This narrative provides an
assessment of current Irish strengths and weaknesses in the information &
communications technology (ICT) market context. However, the specific elements included in this assessment are,
due to the dynamic ICT policy and technological attributes, unavoidably subject
to change. Thus, the identified
strengths and weaknesses provided herein are neither prioritized nor comprehensive. Each strength and weakness is also supported
by analysis ascertained from the various research references cited within the
report. Lastly, a conclusions &
recommendations section identifies specific suggested elements for change as
Ireland progresses as an Information Society.
§
Stable
Macroeconomic Environment. Ireland has benefited from double-digit
economic growth since the early 1990s, largely attributed to its investment in
and dividends from the ICT industry.
The Irish Government forecasts a continuation of positive progress and
stability trends in such matters as income convergence, employment creation and
improving public finances.
§
Foreign Direct
Investment (FDI). Like much of Europe and other developed
countries, ICT has been the engine of growth and Ireland has benefited
substantially to this end. Remarkably,
Ireland has been successful both in attracting FDI in the technology sector
through attractive incentives and in developing a select number of global
companies indigenous to Ireland (Iona,
Trintech).
§
Home Market Size. The limited
size of the domestic Irish market has forced Irish software companies to adopt
an export-oriented, product-focused approach.
This approach has mitigated the risk and reliance on domestic revenues
and has enabled several companies to achieve significant success in foreign
markets, particularly in the U.S.
§
Coherent Vision
and Consistent Strategy. The Irish Government’s documented vision
and strategy in its consecutive Action Plans
established the country’s policies and delineated the path forward to achieving
ICT success.
§
High Employment
Growth/Low Unemployment. Economic growth and employment growth have
both been strong in recent years, despite a global economic downturn. During the period of 1994-1999, Ireland had
an average real GDP growth rate of over 8% per year, with an annual average
4.5% increase in employment. Unemployment
is now below 5%.
§
High Productivity
Growth. Ireland has benefited from a high rate of
productivity growth: 3.7% annually over the 1961 -1999 period, with 3.8% in
2000 and 3.4% in 2001.
§
Percentage of Age
Cohort 25-64 with Third-Level Education. As the IT Workforce section illustrates, Ireland has a very educated
workforce at most age cohorts.
Specifically, Ireland was above the European Union (EU) average in 1998
with 21% of the population in the 25-64 age group having a third-level
qualification. This trend is projected to increase further in future years.
§
Geographical
Location. Ireland’s geographic location in being
remote from the main European population is a major disadvantage to many
businesses, thus limiting their market scale.
§
Dependence on
Overseas Firms. Ireland's
success in attracting overseas firms could be mitigated in the event of a
serious decline in international trade, thus having an exacerbating effect on
the domestic economy.
§
Dublin Growth. In light of
the fact that a disproportionate share of the growth in the economy over the
last decade has taken place in the greater Dublin area, the metropolitan
infrastructure, most noticeably in terms of transport and housing, is now under
serious and growing strain. Implications of this strain are higher housing and
rental costs and more congested infrastructure.
§
Road and Rail
Transportation Infrastructure. Ireland has the worst quality internal
national road and rail systems of all EU member states. These systems must be improved to allow for
de-concentration of activity outside of the ICT-concentrated regions of Dublin
and County Cork.
§
Poor Education of
Older Groups. Although Ireland
has one of the most advanced and well-educated populations among developed
countries, a high proportion of the working-age population has a relatively low
level of educational attainment. While the percentage of the 25-34 age cohort
having attained at least proportional upper secondary education was 67% in
1998, the corresponding levels for the older 35-44, 45-54 and 55-64 age-groups
were 56%, 41% and 31% respectively.[1]
§
Telecomm
Infrastructure. The number of main phone lines per 100
population is the lowest in the EU (39 vs. EU high of 68).
The aforementioned analysis
points to the importance of addressing a number of central issues facing
Ireland, many of which are echoed in Ireland’s National
Development Plan. The key
conclusions and recommendations are as follows:
§
Maintain the key
elements of the social consensus underpinning social and economic progress
through government policies and initiatives
§
Continue to minimize
unemployment
§
Upgrade the skills of
older people
§
Retain international
competitiveness in relative salary and productivity terms
§
Exploit ICT’s ability
to offset geographic location disadvantages
§
Rebalance growth away
from the greater Dublin area to other regions and develop the physical
infrastructure to support this growth