Any chance of Ireland’s tech and financial services sectors gaining from the UK’s Brexit from the EU is just speculation as long as the frictions of doing business and living here remain, writes John Kennedy
The UK’s fateful decision to exit the EU was sealed in a referendum that was an ill-advised throw of the dice by David Cameron just to hold on to the semblance of power. As clownish as Cameron’s gamble would seem, all the sad actors in this tragedy have made clowns of themselves. The leading advocates of Brexit, Boris Johnson and Nigel Farage, were shown to have feet of clay in the end, with no plan for what would happen if their little selfish little ruse succeeded.
In the end, you can’t help but feel the future of millions have been gambled away by the folly and ambitions of a few privileged clowns. In the years ahead, millions of young people will be denied the chance to travel freely, live, love, marry and just be European. All because of a campaign that had lies, xenophobia and toxic ambition at its core.
That’s why I prefer the company of people who don’t clown around or mess with the future of people.
In the weeks preceding the Brexit referendum, in a single day, I met with two individuals who take the future of their people very serious. The first was Brian Halligan from HubSpot, who said that his company’s investment in Dublin was the most pivotal and rewarding decision in HubSpot’s 10-year history. He cited Dublin as the scale-up capital of the world.
‘The countries that will be successful in the future will be those that create the most attractive and compelling environment for entrepreneurs to build their businesses and for other highly-mobile talented people to join them on that journey’
– BRIAN CAULFIELD, IVCA
But, he pointed out, in the war for talent and the cost of doing business, Dublin was now on a par with, if not more expensive than, Boston.
A couple of hours later, I met the CEO and co-founder of a Ukrainian fintech start-up who was visiting various European cities, including London and Dublin, to figure out which was best for his company. He wants to move lock, stock and barrel to a European city that would help his company target the fintech sector more effectively.
It’s a kind of magic
Curiously, in those conversations with Halligan and the Ukrainian start-up CEO, the subject of the then-looming Brexit was barely mentioned. Probably because at the time the very notion of the UK voting itself out of the EU seemed too ludicrous. No country could make such a stupid mistake, could it?
When they asked me what was best about Dublin as a place to grow a business, I cited not only the experienced population of tech people who know how to scale up an organisation, be it a data centre or a manufacturing or a software hub, but the intimacy of the city. It’s still a small city where everyone knows each other, and when you add that magic to the fact that all the biggest tech companies in the world are here too, it is a potent formula.
Dublin, like London, Frankfurt, Paris and others, fosters ambitions to be a fintech hub. Ireland as a whole wants to be the Silicon Valley of Europe, and with every important tech brand name based here, it has every reason to believe it has the pedigree to be so.
There is no hiding away from the opportunity Ireland has as the only remaining English-speaking country in the EU and Eurozone with the scale to accommodate major investments from American and Asian tech and finance companies targeting Europe.
But can we claim to be the next ‘City’ on a scale with London’s financial industry in the same way as Frankfurt or Paris can?
In recent weeks, Taavet Hinrikus, CEO and co-founder of TransferWise, an Estonian who moved his fast-growing company to London six years ago, tweeted that Ireland, Switzerland and other countries are reaching out with tempting offers to move operations.
In an op-ed on Medium, Hinrikus lamented that the toxic debate over immigration in the UK.
“Immigration is part of the solution we need, not the problem,” Hinrikus said. “Without immigration, nations would stagnate. It is key for innovation and for economic growth.”
It’s about infrastructure and people
Investment in the 21st century isn’t just money, it is talent. Talent invests time in places it wants to go to. Talent is worth more than anything else to Google, Facebook, Apple, Snapchat, Twitter or any other company that graces a country with their respective operations.
Talent goes where life is good, where it is good to bring up Talent’s children in a stimulating environment, where opportunities, hope and knowledge and experience are in abundance. Talent likes to rub shoulders with Talent.
To win over Talent you need good infrastructure and to eradicate infrastructure bottlenecks. You also need to get rid of the frictions of doing business and just living.
In fact, when you consider what infrastructure will be in the future, it won’t be just roads, or fibre pipes or railway lines, it will be ‘soft’ infrastructure that enables the fluid movement of people and services.
Dublin has this within its grasp and is the go-to location for Europeans, who are within an hour or two’s flight of home, as well as a growing coterie of talented people from America and Asia.
It’s hard to believe it is almost a year since the whole Web Summit kerfuffle about moving the event from Dublin to Lisbon erupted.
While the manner of Web Summit’s leaving left a lot to be desired, the core point about infrastructure was perhaps the most useful contribution the Summit ever made. Okay, the notion of Garda escorts for tech executives with colourful shoes was a bit out there, but Paddy Cosgrave’s observations about traffic, transport, mounting costs and broadband infrastructure are certainly worth noting.
If Dublin and wider Ireland wants to compete against the bigger cities like Frankfurt or Paris, it needs to think bigger.
It is 2016 and why is Dublin the only capital city in Europe that still doesn’t have a railway or Metro link connecting its airport with the city centre? Is this perhaps a legacy of the same dim planning that built the M50 originally as a two-lane highway with a giant toll booth at its centre?
It is 2016 and people I know from overseas who have lived here for a long time still have to queue every year to get their work permit/visa approved. Others have to wait in long queues at midnight Sunday-into-Monday at passport control.
Dublin has come on in leaps and bounds as a place to live and work. There are more restaurants and things to do other than visit pubs, and every night the city is abuzz with people both local and from all over the world enjoying its increasingly cosmopolitan vibe.
But how can we seriously expect companies to move significant financial hubs from London to Dublin or Cork if their young workforce will struggle to find accommodation due to a housing crisis caused by a broken rental market?
How can we expect high-powered executives or engineers to come from Silicon Valley or Delhi or Beijing to spearhead the growth of operations if getting a work permit is so difficult, and even then their spouses or children cannot also work or travel freely around a Europe, so tantalisingly close enough to explore?
How can we expect next generation start-ups from Russia or India to consider Ireland if our graduate or venture capital pools are not of a sufficient scale?
Writing in The Irish Times recently, entrepreneur and venture capitalist Brian Caulfield hit the nail on the head: “We face a global ‘war for talent’. The countries that will be successful in the future will be those that create the most attractive and compelling environment for entrepreneurs to build their businesses and for other highly-mobile talented people to join them on that journey.”
The truth is Ireland, if it really wants to make the most of the shifting sands of fortune, needs to draw up a vision for the kind of country it wants to be for people too. And stick to that plan.
Time is everything. Already the UK forces are marshalled to win on the foreign direct investment (FDI) front and this could cost Ireland dearly. London-based think-tank. the Centre for Economics and Business Research (CEBR), has claimed that cutting corporation tax there to 15pc would boost FDI investment by 11pc and reverse any declines from Brexit.
Build it and they ‘may’ come
I don’t credit Charlie Haughey with much, but you have to admit the IFSC was ahead of its time and an example of what would follow if vision is applied to ambition. Employment in the financial services portfolios of Enterprise Ireland and the IDA stood at over 35,000 people at the end of 2015.
Perhaps the ambition is needed for a digital Ireland of the future that would be a magnet for investment and talent.
This doesn’t necessarily require a whole new bricks and mortar district per se, but it does involve other kinds of infrastructure and removal of frictions. It requires digital infrastructure but it also requires making it easy to locate here, do business ethically and, quintessentially, be a good, safe place for people to live.
Transport, crime, housing, health, immigration – all of these frictions that don’t seem digital will ultimately have a bearing on Ireland’s digital and financial ambitions.
We simply need to think bigger and realistically about the longer-term future of living in Ireland.
It emerged last week that in the mapping exercise around Ireland’s National Broadband Plan to connect 1.8m people to core technology for life in the 21st century, somehow more than 170,000 properties in areas supposed to be served by commercial operators were overlooked. It scared me to realise that the plan – on which so many things depend and which could cost €500m to €600m – may be far from perfect. Indeed, as some sources have already suggested, what if these 170,000 were just the tip of the iceberg?
But not only was there the numbers glitch, the fact that the new network will be privatised sent shivers down my spine. It made me think of the M50 toll booth debacle and the privatisation of Telecom Éireann in 1999.
The decision to let the ownership of the new national broadband network fall into private hands – and these could turn out to be overseas hands – rather than remain an asset belonging the country was made for reasons of near-term financial concerns. It was made to ensure the money didn’t sit on a national balance sheet at a time when other pressing issues like health and housing desperately need attention.
The decision was probably made with the best of intentions. But will it come back to haunt us?
All these matters from talent to infrastructure will require a bigger, more ambitious, all-encompassing vision than ever before.
If Brexit has taught us anything, it has taught us what can happen when a country thinks small.
It’s time to think big.
Brexit image via Shutterstock