IT investment
Ireland needs more venture capitalists, more partnerships between business and academia and more graduates with high-level IT skills in order to increase its inward IT investment.
In October, Ireland was ranked number one globally for jobs created by inward investment in IBM’s 2010 global location trends report, and Dublin moved up to 15th place in the list of cities by number of investment projects.
On the other hand, an ICT skills shortage has been identified (see page 59) and leading companies are looking for staff with high-end J2ME IT skills and qualifications in C++ or Microsoft.net programming. IT companies based in Ireland have to pay over and above the going rate in other countries for these particular skills.
The Forfás annual employment survey 2009 shows that there are 987 foreign companies operating in Ireland (471 American, 106 British and 100 German). IBEC says there are currently 960 foreign companies with expertise in IT hardware and software, pharmaceuticals and medical devices. These companies employ 138,000 workers in “cutting edge technological research.”
Ireland’s main strengths are in medical devices, of which €6.9 billion’s worth are exported each year.
Since the beginning of the year, the IDA has issued 76 press releases announcing new IT or research and development initiatives, new jobs being created in existing companies, the opening of new headquarters in Ireland, and the promise from companies to set up and create jobs in the next five years.
However, the feeling in the industry is that the country needs more venture capitalists to grow economic output in new technology.
The Irish Technology Leadership Group (ITLG) has said that there is a good effort being made in the country to develop links between entrepreneurs and Silicon Valley. In addition, partnerships between business and university research in the area of IT and research and development are growing (and are a priority for the Research, Innovation and Science Commissioner, see page 76).
Richard Moran, a venture capitalist (VC) in Silicon Valley and member of ITLG reports that what is needed is a balance of VC firms and money in Ireland as well as a developed relationship base with the VCs in Silicon Valley which will facilitate syndicated deals.
“There are big and bright ideas in Ireland but the lack of capital to fund the ideas hurts the entire sector and the economy. Anecdotal evidence suggests that there are plenty of technology firms in Ireland with growth potential. But if the banks are not lending and will not be for the foreseeable future, then how will these firms get access to the necessary funding? The creation of a venture capital infrastructure in Ireland is a big part of the solution to the dilemma,” Moran wrote in the ITLG autumn newsletter.
Enterprise Minister Batt O’Keeffe and Finance Minister Brian Lenihan have both defended the country’s prized 12.5 per cent corporation tax in light of reports that Ireland will need to seek a bailout from the EU or the IMF and the tax would be a form of re-payment.
“On the subject of our rate of corporate tax, coverage in international media has speculated that this rate of 12.5 per cent corporate tax may experience an adjustment. I would like to state categorically that a change in Ireland’s rate of corporate tax is simply not on the agenda,” O’Keeffe said.
He added: “Foreign and direct investment is back at investment levels not seen since 2005/2006.”
The Minister insisted that “Ireland’s four Ts: track record, talent, technology and tax regime, and its reputation for excellence in all these areas” continue to attract a strong flow of companies to the country.
