Ireland is keeping its edge as the top location for digital giants to invest. But we can’t rest on our laurels, warns IDA Ireland CEO Barry O’Leary.
Last week, VMware, a global player in virtualisation and cloud infrastructure, announced the opening of a major new VMware office in Ballincollig, Co Cork, adding 250 new jobs to the 550 existing jobs across two sites there. And this week, Indian IT services company HCL Technologies revealed plans to create 80 new jobs in Dublin by setting up a new software business in the capital.
The announcements, bittersweet in light of Talk Talk’s decision to close its Waterford call centre operation in recent weeks, are nevertheless ample proof of the brand reputation Ireland is developing as a safe place for major internet companies to locate mission-critical operations.
Multinationals in Ireland
Emphasising the importance of foreign direct investment (FDI), IDA Ireland chief executive Barry O’Leary explains: “The multinationals account for over 75pc of all exports out of Ireland representing about €110bn a year, and they directly and indirectly employ about 24,000 people.
“Particularly in the technology sector, we’ve seen great growth, and we now have a very strong established base of many of the leading technology companies, with the top eight US ones here, for instance,” he continues.
“But also what we are noticing is that the second tier and emerging companies are coming in great numbers in recent years,” he says.
“When you think of the big brands – Google, Intel, Facebook, Microsoft – we now have those world leaders here, and that has a spin-off effect when you see the number of Irish start-ups in this space. I think we can fairly say that we have a really strong technology cluster in Ireland.”
Ireland’s place on the global digital map is strong, says O’Leary.
“The big brand names – eBay, PayPal, Yahoo!, Zynga, Google, Facebook – they’re all here. People are quite aware that these firms have a very strong presence here. That has helped establish Ireland’s brand in that space.
“Then, more particularly, you have these new companies coming in now, and what you’re finding is, because of technology, they’re going global much quicker than, say, traditional businesses would.”
The successes are all interrelated to some extent.
“When Zynga was making its recent announcement about its European operation centre in Ireland they made one fairly strong comment,” says O’Leary. “They’re a partner globally with Facebook, and when they saw that Facebook was in Ireland, it gave us an immediate advantage. It comes back to the building of a true technology cluster. We’re doing that and I think it’s getting international recognition.”
Irish advantages for multinationals
O’Leary points to Ireland’s other advantages when it comes to attracting these companies.
“First of all there’s the overall business-friendly environment. This has been particularly the case for international companies here,” he says. “Of course they do look at a lot of things when they are considering a location, they often have a list of 10 or 12 items they need to be satisfied on.
“Some of the top ones would clearly be the talent pool, the track record, which is proven here, our corporate tax rate, of course, and the technology capability in Ireland.
“Also, a lot of people in this business tend to move around the globe. Particularly, from a European perspective, you’ll find that, if someone is living in Italy or Finland and they want to work with a Google or a Zynga, well they’ll go to work where they have substantial operations. Ireland is a very friendly place, and attractive to the 22–38 age bracket. It’s a combination of those things that make us attractive.”
Ireland up for the competition
Not that Ireland doesn’t face challenges.
“Many, many other countries want to get into this space in a big way so I think the competition is going to increase all the time, there’s no doubt about that,” says O’Leary, although he remains upbeat about Ireland’s ability to compete.
“Despite increasing competition we’re still maintaining that leadership position in getting a number of the newer companies. Just look at the recent decision by (online retailer) Gilt to come to Ireland. It is a great recognition of our continuing success and competitiveness in this area.”
However, we cannot rest on our laurels, as O’Leary points out.
“You always have to be enhancing Ireland’s value proposition, and that applies to all the business sectors we’re in. How do you make sure that you’re doing enough to keep a competitive edge? That might be new initiatives in terms of education, or it might be more flexible arrangements in targeting people around the globe to come to work in Ireland, having a much more Visa-friendly environment – and to be fair we have improved in that area. Constant enhancement of every part of the value chain is going to be important.”
Skilled talent pool is key
Education will continue to be crucial, says O’Leary, but Ireland also needs to look at attracting in the people with the vital skills.
“Education and skills are very much key areas because it’s the talent pool at the end of the day that drives this, and of course there’s lots to be done within the wide education system in Ireland.
“But bearing in mind you’re not going to switch that on overnight, I think there’s a strong recognition, particularly this year, that there are opportunities out there if we have the right skills mix.
“While we’re making sure that we’re increasing the number of people coming out with those skills, we have to ensure we’re getting plenty of people in. The important thing for the economy is to have a mix of locally produced people and people coming in. And when you bring people in they’re renting apartments, they’re spending money in the economy, so there’s a great economic impact.”
‘Internet Capital of Europe’ is a phrase that has been touted in recent years in relation to Ireland. Can we justifiably claim that title, however?
“It’s like drinking Coca-Cola or Pepsi Cola,” says O’Leary. “People have brand affinity and brand recognition and, from that point of view, we have all of the big brands here,” says O’Leary. “But it is not just in that defined new wave. A lot of the established players like IBM, Dell, HP, EMC, Microsoft, VMware, they’re all doing a lot of things in Ireland, many related to the internet.
“Then we have the more specialised players like Salesforce.com, Marketo, Mycroft, and in internet security you have McAfee’s recent announcement. That’s why I think we can justifiably say that we are the internet capital of Europe. You’re not just talking about the suite of newer brands, it’s the totality of the technology industry.”
Ireland’s tech leaders will discuss Ireland’s digital future at The Digital Ireland Forum on 30 September 2011.