There is often a cautious note sung about the strength of the Irish tech sector. Many are understandably wary in the wake of the recession and feel the sector’s success is too dependent on an enticing corporate tax rate.
Low tax is certainly a perk but international technology firms need substance to do more than putting a brass plate on the side of a building. Facebook, Google, Cisco, Intel and Microsoft are just some of the huge international technology businesses that have filled office blocks around the country with thousands of high-skilled workers.
Their presence here gives indigenous startups opportunities, resources and experience that they simply would not have without them. Business connections with educational bodies give Irish graduates access to knowledge and networks that students in many other countries could only dream of.
With rumours of European tax harmonisation circulating it seems likely that the substance of the Irish tech sector will be tested before long. However, there are plenty of signs that the digital business environment in Ireland is strong enough to stand on its own even on an international playing field.
Here are just 10 signs that the Irish tech boom is here to stay.
1. Data Centres Galore
This year will see Apple build two enormous data centres in Europe, each costing almost 1 billion Euro. One will be built in Viborg, Denmark, the other will be built near Athenry in Co. Galway. Ireland already houses data centres for companies including Google, Microsoft and Amazon and companies continue to choose Ireland for their European data centres. Being the only English speaking nation in the Eurozone is one draw but a growing renewable energy infrastructure is also important to environmentally conscious tech firms.
2. Venture Capital Investment is Growing
2014 saw an enormous leap in venture capital investment in the country with a 41% increase in funding for start-ups. Much of this capital came directly from Silicon Valley demonstrating the confidence specialist investors have in the Irish tech sector. This increased funding may also explain the next sign:
3. Most Venture Capital Deals per Capita
Forbes recently revealed that Ireland has the highest rate of venture capital deals in Europe. Again, a large part of this investment is in tech companies developed in the dynamic environment created by large international tech firms. It is also aided by healthy support from Enterprise Ireland in the form of:
4. The Largest Venture Capital Fund in Europe
Enterprise Ireland has been helping grow businesses across the country for some time now and the fund it controls has grown substantially. With a programme of matched investing, startups who get private funding can see that funding increased by Enterprise Ireland.
The system makes Irish startups more desirable to investors while ensuring that Enterprise Ireland does not shoulder all of the risks.
5. The EU Headquarters Capital
International companies didn’t stop setting up their EU headquarters in Ireland after Google and Facebook arrived. Dropbox is just one of the more recent tech companies to set up shop in Ireland but many other successful startups are expanding from the US into Europe via Ireland.
[dropbox] Via Dropbox
6. The Skills Gap
Despite the high level of education in the Irish workforce, there is still a substantial skills gap in the tech sector with many tech firms finding it difficult to fill positions. There are so many opportunities that companies are having to hire from across Europe to find the workers they need. This not only highlights the strength of Ireland’s tech sector but also the importance of upskilling for the digital economy as unemployment remains high while skills are mismatched with demand.
7. Strong Wages
Another sign of the strength of the Irish tech sector is the ability of firms to pay top rates for skilled employees. A quick glance at Morgan McKinley’s 2015 Salary and Benefits guide shows entry-level web developers, UI designers and SEO specialists can all earn between €25,000 and €45,000. Entry level IT managers and Project Managers can earn €55,000 to €65,000.
8. Tech Centred Institutions
A key sign that Ireland’s tech boom is real is the investment in the digital sector by third level institutes. One of the most substantial projects is the consolidation of the DIT campuses at Grangegorman where a number of innovative, digital business centres are being developed. Another is the Trinity Technology and Enterprise Campus designed to support the development of indigenous knowledge based businesses. Other tech centres such as the Digital Hub in Dublin continue to see tech companies setting up to take advantage of specialist resources.
9. More Incubation and Acceleration
According to a report last year from AIB there are twenty-seven incubators and accelerators in Ireland with more than 200 start-ups taking part in these programs. The report also found that the main challenge existing businesses faced was in scaling their operations. The knowledge Irish entrepreneurs gain from growing businesses in incubators and accelerators is likely to spread through the business community, helping businesses scale in innovative and cost effective ways.
10. A Young workforce
One of the most important signals for a country’s tech sector strength is the age of its workforce. A younger workforce is generally more tech savvy, more likely to be educated in the sector and better able to reskill and adapt to what can be dynamic industries. Ireland has one of the youngest workforces in Europe with half of Irish workers under 35.
Global investment, Local development
Overall the signs point in the direction of a strong and sustainable Irish tech sector with a bright future ahead of it. While much of the investment in the sector has come in the form of foreign capital and international operations, the tangible development has been predominantly local with a growing knowledge and skill base, not just in terms of technical expertise but also in the experience of developing, running and funding high-tech businesses.
