireland partners with entrepreneurs, Irish businesses, and the research and investment communities to develop Ireland’s international trade, innovation, leadership, and competitiveness. For more information on Enterprise Ireland, please visit here. To check out the Enterprise Ireland Action Plan for Women in Business click here.