Despite gripes from tech sector Republic still offers real value

Success Through Services, the report on the Irish technology sector and its opinions, is an insightful gaze into the collective mind of one of the nation's most crucial industries. At the same time, some of its conclusions need to be regarded with considerable caution.

Published this week by services consultancy Prospectus (download it as a PDF file at www.prospectus.ie), the report is the result of the collated responses from 700 technology company executives, who give their views on what they see as the facilitators and barriers to growth in the State for the technology industry.

There are no big surprises - the responses indicate an industry that is generally optimistic about its future and the growing ability of the Republic to lead, rather than follow, in some areas.

The thought-provoking report pulls together a broad sweep of opinion. One gets an eagle-eye view of the sector's strategies for growth, e-business opportunities, concerns about possible inhibitors and human resource issues.

However, the survey, from what I can tell, seems to have been made in 1999. One can presume near the end of the year but, nonetheless, we are 12 months on. The infrastructure of the State has changed significantly, the markets have pitched, lurched and wiped out much of the value of many of the companies interviewed, and the views of most rational people about e-business have been greatly tempered.

For example, the report notes concerns that the State's broadband capacity was and may continue to be insufficient. It notes that when the Global Crossing transatlantic fibre cable project comes online, this will be somewhat addressed - the project went live last June, although the management infrastructure is not entirely in place. Oddly, the report fails to note the similarly central 360networks cable, due to be completed early in the coming year, although work on that project was already well under way.

Industry analysts remain confident that, once the 360networks cable also goes live, the State will have about one-quarter of all international broadband connectivity in Europe pumping through its fibre network.

The general conclusion of the report, as expressed in a press release, is the contention that the study "calls into question Ireland's future competitiveness as a high-tech centre". It continues: "While corporation tax levels were viewed positively, the IT industry is sounding alarm signals over inflation, high salary levels, office rentals and personal taxation."

For many years, the technology industry in the Republic underpaid its tech workers. Salaries were so low that the then Industrial Development Authority (now IDA Ireland) promoted the State on the basis of Irish workers' lower salaries, willingness to work longer hours, and habit of taking fewer holidays than their European counterparts. While I understand the increased costs and more competitive recruitment environment this brings to companies, I continue to have little sympathy with technology companies complaining about these issues. They still do not offer packages that come near the standards in the US technology regions.

A study this week in the US reveals that the average salary of a tech employee in Seattle, Washington - home to Microsoft and others - is $129,000 (€146,000). In San Jose, in the heart of Silicon Valley, it is $89,000 (lower because there are more manufacturing positions diluting down the total). Remember, folks, we are talking average salaries here. Recruitment agencies confirm that similar jobs in the Republic pay a high of perhaps £40,000 (€51,000) and I cannot see how the average tech salary here would work out at more than £25,000. Don't even get me started on perks like large share schemes, housing allowances, in-house childcare, social events, travel and more, routinely given to US tech employees.

I think overall - and every talk I've had with US multinationals confirms this - companies get good value for very well-schooled employees here. Skills shortage? Exists everywhere. Why don't tech companies start working to relax our immigration laws and push the Government to truly tackle the disgraceful racism problem? We need to encourage the growth of an Irish society that would welcome the rainbow nationalities the State needs to support this booming sector.

Then, housing. Yes, Dublin prices and those in the rest of the State are high, but the industry has helped create the demand and the deep pockets that have forced Irish prices skywards. Office rentals? Much the same story.

I think these are all crucial societal issues, where the industry could effectively lobby or partner for positive change rather than threaten to move - where? To Eastern Europe? Multinationals need a European centre - but never underestimate the unwillingness of English-speaking multinationals to plant a headquarters in a non-English-speaking region with poor infrastructure and lack of a social life to lure employees.

There is much that is enlightening and worthy in this report but I cannot see exactly where these knowledge-based companies would go that would be a huge improvement in the areas they complain about. klillington@irish-times.ie