A network of market-focused Commercial Centres of Excellence offering high quality market research and commercial advice to firms looking to compete in the global marketplace should be established, the Irish Software Association (ISA) has proposed.
The recommendation was made by John Shiel, chairperson of the ISA Competitiveness Sub-Committee this morning. He was speaking at the first ISA Open Conference Debate Series which examined how software companies based in Ireland would meet the dual challenges of competition from lower-cost economies and a rapidly changing software supply chain.
Speaking to siliconrepublic.com, Shiel said the services provided by the centres would be similar to those offered by top-notch market research houses or stock brokerages except they would be exclusively focused on niche markets of relevance to the Irish technology sector. He envisaged that 10 to 15 such centres would be needed. They would be located in Ireland in the first instance but possibly in other countries later on where a need was identified.
“We feel Ireland Inc needs to take very focussed approach to certain niche markets where we have competitive advantage. We also feel that it’s beyond the capability of these companies to do the research required to dominate international markets,” said Shiel.
On the question of funding, he doubted whether private financing or even public-private partnership funding would be viable, given the nature and scale of the investment required. He suggested the Government should look at funding the centres, much in the same way as it does technical and research infrastructure.
“Although €600m is being spent on SFI [Science Foundation Ireland] to provide technical infrastructure there’s no money being spent on the commercial side. Nothing is ever just a technical proposition; the commercial side needs just as much attention. Ultimately you can only sell something if you identify a need. Give any sales person a good product and point them at a market need and they’ve got a good chance of success,” he said.
The Centres of Excellence were primarily needed, he argued, to give Irish technology firms the scale necessary to break through the ‘glass ceiling’ – the invisible barrier to growth that many firms hit once their turnover reaches certain levels such as €5m or €10m. “We’ve got to up turnover – create scale,” he explained. The way to do this would be to identify “global niches” in which Ireland could compete internationally – it could be a sectoral niche such as multimedia messaging software or a value chain niche, where companies specialise in developing and marketing new technology and leave its distribution to others.
Where the centres would differ from other agencies such as Enterprise Ireland, which already perform valuable market surveys on behalf of Irish companies, is that each would be focused on a niche market and headed up by someone with a strong commercial pedigree in that area. “No disrespect to Enterprise Ireland or IDA people but not a lot of them have sold commercially,” observed Shiel.
He further argued that to be successful the centres should be aimed at all Irish-based tech firms, both international and indigenous. In the e-learning area, for example, focusing exclusively on small domestic companies would exclude big names like SkillSoft, NetG, Thirdforce and Intuition. Firms like these are just as much in need of good market intelligence as young Irish firms, he pointed out, and they would have the resources to become industry partners to the centres in the same way that the MediaLab Europe has industry partners.
Shiel added that a submission on the idea had been made to the Enterprise Strategy Group [ESG], the think-tank appointed by the Tanaiste Mary Harney TD last year and he hoped that the ESG “would see some merit in it”.
By Brian Skelly