Relocate Profile: Ireland’s ICT sector

A number of places have been touted in recent headlines as ‘Europe’s Silicon Valley’. While nowhere east of the Atlantic packs the same punch in the tech world as California, the Republic of Ireland certainly has a strong case to be Europe’s nearest contender.

Businessman sketching out mind map of new business
The information and communications technology (ICT) sector has proved a boon for the Republic of Ireland. According to the Irish government’s 2014 Action Plan for Jobs report, the industry accounts for €70 billion in exports per year. That’s 40 per cent of Ireland’s total exports, according to the Irish Software Association(ISA), which said in its Global Technology Hub report that four out of five of the country’s top exporters hailed from the sector.Ireland is a popular European base for multinationals, including longer-standing players such as Intel, HP, IBM, Microsoft and Apple. These mainstays have been joined, in recent years, by newer giants such as Facebook, Google, LinkedIn, Amazon, Twitter, PayPal and eBay.The country is also a popular location for data centres, with the likes of IBM, Microsoft, Google, Yahoo, Adobe and MSN all having cloud operations there. Gaming companies, too, are represented, with companies such as Big Fish, EA, Havok, DemonWare, PopCap, Zynga, Riot Games and Jolt all having significant presences.Ireland’s tax regime plays a big part in the ICT sector’s success. As well as its low corporation tax rate of 12.5 per cent, Ireland offers 25 per cent tax credit on research and development, a strong draw for companies that thrive on innovation.SMEs flourishing
While multinationals are a big part of the story, however, a fertile scene of indigenous SMEs exists around the larger companies, something reflected in the export figures.Indigenous companies account for €2 billion annually, according to the Allied Irish Bank’s (AIB) 2014 Outlook report on the tech sector. That brings with it a mentality reflected in the larger companies, too, according to Eoin Langdon, IT division manager at Sigmar Recruitment.“There’s a really strong start-up environment in Ireland. A lot of companies are indigenous start-ups, but there are also well-funded multinational start-ups, which we call ‘startups in Ireland’. So they’re well established in the US, but they’re looking to start a new operation in Ireland,” Mr Langdon told Re:locate.According to AIB’s report, three in four of the companies operating in this space have fewer than 50 employees, while 22 per cent employ upwards of 50 staff. They typically target business-to-business markets, finance and insurance(39 per cent), consumer (31 per cent) and digital media (31 per cent). Four out of ten companies surveyed said that software as a service (SaaS) was their revenue collection model, and that they expected this to grow throughout 2014. Things are looking strong for this area, too. Of the SMEs surveyed, 71 per cent said they had increased their turnover in 2013, the average increase being 31 per cent.This scene is fed by a series of accelerator/incubator programmes offering help to start-ups, such as mentoring, pre-seed funding, workspace, workshops, and access to angel and venture capital investors. There are 27 such programmes in Ireland, with up to 220 companies being accepted onto them each year.Creating jobs and growth
Reports on the number of people working in the ICT sector are variable, but the ISA puts it at 105,000. A significant portion of that is accounted for by the multinationals that have set up headquarters in Ireland, but some 30,000 tech sector workers are employed by indigenous companies.In the Action Plan for Jobs report, it was predicted that as many as 45,000 new technology posts could come on stream over the next four years, thanks to a mixture of expansion and replacement. Respondents to the government’s surveyhighlighted issues related to recruiting talent, however. In the SME space, AIB reported that 74 per cent of companies planned to grow their workforce in 2014, with 38 per cent of those surveyed identifying recruitment as one of the biggest challenges facing them.“Growth areas are things like mobile applications. Big data is a big thing in Ireland at the moment. There’s a huge shortage of data scientists and big-data analysts. Everyone’s trying to get into using cloud and virtualisation,” Mr Langdon told Re:locate. Drilling down, he added, “The main shortage area for skills is software development. And that’s across mobile developers, .NET developers, Java, PHP, Python, Ruby, pretty much everything on the open source side as well. In application support and software testing, there’s a big movement into automated testing.“And then there’s always been a requirement for people like business analysts and project managers, mostly across the telecoms, finance and insurance industries.”Recruiting for success
The foreword to Addressing Future Demand for High-Level ICT Skills, published by Forfás (now absorbed into the Department of Jobs, Enterprise and Innovation), notes that, when the first Action Plan for Jobs was launched in2012, domestic supply from higher education only met 45 per cent of demand. The figure is now up to 60 per cent. That still leaves a significant gap to be plugged by foreign hires, however. Fast Track to IT (FIT), an industry-led initiative focused on promoting technical skills, estimated in October that there were some 7,000 unfilled ICT vacancies.“The volume of foreign hires is definitely growing,” Eoin Langdon said, “and probably 40 to 50 per cent are coming from outside Ireland. In certain areas, the percentage will be higher. Some technologies, like Python and Ruby – Croatia, for example, have a really good network of Python developers, and these are really difficult people to find. The market in Ireland was probably exhausted two years ago, and companies have had to hire maybe 80 or 90 per cent of Python developers from outside Ireland.Hires for less-specialised roles are often readily available, however. “If you look at business analysts and project managers and people like that, there’s a decent supply in Ireland,” added Mr Langdon. The primary sources of foreign hires, unsurprisingly, are in the EU. “Within the EU, it’s typically Spain, Portugal,Greece, and Poland to a lesser extent. We attract some from the likes of Hungary and the Czech Republic, but their economies seem to have recovered. “We get very few from Germany and France, probably for the same reason. But Italy – in fact, anywhere that’s struggling – we tend to get more CVs from. More recently, we’ve had a large volume from Croatia, Hungary and Romania,” Eoin Langdon explained. A few candidates do come from Brazil and Venezuela, though, thanks to a number of nationals in those countries having dual citizenships that give them access to Europe.Filling the talent gap
There are concerns in some quarters that multinationals could face challenges drawing in talent. A survey this year by Brightwater Recruitment showed that45 per cent of ICT professionals would consider moving to a start-up or established SME, compared with just 15 per cent who would choose to work for a multinational.According to Brightwater, the amount of choice on offer to many developers makes them prepared to take a chance on riskier start-ups. Eoin Langdon broke it down further, explaining that foreign hires tended to be more drawn than Irish talent to the large companies. “In the domestic market, people are not necessarily going to be motivated by the same things that are drawing people from other countries.“We’ve made our visa process quite easy; it’s certainly been more accessible over the last couple of years for people outside the EU. Within the EU, Romanians and Bulgarians have become able to work in Ireland in the last 18 months. In the last six months, Croatia has been allowed into the EU. And Croatia, Bulgaria and Romania now have some of the strongest software developers out there. They tend to have been working for multinationals over there because they’ve been set up for cost reasons. The draw for these people is probably international experience and the chance to better their quality of life, so salary is probably a big thing for them.“People based in the Irish markets are probably looking at things like sexy technology (whatever that means to them), the industry they can work in, whether it’s a startup environment, getting more ownership, and then salary.”Attracting the new generation
While relocating foreign hires to Ireland is clearly a big part of the solution, there’s also a push to increase the number of graduates feeding the ICT sector. Addressing Future Demand for High-Level ICT Skills showed a 25 per cent growth in the output of computer graduates in the two years preceding publication in 2013. It predicted a doubling by 2015.The Irish government has, in particular, given conversion courses for graduates a big push recently. So far, 1,500 free places on ICT conversion courses have been provided to jobseeking graduates through the Springboard programme, while this year’s scheme offers 6,100 placements, including courses in other in-demand areas, such as high-end manufacturing and international financial services. Recruiters certainly have challenges to face but, as Eoin Langdon put it, “The companies wouldn’t still be coming here if they couldn’t get the talent.”For more Relocate news and features about Ireland click hereFor more Relocate news and features about technology click here

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