Two massive investments by IBM in Ireland have behind them the influence of one man: Pat Toole, writes KARLIN LILLINGTON

NOW RETIRED from a 36- year career with IBM, Pat Toole was still central to IBM’s decision, announced last week, to create a €66 million 200- job Dublin Smarter Cities Technology Centre that will look at how to build and manage core systems for transport, water, energy and communication.

Fifteen years ago, as a senior vice-president in the company, Toole was pivotal in the decision in 1996 to expand vastly IBM’s Irish presence from a sales organisation to a 2,000-plus manufacturing and, eventually, research campus.

When he retired, he worked on the Irish government’s Foresight committee and, five years later, was involved in the establishment of Science Foundation Ireland. He has advised IDA Ireland, Forfás and the Taoiseach.

In other words, Toole has been the kind of quietly influential Irish-American that the Government now recognises it should more actively court.

“I have had long-time connections to Ireland,” he says with understatement, “and I have continued to have contact with the Irish technology environment.

“I’m interested in nano science and I follow [nano science research centres] Crann [at Trinity College] and Tyndall [at UCC]. And I was asked to Farmleigh.”

Ah, yes, Farmleigh.

The Farmleigh sceptics are going to be disappointed that the Government’s Global Economic Forum held there last September has had a result only six months later: the Smarter Cities Dublin centre emerged directly from Toole’s visit.

“I came in and talked to everyone in IBM research here. I spent two days looking at what we were doing with Smart Bay [an IBM-supported research initiative in Galway Bay], sensors and metering,” he says.

“A couple of us [here for Farmleigh] got the insight that we could turn the great projects going on in Dublin into a larger enterprise.”

Thus, the Smarter Cities centre was conceived over discussions in the pub between Toole and John Kelly, IBM’s global head of research, also attending Farmleigh.

“We’d have a drink and talk. Kelly had ideas that were greatly synergistic with what was going on here.

“I won’t say it would not have happened without Farmleigh, because it was such a good idea that it could have happened in other ways, but Farmleigh was the catalyst and it was a direct outcome of Farmleigh.”

Toole says he was “pleasantly surprised” by the scope and intensity of the event, even though he arrived thinking it might be more show than substance, “but I enjoyed doing it and I’d do it again”.

He says the diaspora attending realised the Government was there to truly listen.

It’s all quite a change from the Ireland Toole saw on arrival here in the 1990s.

An internal review of IBM’s manufacturing strategy back then led the company to the conclusion that they would have to “dramatically change the nature of manufacturing in IBM”.

Both product development and life cycles had reduced significantly between the 1980s and 1990s. The advent of microprocessors, cheap memory and other building blocks of technology meant the “velocity of change” was high.

New competitors had also entered the ring because these cheap components lowered the barrier of entry into the technology market.

IBM was scrambling to reinvent itself and, like other technology companies, began to bring the innovations of the automotive manufacturing world into the tech world.

“Therefore, where you manufactured became more flexible and the driving force in locating here was flexibility,” he says.

For Ireland, the IBM expansion was one of the most important of the decade, elevating Ireland’s profile for foreign direct investment.

At the December 1996 press conference announcing the IBM expansion, Toole was asked what kind of products the new site would be making.

“I told them the products we were going to put there were not designed yet. It was not a glib answer,” he says.

IBM couldn’t make predictions because markets were changing so quickly. “In the 1990s, maybe 50 per cent of revenue was in hardware, now it’s less than 30 per cent.

“Change meant more than just hearts and minds – it was reinventing the products and channels, software and services.”

Toole notes that in the 1990s, IBM made decisions on expansion based on whether a location had good internet provider protection, a skilled workforce, government co-operation and good tax policies.

“All existed here, but also in places like Hungary or Singapore, so why Ireland?

“I knew the velocity of change was going to carry us into manufacturing, call centres etc. I decided, as part of the strategy, we needed a multi-mission site, and Ireland was the first site with multiple missions in IBM. And it’s still the case that you have special flexibility here.

“Back then, in the US and other countries, people were resistant to change but in this kind of [technology] environment, you need people willing to learn.

“Today you might be a technician, but tomorrow, maybe you’re programming.

“The culture in Ireland where people had to adjust to a difficult economy many times and where they often had to emigrate gave a geographic and psychological flexibility.”

Therefore, says Toole, IBM deliberately “over-hired” – hired employees who were more qualified than the jobs they were to fill, on the basis that they would soon be moved to more challenging jobs.

Toole says IBM was able to “take advantage of overskilling. When you do that, employees tend to be more innovative and more questioning. You tend to get not necessarily increased production, but you get more innovation.”

The company moved fast. It made the decision to come here in June 1996, made the public announcement in December of that year and was shipping its first products seven months later.

“It was an indoor record at the time.”

The flexibility of the workforce in Ireland has meant the company has continued to bring in further higher-end projects and research centres on a steady basis over the past decade.

“Toole is very excited about the Smarter Cities Centre and what it might mean to Dublin and to Ireland.

“This project is going to last several lifetimes. It’s extraordinarily exciting. Any city in the world would love to have the intellectual energy that will come out of this.

“It’s going to make the universities better because of collaborations, also we’ll be working with the best small Irish companies. It’s more an ecosystem,” he says.

“You know, the secret of Silicon Valley and its success is that it’s the environment more than any single thing.

“You need to create the right environment. I’m hoping if we can do it anywhere, we can do it here. If we can prove it works here, it can be a great model for the rest of the world.”