Irish software firms employ 16,000 people and are responsible for annual revenues of €1.4bn. Shane Dempsey (pictured) is the new director of the Irish Software Association.
Is it fair to say that Irish software companies are under-performing and need to achieve a lot more on the international market?
It’s fair to say they are not achieving enough internationally. We have over 700 very ambitious and successful companies in Ireland. But we feel that so much of their attention and energy is expended on simply surviving.
They don’t seem to have enough time to take the international view needed to up-skill, market and win more business overseas.
Why has this situation arisen?
There are a number of factors ranging from infrastructural supports to winning local public sector business. But the real problem is that by trying to survive on a day-to-day basis these companies aren’t achieving their real potential.
The best way to sum it up is to look at Maslow’s hierarchy of needs. The industry needs to self-actualise, achieve its real potential, but it’s too busy trying to survive on a hand-to-mouth basis.
It can’t realise its potential until other necessities, ensuring survival, are satisfied.
What needs to be done to help local software firms grow and export more?
Irish software companies are the infrastructure of the knowledge economy but they don’t get enough support and investment at home.
Ireland needs to consider its local software industry as an infrastructural base. Software is now the universal language of business and can be a huge enabler for other sectors in the economy to grow.
People who work in software can work in financial services and medical device companies. They have transferable skills.
China and India are putting 0.2pc of their GDP into R&D. They’re not happy to just compete with us for the low-paid jobs, they want the knowledge jobs as well. Who can blame them?
If there were actions that need to be taken immediately, what are they?
Well-funded R&D would be a key part of the self-actualisation process. What has made Silicon Valley successful is the presence of rich people and smart people.
Software companies by their nature are run by serial entrepreneurs. They are naturally innovative and flexible and can do R&D quite easily but it’s not on their survival radars.
Science Foundation Ireland is investing heavily in building up an academic structure for research. But what’s missing is funding and support to allow SMEs to come in and commercialise that research by applying their market research. This would add value and jobs.
Is the software industry still facing a funding crisis?
There is a considerable gap beginning to build between early-stage and mid-stage venture funding. Firms can raise up to €2m under the Business Expansion Scheme (BES) and there is a lot more seed capital available than before. But if you need to raise a further €1m, the money isn’t there.
This is causing big problems for good companies. Many entrepreneurs are being stopped in their tracks. These individuals are key to building up the software infrastructure the nation needs.
By John Kennedy