Remember all that brave talk when the Coalition came to power coming up for 18 months ago about “rebalancing the economy,” moving away from our fatal reliance on financial services and back to encouraging a bit more actual, making of stuff?
Granted we’ve had a crisis or two since (though as we’re not in the Euro, Chancellor hasn’t had to be sitting on that many planes). But from where we sit, we don’t see that much being done in London to encourage high-paying firms to expand their employment rolls. Not in London, no.
Quite a different story in Dublin, mind. While once the M4 corridor was the standard ‘route to Europe’ for expansionist US technology firms, it’s increasingly to our greener neighbour that Digital Economy builders now look for their first overseas adventures in a trend that doesn’t exactly showcase our country as being (remember this phrase?) “open for business”.
Recently the news broke that Twitter is the latest to set up shop there, joining social media fellows LinkedIn, Google and Facebook by opening an international office in Dublin. They’ll also find the likes Amazon and Google and Salesforce.com nearby as Silicon Fen seeks to morph into the go-to destination for US investment.
US firms are lured by a combination of low rates of corporate tax (at 12.5% it’s one of the lowest in Europe), the opportunity to remit profits to other parts of the world more easily and an educated, English-speaking (or perhaps, American-speaking) workforce. Eire’s Industrial Development Authority (IDA), which spearheads the drive to attract inward investment to the country, claims thousands of well-paid, good quality local jobs have been created by its favourable business climate.
The IDA undoubtedly does a good job. One US firm told BusinessCloud9 that the IDA’s representatives were proactive, well-informed, persuasive and argued a positive business case. In contrast, said the US firm, the UK counterparts best effort consisted of saying: “Ireland’s economy’s about to go bust; you’d be safer setting up in the UK.” That particular firm is opening its doors in Dublin needless to say.
In fact, Ireland is ranked third in the EU by the World Bank in terms of ease of doing business and fourth in the world for the availability of skilled labour and openness to new ideas. The European Commission forecasts that the cumulative fall in Irish unit labour costs will be over 8% in the period 2008-2012 – theoretically making Ireland even more attractive for foreign direct investment.
The Dail's Minister for Jobs, Enterprise and Innovation Richard Bruton argues that the Twitter announcement is a "massive win" that showed there was:
It’s hard to dispute that Ireland isn’t doing a good job on that front. Earlier this month software firm VMware opened expanded premises in Cork, bringing with it 250 new jobs in customer support, sales specialists and recruitment. The firm already employs 550 staff in Cork. Maurizio Carli, senior vice president at VMware, notes:
It’s music to the ears of Bruton who sees the Cloud as a rich new source of economic growth for Ireland:
What the Irish government has done very effectively is set out a stall that says ‘open for Cloud Computing and social media business”. Earlier this year the government published its Programme for Government, which contains a pledge to “make Ireland a leader in the emerging IT market of Cloud Computing by
- promoting greater use of Cloud Computing in the public sector
- organising existing State supports for Cloud Computing into a package to promote Ireland as a progressive place for IT investment
- establishing an expert group to address new security and privacy issues arising from the use of Cloud Computing
- reviewing the adequacy of current legislation and identify what steps need to be taken to ensure a supportive regulatory environment.
Contrast that with the UK government’s national ICT strategy which makes no such commitments, barely mentions Cloud Computing and isn’t exactly bursting at the seams with schemes for attracting and incentivising inward investment from the new breed of hi-tech firm.
That figure is based on a study by Microsoft which set up a $500m data centre in Dublin to host and support its Cloud Computing offerings. The study argues that as well as job creation, a wholesale commitment to the Cloud could take 500 million Euro of costs out of the Irish economy, a tempting message given its recent travails.
Microsoft’s not alone. In the summer, Amazon purchased a 240,000 square foot building in Dublin which it will convert into a new data centre which will expand the company’s Cloud operations. Amazon is one of the pioneers of the Irish Cloud settlement. Amazon Web Services opened its first data centre in Dublin in December 2008 to house European availability for its EC2 services and Amazon’s Cloud hosting now makes up more than a third of all internet-facing web servers in Ireland, with three times more web servers hosted than the next largest hosting location.
Latter day arrivals include marketing Cloud specialist Marketo – one of Silicon Valley’s hottest firms - which has set up a 125-person operation in Dublin. The European operation is headed up by Irishman Fergus Gloster, but his nationality isn’t the reason for the chosen location. Gloster insists:
Gloster reckons that Ireland now has a stronghold in Cloud Computing. He observes:
