The Republic currently has a shortage of 5,635 information technology professionals and this is expected to worsen over the next three years, according to a survey on skill shortages in western Europe.
By 2003 the Republic will have the fourth highest level of IT skill shortage in western Europe, according to the study by the world's largest software company Microsoft and International Data Corporation (IDC), the IT forecasting company.
It says the Republic currently has a demand for 54,296 IT professionals but can supply companies with only 48,662. Consequently, the economy has a 10 per cent skills shortage deficit, according to the study. This is 2 per cent below the current average in western Europe, but by 2003 the Republic's IT shortage will be 1 per cent above the average for western Europe.
By then there will be a demand for 68,726 IT employees, with the economy able to provide only 58,845 qualified people, says the study. While the State's skill shortages will be marked, the study reveals that countries throughout western Europe will also be suffering dramatic IT skill shortages.
For example, Germany will have a deficit of almost half a million IT employees by 2003, while Britain will have a 329,573 shortage by then.
The widespread nature of the shortages means that almost all European economies will be competing for IT staff, according to the study, often drawing from the same source of labour.
The study puts the total IT staff shortage in western Europe by 2003 at 1.7 million. "Northern regions of western Europe stand to lose the most from the projected skills gap due to the comparative size of their GDP and the significance of IT to their economies," says the study.
Ms Carol Darby, IT skills development manager at Microsoft Ireland says: "The IT skills shortage is already hurting the European economy. The IT industry is working closely with governments and educational institutions at every level to address this, but we need to move faster if we are to benefit from the opportunities that tomorrow's technology presents."
The Microsoft/IDC study recommends several steps to improve the situation.
It recommends governments should provide tax breaks for IT start-up companies and support the recruiting of non-traditional IT employees such as older workers, women, graduates trained in other disciplines and the unemployed. Universities and third-level colleges should "work more closely with industry and government to address issues at an early stage", it says, checking their courses to see if they meet the demands of the IT world.
A major report on how the Republic is going to tackle skill shortages is expected shortly from the Government-appointed Expert Group on Future Skills Needs, chaired by the former president of Dublin City University, Dr Daniel O'Hare. This is likely to recommend a major attempt to get over-55s back into the workplace.