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News : Innovation Last Updated: Feb 13, 2015 - 2:43 PM

Ireland as 'The Global Technology Hub' or a fantasy?
By Michael Hennigan, Finfacts founder and editor
Dec 2, 2013 - 5:50 AM

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Richard Bruton, jobs, enterprise and innovation minister, has launched the ICT Ireland and the Irish Software Association's new strategy document ‘The Global Technology Hub: How Ireland enables success for international and indigenous technology companies.’ If anyone has a vague recollection of the fantasy of Brian Cowen, former taoiseach ( (Irish prime minister), to create a European Silicon Valley in Ireland, you may wonder what happened that?

"The strategy sets out the future opportunities and trends for the industry in Ireland which, if supported, will deliver further investment, growth and jobs. Key recommendations are detailed for Government, academia and industry to ensure that the industry's potential is fully realised," according to ICT Ireland, a unit of Ibec, the business lobby group.

Let's deal with reality first: this is not a strategy. It's a promotional and lobbying brochure that uses misleading headline data as fact such as exports that are massively distorted by the tax avoidance strategies of big US multinationals.

The document sets out the need for more public investment in education and broadband while calling for reduced taxes: "Reduce the burden of labour taxation in order to attract inward investment and entrepreneurship."

You want lower employer social security costs that are already among Europe's lowest?

For the units of American firms that are featured, there is an effective rate of corporate tax at 2.5% and you want a lower tax burden? Should the workers in the SME sector who don't even have an occupational pension, provide the cash for increased investment?

What the brochure doesn't say is that the high tech services companies such as Apple, Google and Facebook are primarily involved in sales and general administration and significant number of their staffs are from overseas.

The skills crisis is in the poor language skills of the Irish. There is no tech skills crisis as the market for people is subdued growth Europe.

There is a brief reference to research and development and no reference to patents as most of the research is low level.

So 'The Global Technology Hub' is as fatuous as Enda Kenny's 'Digital Capital of the World' and Brian Cowen's 'European Silicon Valley'

In September 2009, Brian Cowen, taoiseach, in a speech at the inaugural meeting of the Global Economic Forum, an Irish diaspora group, asked for help to create a "European Silicon Valley‟ in Ireland that would be bigger than the original!

It was a brave or delusional aspiration. However, in March 2010, an official 28-strong group of mainly policy insiders, university presidents and managers of multinational operations in Ireland, endorsed the goal.

The Innovation Taskforce reported in March 2010 and said there was potential for "net job creation in high-tech firms of the order of between 117,000 and 215,000 between now and 2020."

"More realistically, Ireland might aspire to be a leader in Europe and aim to have 15% of employment concentrated in high-tech firms. This would result in almost 346,000 people being employed in high-tech firms by 2020 - - a net increase of 215,000 jobs over the period."

The report said in respect of Silicon Valley: "It is estimated that 320,000 people are employed in 5,500 high-technology firms."

The analysis was seriously in need of a reality check.

One inconvenient truth was that the oldest technology cluster in Europe, in the area around Cambridge University, had managed to grow to only 48,000 jobs after 50 years and 40% of firms employed just up to 5 people.

There were only 3,300 permanent net jobs added by US firms in Ireland in 2007-2012 and 1,600 by indigenous firms in high tech sector.

Here is a Reality Check from Finfacts: Irish Medium-Term Economic Strategy 2014-2020: Innovation and entrepreneurs? - - Part 3

ICT Ireland says the key areas identified by industry for growth (from p 20) in the report [pdf], are:

1. Digital services in every business;
2. Smart cities and smart infrastructure;
3. Analytics and big data;
4. Apps, content and mobility;
5. Cloud computing;
6. High-tech manufacturing.

Paul Sweetman, director of ICT Ireland and the ISA said: “With over 18,000 jobs announced in the technology sector since 2010 and exports continuing to grow, the industry is thriving. The sector has the potential to deliver so much more. In order to realise this ambition, we have worked with our member companies to devise a blueprint strategy. This document sets out our vision for Ireland to retain and build upon its reputation as an attractive location for business.”

“The report provides sets out the opportunities and trends for the industry, which if supported will attract further investment, as well as create growth and jobs. Given the breadth and depth of technology companies already established here, Ireland is uniquely placed to become a global technology hub.”

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