Tech sector needs to be ready for upturn

ICT Ireland is also pushing for more support for research and development in Ireland, including the development of centres of excellence in sectors such as photonics, which is the science of harnessing and generating light and other forms of radiant energy. The industry is pushing for a new R&D tax allowance to be included in the Finance Bill.

The technology sector will make a comeback after a few difficult years and the Republic needs to be ready to capture the benefits. So says Mr Jim O'Hara, the newly appointed chairman of ICT Ireland, the industry lobby group.

Mr O'Hara, in his first major address this week after taking the chair of the group, says that the past couple of years have seen a huge shift in the industry.

"The dramatic retrenchment seen in the communications industries, combined with the implosion of internet enterprise valuations, have imposed new investment priorities," which could have a marked effect on the Irish economy, he said.

The cyclical nature of the industry should not be forgotten. "Demand will recover as changes in technology and the external environment bring an end to the current downturn."

He argues that Ireland needs to be prepared for this upturn "and ensure that we have a world-class environment for investment".

The tech industry has recently suffered from job losses, most recently at Square D in Ballinasloe. Mr O'Hara believes a sustained effort is needed to get across the key role of the tech sector, which employs 100,000 people in more than a thousand organisations and exports €31 billion per annum.

"Ireland's economic progress during the late 1990s was fuelled by the success of the tech sector," he argues, and the industry needs to develop information on its contribution through employment, tax revenue and exports to ensure it gets proper consideration in policy terms.

A positive image of the sector will also help to attract students to tech subjects, he believes. A recent report by the European Commission predicted a 1.9 million shortfall in skilled IT professionals in the EU over the next few years. A 25 per cent decline last year in applications for third-level engineering and technology courses was a worrying sign for Ireland, he said.

Policymakers also need to put a renewed emphasis on e-government. "The adoption of online information services and Web- based application procedures by a number of departments and agencies will promote Ireland as an ICT-literate location for high-tech industry," Mr O'Hara says.

Some progress has been made in bringing parts of Government online, but ICT Ireland wants an expansion into areas such as health information and education.

Part of the benefit of e-government would be in encouraging more people to use technology and the internet. By the end of 2000, only 23.9 per cent of the population used the internet, compared with 46.5 per cent in Sweden and 42.2 per cent in the US. This gap is due to remain, with projected use of 39.5 per cent here in 2004 versus 58 per cent in Sweden.