Technology Ireland report outlines how Brexit could disrupt Irish tech

4 Dec 2017

European Parliament, Brussels. Image: ilolab/Shutterstock

Technology Ireland has outlined potential obstacles and opportunities for Ireland as Brexit negotiations continue.

It has been a tumultuous few days for Brexit discussions between Ireland and the UK, with plenty at stake as negotiations continue to unfold.

Amidst the flurry of news, statements and leaked documents, Technology Ireland has today (4 December) released a report entitled Brexit and the Irish technology sector, which warns of key risks and flags potential opportunities for the future of the sector in a transformed EU.

The report was compiled by Frontier Economics, and it highlighted the potential for “significant disruption” to Ireland’s tech sector.

Director of Technology Ireland, Paul Sweetman, said: “Ireland’s digitally intensive sectors are intrinsically linked to the global market and are heavily trade-dependent.

“The outcome of Brexit negotiations could have a far-reaching impact on the sector. Ireland must respond proactively to minimise the risks and maximise the opportunities presented by any market disruption.”

Brexit poses risks to R&D

One key risk is that a large proportion of EU-funded research and development (R&D) projects with Irish participants also have UK partners. A cut to funding in the UK and diversion to other EU states could have a negative effect on Irish R&D and the country’s attractiveness to digital firms.

GDPR and data negotiation is another factor that could impact Irish tech firms that associate with UK companies or organisations.

The report also flagged the possibility of fragmentation unless EU regulation is regularly transposed into UK law, which could limit market access or increase business costs associated with relying on UK partners for supply chain purposes.

On a positive note, there could be potential for diversion of investment to Ireland if issues around data flows between the EU and the UK are not resolved, as companies will want ease of access from within the EU. Companies may also relocate to Ireland to minimise regulatory compliance costs and other barriers.

Implementing Innovation 2020 is crucial

Technology Ireland, which represents more than 200 companies, recommended that the Government implement Innovation 2020, “putting in place the necessary funding to grow the capacity of the R&D sector in Ireland”.

It stressed the need to “invest in R&D infrastructure, skills and research frameworks in order to ensure talent is located into Ireland, and that R&D activity can grow in centres of excellence”. It also said that Ireland must diversify in terms of research partners, looking beyond the UK to establish new agreements with other innovative EU member states.

Sweetman concluded with a remark citing Ireland’s status as a tech hub: “Ireland is now a global powerhouse in digital technology, employing over 120,000 people in a multitude of business and technology roles, with businesses adding approximately 100 new jobs per week over the past five years.

“Since 2013, the sector has grown at an average of 12pc per annum, and now accounts for about 13pc of national GDP. While the sector is not overly reliant on the UK at an aggregate level, for some firms and industries, the UK is [a] vital source of inputs and an important export market. The Irish approach to Brexit needs to be informed by this.”

European Parliament, Brussels. Image: ilolab/Shutterstock

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects