Is Ireland over-investing in IT/digital technology?

experiMental

As I work in IT and digital technology, I think Ireland is seriously over-investing in this area. Sure, it brings profits, but those profits can be short-term. I find it perverse that there are so many business accelerator programmes who give out money to build technologies that will become obsolete a year after they are released into the market. I am seeing much better and long term ideas in areas such as agriculture, for example.

Ireland has a large number of natural advantages such as soil, climate, access to sea, etc. I find it odd that investors are not investing with consideration to these and other factors, but are pumping money into something that will return them a quick buck.

Am I over-reacting to the whole investing situation or do you also think that too much money is being put into IT and digital technology in Ireland?

jimmycrackcorm

What technologies are you talking about that become obsolete? Surely every technology becomes obsolete?

L1011

The technology that was brought in 3 years ago is already obsolete. There isn't going to be an endpoint for a number of years yet, there needs to be - and is - constant evolution.

Phoebas

New technologies tend to be built upon old ones, so obsolescence is just progression.

Scortho

The biggest area that Ireland needs to invest in is broadband. While speeds have been improved, they're still to slow with the progression seen in technology.
While technology has came on leaps and bounds, broadband capability at the moment is what it should have been 5 years ago.

Re the op, the biggest issue with the current emphasis on tech investment especially accelerator programmes is a potential .com style crash reoccurring again.

jmayo

experiMental wrote: »

As I work in IT and digital technology, I think Ireland is seriously over-investing in this area. Sure, it brings profits, but those profits can be short-term. I find it perverse that there are so many business accelerator programmes who give out money to build technologies that will become obsolete a year after they are released into the market.

Is this the reason why our broadband infrastructure is so cr** throuhout the country ?
Sure why bother investing since it will be obsolete in a few years. :rolleyes:

experiMental wrote: »

I am seeing much better and long term ideas in areas such as agriculture, for example.

Ireland has a large number of natural advantages such as soil, climate, access to sea, etc. I find it odd that investors are not investing with consideration to these and other factors, but are pumping money into something that will return them a quick buck.

There is argument about food production becoming more important as population grows and climate change takes hold.
But there is only so much land, so much we can do with the limited fish stocks we have, etc.
Unless of course you want to go into industrialised farming creating massive feedlots, etc as in US or massive fish farms in every bay, harbour and inlet.
Of course if we go that route then our more organic, free range food image goes out the window and it becomes couter productive.

experiMental wrote: »

Am I over-reacting to the whole investing situation or do you also think that too much money is being put into IT and digital technology in Ireland?

The key shoudl be investing in home grown long term projects rather than just hoping some guys from San Jose or Redmond decide to set up here.

antoobrien

experiMental wrote: »

Am I over-reacting to the whole investing situation or do you also think that too much money is being put into IT and digital technology in Ireland?

Yup, there are still a lot of companies that are running old (ancient in our terms and I'm not talking XP) IT systems. Win XP is around for over 10 years now and is still being maintained - mostly because it's successors are crap and there are more than a few DEC (no not Compaq or HP) VMS boxes hanging around.

It might seem as if technologies go obsolete within a year or two, but it's not exactly true. Even then the uptake on some technologies is so wide that older versions have to be ported or rebuilt entirely on the new platforms.

If IT&T starts to approach 15% of the economy you can become concerned, otherwise we have proven too adept at developing and evolving our skillsets to become irrelevant. Perhaps we should start to take note of how many companies are starting to move operations back from India because they ended up losing customers over the quality of work being done. Domain knowledge counts for a lot and we have built up knowledge bases across many industries here, which helps offset any lack of pricing competitiveness.

bbam

Agriculture?
Where are there good opportunities there? I farm and the industry is beat out.
You could of course invest in the most viable sector, dairy. Invest a €1M and you should have a €50k income, with a nice 14 hour days, 7 days a week 365 a year job
All other stock farming sectors are break even at best with probably 50% loosing money.

carpejugulum

agriculture? Climate? Soil? lol

bbam

I would have the same reservations as OP.. We are building our future on a set of businesses that could be pulled out from under us in a very short time.. Many of the technology companies are plug and play, relocating them elsewhere would be very simple..
But even our drive to be ready for technology is half-arsed, BB coverage outside the main urban centers is a joke, thats if there is any BB out in rural areas at all..

Agriculture or Agrifoods ?
Well agriculture is on a road to collapse. Stock based enterprises are being distorted by Farm Payments from the EU which have damaged the industry beyond repair.. the leveling of the Farm payments could send shock waves through beef production causing a collapse in production. the future of agriculture would be much better without any Farm Payment system at all... then he who makes money survives, he who doesn't leaves the business.

Dairy has been seen to be a profit business but post 2015 quotas will be eliminated and its estimated that milk revenue will only marginally exceed production costs..
The agrifood sector is reliant on agriculture and thats a real worry..

We cant manufacture wholesale in this country as the cost of doing business is so high its near unfeesable.


So from what I can see our "recovery" is being built on a house of cards that has hard times ahead and the potential to fall anytime soon.

• Technology/IT companies could leave in a heartbeat if the corporate TAX changed here or maybe in Britain.
  
• Agriculture is down to one profit sector which is facing a huge game-changer in the near future.
  
• Agrifoods are reliant on the above, their exports would collapse if agriculture goes into further decline
  
• Manufacturing on any scale is really confined to the MN's in maybe three urban centers, not a great thing. and the American govt would really like to bring them home, or at least the majority of their manufacturing volumes..

experiMental

We can't manufacture wholesale in this country as the cost of doing business is so high its near unfeesable.

If solicitors, legal services, banking and rental property fees would be lower, would the cost of doing business drop dramatically?

bbam

experiMental wrote: »

If solicitors, legal services, banking and rental property fees would be lower, would the cost of doing business drop dramatically?

It's a whole system problem.
What about rates, insurance and power. None of them cheap and none due to fall in price.

I can't ever see changes of the magnitude which are required to make regular manufacturing competitive. The gap is just too big and too many vested interests involved.

djpbarry

bbam wrote: »

We cant manufacture wholesale in this country as the cost of doing business is so high its near unfeesable.

And yet, manufacturing is taking place in Ireland, as you allude to yourself...

bbam wrote: »

Manufacturing on any scale is really confined to the MN's in maybe three urban centers, not a great thing. and the American govt would really like to bring them home, or at least the majority of their manufacturing volumes.

maninasia

bbam wrote: »

It's a whole system problem.
What about rates, insurance and power. None of them cheap and none due to fall in price.

I can't ever see changes of the magnitude which are required to make regular manufacturing competitive. The gap is just too big and too many vested interests involved.

I'm currently looking at manufacturing something in Asia. I am also considering manufacturing in Ireland in some form. However the higher costs for everything does make it a challenging proposition, even if it is just final assembly in Ireland. I'm talking about rates, taxes, labour, construction costs, fuel, health & safety, insurance. Things like accountancy fees, legal fees, regulatory authority fees..all more. Corporate tax is reasonable of course. The other issues is there are less options in terms of manufacturing and parts sourcing. The UK would be better for that or Germany or Italy.
Where being based in Ireland could help is running an integrated quick turnaround custom manufacturing and design service for European clients.

maninasia

Agrifoods are reliant on the above, their exports would collapse if agriculture goes into further decline

Exports depend on foreign demand more than anything. Overall there should be plenty of demand growth to support further growth in Irish food exports.

Branding is also key, and Irish companies need to more involved in developing global brands. It's hard for smaller companies but it is possible.

Ireland is doing well in IT, there's nothing wrong with supporting it's future development and growth.

What is important though is to develop diverse industries that can leverage off our natural advantages, our clean and green country and our historical and cultural traditions. This has the great benefit of spreading wealth into more parts of the country rather than a few areas such as Dublin, Galway and Cork. Medium to high end luxury brands in cosmetics and fashion and food would be a good choice.

We can also support our medical and pharma industries which has been a successful strategy and which do tend to provide high incomes to employees.

[Jackass]

The good thing about our investment in the I.T. / Technology sector is that it potentially will grow exponentially for the foreseeable future. Some might say we, as a society, are in the midst of an information revolution that may be remembered in similar vein to how the industrial revolution of the late 19th century will be remembered.

However, having said that, Irelands place in this is precarious at best. A massive chunk of the technology / I.T. industry in Ireland is based largely around Foreign Direct Investment from global super powers wanting to take advantage of our EU status and low corporate tax rate.

Whilst our EU status is no in any realistic danger, there is a significant potential threat to our low corporation tax. This has been a divisive issue in Europe ever since we became dependent on foreign support / lost our economic independence, and it is not beyond the realms of possibility that we could be forced indirectly to forfeit that status, even if non-directly, by a European Fiscal Union, which I think is inevitable, the only question is "when", not "if".

An aggravating factor also being how this has come to attention of congress in the United States and the potential legislation they may introduce within their own country that would deminish the incentive of those companies being based here.

Should that become the case, we then face significant competition from Eastern Block developing nations who have become part of the EU and will gradually continue to do so, as capital expense and cost of labour would be far less than here, and even if they would not initially have the skilled workforce to support it, central European countries like Germany would, and would also have comparatively cheaper capital and workforce outside of the main industrial areas.

As it stands, I think we should continue with having a highly skilled, specialised workforce, however the main threat is that we do the typical Irish thing and get tunnel vision to the point that we again focus on one industry to prop up our economy, and IT was the building block of the recent boom, and may well be the main economic performer of a recovered Ireland.

Personally I would like to have seen us take advantage of a bad situation through financial services reform to be a big industry in Ireland but also to focus a significant chunk of our spending on developing small startups and medium sized domestic business' across all sectors.

We do need to find a few niche sectors though, as manufacturing in Ireland has relative expense, areas like IT / Technology / Pharmacuitical are all largely dependent on FDI, I think we need to look to become greater exporters of high skilled services more than anything, and give large incentives and support to grow domestic suppliers.

Lbeard

bbam wrote: »

Agriculture?
Where are there good opportunities there? I farm and the industry is beat out.
You could of course invest in the most viable sector, dairy.

Viable because it's so heavily subsidized. How much of this milk is actually consumed by humans? How much is being used to make plastics?.........Would it make far more sense economically, that instead of letting farmers have subsidised diesel, that they run their cars and tractors on butter diesel instead?

Invest a €1M and you should have a €50k income, with a nice 14 hour days, 7 days a week 365 a year job
All other stock farming sectors are break even at best with probably 50% loosing money.

Or you could put €1M in a bank account if you want to play it save, earn at least 20k for sitting on your arse.

Or buy some houses and apartments, they're going for a song. Get rent cattle in them. You don't even have to get up early in the morning to milk them. They milk themselves. As long as you weren't a complete and utter eejit, you could get easily over a 5% return. And it's a lot easier than having cows scutter on you two or three times a day.

The only reason anyone would buy a farm at this stage, would be someone like Michael O'Leary, who wants to trot around in tweeds and wellington boots playing the country gent.

bbam

Lbeard wrote: »

Viable because it's so heavily subsidized. How much of this milk is actually consumed by humans? How much is being used to make plastics?.........Would it make far more sense economically, that instead of letting farmers have subsidised diesel, that they run their cars and tractors on butter diesel instead?





Or you could put €1M in a bank account if you want to play it save, earn at least 20k for sitting on your arse.

Or buy some houses and apartments, they're going for a song. Get rent cattle in them. You don't even have to get up early in the morning to milk them. They milk themselves. As long as you weren't a complete and utter eejit, you could get easily over a 5% return. And it's a lot easier than having cows scutter on you two or three times a day.

The only reason anyone would buy a farm at this stage, would be someone like Michael O'Leary, who wants to trot around in tweeds and wellington boots playing the country gent.

OK.. last comments in your general direction as you sem to have a serious set against the Farming community in general..

I worked in the dairy services sector for years and to my knowledge milk in Ireland is not sent to manufacture plastic. I may be wrong here but if it is its not widely practiced.. Milk in Ireland generally goes for human and animal consumption.

What is butter diesel?? And other sectors consume vast ammounts of marked diesel. Construction and rail transport being two just of the top of my head..

Farming is an industry sector in crisis, not many outside farming seem to realise that margins in general have been reducing and it will get to a stage where very few farms are viable. This will be a problem for the whole country, not just farmers.

Don't bother adding any reply in my general direction as you're being added to my "Ignore" list.. I'm sure you'll educate the boardies in general about how bad people farmers are, but I would rather read posts from someone who understands something - or anything at all.

daithicarr

It seems to me that hopes for our economic recovery are 90% reliant on FDI, which is as most of us not in the government seem to know is currently a giant smoke screen for company's shifting their assets around the globe. Dell being a leading exporter with plants closed etc. etc.

Its hard to see where growth would come from, being a small open economy any government stimulus would have to very carefully managed to make sure the majority of the benefit didn't go abroad. Not sure from where else the capital would come from apart from the state/tax payer. and I would place my confidences in the government managing it properly.

Another issue is how much involvement the government should take, should they set up strategic company's , fund businesses etc. Again I don't think the state is currently capable in the slightest or the Government ideologically inclined to this route. Any stimulus as it stands would also see a large proportion of the spending going in to private corporate pockets.

Example, the government pay a company to run a national broadband service in rural areas ( rural broadband, great), This company takes the money, and then their customers money, provides a minimal service and outsources most the work involved abroad and the profits go abroad. No multiplier effect, no game changing service.

Scofflaw

Hmm. On this note:

A state-of-the-art hub of innovation to hothouse start-ups and create tech clusters was the intention: a big white elephant was the reality.

Webworks Galway is for sale for circa €4m by receivers – a fraction of the €35m Exchequer-backed cost to build it.

Worse still, the taxpayer has seen minimal return on millions invested in this and a similar centre in Cork.

"It's money that has basically been squandered," said one well-known technology industry figure. "It was a badly needed city-centre tech hub. The funding involved could have paid the rent for hundreds of start-ups for 10 years. It's a disgrace."

Completed in 2007, the impressive high-spec glass and steel building is all but dormant now, with as few as two paying tenants in its 42 offices. It has never been more than 20 per cent occupied.

The Cork Webworks is less than half occupied, and most tenants aren't start-ups or tech companies. One is a solicitor's office, one is the architect that designed the building and another is telecoms software giant Huawei.

http://www.independent.ie/business/irish/taxpayers-lose-millions-in-enterprise-ireland-failures-29365530.html

Not only investing too much, but investing it badly. Was there ever a point in creating a "startup hub" that startups couldn't afford, never mind doing nothing more than earmarking a building and claiming it would be an 'innovation hub' all by itself?

cordially,
Scofflaw

Lbeard

Scofflaw wrote: »

Not only investing too much, but investing it badly. Was there ever a point in creating a "startup hub" that startups couldn't afford, never mind doing nothing more than earmarking a building and claiming it would be an 'innovation hub' all by itself?

cordially,
Scofflaw

The purpose of the "startup hub", is to give well connected tossers jobs. If you don't have a clue about computers, but see there's cash to be made in training schemes funded by the government - tap into your connections, and before you know it you'll be giving lectures on subject you don't have a clue about. Want to piss about with i-phone apps, if you know the people, and they think you're "one of them", along will come the money truck to piss away a fortune on you.

Pissing money away is all about who you give it to. Without getting into the class thing again, there is a brigade of people in Ireland who get first dibs on the cash. The wing nut whingers who come on here bellyaching about civil servants have no idea how much government money is pissed away on people not worth piss.

[Jackass]

Scofflaw wrote: »

Hmm. On this note:



http://www.independent.ie/business/irish/taxpayers-lose-millions-in-enterprise-ireland-failures-29365530.html

Not only investing too much, but investing it badly. Was there ever a point in creating a "startup hub" that startups couldn't afford, never mind doing nothing more than earmarking a building and claiming it would be an 'innovation hub' all by itself?

cordially,
Scofflaw

I don't think that's a sign of investing too much, merely an example of awful planning when looking to invest. Without question there are the skills and innovation out there for small, domestic tech startups, but wasting millions on a fancy building and presumably charging a fair chunk of rent is pretty much the worst idea I've heard of to support start-ups, and I'm not sure what it has to do with a "technology hub" other than attaching a buzz word to yet another failed office development.

Scofflaw

[Jackass] wrote: »

I don't think that's a sign of investing too much, merely an example of awful planning when looking to invest. Without question there are the skills and innovation out there for small, domestic tech startups, but wasting millions on a fancy building and presumably charging a fair chunk of rent is pretty much the worst idea I've heard of to support start-ups, and I'm not sure what it has to do with a "technology hub" other than attaching a buzz word to yet another failed office development.

I think the fact that you could take an expensive office development and hang "tech hub" on it is quite indicative of the extent to which the Irish political class have over-invested themselves in IT as a strategy. And given the results of their over-investment of themselves in property and finance as strategic choices for Ireland, I think that's compellingly worrying in itself.

Mind you, I could be wrong, and it could simply have been a cynical Ministerial paint-job for what really was just another office development. In which case I would theoretically breathe a sigh of relief with respect to Ireland's long-term strategic policy-making, since most of that strategy's tidal wave of brown stuff is already visibly in motion.

cordially,
Scofflaw

nice_guy80

schools down in rural Ireland still cannot get broadband through the phone line

it is killing any hope of digital learning in the classroom

where is the investment??

Scofflaw

nice_guy80 wrote: »

schools down in rural Ireland still cannot get broadband through the phone line

it is killing any hope of digital learning in the classroom

where is the investment??

That's sort of the point of the media hub story, to me - there's an "investment" by the politicians in IT as a "strategy", to the point where there's a danger of "over-investment" as per the OP, but there's a complete mismatch with actual investment. I can't see that broadband for all rural schools, say, or investment in putting businesses and resources online, can be a bad thing whatever our "strategic stance" may be, whether that's to be a biotech hub or a tourist trap - but I can see that over-investment in the idea of being a "digital economy", particularly without the substance, could be a serious problem.

cordially,
Scofflaw

Lbeard

Scofflaw wrote: »

Mind you, I could be wrong, and it could simply have been a cynical Ministerial paint-job for what really was just another office development.

A bit more than a paint job. And not cynical as in these people think they're they best people for any job - jobs that award nice pay packets and puts them in charge of stuff.

If you look up some of the names involved in the project, you'll draw the dots quite quickly.

Office space in Dublin is way overpriced. Especially considering nearly all of it is empty.

experiMental

Scofflaw wrote: »

but I can see that over-investment in the idea of being a "digital economy", particularly without the substance, could be a serious problem.

I absolutely agree. This could say that Ireland is just good at digital and very little else. Most other countries can also do IT, so that doesn't make digital industry a good enough competitive advantage.

For each tech startup idea conceived in Ireland, a same one can also be conceived in Silicon Valley. It can easily get at least twice the amount of funding than in Ireland. Many Irish IT companies are having a hard time competing against Silicon Valley startups. Many are playing a catch-up game rather than leading the way.

I have noticed that Irish startups are much better at selling themselves than Silicon Valley ones. In fact, very few countries are as good at starting businesses as Ireland is. The process of starting businesses is a competitive advantage, because it's unpredictable and it can't be replicated. The methodology behind this process has no single universal format, so it's hard to teach and therefore hard to outsource. Over hundreds of years, Irish people have built up a unique entrepreneurial culture, so I wonder if the government invests in developing it further.

IT is in a state of gold rush, but there are other ways of making money.

djpbarry

experiMental wrote: »

Most other countries can also do IT...

That really depends on what you mean by "IT" - it's an incredibly broad area.

experiMental wrote: »

Over hundreds of years, Irish people have built up a unique entrepreneurial culture...

They have? Well, I guess that depends on how you define "unique".

Bits_n_Bobs

Ireland made two serious policy decisions that had a massive impact on our digital infrastructure;
- privatised Eircom - the market is all knowing
- beauty contest for awarding original Esat license - the state knows best and the market should not be trusted

Dysfunctional and disastrous lack of an actual 'policy'. The depressing thing is I don't see any solid policy emerging since those decisions were taken other than the usual bluffing. Thankfully they've stopped creating bloody hubs

maninasia

experiMental wrote: »

I have noticed that Irish startups are much better at selling themselves than Silicon Valley ones. In fact, very few countries are as good at starting businesses as Ireland is. The process of starting businesses is a competitive advantage, because it's unpredictable and it can't be replicated. The methodology behind this process has no single universal format, so it's hard to teach and therefore hard to outsource. Over hundreds of years, Irish people have built up a unique entrepreneurial culture, so I wonder if the government invests in developing it further.

Where is the evidence for these ludicrous statements?

experiMental

maninasia wrote: »

Where is the evidence for these ludicrous statements?

Ryanair and Paddy Power were started in Ireland. Ford was started by an Irishman. They are all industry leaders. You have to look at the amount of industry leading countries per capita. Ireland has a high proportion of them in relation to many other countries. Look at it this way: what I mentioned here are already two industry leading companies per a country of 4.5 million.

I am also quoting this article : http://gemconsortium.org/docs/download/2432

At the other end of the scale there is a higher proportion of entrepreneurs in Ireland with high growth ambitions that is the norm across other countries.

Getting back on topic:

If there will be such a high proportion people who will know IT-specific skills only, it will take a while to re-train some of them when some IT companies will pull out. Look at what happened during the Celtic Tiger: a lot of people were employed in the construction sector, but now they are finding it hard to adapt to the new economic situation, where there is less demand for their skills.