The road ahead: Dermot O’Connell, Dell

1 Jan 2009

With over 5,000 people in Ireland, Dell is one of the country’s top employers and a weathervane for global economic change. Dermot O’Connell is country general manager.

Q. In a very short space of time, both Ireland and the world’s economic fortunes have changed. In your opinion, what are the priorities that need to be addressed to steer this country back to a sound economic footing?

A. There’s no denying that we’re facing an unprecedented and unchartered economic future. To ensure we come out the other side in good shape, I think there are a number of measures that both Government and the private sector can take.

If we are serious about driving economic growth in the future, and competing as a knowledge economy, we have to differentiate ourselves from our neighbours and look at how we can continue to attract foreign direct investment (FDI). The Government move to extend R&D tax credits in the budget will help, as will maintaining the current rate of corporation tax.

The Government’s move to reform the public sector should also be welcomed. While a timeframe has been given to deliver its report, I would like to see updates provided and steps taken on a quarterly basis.

The economic environment is changing at such a rapid pace, we need to be prepared to make decisions quickly and to react to external circumstances. This is something that publicly quoted companies are required to do, and it ensures efficiencies and transparency. A similar approach adopted on public-sector reform would be welcome.

The Government was very responsive when it announced the recent bank guarantee scheme. Now, there is a requirement to look at what’s next in this area. A number of options are being discussed around equity injections and mergers etc. I think confidence might be restored in the broader economy if there was more certainty around what will happen in the financial services industry.

Finally, it is critical we ensure there is liquidity in the business community. A number of banks have announced small business loan schemes in recent days and I think that is to be welcomed. We need to ensure that viable businesses are supported during these challenging times through access to credit, so that we can continue to develop a vibrant indigenous economy and maintain employment levels.

Q. More than ever, Ireland needs breakthrough science and technology business stories, with local companies reaching global markets. What’s missing and what areas of technology could deliver rewards?

A. Supporting innovative companies that have the potential to be players on the global stage is essential for Ireland’s future competitiveness. We also need to continue to support global companies that are carrying out core R&D work in Ireland.

At Dell in Limerick there are a number of dedicated teams that are developing products in the wireless solutions space. This intellectual property is then used throughout the globe. It is this kind of activity that helps to grow Ireland’s reputation globally, and is the activity that is most appropriate to our economy.

Policies that support and reward companies for carrying out work of this nature in Ireland should continue to be prioritised. There is no limit on the type of work that can be done here, as the ability of our graduates and the quality of our academic institutions is unparalleled.

We also need to look at how we can support the commercialisation of R&D work carried out, particularly by smaller indigenous companies. Despite the economic challenges, the Government ring-fenced €500m to support science, technology and innovation. It is great the funding is there, what we need to do is ensure it is being used effectively, and that the funding is maximised through partnerships with industry.

Dell has a very successful partnership in place with Science Foundation Ireland. Through the partnership we are supporting young women in engineering. It is critical that initiatives of this nature continue because if we do not continue to produce graduates with the right skill sets, our ability to compete for FDI will be seriously damaged. 

Q. Ireland is continuing to win its share of FDI. Why is this, and how sustainable is this going forward?

A. We’re continuing to win our share of FDI because Ireland has worked very hard over the past number of years to evolve and change to attract higher-end jobs. As a nation, we now have the infrastructure, the qualified workforce and the know-how to deliver R&D, services and support at the highest level. To ensure we maintain our attractiveness, we have to be competitive.

The Government decision in the budget to increase and widen the band on tax credits for R&D is to be welcomed, and should not only increase our attractiveness as a location, but should also help to keep existing R&D facilities in Ireland. An ongoing focus on education is vital if we are to maintain our competitiveness into the future. It’s essential we have a workforce with the skills to meet the needs of companies seeking to invest in Ireland in the future.

Q. Education was the bedrock of the economy that was known as the Celtic tiger. But the evidence is Irish schools are not receiving the same level of investment as counterparts in neighbouring and competing economies. What can and should be done about this?

A. Supporting education and investment in schools is an imperative if we are to emerge from the current economic turbulence in good shape and position ourselves to build a knowledge economy in the future. The challenge, with funding under pressure across the board, is to come up with some innovative thinking about how we can deliver a solution that gives schools and students the resources and tools they need to upskill within current economic constraints.

I believe we need to shift how technology in education is viewed. We need to start looking on technology for schools as a long-term investment, rather than a short-term cost.  We should look to adopt new, cost-effective technologies within the teaching environment to provide easy-to-use, low-maintenance high-tech services to all. A lot of this can be done within the existing budgets.

By taking a standard approach across all schools, we can make the funding go further, remove the challenge of IT support from teachers and ensure that technology is integrated seamlessly into the teaching process in every classroom.

The Minister for Education, Batt O’Keeffe TD, has stated his interest in developing solutions in this area. As leaders in the provision of technology solutions in the education space, we look forward to working with the Minister to see how we can address the challenges the system is facing.

Q. In terms of infrastructure, is Ireland, in your opinion, adequately equipped to perform as an agile economy in 2009, and do you think it could emerge stronger as the economic storm clouds clear?

A. Under the National Development Plan (NDP), Ireland’s capital infrastructure is vastly improved. The Government’s decision to protect vital NDP infrastructure funding in the budget and deliver existing projects was very welcome. As an island nation, for our competitiveness, it is imperative our major urban centres are linked, and so we need to ensure we have the infrastructure in place that will enhance our ability to grow in the future.

Broadband connectivity is something, however, that requires significantly more investment. With the volumes of data sent and stored online increasing at an exponential rate, our current infrastructure is struggling to keep up with demand. We need to add capacity and expand the reach of broadband services countrywide if we are going to be able to compete for FDI or to be considered as a leading knowledge economy.

By John Kennedy

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