Is Cork our new tech capital?

27 Sep 2007

Motorola’s decision to leave Cork earlier this year, with the loss of more than 300 jobs, could have been the cue for despair just as Digital’s departure had been for Galway years before.

But history may record it as a mere setback, because a thriving technology scene in the city and county is helping to absorb the shock of a 20-year employer cutting ties.

The three technology-focused incubation centres serving the city and outlying areas are all heavily subscribed — one sign of a vibrant sector.

Applications to join the Rubicon incubation facility this year have been greatly swelled by former Motorola managers looking to start their own businesses.

“We have a number of projects that came from that, either in the Rubicon already or at the planning stage,” says its manager Paul Healy.

Rubicon is attached to Cork Institute of Technology and has the backing of Enterprise Ireland and the local enterprise board. It has 34 client companies, mostly in the high tech sector.

“We opened 18 months ago and our first facility is full. We’re getting regular enquiries,” says Healy.

Enterprise Ireland also operates Webworks, based in Cork City Centre. It now has 13 high potential start-ups on site.

“There is huge potential to grow further,” says Michael Cantwell, manager of e-learning, media and education with Enterprise Ireland. “We’ve had good growth in start-up businesses and we’d like to see more.”

The longest established of the three incubators is the National Software Centre (NSC), currently home to 40 companies.

A public-private partnership between the IT industry and Cork City Council, the campus has obtained planning approval to expand with the addition of 25,000 sq ft.

Shemas Eivers (pictured), co-founder of the NSC, is bullish about the sector.

Eivers, who is also managing director of Client Solutions, believes that there is a strong sense of belief and confidence among local firms.

“You need a couple of generations of software companies and venture capitalists and people who get confidence from each other. That’s there now.”

Enterprise Ireland supports 114 Cork technology companies, employing around 2,000 people or 5pc of the total Irish IT sector. Those firms’ sales for 2006 amounted to €92m, of which more than €50m was from exports.

The profile of Cork-based tech firms is wide ranging. Qumas, one of the best established software companies in the area, arguably owes its very origins to Cork. The region is home to many of the pharmaceutical companies and Qumas grew out of serving their regulatory compliance needs by developing software tools to manage this.

Pat Phelan’s Cubic Telecom is the talk of the Cork tech scene and has a growing profile in the US. Its technology aims to eliminate the high cost of mobile roaming charges — a major bugbear of international travellers.

Sigtec develops technology to reduce risk in hazardous or potentially dangerous areas of operations. Its customers include the ESB, Chubb, Pfizer, the HSE, GlaxoSmith Kline and Schering-Plough.

Nitrosell develops software that allows traditional stores to sell via the internet. The company was founded two years ago and its board reads like a who’s who of the Irish software industry including former Horizon chief Charles Garvey (CEO) and Iona co-founder Colin Newman (non-executive director).

Smaller companies are also attracting attention, such as Sxoop Technologies, founded by Walter Higgins. This startup has created a web-based photo-editing and customisation tool called Pixenate for photo-sharing and printing websites.

Conor O’Neill’s Argolon Solutions has developed LouderVoice, a web-based aggregator of reviews about everything from music and movies to food and technology.

Rubicon’s Paul Healy believes scale is not a hindrance to success. He claims Irish start-ups with clever technology are attracting the likes of Nokia and Microsoft.

“Being a small firm is no longer a barrier to doing business with large multinationals. A two-or three-person firm based in an incubation
centre can do it,” he says.

Encouragingly, the investment community is also sitting up and taking notice.

Venture capital firm Enterprise Equity has a dedicated office at the NSC. “We’re currently looking at 20 firms, the vast majority of which are Cork-based technology companies,” says investment executive Frank Walsh. “The place is a hive of activity.”

Enterprise Ireland has invested in 56 Cork IT start-ups since 2000; 16pc of the national total.

However, there are some clouds on the horizon. As companies grow, finding qualified staff can be difficult and some are experiencing this already. The networking group IT@Cork conducted a survey this year about sourcing talent and found shortages in certain areas.

Migrant workers will fill some of the gaps, and IT@Cork is looking to schools and organisations like ICT Ireland to solve the longer-term problem.

Telecoms entrepreneur Pat Phelan says state agencies could do more to support indigenous companies, arguing the process for obtaining funds is too long.

Michael Cantwell counters, saying Enterprise Ireland wants to keep red tape to a minimum: “We’re doing our best to reduce bureaucracy, but we are dispensing state funds. There’s a due diligence process.”

Notwithstanding those concerns, Cork’s immediate future looks secure. When Motorola’s news became public, development agencies moved swiftly with further inward investment.

In the past month alone, two software development companies set up operations in Cork: SolarWorks and Blizzard Entertainment plan to employ 175 people in total.

More positive developments for the longer term are the activities of indigenous startups or growing businesses. “I think the Motorola thing will generate companies starting,” says Eivers. “Things won’t happen overnight; you have to get the seeds sown.”

Favourable conditions in Cork suggest its position as a technology hub should be more sustainable and less subject to the whims of multinational management in the years ahead.

With a Rebel yell, they cried more, more, more…

IT@Cork is a non-profit networking group for technology professionals and companies.

Now in its tenth year, the organisation has 270 members; less than five years ago, this figure stood at just 70.

“Every week we probably get one or two new members. We’re hoping to have 300 members by next year,” says Catherine Wall, programme manager for the group.

IT@Cork is based out of the National Software Centre. According to Wall, the campus also acts as a focal point for activities, such as a conference last month about Java technology which drew 140 delegates.

The networking opportunities are also less formal, with firms attending meetings at the centre or simply catching up and exploring potential opportunities.

Much of the activity among up-and-coming Cork companies is around Web 2.0, a broad term covering social networking and collaborative services delivered on the web. That subject was the theme of last year’s annual
IT@Cork conference.

Social media commentator Tom Raftery believes that it’s no coincidence the earliest and most active weblogs in Ireland are maintained by Cork people. “There is an active Web 2.0 scene in Cork,” he says.

By Gordon Smith