ICT sector rides out storm

TECH SECTOR: The Republic's information and communications technology (ICT) sector has outstripped the growth rate of the national economy, increasing at the "staggering" rate of 18 per cent per annum between 1993 and 2000.

That was twice the rate of growth of the Republic's GDP, according to Davy Stockbrokers analyst Mr Barry Dixon.

Jobs growth in the sector also rose at nearly twice the pace of the national labour force, he said.

"This has been the most significant influence on the growth of the tiger economy," said Mr Dixon.

The output of the ICT sector was equivalent to nearly 16 per cent of the State's GDP in 2000. ICT exports were valued at almost €31 billion and represented a third of total exports of goods and services.

In addition, the top 30 multinational technology sector companies here shed significantly fewer Irish jobs in 2001 than they did globally - 12 per cent of their Irish workforce was cut, compared to 19 per cent worldwide. Ninety per cent of job losses in the Republic were in the relatively low-skilled areas of assembly and manufacturing, he said.

"The Irish technology sector has suffered, but not nearly as much as its foreign counterparts," said Mr Dixon.

Lower-skilled jobs were always going to be the obvious casualties of a downturn and further job losses in that area could be expected in coming months as the global economy slowly righted itself, he said.

Mr Dixon believed overall job losses were lower here because the Republic had succeeded in attracting higher-skilled, less-vulnerable jobs in the sector.

"These companies have positioned their research and development, and sales and marketing facilities here, which are more important to those companies," he said. "That's of crucial importance to Ireland when looking at what happened in 2000 and 2001, during a downturn."

IDA Ireland estimates that 50 per cent of the State's ICT employees - about 83,000 people in 2000 - are involved in low-skill manufacturing. Of that number, the top 30 companies employed 38,000, or 46 per cent.

Mr Dixon said the highest-value jobs seemed to be in software development, the fastest-growing niche of the ICT sector here between 1993 and 2000, according to Forfás statistics. Software development also accounts for 41 per cent of total jobs in the indigenous technology sector, suggesting that home-grown companies have some of the highest-value jobs.

"A far higher proportion of high-skilled jobs are within the indigenous industry," said Mr Dixon.

In order for the sector to flourish, the State needed to address the growing skills shortage, he said.

Over the next four years, Forfás predicts an annual shortfall of 2,492 engineering and computer science professionals, and 840 technicians.

Mr Dixon addressed a group of industry and academic representatives at NUI Maynooth on Wednesday.