This article is authored by Andrew O’Neill with the help of Pia Michel from Prima Materia. Andrew is a Principal at Act Venture Capital, an early-stage, Irish-focused VC firm. Act Venture Capital is one of Ireland’s longest-established early-stage VC firms, having raised 6 funds and backed over 240 founders. The team at Act VC are deeply focused on finding ambitious deeptech founders and supporting them to build the future of Ireland and Europe.

When asked to talk about Ireland, the obvious first question is where to start?

Ireland is a complex story of rebellion, reinvention and resurrection. Across a longer arc of time, this is a story ensnared with religion, migration and abject poverty. An island of 5.2m people on the western outskirts of Europe that only a century ago was reeling after the civil war and finding its place in the world as a newly established republic. Even when referring to Ireland, a dichotomy exists. For the purpose of this article, we will be referring to the Republic of Ireland.

As a frustrated historian, I could start with the Rebellion of 1798, but this Grand Tour is to focus on the future of Ireland. The builders, the innovators - the new rebels.

Ireland has never had better foundations on which to build.

As the image above suggests, Ireland Inc. is highly profitable. Ireland's tax revenue for 2024 was €108bn, and the cash balance at the start of this year is €34bn. It is expected to grow considerably in the coming years as the country grows at a projected rate of 4% – far greater than the rest of the Eurozone.

Meanwhile, across much of the rest of the EU, public finances are under pressure, budgets are in deficit and economic growth has stagnated. To put this into even more context, the UK (with 60m people) has a much-discussed exchequer “black hole” of £22bn:

In my lifetime, the year in which I was born (1988), The Economist dubbed Ireland “The poorest of the rich”; today its average net earnings are the third-highest in the EU. In 1990 the UN’s Human Development Index ranked it 25th in the world; today it is ranked 8th.

In fact, since 1988, Ireland has had the second-highest population growth in the EU. Compared to countries of a comparable population size like Denmark, Finland and Slovakia, Ireland is growing much faster.

Even if the return of Donald Trump to the White House brings some obvious cause for concern, the windfall element of corporate tax will not simply disappear overnight – indeed, the bulk of the money may continue to recur. Multinational restructuring, perhaps spurred by new US protectionist policies, could lead to corporate tax payments declining over a short period of years, but will inevitably take time. Then, the theoretical deficit might become something much more real.

So Ireland, with abundant capital, a rapidly growing population and the most educated workforce in the EU has a unique and relatively small window of opportunity to seize with both hands, deal with its growing pains and aggressively build.

The Rise of Ireland Inc.

Ireland's economic and technological development has followed a unique trajectory, transforming from a predominantly agricultural society into a modern knowledge economy. The 19th century saw Dublin recognised as the second city of the empire with the establishment of crucial infrastructure, including railways and the expansion of ports like Dublin and Belfast, though Ireland's industrial revolution lagged behind Britain's.

Among the notable figures who shaped Ireland's early technological developments were people like Ernest Walton, a physicist who made history as Ireland's first Nobel Prize winner in science for his work on atom splitting.

Ernest Walton, Ireland’s first Nobel Laureate. Image: The Irish Times

A pivotal shift occurred after joining the European Economic Community in 1973, when Ireland began attracting international technology companies through favourable tax policies and an educated workforce. The 1990s marked the beginning of the "Celtic Tiger" era, characterised by rapid economic growth and the emergence of Dublin as a leading European tech hub.

Governor of the Central Bank TK Whitaker in 1975. Image: Tommy Collins

The establishment of the Industrial Development Authority (IDA) in 1949 by T.K. Whitaker, who as Secretary of the Department of Finance authored the influential "First Programme for Economic Expansion," marked a crucial turning point in Ireland's approach to industrial development and foreign investment.

At the turn of the 21st century, Ireland had begun a period of growth that would see it leave the shadows of its larger neighbour and chart a path of economic prosperity.

More recently, entrepreneurs like Patrick and John Collison and many others have symbolised Ireland's transformation into a digital economy powerhouse. Stripe is of course a US-founded company and exists today rather based on the US innovation ecosystem vs Europe or Ireland, but they still can be seen as an example of the raw talent that has emerged from Ireland.

Ireland Resurrected

In the past years, Ireland's economy has demonstrated remarkable resilience and growth, with a GDP of approximately €550 billion in 2024, making it one of Europe's most prosperous nations on a per-capita basis. The economy is characterised by its dual nature: a robust domestic sector and a significant multinational presence. Ireland has long since outpaced its bigger neighbour, the UK, in economic growth.

A Link Between Europe and the U.S.

Ireland maintains a strategically significant position as a committed member of the European Union, serving as a crucial bridge between Europe and the English-speaking world, particularly following Brexit. While maintaining military neutrality, Ireland actively participates in EU defense cooperation through PESCO (Permanent Structured Cooperation) and contributes to UN peacekeeping missions.

Europe has lost its mojo. Thankfully Ireland is in bed with the US — David McWilliams, Irish Times, 14.12.24

The country's diplomatic influence has always greatly extended beyond its size, particularly in EU-US relations, where it leverages its strong cultural ties with the American diaspora and its position as the last remaining primarily English-speaking EU member state. Ireland has generally looked west not east when it comes to economic export and opportunity with the US representing a 2-3x multiple of export value over markets like Germany or the UK.

Innovation Doesn’t Just Come in The Form of Policy

Ireland's education system has been instrumental in its economic success, with particular strengths in:

The highest tertiary education participation rate in the EU, with Computer Science becoming a school subject in 2018, creating a new technically literate generation
Strong STEM education programs at institutions like Trinity College Dublin and University College Dublin
Research excellence in areas such as software engineering, data analytics, advanced manufacturing, optics and biotechnology
Successful industry-academia partnerships through Science Foundation Ireland
A highly skilled workforce augmented by talent attraction from across the EU

Building upon this strong talent base and close ties to both the US and Europe, Ireland has developed several distinct industrial advantages:

Life Sciences and Pharmaceutical

The life sciences and pharmaceutical sector represents a crucial pillar of Ireland's economy and accounts for significant exports (34%), featuring major global players like Pfizer, Johnson & Johnson, and Merck alongside medical device manufacturers like Medtronic.

The country has developed a particularly strong presence in biotech, with companies like Regeneron establishing significant operations, and indigenous companies like GH Research and Nuritas leading breakthrough research in therapeutic solutions and AI-powered drug discovery. Supporting this innovation ecosystem, government initiatives through Enterprise Ireland, ISIF and IDA Ireland are actively fostering R&D development. Meanwhile Galway and the South West has emerged as a hub for medical device manufacturing.

Ireland's expertise in biomanufacturing and pharmaceutical production has made it a critical node in global healthcare supply chains: in 2022, Ireland was the world’s largest exporter of vaccines, blood, antisera, toxins and cultures ($47bn), nucleic acids ($9.5bn), and hormones ($7bn).

Tech

The technology sector as previously referenced has earned Dublin the nickname "Silicon Docks," hosting European headquarters for companies like Google, Meta, and Microsoft due to its favourable tax policy and educated English speaking workforce.

Aside from Ireland hosting the major global tech firms, the country has also cultivated successful indigenous tech companies like Intercom, Workhuman, Cubic Telecom, AMCS, Fenergo, Tines and many others. This tech ecosystem has created a vibrant environment that continues to attract international investment and talent.

In the AI sphere, companies like Provizio are breaking new ground in autonomous vehicle technology, while Research Institutes like CeADAR (Ireland's Centre for Applied AI) are supporting innovation for SMEs.

Ireland's strategic position has also made it a prime location for data centres, with major tech companies continuing to expand their facilities despite growing concerns about energy consumption.

Air Travel

Ireland has established itself as the world's premier aircraft leasing hub, controlling approximately 65% of the world's leased commercial aircraft. Major players like AerCap, SMBC Aviation Capital and Avolon have made Ireland their home, supported by a sophisticated ecosystem of financial and legal services. This unique industry leverages Ireland's advantageous tax structure and deep expertise in aviation finance. Ireland is also home to Europe’s largest airline - Ryanair, which represents a shining example of bold ambition, rebel mentality and ingenuity from its leader and one of Ireland’s most talented entrepreneurs Michael O’Leary.

For those wishing to dive deeper into the fascinating story of Ryanair and the rise of aircraft leasing, there is a much anticipated book AerDogs by Tom Lyons due for release very soon.

Ryanair founder Michael O’Leary. Image: Bryan Meade, Business Post

Food

Irish butter has as much global clout as our Guinness, as the agricultural and food sector maintains its historical importance while embracing innovation, led by companies like Kerry Group, which has evolved into a global taste and nutrition leader. Other significant players include Glanbia in dairy and nutritional products and Origin Enterprises in agri-services, demonstrating how traditional agricultural strengths have been transformed into modern, technology-driven food solutions.

Energy

The energy sector is undergoing rapid transformation, with particular emphasis on renewable energy development. The state-owned ESB is leading the green transition, with the state making a long-term €100bn investment in offshore wind projects. With the next technology paradigm shift in AI beginning, cost-effective power will become increasingly important. Ireland has an opportunity to harness cheap sustainable electricity and attract the best technical talent to build the future of computing.

Image: Enterprise Ireland / Irish Sea Contractors

Marine Technology

The marine technology and ocean economy are also seeing exciting developments with companies like XOcean revolutionising ocean data collection through unmanned surface vessels and recently raising €115m. Both Barry Lunn and James Ives are great examples of talented repeat founders looking to build truly exceptional companies of scale.

Finance Ecosystem

Ireland's financial ecosystem has matured significantly in the last two decades. Ireland's venture capital landscape has seen remarkable growth over that time, with funding increasing from a total of €400m in 2014 to an impressive €651m raised in just the first two months of 2025.

The ecosystem is anchored by established domestic VC firms including Act Venture Capital, Atlantic Bridge, Frontline, Elkstone, and Sure Valley Ventures, while international players like Energy Impact Partners through the support of ISIF are increasingly establishing dedicated Irish investment mandates.

Enterprise Ireland continues to play a crucial role as one of Europe's most active early-stage investors while announcing an intent to invest another €250m at seed as an LP in Ireland over the next 4 years. The PE sector has also matured significantly, and sophisticated first and second-generation family offices have become integral to Ireland's investment landscape. Though still developing, the angel investor network shows promising growth potential.

Future Outlook

It is obvious we need to address housing, infrastructure and reduce reliance on multinational corporations, yet the path to get there is far from obvious. The success of the Irish economy can mask the challenges. Ireland doesn’t feel as rich as it is fiscally. Despite the third-highest incomes in the EU, Irish consumption is ranked 15th in the EU. The quality of Irish infrastructure is poor when compared with our European peers.

Ireland’s problems are those of growth. A rapidly growing population poses challenges and opportunities. If you were to think of Ireland like a startup, it didn’t steadily bootstrap its way up to scale; like many VC-backed companies, the top line has grown quicker than the organisation can keep up with. The corporate tax revenue and population scaled way ahead of its core infrastructure.

Yet Ireland's success story demonstrates how strategic policy choices, education investment, and openness to international business can transform a small nation into a global economic player. The country's ability to punch above its weight is dependent on attracting and retaining both multinational corporations and talent, while nurturing domestic innovation. If this can be achieved, it positions itself well for continued growth in the evolving global economy.

A Radical Embrace of Talent

We must now build upon these solid foundations and prepare for the next stage of Ireland’s evolution by encouraging not only indigenous start-ups but also on attracting foreign start-ups.

The Industrial Development Authority (IDA) responsible for attracting and retaining foreign direct investment to the country was once a radical idea - why not embrace radical again and expand its mandate to include attracting the best and brightest to Ireland to build their dreams?

The US became a powerhouse of innovation and entrepreneurship in large part due to attracting ambitious, highly skilled immigrants. Let's be aggressive and not wait for the number of homegrown entrepreneurs in Ireland to just emerge. Instead, we can become a beacon for talented people to supercharge our ecosystem and build their dreams.

Next week we’ll publish Part 2 about some of Ireland’s most ambitious founders and opportunities in the coming decades.