Ireland ICT industry market overview

by Anastasia Tsvetkova

Ireland has one of the highest concentrations of information and communications technology (ICT) activity and employment in the Organization for Economic Help and Development (OECD). This activity comprises both electronics hardware manufacturing, such as PCs, and software products and services, especially business application products and “localization”^[1].

The sector comprises over 1,000 companies across an array of diverse industries, ranging from leading technology multinationals to indigenous start-ups to telecoms companies. Almost 90,000 people are currently employed in the ICT sector in Ireland, which accounts for 36% of total exports of goods and services. Productivity in the sector is high.

N/B Ireland has export oriented ICT market economy

Brief story of success:

It is a unique experience which has made Ireland one of the major international players within the ICT industry.  The growth of the industry coincided with Ireland’s economic awakening during the late 1980s and the 1990s, a period known as the Celtic Tiger.  In the space of 10 years Ireland was transformed from one of Europe’s poorest countries to one of its richest. Ireland became the natural choice for companies to locate their European headquarters and thus it has earned the nickname the “Silicone Valley of Europe”.

The reasons for ICT market growth:

• foreign direct investment (FDI), especially from the USA companies (Nearly 50% of all US software investment locates in Ireland)^[3]
• high skill, high wage job creation since the early 1990s
• government policy regarding IT development as the key element of Ireland’s “national innovation system”
• low corporate tax rate and low labour costs attracted mainly manufacturing activity (as a result IT clusters appearing around Ireland’s major cities: Dublin, Cork, Galway and Limerick).

Difficulties in ICT sector:

• lack of software graduates
• over dependence upon foreign investment
• inability of indigenous software companies to grow
• loss of competitive advantage^[4].

Prognoses for the near future:

• new decisions of Ireland’s policy makers regarding the needs of a competitive, innovative and dynamic ICT industry (decentralization, structural changes in public services, development of supportive environment in research, etc.)
• further development of educational-based policies, combined with a business friendly environment as a mean to transform a struggling economy into a modern knowledge based one
• the revenue opportunity in the Irish IT services market is forecast to grow at a compound annual growth rate (CAGR) of 3.7% over the 2009-14 period^[5].

The leading ICT market sector:

Software products. It has been one of the most rapidly expanding sectors in Ireland over the last two decades. By 2000 Ireland had become the European manufacturing and distribution center for the software of the world’s top software vendors accounting for over 40% of all packaged software and 60% of all business software sold in Europe.  Ireland is also ranked first worldwide of software services exported^[6].

The major players on the Ireland software market:

Microsoft, Pramerica Systems Ireland Ltd., Sage Ireland Ltd., FINEOS, Havok, Google, Dell, Cúram Software. 

Other ICT market sectors (examples):

Hardware:

The rapid growth started in 1970s. Today is popular the idea of electronic clusters building. Hardware is presented by electrical equipment and components, discrete and integrated electronic components, computers and computer peripherals, telecommunications equipment, consumer products such as televisions and calculators, testing and control instruments

The major players on the Ireland hardware market:

Apple, Amdahl, Xidex, Data Products, Zenith, Motorola, IBM, DEC, Wang, AT&T, Philips, Alcatel, Memorex, Ericsson, Norsk, Fujitsu, NEC

Telecommunications:

The telecommunications developments have become important since there appeared an urgency in providing links between sites within Ireland, and between Irish and overseas locations, for data transmission, and in supporting demand for telecommunication products (“Celtic Tiger” period).

The major players on the Ireland telecommunications market:

Ericsson and Alcatel have become remarkable players on IT market due to their help to generate employment and economic growth in the beginning of IT development in Ireland.

Interesting point:

The service sector in Ireland has been relatively slow in adopting IT even where highly marketable software/hardware is available. The high level of application of information technology is working today in Ireland banks, retail companies, libraries and government^[7].

Next steps in IT evolution (in my opinion and not only about Ireland)

- new technologies for providing secure search

- new social networks where you can defend your private data

- new technologies for defending intellectual property