Is Ireland over-investing in IT/digital technology?

experiMental · 12-05-2013 8:18pm #1

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 · 12-05-2013 8:40pm

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

L1011 · 12-05-2013 10:01pm

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 · 12-05-2013 10:09pm

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

Scortho · 12-05-2013 10:30pm

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 · 13-05-2013 11:53am

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 · 13-05-2013 12:36pm

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 · 13-05-2013 2:23pm

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 · 13-05-2013 6:40pm

agriculture? Climate? Soil? lol

bbam · 13-05-2013 7:25pm

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 · 11-06-2013 11:54am

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 · 11-06-2013 4:33pm

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 · 12-06-2013 2:28pm

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 · 13-06-2013 3:43am

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 · 13-06-2013 3:58am

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] · 13-06-2013 3:48pm

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 · 16-06-2013 4:08pm

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 · 17-06-2013 9:07am

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 · 23-06-2013 5:25pm

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 · 24-06-2013 4:16pm

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 · 24-06-2013 4:30pm

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] · 24-06-2013 5:50pm

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 · 24-06-2013 6:40pm

[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 · 24-06-2013 6:41pm

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 · 24-06-2013 7:03pm

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 · 24-06-2013 9:38pm

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 · 29-06-2013 11:13pm

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 · 30-06-2013 11:28am

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 · 01-07-2013 3:46pm

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 · 03-07-2013 3:52am

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 · 05-07-2013 10:51am

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.

who_me · 05-07-2013 11:00am

experiMental wrote: »

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.

That comparison doesn't really hold. The fate of construction workers in Ireland is tied entirely to the Irish construction industry & economy - if that fails (as it kind of did), they have to re-skill or move to another country.

The fate of IT workers in Ireland is tied to the global IT industry & economy. I work in IT and we don't have a single Irish client and probably never will. For us to fail, the global IT economy would need to fail, or else Ireland becomes horribly uncompetitive to employ people. Given that Silicon Valley salaries are (approx.) 70 - 100% higher than here, I don't think that's happening any time soon.

Cody Pomeray · 08-07-2013 4:07pm

maninasia wrote: »

very few countries are as good at starting businesses as Ireland is.

Where is the evidence for these ludicrous statements?

If he's referring to the ease with which you can open a business in Ireland, then he's right. It is exceptionally easy for firms to become privately incorporated relative to other jurisdictions, with no minimum capital requirements, not even the necessity to have a bank account, or (if my memory serves me correctly) an ID. While Ireland's lax regulation of financial institutions has not survived the financial crisis, lax regulation of incorporation has, in effect, grown even more relaxed.

nesf · 08-07-2013 6:25pm

Cody Pomeray wrote: »

If he's referring to the ease with which you can open a business in Ireland, then he's right. It is exceptionally easy for firms to become privately incorporated relative to other jurisdictions, with no minimum capital requirements, not even the necessity to have a bank account, or (if my memory serves me correctly) an ID. While Ireland's lax regulation of financial institutions has not survived the financial crisis, lax regulation of incorporation has, in effect, grown even more relaxed.

What nonsense, you've obviously never set up a limited company. When creating a company you have to submit this form: http://www.cro.ie/GetAttachment.aspx?id=d493d5cc-adef-41bd-ae1c-779b80ef3986

It has to be signed off on by a solicitor or other suitable legal authority and part of this is a declaration of identity of the person who wants to form the company.

Cody Pomeray · 08-07-2013 6:35pm

nesf wrote: »

It has to be signed off on by a solicitor or other suitable legal authority

This "legal authority" usually amounts to a person who simply runs a company formation firm.

What I am saying is that, to the best of my knowledge, the CRO do not confirm the identity of company directors. I raise this point because I am aware of a case that came before the circuit court last year whereby there was, or is, a difficulty in identifying the true identity of a company secretary, and without which a number of legal issues were (are) held in limbo.

My issue is with the lack of oversight of the CRO with regard to the identity of directors, although I may be erroneously remembering the requirements. From your link, it doesn't appear like I am. However, this is only one of the factors i recognized in what I would suggest is an overly-lax regulation structure.

nesf · 08-07-2013 6:42pm

Cody Pomeray wrote: »

This "legal authority" usually amounts to a person who simply runs a company formation firm.

What I am saying is that, to the best of my knowledge, the CRO do not confirm the identity of company directors. I raise this point because I am aware of a case that came before the circuit court last year whereby there was, or is, a difficulty in identifying the true identity of a company secretary, and without which a number of legal issues were (are) held in limbo.

My issue is with the lack of oversight of the CRO with regard to the identity of directors, although I may be erroneously remembering the requirements. From your link, it doesn't appear like I am. However, this is only one of the factors i recognized in what I would suggest is an overly-lax regulation structure.

Someone who runs a company formation firm? No. They keep solicitors on retainer for a reason.

The CRO do not confirm the identities of directors and secretaries, that's the solicitors job and just like any declared document if the solicitor is willing to look the other way you can get away with a lot.

Cody Pomeray · 08-07-2013 6:57pm

nesf wrote: »

The CRO do not confirm the identities of directors and secretaries, that's the solicitors job

No, the solicitor, or senile Billy the shopkeeper who happens to be the local peace commissioner (this is my actual local example) meets his acquaintance Johnny 1 who says "Billy, this is Johnny 2, will you sign his form?".

Johnny 2 is now secretary of the company. The next day, or when the documents are filed, Johnny 2 (whose ID has never been verified) now signs away his role to a new secretary and a new director, called Johnny 3 and Johnny 4. The next available day they sign the company over to Micky and Minnie Mouse. Nobody in the CRO asks for anybody's ID along the trail, and as far as I can recall, there is no requirement for them to procure the services of a solicitor or formations agent or peace commissioner

I think my suggestion that no actual ID is required to be produced is satisfied.

nesf · 08-07-2013 7:26pm

Cody Pomeray wrote: »

No, the solicitor, or senile Billy the shopkeeper who happens to be the local peace commissioner (this is my actual local example) meets his acquaintance Johnny 1 who says "Billy, this is Johnny 2, will you sign his form?".

Johnny 2 is now secretary of the company. The next day, or when the documents are filed, Johnny 2 (whose ID has never been verified) now signs away his role to a new secretary and a new director, called Johnny 3 and Johnny 4. The next available day they sign the company over to Micky and Minnie Mouse. Nobody in the CRO asks for anybody's ID along the trail, and as far as I can recall, there is no requirement for them to procure the services of a solicitor or formations agent or peace commissioner

I think my suggestion that no actual ID is required to be produced is satisfied.

And what did I say in my last line? If the legal authority who is signing off on the document isn't doing their job right the system fails. This is accepted.

Your suggestion is far from satisfied I'm afraid. You suggested no ID need be provided, the implication being in general from your phrasing, you've now shifted the goalposts to "if you know a guy he can sort you out" which is kind of pointless since this applies to almost anything in any society that's signed off on on the word of a particular professional or office holder.

Cody Pomeray · 08-07-2013 7:28pm

nesf wrote: »

Your suggestion is far from satisfied I'm afraid. You suggested no ID need be provided, the implication being in general from your phrasing, you've now shifted the goalposts to "if you know a guy he can sort you out"

Er, yeah, because with a nod and a wink, this non regulated, amateur official can sort you out without you ever producing any ID. More seriously, change of directorships require no validation.

How is this anything but a blatant vindication of what I originally described as my understanding? Where is the necessity to produce any ID along the trail?

nesf · 08-07-2013 7:37pm

Cody Pomeray wrote: »

Er, yeah, because with a nod and a wink, this non regulated, amateur official can sort you out without you ever producing any ID. More seriously, change of directorships require no validation.

How is this anything but a blatant vindication of what I originally described as my understanding? Where is the necessity to produce any ID along the trail?

Change of directorship and sale of "off-the-shelf" companies are two different issues. For anyone incorporating a company who doesn't have a handy peace commissioner or whatever they'll have to go through a different legal official who will either have to know them personally to the extent of being sure of their identity or they'll have to produce ID (many solicitors will ask for it anyway as a routine thing).

Cody Pomeray · 08-07-2013 8:01pm

nesf wrote: »

Change of directorship and sale of "off-the-shelf" companies are two different issues. For anyone incorporating a company who doesn't have a handy peace commissioner or whatever they'll have to go through a different legal official who will either have to know them personally to the extent of being sure of their identity or they'll have to produce ID (many solicitors will ask for it anyway as a routine thing).

No, they don't have to be known to them personally. The 'friend of a friend' rule applies. This is inadequate.

I raise the change of directorship issue because it has the same effect, in fact it has an aggravating effect.

maninasia · 09-07-2013 1:52am

experiMental wrote: »

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

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.

I would say that Ryan Air and Power Power are the exception, even if very successful Irish companies, rather than the rule. There's little interest in investing on or starting entrepreneurial companies in Ireland in general.

Ireland does have some good attributes in terms of low taxes etc. but the high cost of rates, insurance, legal and other services puts me off personally in establishing a manufacturing business there.

http://www.irishtimes.com/business/sectors/transport-and-tourism/property-still-the-main-store-of-wealth-for-irish-1.1432519

Property still the main store of wealth for Irish
Survey finds low levels of investment In business or financial products

Sister Assumpta · 11-07-2013 9:48am

maninasia wrote: »

There's little interest in investing on or starting entrepreneurial companies in Ireland in general.

Aren't something like 2000 businesses a month set up in Ireland?

The problem is access to credit, not incentive and not ambition. If anything people are becoming more reliant on self employment following the crash, they are starting plenty of new businesses but they are not being supported because the market isn't there.

Cody Pomeray wrote: »

No, they don't have to be known to them personally. The 'friend of a friend' rule applies. This is inadequate.

I raise the change of directorship issue because it has the same effect, in fact it has an aggravating effect.

If they have limited liability, it shouldn't matter who the directors are, they are separate from the company anyway. Consumers don't tend do background checks on directors, that wouldn't even be common in the majority of business to business transactions. I don't think it matters to most people.

Cody Pomeray · 11-07-2013 11:42am

Sister Assumpta wrote: »

If they have limited liability, it shouldn't matter who the directors are, they are separate from the company anyway. Consumers don't tend do background checks on directors, that wouldn't even be common in the majority of business to business transactions. I don't think it matters to most people.

There are a number of important points.

When a company is established as an incorporated body it becomes a distinct personality, with its own constitutional and legal rights, and similarly, its own legal obligations.

1. Rights.
If you apportion constitutional rights and legal rights to a personality, those rights can encroach upon the constitutional and legal rights of citizens when the rights of one party are balanced with those of another. In short, the constitutional cake, or the legal cake gets divided up further. That's fine. But if so, can we please make sure that these legal personalities are pursuing legitimate interests, by regulating them to a more reasonable extent

(asking their directors for ID before granting them legal personality status would be a great beginning).

2. Obligations.
If we apportion obligations to legal personalities, citizens and other legal personalities have a valid expectation of those obligations being enforceable. So when a Director is pursued through the courts and the ODCE for reckless trading, or example, we should be sure that that director has not been recorded as "Mr Michael Mouse" on the company's register.

This expectation extends to shareholders and consumers. If they are to continue having confidence in Ltd. companies, they ought to be reasonably assured of a level of transparency. This transparency is vital to the interests of a dynamic, healthy marketplace.

3. Revenue & Compliance Issues
I don't think this requires too much elaboration. Listing false directors is one of the oldest (and most fool-proof) tricks in the book when it comes to tax avoidance. Similarly, what's the point in striking off a director, and preventing him from taking up a new directorship, when the guy can go back to work, and be listed as a director under a modified surname? PPS number? What PPS number? The CRO aren't interested.

nice_guy80 · 11-07-2013 11:29pm

we need a huge investment in the fibre broadband network in rural areas.

not finance for tiny start up companies

the fact that a lot of rural businesses rely on mobile broadband through a usb stick or via satellite broadband tells you its own story

rural electrification was done more efficiently in the 1950's

maninasia · 12-07-2013 2:38am

Sister Assumpta wrote: »

Aren't something like 2000 businesses a month set up in Ireland?

The problem is access to credit, not incentive and not ambition. If anything people are becoming more reliant on self employment following the crash, they are starting plenty of new businesses but they are not being supported because the market isn't there.

If you are going to mention how many open every month you should also mention how many close every month.

Sure there are entrepeneurs in Ireland, and it probably stacks up well to some European countries, but to say it is a very entrepeneurial country or one that is flush with new and up and coming businesses, is plainly wrong. Compared to countries in Asia that I know, it doesn't hold a candle to them in terms of business creation and the number of people running their own businesses. Like you said, the environment in Ireland is not helpful in some respects, such as lack of investment (looking at the numbers it's as big a problem as credit), lack of domestic market, high costs all round, strong labour protection for workers and heavy taxation makes it easier to be an employee than an employer.

Most people in Ireland dream of becoming a professional or working in a civil service type role or for multinationals. That is the same almost everywhere to be fair.

The latest issue of Wealth Insights, published by British bank Barclays, shows that Irish high-net-worth individuals hold 55 per cent of their wealth in property and just 2 per cent of it is invested in enterprise or business. Of the rest, they keep 18 per cent in cash, 16 per cent in financial investments and 7 per cent in assets such as collectables.

Scofflaw · 12-07-2013 11:10am

It seems highly unlikely there aren't measures for this kind of thing, so perhaps we should inject some facts into the debate:

This graph is interesting, since it suggests we're about mid-rank for entrepreneurialism in terms of the % of adults in start-ups - but on the other hand, a high proportion of Irish entrepreneurs do it because they have no other option.

cordially,
Scofflaw

Frank Lee Midere · 12-07-2013 11:23am

Bits_n_Bobs wrote: »

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

You contradicted yourself in one paragraph there. When Eircom is finished its broadband roll out we will probably have one of the best networks in Europe. Thanks to UPC Dublin is one of the best served in fibre in Europe anyway.

Frank Lee Midere · 12-07-2013 11:27am

But back to the original point -- do we have too much IT. That's a bit like worrying about having too many factories in the UK in 1850. Sure there were recessions but factories were the future then and IT is the future now. Unless software learns to write itself, and networks install themselves, there will always be a demand for IT and it will probably exceed demand even if China comes on strong. The latter is the only real worry.

Frank Lee Midere · 12-07-2013 11:47am

Cody Pomeray wrote: »

No, the solicitor, or senile Billy the shopkeeper who happens to be the local peace commissioner (this is my actual local example) meets his acquaintance Johnny 1 who says "Billy, this is Johnny 2, will you sign his form?".

Johnny 2 is now secretary of the company. The next day, or when the documents are filed, Johnny 2 (whose ID has never been verified) now signs away his role to a new secretary and a new director, called Johnny 3 and Johnny 4. The next available day they sign the company over to Micky and Minnie Mouse. Nobody in the CRO asks for anybody's ID along the trail, and as far as I can recall, there is no requirement for them to procure the services of a solicitor or formations agent or peace commissioner

I think my suggestion that no actual ID is required to be produced is satisfied.

No ID is needed in the UK either. It's online. You need a PPS number.

Sister Assumpta · 12-07-2013 1:23pm

maninasia wrote: »

If you are going to mention how many open every month you should also mention how many close every month.

I disagree.

I was responding to:

maninasia wrote: »

There's little interest in investing on or starting entrepreneurial companies in Ireland in general.

That's just not true based on my 2000-per-month figure. But Scofflaw's graph more clearly proves that this is not true on an international comparison.

The number of businesses which fail are not relevant to the suggestion that there is little interest in investing or starting entrepreneurial companies here.

Clearly we have the interest/ ambition in entrepreneurship. Like I said, the market isn't there right now.

I am assuming you live in Asia and I don't want to get personal and I've been an 'emigrant' myself, but my experience is that there is a tendency to be overly critical of the 'homeland' by emigrants abroad. Sometimes this is justified, often it is not. Especially when it verges on applying personality characteristics to Irish people living in Ireland.

Is Ireland over-investing in IT/digital technology?

Comments