After a bad recession in 2008, Ireland's economy is now making a strong recovery. The government projects that the economy will grow by six percent this year, which is up from 2014, when it grew by an already impressive five percent.
Better financial conditions are fueling the Irish startup scene. Bolstered by a strong venture capital presence, the city of Dublin--which has a population of 1.2 million--is fast becoming a technology epicenter.
"We're bouncing back," says Orla Carroll, the director of strategic development at Failte Ireland, a Dublin tourism development group. "There's this buzz of optimism.... People are being adventurous and taking the plunge."
Last year, tourism in Ireland brought in about $7.2 billion, up from roughly $6.6 billion in 2013. Funded by Failte, the city of Dublin's minister of transport, tourism, and sports unveiled a new marketing campaign, giving Dublin the slogan: "A breath of fresh air."
Barry O'Dowd, the senior vice president of IDA Ireland's emerging business division, is optimistic about the Irish startup ecosystem. He works with international tech companies looking to expand into the country, as well as with indigenous startups. O'Dowd says that the support of the local government makes Ireland especially unique for business owners. "There's an ease of doing business, a lack of bureaucracy," he says.
Jay Bregman, the co-founder of Hailo, an on-demand cab service, also credits the city's business ecosystem. Though based in London, the company first expanded internationally in Dublin back in 2012.
"We had not originally thought that Ireland would be our first place to jump into," he says. Still, Hailo was able to take advantage of the country's economic situation. "Even more people wanted to become drivers because it was a cheap source of relatively steady income," he explains.
Now, Bregman is launching a new startup called Verifly, which bills itself as the "Verisign of drones." Verifly is creating a global drone database that tracks where the vehicles can fly. Bregman and his executives are based in New York City, but the engineering team is based in Dublin, because that's where he says he can access the best, most affordable talent.
Here's a quick look at why entrepreneurs are now flocking to the "Silicon Docks":
1. A strong venture capital community.
Ireland's venture capital scene is hot; investments grew by a record 41 percent in 2014, hitting $448 million total, according to the Irish Venture Capital Association (IVCA).
Regina Breheny, the director general at the IVCA, notes that investment in Ireland as a percentage of the national GDP is especially high. It ties for fifth place in Europe, alongside the United Kingdom, France, and Switzerland.
"We're doing very well, and that's primarily because the Irish VCs are particularly good at syndicating deals for Irish companies," Breheny says.
Verifly has raised about $2.2 million in seed funding, from investors like Irelandia Aviation.
"There's definitely more capital in the marketplace, and that capital is becoming much better at making itself known," Bregman says. He sees this as a sign that the VC market is maturing, but warns that Ireland is still about five to 10 years behind the U.K.
To be sure, Irish venture capital firms have their own trouble raising money, which often makes it difficult to invest in startups for the long-term. Generally speaking, they're more risk-averse than U.S. funds.
2. A young, educated work force.
Tech talent in Dublin stems from universities like Trinity College Dublin, University College Dublin, and Dublin City University. Trinity is home to Ireland's flagship Nanoscience Institute, and it recently created an entrepreneurship outreach program. Collectively, three universities and four technology institutes in Dublin graduate 26,800 people each year.
"Ireland's got a great pool of talent," O'Dowd says. It helps that Ireland has the youngest population in Europe, with nearly half of residents below the age of 35.
Still, much of that talent can get stolen away by high-profile companies like Google and Facebook, which both have offices in the city.
"There's competition for talent, but we welcome all of these companies," Breheny notes. That's because founders in Ireland often incubate their ideas at the larger corporations before starting their own ventures.
3. Favorable tax policies.
Companies in Ireland pay low corporate taxes--12.5 percent--which is part of the reason the World Bank Group recently ranked the country as the No. 13 best place to start a business in the world.
"You have to take everything into account in looking at Irish taxation," O'Dowd says. Startups also benefit from a 25 percent tax credit for research and development.
4. Access to co-working spaces and startup accelerators.
Roughly 7,000 workers populate the area around Ireland's Grand Canal Docks, which is commonly referred to as the Silicon Docks. O'Dowd, whose office is located in the neighborhood, notes that the Docks have changed dramatically over the past five years, as companies like Google, Facebook, and Twitter have set up shop.
Earlier this year, Google partnered with Dogpatch Labs to bring co-working spaces, where early-stage companies can receive guidance and mentorship, to Dublin. There's also the startup incubator Wayra, and the National Digital Research Centre's LaunchPad accelerator.
Another resource is the annual Web Summit technology conference. The gathering brings together prominent founders and venture capitalists from around the world. This year, for example, Slack co-founder and CEO Stewart Butterfield and Deutsche Bank's chief data officer, JP Rangaswami, are both slated to be in attendance.
While a fair amount of Irish Luck may be involved, it's increasingly clear that Dublin startups are well-earning their international chops.