Is it time to get out of town?


26 Jun 2003

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BRIAN SKELLY met up with three organisations that have seen the wisdom in relocating to the regions. Here, they explain their reasons and give a progress report on life in the provinces

Name: Environmental Protection Agency
Location: near Wexford town

Ten years old next month, the Irish Environmental Protection Agency (EPA) was one of the first such organisations to be established in Europe. As the title suggests, its role is to protect the environment and do so in a sustainable way that also leads to balanced development.

Few public or private organisations are as geographically dispersed as the EPA. Headquartered in Wexford, it has five regional offices (Castlebar, Cork, Dublin, Kilkenny and Monaghan) and four sub-offices (Athlone, Letterkenny, Limerick and Mallow). It employs 240 people, roughly half of them based in the head office in the appropriately green surroundings of the Johnstown Castle Estate near Wexford town, a site it shares with over 400 employees of the Department of Agriculture and Forestry.

The decision to locate the agency outside of the capital cannot have been taken lightly. The environment is a highly-regulated, high-profile area and many of the relevant organisations, from environmental groups to waste contractors and, of course, the Department of the Environment itself, are based in Dublin.

Deputy director general of the EPA, Declan Burns, who was centrally involved in establishing the agency in Wexford, remarks that while that EPA employees inevitably spend a lot of travelling to and from Dublin for meetings, this is offset by the short commuting time enjoyed by the staff who do not need to travel to the capital regularly and by the more relaxed way of life that tends to go hand in hand with a rural location.

As well as quality-of-life issues, Carlow-born Burns also emphasises the practical advantages that a location such as Wexford has to offer. The first relates to recruitment. Although many of its employees have specialist skills covering a range of science and engineering disciplines, the EPA actually finds it relatively easy to recruit staff in Wexford and other regional locations.

“It’s very difficult to get young people who are not living in Dublin to move to Dublin because of the cost of housing. We don’t have any problems recruiting for the regions,” Burns notes. In fact, a sizeable number of head office staff is either from Dublin or has spent time working in the capital and is moving back out. The fact that the EPA has several rural offices, with considerable mobility between them, also appeals to employees who see this as a “route home”. “We try to facilitate people who want to get back to their roots,” says Burns.

Nowadays, when a company is choosing a location, one of the key issues is connectivity: the cost and speed of the data communications between offices and third-party companies.

When the EPA was founded, the internet was in its infancy, so the issue of broadband never entered the equation. Now it is a factor that Burns is increasingly conscious of. “We’re highly dependant on IT to enable our work processes. We use a high-speed Frame Relay network to connect up all our offices and we feel it’s adequate to meet the data transmission needs between our various sites. Unfortunately, we are too far out of town to hook into the new fibre loop that is planned for Wexford. Presumably, it would be cheaper as we are heavy users of data,” he says.

The EPA also sees technology as a way to reduce some of the travelling done by many staff members. “We do a certain amount of teleconferencing and we have also investigated videoconferencing, but have decided not to implement it just at the moment. One of the obstacles we face is that many of the meetings are with outside organisations and so videoconferencing would not be an option,” says Burns.

Likewise, teleworking or e-working has been established, but only to a limited degree. Burns identifies a culture of “informal teleworking” in the EPA, whereby staff will go home to work on a specific project, but in general they prefer to work in the office where they can engage more easily with colleagues both socially and professionally. “We tried to set up a formal teleworking scheme last year but the demand wasn’t great,” he comments. “A lot of people are not too happy spending most of their time at home. I think teleworking will come but the demand just isn’t there at the moment.”

As a regionally-spread agency with a highly-skilled workforce, the EPA is a prime example of what the Government’s vaunted National Spatial Strategy is looking to achieve. Burns feels that, while there are some downsides, decentralisation has worked for the EPA. “There is much more travel time involved in official hours if you’re relocated and there are real costs involved. But the boost to the Wexford economy here from having even our 115 highly-skilled reasonably well-paid people is pretty significant — the equivalent of have a sizeable factory here — so, from a national perspective the strategy certainly makes good sense,” he says.

Name: Autolaunch
Location: Bagenalstown, Co Carlow

Ed and Michael Hickey were part of the ‘brain drain’ that left Ireland during the recession of the late Eighties. After the brothers lost their jobs when German toolmaking giant Lapple scaled back its operation in Carlow in 1988, they emigrated to Canada in search of work.

As experienced toolmakers, they were soon taken on by Magna, a leading automotive toolmaking firm that has contracts with some of the biggest car companies in the world. Ed stayed in Toronto while Michael was transferred to a Magna subsidiary in North Carolina in the US. Like many ex-pats, the brothers eventually decided it was time to return to Ireland.

The Hickeys’ dream was to establish their own automotive toolmaking firm in their native Carlow. Later this year, that dream will come true. Having bought five acres of land in Bagenalstown, 10 minutes’ drive from the county capital, and constructed a toolmaking plant on this site, they expect to be in production within six to nine months. Their company, Autolaunch, has now begun hiring the first of 50 employees.

Autolaunch will neither design car components nor manufacture them. It will do a crucial bit in between: make the tools that allow a manufacturer to churn out millions of doors, boots, bonnets, bumpers and various other car parts to order on behalf of a big car company.

When deciding where to locate Autolaunch, Ed, now managing director of the new firm, says he had a number of priorities in mind. The first was that it would have good transport connections and be accessible both to Dublin Airport and Waterford for shipping. Bagenalstown is positioned just a mile from the proposed bypass on the Dublin to Waterford road and so met this criterion perfectly.

Affordable land was another key factor. By locating their business a few miles from Carlow, Ed believes they saved 70pc on what they would have paid for land in the town itself. They have bought 5.6 acres of land from Carlow County Council with an option to buy a further three within five years. From the points of view of access and affordability, Bagenalstown has met the brief, he observes: “It was just a kind of perfect location.”

A third requirement was for substantial amounts of electricity to run the plant. “I had heard horror stories about dealing with the utility companies, but we found that as long as you weren’t looking to set up a business very quickly you wouldn’t have a problem. We experienced no hold-ups with the ESB,” he recalls.

Telecommunications were the fourth element. Apart from the usual voice services, Autolaunch would need good data connections in order to trade information with the design departments of the big car companies in the US. The company has now installed four ISDN lines, which Ed believes will provide sufficient capacity into the foreseeable future.

The final piece of the jigsaw will be getting the right people. Toolmaking these days is as much about software as hardware. A majority of carmakers use a software application called Catia to communicate with their sub-contractors. Their design departments transmit data files to the contractor, which contains all the technical information needed to produce a given component. The toolmaker will feed the information into a stamping machine that then produces a mould of the tool needed to make each part.

To handle the design side of the operation, Ed expects to hire about 15 computer-aided design professionals and programmers. While IT professionals would not be hard to come by thanks to the proximity of Carlow IT, Autolaunch is looking for specific toolmaking design experience. “They’re not going to be easy to find. They’re going to have to be trained, whether they’re a designer hired right from college or a toolmaker with the sort of experience we’re looking for,” he says.

On the face of it, starting up a business in rural Ireland is riskier than basing it in Dublin or another major city: the transport infrastructure is likely to be worse, power and phones lines harder to organise and specialist skills more difficult to secure. But the success of the Hickey brothers to date and the good prospects for their new enterprise proves that rural Ireland is well and truly open for business.

Name: Iontas
Location: Moville, Co Donegal

The Inishowen Peninsula near Letterkenny is better known for its rich fishing grounds than high technology, but this is beginning to change. Moville-based Iontas is an example of a ‘new economy’ company that has moved into the area in recent years.

Established in 2000 and employing 16 people, Iontas develops performance management software for big-name firms such as Lucent, Conduit and Esat BT. Technology from Iontas enables these firms to collect information on how users such as contact centre agents interact with software applications. Companies such as Lucent use Iontas’ software as a building block for products they sell on to corporate customers.

Remotest Donegal may be considered a far from ideal location for a software company that is highly dependent on technology, but Iontas founder and chief technology officer, Martin McCreesh, has found connectivity to be both readily available and reliable.

“We use dial-up ISDN and it works fine. The only issue is that it is expensive as a means of internet access because we leave it always on. We have an office in the US and it needs to connect through different time zones so the connection needs to be always open. We are spending the guts of €500 or €550 a month on ISDN. We have investigated getting a leased line, but this is not cost effective either,” he says.

McCreesh notes that if digital subscriber line (DSL) was available in Moville, the monthly cost would come down to about €90 a month. “But that’s an issue not just for Donegal but for anyone who’s not near a DSL access point.”

Iontas was also planning to pilot satellite technology as part of a government-funded project led by a Castlebar company, Cedar Group, but unfortunately this firm collapsed and the project “died a death”, he says dramatically.

McCreesh is hopeful that the FRIACO (flat-rate internet access call origination) services due to be launched tomorrow will bring down his phone bill, but expresses concern that there may be a monthly limit on the amount of time users can spend online. Esat BT, the only provider so far to give details of its intentions in this area, is expected to impose an upper usage limit of between 180 and 200 hours a month on users of its proposed flat-rate offering, IOL Anytime.

“My understanding was that there was going to be no limit on the time you could spend online. I would be disappointed if this turned out not to be the case. It would mean that, at least if we didn’t have DSL, we’d still have equivalent pricing even though it was on ISDN technology. I think that would be only fair,” McCreesh says.

Given the heat surrounding the broadband debate and the so-called digital divide between urban and rural areas, it would be easy to believe that the speed and cost of communications was the only important issue facing rurally-based companies. McCreesh makes it clear that this is not the case and although connectivity costs are undoubtedly higher in Donegal than in big cities such as Dublin, he points out that other costs are significantly lower, from property and salaries to the general cost of living. In addition, finding staff with the right skills has rarely been a problem for Iontas even at the height of the tech boom three years ago; and staff turnover is low, perhaps due to the fewer alternative employment opportunities.

The main disadvantage of being located in Donegal and working in the technology industry is that most of the action still happens in the capital. As a result, McCreesh and one or two senior colleagues are required to travel to Dublin on a regular basis usually for meetings with customers or Iontas’ venture capital partner. However, McCreesh is rarely required to travel to the US anymore not only because there is a sales office in Austin, Texas, but because internet technology has made it easier to communicate with customers and partners.

“A couple of years ago, customers would want to have face-to-face meetings but now with everyone watching their budgets, we use ‘Web Ex’ — essentially online collaboration tools — to hold meetings with customers and demo our technology,” he explains.

Commenting on the Government’s decentralisation programme, the National Spatial Strategy, McCreesh believes the Government needs to be canny about how it tackles this. “The problem with the policy is that there’s no point in moving satellite offices out to the regions because they are the first thing to get cut during a downturn. I think what they’ve got to do is encourage start-ups in the regions and support them financially or encourage whole moves to the region to reduce costs.

“However, trying to get a company to move to the regions is going to be difficult. What you’ve got to do is try to entice those companies out to the regions by offering packages when they are at an early stage of development, perhaps even before they start trading,” he adds.

As a company developing technology and in turn dependent on it, Iontas has potentially much to lose if broadband is not rolled out to the regions. But McCreesh is careful not to hype the issue and instead seems reasonably satisfied with the connectivity available. “I’m relatively happy with the infrastructure that’s provided; it’s the cost that’s the issue. I think that DSL will come in time, certainly to Letterkenny if not ourselves, but in general, there’s enough there to do our business the way we want to do it.”

By Brian Skelly