Ireland’s technology sector has become the envy of the world thanks to its potent blend of global leaders and highly innovative indigenous firms. The industry now employs 210,000 people and accounts for 13 per cent of Ireland’s GDP.
Nine of the world's top 10 software firms, nine of the top 10 US technology firms, and all of the top 10 "born on the Internet" companies have chosen to locate in Ireland.
But continued success is by no means guaranteed, according to Jonathan Hyland, who chairs Technology Ireland, the Ibec association which represents the industry in Ireland.
"Technology Ireland was formed from the merger of ICT Ireland and the Irish Software Association, " he explains. "There was significant commonality and overlap in terms of the challenges faced by the member companies in the two organisations. And it's not just multinationals. As chair of Technology Ireland, I get to work with companies across all parts of the spectrum. We have a thriving indigenous sector and a great ecosystem that encourages innovation and collaboration and allows all parts of the industry to thrive."
The organisation has produced a significant policy document, Future Needs, Future Thinking 2020, which identifies the four key pillars which will shape the future success of the Irish technology sector.
The housing shortage has become a real constraint. It's very hard to attract staff when rents are so high
"Everything we do has to be about maintaining and strengthening our position as a global digital hub," says Hyland. "Ireland has to become the Silicon Valley of Europe. The four pillars of success required to achieve this are education and skills, competitiveness and constraints, supporting digitalisation, and taxation and investment supports."
Talent
The continuing demand for talent is the first issue. “We have a highly skilled workforce, but the talent required in future will come from a variety of sources: third level, continuing professional development, apprenticeships, and some will come in from abroad. The education system cannot provide the numbers needed, and we must have efficient mechanisms to allow people to come in sufficient numbers. Things like the visa system must be made to work better.”
Competitiveness is affected by a variety of issues including the need for high-quality electricity and water infrastructure. Housing has now been added to the list. “This is a huge headache,” he says. “The housing shortage has become a real constraint. It’s very hard to attract staff when rents are so high. We hear stories of people getting visas and leaving because they couldn’t get accommodation. This affects all sectors as well as society as a whole, and the Government needs to take action to address it.”
Another area to address is data protection. “Ireland has to play a leading role in the debate on that,” says Hyland. “We are in a unique position being home to the European headquarters of so many digital companies. We need solid evidence-based regulations which safeguard privacy without strangling innovation.”
On taxation, Hyland says that it is more than just about the 12.5 per cent rate. “We have to ensure that appropriate incentives are in place to continue to attract FDI companies to invest here. We need to maintain the corporation tax rate and the R&D tax credit, which provides relief to companies on the amount of R&D investment they make. The Government must also continue to take a firm stance on any proposals for a unilateral EU digital tax.”
The digital economy is simply too big, too important and intrinsically a crucial part of our wider economy
There are also opportunities in areas such as cybersecurity and AI for Ireland to capitalise on existing strengths. “These burgeoning areas are still in their infancy and it’s an opportune moment to take a leadership position.”
Digital affairs
Among the most important actions which could be taken to ensure the continued health and success of the sector would be the appointment of a minister of state dedicated to digital affairs at the Department of the Taoiseach, he contends.
“Such a minister would have responsibility for co-ordinating relevant government policies and programmes across departments, developing our digital infrastructure and public services, bridging digital divides, engaging stakeholders, and securing Ireland’s place as a world-leading digital economy,” he explains.
“The digital economy is simply too big, too important and intrinsically a crucial part of our wider economy. A dedicated ministry is therefore required to offer the high-level political commitment to driving a whole-of-government response.”
He believes the whole economy would benefit from such a move. “Digitalisation is not just about the tech sector anymore,” he says. “All companies are becoming digitalised and becoming digital organisations to some extent. The digital economy transcends all aspects of Irish and international life. It is vital that it is not treated in a piecemeal way and that a strong focus is maintained, ensuring that Ireland retains its position as a digital hub.”