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News : Irish Economy Last Updated: Jan 17, 2014 - 10:41 AM

Jobs in Ireland's foreign-owned sector in 2013 below level in 2000
By Michael Hennigan, Finfacts founder and editor
Jan 4, 2014 - 9:22 AM

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20/09/2013: Richard Bruton (l), Enda Kenny, taoiseach, and Joan Burton, social protection minister, at the announcement that US firm National Pen, a company specialising in the marketing and manufacture of promotional products, is to create 200 additional permanent jobs at Dundalk over 5 years. The company said its existing Irish workforce was from over 30 different countries with 16 working languages. 

Jobs in Ireland's foreign-owned sector in 2013 were below the level in 2000 - - 13 years ago, when the total workforce was 20% smaller. The jobs in focus here are in the internationally tradebale goods and services sector and exclude for example retail which include the biggest Irish employers -- the UK's Tesco and its Irish rival Dunnes Stores - - which together employ about 30,000 people.

On Friday, IDA Ireland issued its end of year 2013 statement which shows that 13,400 gross jobs and 7,000 net jobs were added in client firms in 2013 while the number of new projects rose from 145 in 2012 to 164 last year with 78 new companies included -- an 18% rise on 2012.  There were 59 expansions and 27 Research, Development & Innovation (RD&I) projects - - in 2012 only 28% of the agency's clients did research from a minimum level and only the count of RD&I projects was issued, not information on significance.

IDA Ireland is the main Irish public inward investment promotion agency, and it said on Friday that 161,000 were employed in client firms at end 2013. About 11% of the number are temporary jobs and the total compares with 157,000 in 2000.

Shannon Development and Údarás na Gaeltachta are the other public agencies responsible for FDI (foreign direct investment) promotion - - their foreign-owned client firms employed 25,000 in 2000 and an estimated 15,000 in 2013.

So the total employed in public-agency assisted FDI firms was 182,000 in 2000 when FDI jobs peaked, and 176,000 in 2013.

IDA Ireland projects that it will add 6,000 net jobs in 2014.

Barry O'Leary, IDA chief executive, announced that he will retire this year from the position he has held since 2008.

O'Leary said the agency will build two 25,000 square foot facilities in both in Athlone and Waterford to have empty factory space available for rent or sale to new clients. It will be the first time in five years that it has invested in new facilities.

Over the past decade, many of the new jobs in foreign-owned tech companies have been in the areas of sales and general administration, and call centre support. Many positions have to be filled from overseas as multilingual skills are required.

Liz Alderman of The New York Times in a report from Dublin today, says: "Week after week, newspapers issue a stream of hopeful headlines: Microsoft, PayPal, Fujitsu and scores of other companies are expanding their investments in Ireland, creating thousands of jobs as unemployment hovers near record highs."

She adds that: "In some cases, the companies have had to look outside Ireland to recruit candidates with the right skills."

Two companies cited - - PayPal and Fujitsu - - reflected the shortage of language skills for PayPal positions while the Japanese company "had to hire most of its PhD-level experts from abroad."

The language issue is a serious challenge while a small country cannot realistically provide the full gamut of PhD skills.

We at Finfacts believe that the business lobby claims of around 4,500 information technology jobs in the country being unfilled because of a limited supply of suitably skilled applicants, should be treated with caution.

Claims of a skills crisis elsewhere also merit some scepticism and can be part of lobbying efforts for increased public spending and immigrant visas, as in-house training programs are cut

Paul Sweetnam, director of ICT Ireland, wrote in a preface to a report linked to by the NYT: "Since 2010, a staggering 15,000 jobs have been announced by indigenous and multinational technology companies in Ireland. With this phenomenal growth comes a strong demand for skills."

There were only 1,600 full-time jobs added in services and manufacturing added by Irish firms in information and communications technology (ICT)  in the period 2007-2012.

Full-time jobs in Irish State-agency assisted firms in high-tech manufacturing (chemicals, computers, chips, medical devices) grew from 62,300 in 2003 to 63,200 in 2012 while services jobs in the computer and information sectors expanded from 55,000 to 64,900 - - 10 years!

As we noted above, many of these jobs did not require high-level tech expertise.

In the US, the Congressional Research Service said in a November 2012 report [pdf] that 1) almost two-thirds of the 9.3m people in the US workforce who had STEM (science, technology, engineering, or mathematics) degrees in 2010 were employed in non-STEM occupations; 2) 36% of IT workers do not hold a college degree at all; 3) only 24% of IT workers have a four-year computer science or math degree. More, here, and here.

Rob Neil, head of business change and technology at Ashford Borough Council, Kent, England, said in 2012 on the perception that most IT jobs are now graduate positions: "The profession does not need to be a 100% graduate profession by any stretch of the imagination," he said.

"Couple that with degree level IT/computing courses concentrating on more commodity areas of the subject (at the expense of theoretical underpinnings) and you end up with a workforce that is skilled in some areas but without the supporting in-depth understanding that is required."

He added: "Don't get me started on the shockingly poor level of report writing and other business skills exhibited by graduates."

Matthew Oakley, group head of IT at Schroders, the London investment bank, made a similar point: "The skills issue is about relevant technology experience married to business knowledge. We fill our roles with what we can find - - but usually wish we could find better," and added: "The result is reduced productivity, reduced opportunity from our IT investment and this dents UK PLC".

A September 2013 European Commission report said "despite the high overall unemployment, there are shortages of ICT specialists in the EU, forecast to reach up to 900 000 unfilled vacancies by 2015."

That's a big number and while there will always be shortages in new sectors, wherever the real truth lies, there is no crisis.

Training, adjusting to new skills, ensuring that education is of a relevant high standard, are important issues for public policy and maybe the high tech companies could pay a fair share in tax to help fund initiatives.  

Migration is also an important issue in Europe [pdf].

Finfacts: Irish Economy: Full-time jobs in indigenous exporting firms in 2013 below 2000 level

Finfacts: Irish Innovation: No boom in STEM jobs in Ireland

Finfacts: Irish Economy: Sustainable growth dependent on foreign firms since 1990; Now FDI has peaked

Finfacts: Irish Medium-Term Economic Strategy 2014-2020: Where will 300,000 net new jobs come from? - - Part 8

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