Innovation Talk: ‘Technology buildings’ a blast from the past

I encountered a full-on blast from the past last week reading that IDA Ireland had signed contracts to build two "advanced technology buildings" in the midlands and southeast regions.

These icons of future industry are going into Athlone and Waterford and are being provided in anticipation of incoming high-tech companies choosing to set up in the regions and not in Dublin as so many do.

How very 1980s of the IDA – with the imprimatur of the Department of Jobs, Enterprise and Innovation – to become a speculative commercial property investor, building an empty warehouse in the hopes of finding a tenant or a purchaser.

Many readers will be too young to remember the old “advance factories” that were built during the 1970s and up to the early 1980s. The outskirts of many towns across the State boasted weed-strewn industrial estates, IDA hoarding facing the road and battling to be seen through the green mould of the signage.

These future hives of industriousness symbolised Government attempts to bring in foreign direct investment.

Sadly, they also symbolised hope over reality. The period was marked by a succession of recessions that saw tens of thousands heading for the US or UK. Those that didn’t leave joined the dole queues.

The big issue then was not whether you could get ready access to high-speed broadband or satellite links. Then it was all about knowing that the small local power plant could deliver consistent three-phase power without brownouts or whether you could get more than two telephone lines in the whole factory.

The advance factories were a manifestation of the drive to industrialise Ireland initiated by the government led by Seán Lemass. Having a ready-made building available to a prospective US or European investor helped us to win contracts ahead of major rivals for these plants, including depressed parts of Scotland and Wales.

The companies came and went depending on the fortunes of the firm’s markets and so occupancy rose and fell in tune with whether we were in recession or growth.

While the then IDA was happy to see any incoming investment, it tended to tout for companies associated with information technology (ICT).

Even in the 1970s it was clear that ICT was going to be an area for growth, so anything that had the tag “computer” was welcomed in.

Many of the firms were simple “screwdriver factories” where low-level assembly added value to a product that was destined for export. At the time there were corporate tax breaks for companies willing to invest in Ireland.

Economic perils
The advance factory concept went wrong during the hateful recessions of the 1980s. Closures left the agency with a great deal of unused warehousing/ manufacturing space and low occupancy meant these buildings were a liability.

Only a few years later Charles Haughey would tell us to tighten our belts. By then the notion of building an advance factory had disappeared.

Soon after Ireland’s great boom time got underway and all sectors of our economy grew, but particularly the high-tech sector.

And this same sector has done much better in weathering the economic perils since austerity became one of the Government’s primary economic tools.

While there have been closures, many big names arrived to replace them and companies continued to invest in what Ireland had to offer, highly-trained readily available graduates and good corporate tax deals.

Perhaps that’s why I felt a little pang of residual unease when I read about the grand plans for the midlands and southeast. Innovation doesn’t disregard repetition, but it does prize timing.

It will be interesting to see how this next iteration of the advance factory makes out in this technology-driven marketplace. One would hope that today’s “advanced technology buildings” will meet with success.

Competitive advantage
The choice of Athlone and Waterford was based on these areas having a particularly difficult time with job losses between 2008 and 2010, said the Minister for Jobs, Enterprise and Innovation Richard Bruton when announcing the two projects.

Clearly there are other employment blackspots that might benefit, but it would be unwise for the Government to rush back into providing turnkey buildings
and facilities in the hopes of an investor, given the set-up costs but also the
ongoing maintenance and security
costs .

Being able to deliver a solution fast to companies that know they have to hit a market quickly might give us yet another advantage over our competitors. May the timing be better this time.