The road ahead: Paul Rellis, general manager, Microsoft Ireland

30 Dec 2008

The world’s largest software firm Microsoft is one of the jewels in Ireland’s tech crown. Paul Rellis is general manager of Microsoft’s Irish operations.

Q. In 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. As the global economic crisis deepens, there are two potential options facing Ireland: cut costs and manage as best we can, or focus on addressing the issues facing our economy by taking a more innovative approach that will help to increase national competitiveness and help the country return to a period of economic growth.

It is my view that we must make the right policy decisions, the right investments and put in place the correct infrastructure if we are to have the right foundations for future economic growth.

There are no easy answers or solutions to the current challenges facing the economy.  However, addressing issues such as productivity and competitiveness, in both the private and public sectors, will put us in a better position to address our long-term capability to compete internationally.

I believe innovation is central to that discussion. There’s a lot of debate around finite natural resources, yet innovation is a virtually unlimited resource that can deliver a more efficient public and private sector, while addressing many of the social issues facing Ireland.

There is a need to focus on how we can encourage innovation within the private sector, through both fiscal and policy measures. We also need to drive and reward innovation in the public sector through the introduction of new technologies and new management processes, and we also need to ensure that we are equipping our children in schools with the right set of skills for use in the economy over the next two or three decades.

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. I completely agree. Irish start-up companies have the potential to be the engine of future growth for the Irish economy. It is critical that they are given the support that they need to grow and thrive in this challenging environment.  

Microsoft works very closely with the local software industry to help support companies in the sector grow and develop. From what we are seeing, there is a huge amount of great R&D underway. The critical piece is ensuring that the companies are given access to the funds, technologies and knowledge they need to support their commercialisation and business development objectives.

We  recently launched a new programme – Bizspark – which has been developed to address these very issues, helping companies to overcome these barriers. Through BizSpark, they get access to technology, the venture capital community and preferential rates with suppliers from hardware providers and internet services providers.

The issues we are hearing from this community is that while there is seed funding available through Enterprise Ireland, there is limited information about how to access it. They also say they would benefit more from better broadband infrastructure – particularly outside the main urban centres. The first of these issues can be addressed quite quickly through the development of an internet portal, but the second one is more challenging, and I think needs the focus of Government.

In addition to looking at how we can encourage more good news stories from local companies, it is critical that Ireland continues to attract the right kind of foreign direct investment (FDI). If we are to be a true innovation economy, we need to attract as many science, technology and innovation roles as possible, and continue to incentivise the companies that are already here to do more primary R&D in Ireland. This sends the right message to the global economy, and reflects the kinds of roles that are now best suited to our economy.

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

A. Ireland continues to have a very strong international reputation. That fact that many of the world’s leading companies have European bases here means there is a foundation in place that gives new investors comfort.

The competition for FDI is going to become increasingly intense. Our educated workforce, our geographic location and our corporation tax rate have served us well in terms of our ability to compete globally. However, the world is changing very quickly, and we need to ensure we are ahead of the curve. It is critical we make the investments in education to ensure our students and graduates have the skills that are relevant for the kind of economy that Ireland needs to become. 

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. It is critical we look at how we are educating our children and what skills we are equipping them with. It is not yet clear what kind of roles these children will have in Ireland’s future economy, but it is clear they are likely to be very different to the kinds of skills and qualifications I left school with.

Technology has a key role to play in ensuring that our students learn in a new and different way. Learning IT skills is not the issue, the opportunity is to teach our children everything through the use of IT – not just curriculum-based information, but also skills such as lateral thinking and logic.

Right now, our schools do not have the equipment necessary to integrate IT into the classroom. I think this is fundamental to Ireland’s future economic success. Having a pencil or pen has always been fundamental for each child. Now, having some kind of technology device – a laptop, a netbook or a PC – is equally as important. It is really important that the IT industry works closely with Government to look at how we can develop an innovation solution to addressing this challenge, particularly at a time when resources are scarce.

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. There is an opportunity for Ireland to emerge stronger from the downturn, but that will depend on how committed we are to innovation and to making the right investments.

Our infrastructure has improved immensely in recent years. The improvements in our national roads network, along with new urban rail services such as the Luas, have improved access and the quality of life of many people. However, we can’t stand still. There is a need for more to be done – both in terms of the capital infrastructure and technical infrastructure.

While there is a significant impact on budgets we need to ensure that the country is viewed as a modern economy with the right level of infrastructure. To this end, I think that projects such as the Metro are important, as is the continued extension of the Luas. By continuing to invest in certain strategic projects, not only will we ensure that Ireland is better positioned to perform well when the economy recovers, but there is the added benefit of helping to keep some of those in the construction sector active at a time when the industry is seriously challenged.

Of course, it’s not just about infrastructure alone.  By focusing on innovation in the public and private sector, re-thinking education and migrating our economy to provide higher-value products and services, we can move the discussion from cost to value. The future growth of our economy depends on it. Innovation is at the heart of that transition.

By John Kennedy

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