‘It’s time to make Ireland the services centre for the global digital economy’

4 Feb 2010

Cloud computing, ICT in schools and entrepreneurship are needed for our economic fightback.

It’s the year of the tiger. For many of the world’s economies, 2010 is a time of renewal and regrowth. While Ireland may be technically out of recession, according to the Central Statistics Office (CSO), realists know that this is due to exports by multinationals. Internally Irish businesses are still struggling. It is clear that the country’s true economic renewal will be driven by the growth of indigenous firms and their transformation into multinationals.

The head of Hewlett-Packard (HP) Ireland, Martin Murphy, argues that the impetus for changing the fortunes of indigenous companies must come from within. This change will be technological, in terms of grasping areas such as cloud computing and intellectual property (IP), and attitudinal in terms of our approach to languages, computers in schools and actualising Ireland as a digital nation.

About HP Ireland

HP employs more than 4,000 people in Ireland across a range of activities, from inkjet cartridge manufacturing to managed services, enterprise systems and corporate finance. In less than 20 years, the tech giant has invested €1 billion in this country.

Early last year, as the extent of the recession became clear, HP announced 500 new jobs in a hard-fought-for multilingual technical support centre. In August, HP’s Galway operation secured a major cloud computing deal with global food supply chain firm GS1, enabling HP to establish a global cloud computing competency centre in Galway.

“We’ve probably come to a point now where we need to do two things: balance the cost base, which of course drives our competitiveness as a nation, and balance that with job creation, activities and stimuli that will drive job creation into the future,” explains Murphy.

“The vision I have for Ireland is that of a services centre for the global economy. We are a gateway into Europe and that’s a strength we have to play to, while we are currently one of the world’s largest exporters.

“Providing services into the global economy, I think, is an area that we will see huge growth in going forward.”

He says that if we marry this export performance with ICT, Ireland will have two of the magic ingredients for success in the second decade of the 21st century.

Future jobs outlook

According to a study by Microsoft and IDC, the global IT industry will create 5.8 million new jobs and more than 75,000 new businesses over the next four years.

“Underneath that, we have to have the digital infrastructure that will support both the FDI [foreign direct investment] companies operating in that ecosystem and new Irish start-ups that are creating thousands of jobs,” says Murphy.

Crucially, he argues that Ireland needs to achieve the same success rate with indigenous export growth and entrepreneurialism that we have seen in terms of FDI.

“I also think we’ve a great track record with what I’d call entrepreneurial start-ups and we’ve seen over the last decade a number of those go out onto the global stage and be very successful.

“But we have to look at how we can build Irish multinationals that will create thousands of jobs here in Ireland and will go out and perform on the international stage. We need to have a marriage of the best the FDI companies can bring in terms of management skills and capabilities with the best that entrepreneurial start-ups can offer.

“Aside from the IDA and Enterprise Ireland, we need to create a new paradigm, a skill set that will show what are the best of those companies and foster and grow those Irish firms into multinationals. We have to crack that and that’s the key to creating global Irish companies, located in Ireland but servicing international markets.

“To use HP as an example, we announced that we were creating 500 jobs and those jobs were a blend of linguistics – supporting customers in international languages out of Ireland. Ireland, in HP terms, is the best location for Nordic and Dutch-speaking languages. We can support all our customers in these markets because we have the skills based here in terms of the technical and the linguistics.

“Beneath that, we need to have the digital infrastructure that allows us to support those customers and their hi-tech systems out of Ireland.”

Investment in education

Murphy applauds the €150 million ICT for education investment announced before Christmas by Education Minister Batt O’Keeffe TD, but says this should be considered a start on a larger journey.

“We need to have a vision that articulates what a 21st-century education system looks like and, to me, that means every school being connected, every pupil and teacher having access to the technology and, ideally, access to a laptop on a one-to-one basis.”

Murphy says the starting point for building Irish multinationals and realising Ireland as a digital nation in the first rank is students coming out of primary and secondary education with not just strong but also widespread IT literacy skills that go beyond science, technology and maths.

“One of the areas where we have a huge amount to offer internationally is the whole area of IP.

“If you want to reach out and have every company innovating, they need to understand the role that IP will play in that organisation’s development going forward.”

He says the Government’s decision to trim rather than decimate the State’s investment in science and education in the recent Budget, as well as improving the R&D tax credit, was visionary.

“The more companies doing R&D here the higher the value of the jobs being created and the more sustainable those jobs will be going forward. The second thing to look at is how we treat patents. The more R&D we have, the more patents being created here and the more that puts Ireland centre stage.”

What Ireland can do

Murphy cites the IFSC as a prime example of what Ireland can achieve when ambition is turned into action and believes the same could be true in terms of IP. Plans to create an International Content Service Centre to serve IP and digital content creators are envisaged by the State to potentially create 25,000 new jobs in Ireland in the next five years.

He says it is also vital Ireland moves to use opportunities such as green technology and cloud computing to foster the next generation of businesses that could grow to the scale of Glen Dimplex, CRH or Kerry Group and cites Airtricity and Mainstream as examples of what’s happening in the green space.

In terms of the cloud opportunity, Murphy cites the food traceability project with GS1 that has spawned the cloud computing competency centre in Galway.

“The cloud area is confusing businesspeople, but the GS1 project is something that brings it to life.

“The cloud will be vital to the transformation of companies out of the recession we are in.

“Companies worldwide will look to outsource and will look for a cost-effective and secure environment. This could be a huge opportunity for Ireland to be at the cutting edge of that,” he concludes.

By John Kennedy

To watch a video interview with Martin Murphy, go to www.digital21.ie.

Photo: Martin Murphy, managing director of Hewlett-Packard Ireland, who says IP, cloud computing and the creation of Irish multinationals will lead to the country becoming a central global services centre in the digital age

Digital 21Digital 21 is a campaign to highlight the imperative of creating an action programme to secure the digital infrastructure and services upon which the success of our economy depends.

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