Ireland needs smarter cities to capture future FDI

8 Sep 2010

Ireland’s success in winning foreign direct investment (FDI) will over the coming decade depend heavily on key cities emerging as smart cities with the kind of transport and lifestyle infrastructure that would attract the type of talent companies need to locate there.

In recent months, Ireland has excelled in attracting cutting-edge investments such as Google’s 200-job location project, which is locating in Dublin, and EA Games which is locating 200 jobs in Galway. The country has also seen windfall investments by some of the world’s top internet firms, including Facebook, Zynga, eBay and LinkedIn in recent months.

The key to winning these investments has been not only the attractive tax breaks available but also the availability of local and international talented technology workers and people with language skills.

The draw to cosmopolitan cities

The attractiveness of increasingly cosmopolitan cities like Dublin, Cork and Galway for young, talented professionals from around the world as locations to live is key to feeding investing companies’ appetite for skilled, multicultural workforces. But, going into the future, driven primarily by the changed economic landscape, talented and skilled professionals will be mobile, opting to live in cities or towns based on lifestyle choices and access to infrastructure such as integrated transport and broadband.

A report compiled by IBM by economist Dr Constantin Gurdgiev, Mary Keeling and Susanne Dirks claims that cities must focus their attention on attracting, retaining and enabling people with diversified and high quality skills and knowledge.

Highly-skilled individuals’ location decisions, Gurdgiev said, will be directly influenced by the quality of core services provided by a city. Cities must act now to change the nature of their core services away from standardised services towards ‘citizen-centric’ services, tailored to individual work preferences, such as teleworking, and green and clean services.

IBM, for its part, in March invested €66m in its first Smarter Cities Technology Centre, which will be based in Dublin and could employ as many as 200 people.

“The future talent pool will be mobile, making choices to live in cities based on lifestyle, technology, education, transport and green and clean living,” Gurdgiev said.

“Globally, and not just in Dublin, different cities have different qualities of life. In the future, cities will need to change their entire system of providing services.

“This is coming from the realisation that, going forward, the share of economic activity in terms of growth and level of gross domestic product (GDP) will be attributable to people, skills, creativity and knowledge.”

European jobs

Gurdgiev said that across Europe as many as 90,000 new jobs per year are being created in smart, creative, knowledge industries, including ICT and pharmaceuticals.

“Each job you bring into an economy doubles its contribution to the economy. This is what policy-makers are talking about. All of that growth in jobs requires people with skills, knowledge and abilities and an economic system that facilitates that.

“A lot of the workers of the future will find themselves in the workplace as entrepreneurs, inventors and traditional employees. But if you think about how 4.1pc of GDP can be lost through people stuck in traffic jams, you can’t have a high-end lawyer or software developer stuck in traffic.”

Gurdgiev said cities that want to compete in the future will have to follow a citizen-centric model of services that retain increasingly mobile individuals who will choose where they want to live in the world.

“If you look at transport, the best practices exist in Singapore and Japan where public transport is tuned into metrics of demand, weather forecasting and real-time data on traffic congestion, so it can be tailored to ensure optimum individual transport.

“If you think about cities as a set of different services – the quality of which directly impacts health, happiness and productivity – if you are to become competitive you have to think of a systemic approach to core services and integrating them,” he said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years