The number employed in the indigenous information, communications and technology (ICT) sector could double to 60,000 by 2010 if the Government and industry adopt certain key recommendations, a report by ICT Ireland claims.
Among the proposals made by the industry lobby group is for the Government to buy at least 20 per cent of its ICT supplies from small and medium-sized businesses. Implementation of this proposal would support indigenous firms and create a more resilient IT sector, says the report entitled Creating a World Class Environment for ICT Entrepreneurs.
The report notes that the small scale of the Irish market means it lacks an early adopter of technology and therefore companies have to look to the global market very early on in their development. This has huge implications for the costs of early-stage ICT firms, it says.
The Government could alleviate this problem by buying from early-stage firms, a move that would enable many of these companies to gain their first sale.
The US government must purchase 23 per cent of its prime contracts from small and medium- sized companies, it notes.
The report also recommends the creation of more formal partnerships between foreign-owned multinationals with Irish operations and early-stage ICT companies. These partnerships would provide early-stage Irish firms with an immediate competitive advantage. It says that locally- based multinationals should be encouraged by State agencies to build a procurement website, on which all purchasing requirements are publicly advertised.
The report notes the ICT sector is prone to boom and bust cycles and, although the current downturn is difficult for firms, some ICT clusters are planning for recovery and investing.
It highlights the success of telecoms and digital content clusters in Finland and a joint-venture approach taken in Silicon Valley as models of best practice. The report concludes that if the Republic takes action now and adopts the best practices of these clusters, it too can be prepared for the next wave of technology.
The Government should consider extending the lifetime of the business expansion and seed capital schemes as well as making them more accessible. This would help promote the development of an entrepreneurial culture in the Republic.
Likewise, third-level institutions and researchers should adopt best practice for the transparent transfer of technology and the commercialisation of their research. The report says nearly all the successful international ICT clusters, including those in the US, Finland, Cambridge and Munich, have benefited from collaboration between third-level institutions and industry.
Some of Ireland's greatest success stories have their roots in third-level research. Iona Technologies grew from a research project in Trinity College and is responsible for more than 25 spin-off firms, says the report.
It warns there is an immediate need for the Republic to address the falling number of science and technical graduates. Likewise, action should be taken to address the issue of unemployed graduates within the ICT sector. It suggests public funding could be provided to firms to take on recent graduates, rather than risk losing such skills to other countries.
