“I think the economy in Ireland is going to be a bit rougher next year than it was this year. You hear projections of between one and three percent and I wonder whether it’s going to be closer to one than three,” says Danuta Gray (pictured), CEO of O2 Ireland.
The battered and bruised telecoms industry has borne the brunt of the tech downturn so Gray can be forgiven for being a little pessimistic about the prospects for the coming year.
“At a world level in our sector,” she continues, “I don’t yet see huge signs of a pick-up but nor do I see signs of it worsening. Next year, at least in the IT sector, unless we see companies starting to reinvest in infrastructure, I think it’s going to be a bump-along-the-bottom year.”
Like someone who’s had too much to drink and is regretting the excesses of the night before, the industry is still in hangover mode, paying bitterly for the excesses of the late-Nineties when ‘spend, spend, spend’ was the order of the day. Now it’s ‘save, save, save’ and when companies do spend they spend wisely and thoughtfully.
“Investment now is very much driven by the payback in the short to medium term. People are unwilling to invest in IT without a good business case behind it,” says Gray.
As head of a business serving the consumer as well the corporate market, she looks to consumer confidence as a harbinger of better times ahead. At the moment, it’s an indicator that could swing either way. “It’ll take a while for people to judge how the recent budget is going to affect them. There’s nothing dramatic happening and I think people are just going to take it steady,” she reckons.
For Ireland, in technology terms, 2003 will be a transition year between 2002 (GPRS and MMS) and 2004 (3G). This is not necessarily a bad thing so long as the technology seeds sown this year produce a rich harvest next year. So, are camera phones doing the business?
“Too early to say,” Gray replies. “Once we get Christmas out of the way we’ll have a good idea of how many camera phones are being sold and what the usage levels are like.”
With Japanese mobile operator J-Phone due to launch 3G services in Japan tomorrow (20 December) and several European operators introducing services next year, Gray will be eagerly watching how the applications and services play with users. “The real question is how quickly people adapt to services like media messaging and Java games. That will give us an indication of what the demand for 3G will be like,” she adds.
In terms of signposting a way forward for the Irish tech sector, Gray thinks US investment, clustering and skills will all have a bearing on how the next few years pan out. As an Englishwoman relatively new to Ireland, Gray offers an outsider’s view of Ireland’s particular strengths. There are many, she feels, but one has struck her most forcibly. “I have been genuinely impressed with the level of technical literacy here and for a country with a relatively small population it’s a tremendous asset that needs to continue to be sold to the outside world,” she observes.
She predicts that US investment will continue to be important, despite Ireland’s eroding competitiveness against, say, the countries of central and eastern Europe. An English-speaking country with an attractively low rate of corporation tax, Ireland is seen by many an American multinational as the ideal gateway to Europe and she doesn’t see that perception changing in the foreseeable future.
She also expects to see more of a trend towards technology clusters. In other countries, clustering has occurred in certain geographical regions – Cambridge in the UK, Silicon Valley in the US for example – but Ireland is probably small enough to be a cluster of itself, she feels, so long as it develops the communications infrastructure to share knowledge between tech companies in various parts of the country. Unsurprisingly, she firmly believes that wireless technologies such as 3G and wireless local area networks (WLANs) will be as important as wireline networks in making this happen.
Outlook for Irish tech sector: poor to good