The technology industry loves its jargon more than most, but even hard-core techies express bemusement with the terms that describe where we are supposed to be going as a nation - "e-commerce hub" and "information society", for example.

Look a little deeper, and it's clear that what makes these terms so opaque to so many people is that they have become catch-all expressions for the enormously complex shifts happening in Irish society and the Irish economy. One industry source, asked to define an e-commerce hub and explain what such a thing would actually do for the Irish people, was initially speechless. "My God, that's a huge question," he eventually gasped. "Where do you possibly begin?"

Mr Seamus Mulconry, e-commerce consultant with Andersen Consulting in Dublin, is willing to tackle the phrase "e-commerce hub". He believes the term expresses "a cluster of companies and expertise in the area of electronic commerce". Just as various cities and regions around the world have developed a forte for certain kinds of commerce - London as a financial centre, Detroit as an automotive manufacturing centre, Paris as a fashion headquarters - so Ireland, and Dublin in particular, has already become a European centre for technology companies and is beginning to attract the kind of companies that focus on e-commerce, he says.

E-commerce does not necessarily mean selling items to consumers over the Internet. More broadly, it describes any kind of business transaction that uses the Internet as a primary channel for buying and selling, communication, procurement, invoicing, exchanging contracts, customer relations and other tasks.

Certainly, the statistics are increasingly impressive. According to the OECD, the Republic is now the world's leading exporter of software, attracting about $8 billion in technology business per year and 40 per cent of new US investment in electronics. Perhaps as many as 130,000 people are now employed in various corners of the tech industry.

With this summer's arrival of a transatlantic fibre-optic cable, linking the State directly to the US and Europe, the Republic reportedly now has between a third and a half of all the high-speed Internet capacity in Europe. The technology and electronics industries are estimated to drive at least a quarter of the economy.

The ever-growing importance of the Internet to business in general means that e-commerce will soon be the norm, not just the domain of technology-oriented "dotcoms". As the founder of microchip giant Intel, Dr Andy Grove, said during a talk in Dublin last year, soon all companies will either be e-commerce companies or they'll be dead.

But for the moment, why should we want them to cluster here? "Electronic commerce and information society-related businesses can be located anywhere," says Mr Niall O Donnchu, a spokesman for the Department of Public Enterprise. "We're trying to position Ireland so it is possible to take a leading role in the digital revolution. It allows us to build virtual bridges with the rest of the world, so our isolation as a small island is no longer an issue." He prefers the term "virtual bridgehead" to "e-commerce hub".

So why are technology and e-commerce companies coming here, and why is the State seen as a good environment for home-grown technology companies? Most analysts agree that a combination of factors are at work, including the low corporate tax rate, incentives from the Irish Development Authority (IDA) and Enterprise Ireland, and the fact that English is the primary language.

In particular, the Republic's young population means a long-term stream of potential employees, and Irish graduates are seen to have the right sets of skills for the technology industry. Mr Mulconry points out that, despite worries about skills shortages, Ireland currently produces more technology-educated graduates than Germany.

But the concentration of technology companies here doesn't mean that Irish people will be directly affected by technology per se. "Just because Microsoft is here doesn't mean we use more Windows [Microsoft's computer operating system]," says Mr Paddy Holahan, vice-president of marketing for Irish security software company Baltimore Technologies. "But being a centre for the technology industry is great for Ireland Inc. The industry creates more jobs and better jobs. It's good for employment and the economy."

However, agencies like Combat Poverty fear the jobs and prosperity could go entirely to the younger, educated population and have little impact on the 25 per cent of people living below the poverty line.

"The information society is thus both a danger and an opportunity," said the agency in a submission to the State's Information Society Commission. "A danger in that because of pre-existing poverty and inequality in society, it merely constitutes another layer of social exclusion and secondclass citizenship. An opportunity because new technology has most to offer to those experiencing social exclusion, in terms of new skills, better access to information, community empowerment, etc."

"We have to make technology more ubiquitous," says Ms Brenda Boylan, a spokeswoman for the Irish Information Society Commission. "An important strategy [for the commission] is to work with community and volunteer groups that are working with the constituencies that may be excluded." She notes that jobs in the future will not come from traditional sectors and that technology skills will be essential tools in the workplace.

A number of Government and private initiatives aim to make such an "information society" inclusive rather than exclusive. Mr O Donnchu points to a recent £150 million Department of Public Enterprise initiative to encourage telecommunications companies to bring high-speed Internet-access technologies to the regions, to schools and to public organisations and facilities. The Departments of the Taoiseach, Social Welfare, Enterprise, Trade and Employment, and the Environment are among others with programmes to make digital technologies accessible to the general population and small businesses.

None the less, a gulf remains between the leading-edge reputation of the Republic as an e-commerce nation, and the slow penetration of a digital mindset into the population in general. Mr Holahan says "we're way behind culturally" compared to the United States, where a significant proportion of the population embraced buying, banking, information-seeking and even voting online.

"We need to create a Net-savvy generation," says Mr Mulconry. "People have the idea that e-commerce is the Star Trek end of business - but it isn't, it's a necessity. All industries are going to be deeply affected and we have to be ahead of the pack. We've created a high-tech cluster in Ireland and we have to make sure the country is e-enabled, or our prosperity begins to crumble."