Ireland’s assets make it Internet Capital of Europe

24 Sep 2011

IDA Ireland CEO Barry O'Leary

One of the shining lights of the tech sector in Ireland in recent years has been our ongoing ability to attract the biggest names in the digital sphere. The top eight US technology companies have a presence here and, according to IDA Ireland CEO Barry O’Leary, we’re now attracting the emerging players, too.

Despite negative press coverage in recent years, Ireland continues to attract some of the biggest companies in the tech space to set up here, thanks largely to the work of our inward investment agency, IDA Ireland. Just as we go to press, VMware, a global player in virtualisation and cloud infrastructure, has 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.

Foreign direct investment (FDI) is a very large part of the Irish economy overall, of course. “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,” says IDA Ireland CEO Barry O’Leary. “But 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.”

“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, continues O’Leary. “As I say, the big brand names, eBay, PayPal, Yahoo, Zynga, Google, Facebook, they’re all here, and people know that, they are quite aware that they 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 is getting international recognition.”

Ireland’s credentials

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, of course our corporate tax rate, 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’ve got to work where they have substantial operations. And Ireland is a very friendly place, and very attractive to the 22–38 age bracket. It’s a combination of those things that make us attractive.”

Not that we don’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 our 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, insists O’Leary. “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.”

Education will continue to be crucial, he says, 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 wider 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, but can we justifiably claim that title?

“It’s like drinking Coca-Cola or Pepsi,” says O’Leary. “People have brand affinity and brand recognition and, from that point of view, we have all of the big brands here. 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.”