China’s gateway to Europe: Ireland

29 Mar 2012

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Tech entrepreneur and Dragons' Den star Sean O'Sullivan spoke at last week's Digital Ireland Forum in the Convention Centre Dublin, where he said that Ireland needs to open its borders to become the Silicon Valley of Europe

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Tech investor and Dragons’ Den star Sean O’Sullivan says that if Ireland wants to be the Silicon Valley of Europe, it must start by opening the door to China.

Unless you have been living under a rock, you cannot but be aware of the burgeoning economic force that is China today. Travel anywhere in Europe and you will be struck by the numbers of China’s rising middle class traversing the continent and gazing in rapt wonder at the bridges in Venice, the palace at Versailles or Rome’s Coliseum.

This is happening everywhere but Ireland. During a week when Taoiseach Enda Kenny led a trade visit to China, Ireland needs to wake up to the likelihood that by 2030 two-thirds of the world’s middle class will be Chinese.

Tech entrepreneur, Avego CEO and Dragons’ Den star Sean O’Sullivan at the Digital Ireland Forum in Dublin last week presented a vision of a strong, viable and competitive Ireland bolstered by a growing population and welcoming of skilled talent from across the globe.

Opening our hearts and minds to China would be wise policy, he said. As well as boosting Ireland’s influence with China by developing a 30-day tourist visa to start with, he recommended allowing overseas students that gain qualifications in Ireland to remain here and contribute to the economy.

O’Sullivan recommended that by taking in about 75,000 skilled emigrants on an annual basis – who in turn could each generate six additional jobs in the local economy – this would help bring in potentially €1bn in extra tax revenue for the exchequer annually.

O’Sullivan also warned that we need children writing software earlier on.

Sean O’Sullivan’s background

Recognised as co-creator of the term ‘cloud computing’, serial tech entrepreneur O’Sullivan is co-founder and managing director of Avego, a 55-person technology firm with offices in the US, Kinsale, Co Cork, and China.

O’Sullivan is also managing director of SOSventures International, which boasted returns averaging 27pc over the past 15 years, and is a founder of JumpStart International and Chinaccelerator. His first company, MapInfo, grew to a $200m public company and popularised street mapping on computers. He is the latest high-profile addition to the TV programme Dragons’ Den.

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In his keynote, O’Sullivan said it could have turned out very differently for him. He grew up in straitened circumstances in rural upper-state New York and it was only through availing of a local employment programme was he able to help educate and provide for his family.

“The government in their infinite wisdom chose to give me a $20 per week job as a janitor in my local high school. The money earned helped pay for food and education for myself and family.”

O’Sullivan said it was while on a school tour to the local courthouse he noticed the offices of the county’s Central Data Processing Department and that opened up the world of computing to him.

It took him a month of convincing the authorities that he would be much better working with computers than with brooms – the key was convincing a local manager called Stan Franz to let him come and work in the department. “He saw something in me and gave me a shot.”

In telling this story, O’Sullivan painted a metaphor for where Ireland is today.

“When I stepped out of my comfort zone and opened up to possibilities I was going from the cold, hard, dead-end box I found myself in and reached out and there was a hand and a heart on other side that reached back.

“It opened up possibilities that have not stopped. I have reached out across towns, states and oceans ever since.”

O’Sullivan said the reason he told the story of his youth is he believes in an open Ireland, a strong and capable country that takes advantages of its talents and strengths to get itself out of the present economic situation.

This is an Ireland, he said, that “positions itself for an immediate and continuous rise back to a position of quietly confident leadership, inclusion and development.

"No man is an island and Ireland is not an island, either – it is globally interdependent. There are 4.2m Irish in the Republic and 100m Irish beyond its borders.

"But despite being a country that has generated so many emigrants – we have a tight and closed border, even when people from outside have so much to give.

"If we think of ‘ourselves alone’ in the world we live, that is a path for disaster that has put Ireland back for decades. When we have opened ourselves up we were rewarded with growth jobs, economic development and prosperity."

What Ireland needs to do to become Silicon Valley of Europe

DIGITAL IRELAND FORUM – TIME TO ENTER THE DRAGON ECONOMY

€1bn: Additional revenue for the exchequer if Ireland issues 75,000 visas a year to highly skilled engineers

6: The number of new jobs that can be created locally in Ireland for every one knowledge worker hired from overseas

66pc: The proportion of the world’s middle class that by 2030 will be Chinese

$408m: Amount in cash Pitney Bowes paid to acquire MapInfo, a tech firm co-founded by Sean O’Sullivan

O’Sullivan referenced evolutionary biologist Charles Darwin when he said it will not be the strongest nations that will survive, but those that are most responsive to change. He highlighted some things Ireland can do to become the Silicon Valley of Europe.

One is to make it easier for overseas workers to come and work in Ireland. Pointing to the success at attracting giants like Google, Facebook, IBM and others, he warned that restrictive policies are making it hard for firms to recruit overseas talent.

"We actually run the risk of losing these great companies," he said, indicating that 80pc of Google’s hires in Ireland are from outside the country and that every job created in one of these digital businesses produces six additional local jobs.

"When the education system cannot produce these people – we can create jobs and prosperity locally by opening borders. In Silicon Valley, 40pc of residents come from outside the US. Silicon Valley has become the Mecca of the technology world, not because of beaches or traffic – because the best and brightest go there and thankfully people in US are open to working with culturally diverse people.

"If you want to create Ireland as the Silicon Valley of Europe, open your borders and create a frictionless environment," he said.

O’Sullivan presented three courses of action: "Allow the population of Ireland to double in the next 20 years – we are at 4.1m, why shouldn’t it be 8.2m or 9m? We can easily support that many people.

"Second, allow 75,000 visas every year and let everyone who goes to an Irish college or has an engineering ability to stay here.

“Third, create a powerful partner in China – make Ireland the gateway to Europe for the Chinese in same way that Ireland has been a gateway for America. Let’s be that open.”

He pointed out that Ireland’s population today is too small to have an internal market which reduces competition and increases the cost of living. The country has half the land mass of the UK but one-15th of its population.

“We have the space to grow and by growing we can fill these ghost estates and build housing and everything that goes with that. Ireland can become a land of plenty, opportunity, a place people are emigrating to rather than leaving. A higher population also reduces debt.”

Consequence of a closed Ireland

A closed Ireland creates frictions that destroy us, according to O’Sullivan, explaining how technology investor Bill Liao was refused his Irish work visa not once but three times last year.

Liao in the past year has invested in several local technology companies and kick-started the CoderDojo movement that sees 1,000 children in Ireland every week learn how to write software. CoderDojo has now become an international movement.

O’Sullivan read out a letter from the Department of Jobs, Enterprise and Innovation written to his HR manager at Avego, effectively refusing a permit for a skilled employee from overseas.

“Every time we try to employ a worker from China – even though a large export market – this is the response we get, and this is extraordinarily aggravating.

“If we are trying to create an economy here, we need the workers to do it.

“We no longer live in the day and age where the manufacturing jobs of a digital economy are line workers. They are knowledge workers, we have to get these knowledge workers from all over the world if we want to build our economy.

“We are killing ourselves via a bureaucratic death wish from our own Government that on one hand wants to create a digital economy but is doing everything to prevent it.”

He cited the old saying that one hand of government often doesn’t know what the other hand is doing.

Referencing Dr Martin Luther King, Jr’s famous quote – “Faith is taking the first step even when you don’t see the whole staircase" – O’Sullivan concluded: “We have to open Ireland, our borders and our hearts – we can become the America of Europe, the land of opportunity and plenty.

“But close Ireland and say goodbye to what we achieved as local and international companies find it expensive, and uncompetitive to expand.”

To see Sean O’Sullivan’s keynote at the Digital Ireland Forum last week, go to our microsite.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com