Comment: To change the world, change oneself

24 May 2005

Powerlessness in the face of change must be an emotion felt by the 350 workers at IBM Ireland’s 3,700-strong technology campus currently awaiting details of their redundancy packages as the technology giant cuts between 10,000 and 15,000 jobs in its EMEA division. And there is not a single person on this island that cannot feel sympathy for the fate of the 485 Waterford Crystal workers and their families as the reality of redundancy blows a chill wind through the streets of Dungarvan this summer.

The adage that change is constant can never be truer in the world of business. More than 15 years ago, Digital Equipment Corporation (DEC) announced it was going to close its doors in Galway with the loss of hundreds of jobs. In the immediate decade that followed, Galway City witnessed a business renaissance of sorts in terms of the entrepreneurial spirit that shone forth, driven by a cadre of former DEC workers and management who had learned to put their experience to good use.

The same analogy can also be gained from the fact that well-known Irish software player Iona Technologies (just over a decade old) has already spawned more than 20 spin-off companies driven by former staff. This should be inspiring. The notion of managers and workers of multinational and indigenous companies spawning more companies is one that should be encouraged, but it isn’t.

The sad truth is that very few Irish companies succeed in gearing up to a scale that makes them relevant in the eyes of global customers, as the financial and moral supports at home are sadly lacking. But this is changing — 10 years ago there was no venture capital sector in Ireland; today funds totaling €500m are available to start-ups and young companies. Examples such as Cork-based Qumas scoring a major deal with US finance player Fidelity goes to show just what’s possible when an Irish company can get to the scale of being relevant in the eyes of corporate buyers. Charity begins at home in my book and the Irish Government should be more open to buying from local technology firms, in keeping with EU legislation of course. For any firm, having the Government as a reference customer is a major bonus.

Looking at the Irish technology sector alone, where 90,700 people are employed, some 61,000 are employed in multinational companies. Firms of any real scale are lacking in the indigenous sector. This is not the case in countries such as Sweden and Finland that Ireland likes to compare itself with. Sweden and Finland have spawned global technology giants such as Ericsson and Nokia respectively. Ireland has not.

The new strategic plan by Enterprise Ireland is targeting €3bn in new export sales by the end of 2007 and doubling research and development expenditure by Irish firms by 2010. One of the key facets of this plan is to get Irish companies to the scale that matters.

To make this happen, owner-managers of small technology firms must swallow their pride and be prepared to merge
with firms that evince synergies in order to be relevant in the eyes of overseas buyers.

When global players such as IBM hint at job cuts, journalists scribble feverishly about tech’s gathering gloom. And the powerlessness that comes with awaiting redundancy should be tempered with the idea that every cloud has a silver lining and that people have the power, not to stop change, but alter it.

The focus of the coming decade should be about creating and building Irish companies to the point that they become global brands capable of competing in their own right on the global stage. Entrepreneurs should be lauded, supported, given direction and be told to keep going, not shunned when things go wrong.

By John Kennedy