IT leaders look on the bright side

1 Apr 2004

As a lobby group for the technology sector, ICT Ireland can be relied upon for pithy moans and groans when the Government misses the mark. Over the past few years, there has been something reassuring in the steady stream of press releases that emanate from its offices in IBEC, highlighting everything from the need for research and development (R&D) incentives to shortfalls in school science equipment.

So when some of its highest profile members — the local heads of Microsoft, Oracle, IBM and Intel no less — turned up to share the platform with ICT chairman Brendan Butler (pictured) you could have been forgiven for expecting sparks to fly. But someone must have been handing out the happy pills backstage because the most caustic thing that happened was Microsoft general manager Joe Macri ribbing Oracle managing director Nicky Sheridan for taking too many sandwiches.

Intel’s general manager and ICT Ireland chairman Jim O’Hara set the tone for the briefing: “We want to help people understand that what’s gone on over the past number of years is a period of transition.”

A subtext of the event was that somehow messages had been mangled by the media. Things, apparently, were never as bad as they seemed and all was looking good for the future.

O’Hara offered a brief progress report on the State’s relationship with the actual technology as well as the tech companies. He began by praising e-government initiatives but said there was still a lot that IT could improve, highlighting the role it might have in the move to decentralisation.

There was a cautious welcome for the introduction of tax credits for R&D investment with the proviso that even more needed to be done in this area. “It’s the starting point for more generous R&D incentives,” said O’Hara. “We will be pressing hard to expand it in various forms over the coming years.” R&D is perceived as a vital rung in the ladder that will help Ireland step up the value chain.

Signs that PC penetration was on the increase were also welcomed as was Ireland’s regulatory environment, its productivity levels and its free trade capabilities — all of which ensured it is still a competitive place to do business for the large multinationals that the panel represented.

Assurances were also made that the current Government was expected to maintain the 12.5pc corporation tax despite mounting pressure from EU states seeking harmonisation that could curtail Ireland’s attractiveness to overseas investment. “We’re constantly focused on the corporation tax issue. It is very important and the Irish position should not be relaxed,” said Butler.

More statistics were rolled out to highlight the importance of the sector to the Irish economy. The industry currently employs almost 91,000 people in Ireland and generates sales of €51bn annually, according to ICT Ireland figures, with seven of the world’s top 10 tech companies maintaining a substantial base here.

Such was the panel’s enthusiasm for doing business in Ireland, echoed in a new brochure, entitled Why Ireland should be your location choice?, that you might have thought you’d wandered into an IDA briefing by accident. This wasn’t an organisation lobbying the Government, it was now canvassing on its behalf. One can only speculate on the motives for this change in direction but there is clearly an attempt to assuage ongoing speculation about the long-term presence of the multinationals in the country.

When it came to addressing the negative sides of the sector, such as the steady stream of job losses and the declining number of students interested in an IT career, the panel’s comments were determinedly upbeat if occasionally bizarre.

O’Hara put the fall-off in graduates down to a problem in perception blaming “mothers and the media” for turning Ireland’s youth away from working in the sector. It could have been worse for the assembled journalists, he could have blamed mothers in the media.

Macri identified another perception problem, this time with people’s understanding of the technology downturn. “We had three pretty artificial market forces,” he explained, “Y2K [preparing for the millennium bug], increased application development because of the euro and then the dotcom bubble. Take them out and there’s still been long-term growth in the sector.”

The spate of much publicised company closures and the loss of jobs and manufacturing to the east were either put down to mitigating circumstances or painted in a more positive light. “We’re in a transition period,” said Macri. “In certain parts there are job losses — in other areas there are gains.

“We should stop pretending we’re competing with India and China,” he went on to say. “Every multinational must be there [in those countries]. Accept it. We have to find a role for Ireland in specific niches.”

At a time when Ireland faces closer to home competition from accession countries that are aiming to spend millions of EU money to emulate the Irish model, the need to find and define these niche segments is something that ICT Ireland would do well to explore. For now, it seems happy to accentuate the positive.

By Ian Campbell