BUSINESS OPINION: FINALLY THE unspeakable has been spoken: Dell, the US computer giant that employs 4,500 people and accounts for something in the region of 6 per cent of Ireland's GNP, is on the way out the door and we better face up to it.

It is not going to happen overnight and it's not going to happen tomorrow, but it will happen.

The closure of the single biggest industrial concern in the country, with annual sales estimated at more than €10 billion, will send shockwaves through Limerick - where most of the jobs are - and beyond.

Whom do we have to thank for this unpalatable dose of realism? Is it the IDA, the Minister for Enterprise and Employment or even Dell itself?

No. The appalling vista was in fact unveiled last week by a Trinity College professor, Frank Barry, and his colleague from NUI Maynooth, Dr Chris Van Egeraat. It took the form of comments they made after presenting a paper accompanying the Economic and Social Research Institute spring quarterly which was released on Thursday.

The prediction is based on a comprehensive study of the demise of the hardware industry in Ireland, which in its heyday in the late 1990s assembled one in every three PCs sold in Europe.

Since then the industry has been in a steady decline, with 10,000, or about one third of the jobs in the sector, being lost in 2000-2004.

The report is littered with the names of once great computer companies that arrived in Ireland with a bang and left with a whimper: Gateway, AST and Digital, among others. And Dell is sure to join them.

The reason is simple - production has relocated to lower-cost centres in China and central and eastern Europe.

Dell has already set up a second European manufacturing plant at Lodz in Poland (managed by staff from Limerick) and clearly there is more to follow.

"I would be very sure Dell is on the way out of Ireland, given the trend in the sector," was how Prof Barry stated the obvious last week.

The good news, if that is the correct term, is that according to the report's authors, the impact of Dell upping sticks will not be as bad as you might think. They base this assertion on their study of what happened to the people who lost their jobs in other hardware operations that closed down.

The first point they make is that many of the hardware firms that pulled out were replaced by firms operating in related but higher technology segments.

In addition, many firms did not pull out entirely, but instead shifted their Irish operations from assembly into higher value added, non-manufacturing functions such as sales and technical support.

Some 1,000 plus of the people employed by Dell in Ireland are involved in such functions and these jobs would not necessarily follow the assembly jobs out the door.

Prof Barry and Dr Van Egeraat go so far as to conclude that people who lost their jobs when hardware makers shut down found work elsewhere relatively easily, many of them in services industries linked to the technology sector. One company they looked at in some detail was Gateway, which shut up shop in 2001 with the loss of some 650 jobs, of which 400 where in manufacturing.

Some 150 technical support staff transferred to the company which took over the job of providing technical support to Gateway customers, while a quarter of the staff were reported to have found jobs before the plant closed as a result of outplacement initiatives.

Another 250 or were said to have found work within months after a small amount of retraining.

The balance was accounted for by overseas staff - mainly from Europe - returning home and then younger Irish staff taking time off to travel and so forth.

However, the authors did point put that production line operatives who tend not to have tertiary level educational qualifications, fared less well.

Another important caveat put in by the two authors was that the economy's ability to absorb 10,000 people who lost their jobs in computer hardware was linked to the sustained economic boom that has just come to an abrupt end.

An assembly line worker in Dell in Limerick might not be so lucky as the staff at Gateway.

A more useful parallel, which was also looked at in some detail, was the closure of Digital Electronics Corporation (DEC) in Galway in the early 1990s. It employed 1,700 people and contributed £100 million to the local economy.

As a result, the closure of its manufacturing operations with the loss of 760 jobs generated the sort of headlines that can be expected when the axe falls at Dell in Limerick.

However even then, according to Prof Barry and Dr Van Egeraat, employment at DEC had grown back up to 1,400 by 1998, mostly in software and administrative jobs.

In addition, various initiatives put in place and informal networks among former Digital staff all played a part in the ongoing transformation of the local economy and the emergence of Galway as a leading European medical instruments cluster.

It will be a black day when they hand out the P45s at Dell, but it does not have to be the end of the world.