Business Technology

Saturday 21 October 2017

Adrian Weckler: Dublin becoming tech giants' company town

The upshot is that, together, Google and Facebook may utterly dominate a growing area of Dublin's inner city.
The upshot is that, together, Google and Facebook may utterly dominate a growing area of Dublin's inner city.
Adrian Weckler

Adrian Weckler

What does an Irish city quarter dominated by just one or two companies look like? We may soon find out.

By 2019, almost 10,000 Dublin city workers could be clocking in to one of just two companies - Facebook or Google.

That's a significant percentage of all the private sector jobs in the city. But it's an even bigger chunk of the docklands area.

What does this mean for the neighbourhoods around it? Will it set house prices and rents soaring even further? And does it leave a section of the city exposed if one or other of the two giants ever ups and leaves?

For those who missed it last week, Facebook confirmed what had been speculated for months - that it has leased an additional building in Dublin to accommodate its massive growth here. The new building, in the north docklands East Wall district, will have space for 800 'desks' (meaning people). Right now, the company employs 1,600 people in its south docklands, Grand Canal Square premises. It expects to hit 2,000 fairly soon. Another 800, assuming the company's growth continues, would bring it close to 3,000 people in Dublin.

Meanwhile, a few streets away in Barrow Street, Google's relentless 'scaling' seems to have no end. It now employs over 6,000 people here, but may soon start adding more as it is reportedly in discussions on yet another new office building, the 51,000 sq ft Velasco building around the corner from its current offices.

The upshot is that, together, Google and Facebook may utterly dominate a growing area of Dublin's inner city. There will be few auctioneers, white collar offices, retailers or hostelries that won't be affected (or even dependent) on the world's two biggest web companies' city presence.

There are extreme examples of when individual companies - or sectors - grow to dominance in towns and cities. The American town of Endicott, in New York State, had 13,000 residents. Its biggest employer company, IBM, employed 11,000. Then IBM scaled back. And it scaled back again. Today, it only has a handful of people left in the area, with its former industrial premises mostly used by other companies.

The best European example is arguably Wolfsburg in Germany, home to Volkswagen. Some 70,000 people are directly employed in Wolfsburg by the giant car manufacturer, despite the city only having around 125,000 residents. Volkswagen is the life and soul of the city, from sponsoring the area's Bundesliga football team to making Wolfsburg Germany's richest city, with an average income of over €110,000.

Dublin has had its own share of dominating employers. Guinness (owned by Diageo) still owns a chunk of Dublin 8, having historically housed scores of employees to work in its brewery there.

Obviously, Google and Facebook can't be said to have anything like the scale or community effect of VW, IBM or Guinness in their heydays.

But Google is now arguably Dublin city's biggest private industrial employer. Facebook is growing at breakneck speed, too. And then there's AirBnb, Linkedin, Workday and a host of other digital tech employers that range from 500 to 1,000 employees in the centre of Dublin.

We think of the IFSC as a banking zone in Dublin. But look around - digital tech companies are growing a lot faster in the capital. They may already have overtaken banks in raw employment terms.

So what might this rapid ascension mean for Dublin city?

Diversity is one immediate consequence. Facebook's Irish boss, Gareth Lambe, told me last week that there are over 80 nationalities working for the company here - the majority of the workers there.

Begrudgers sometimes moan that this lessens the value of multinational company investments because 'they're shipping in workers from abroad'. I have always found this to be a weak, occasionally ugly criticism. Even leaving aside the Little-Irelander tone behind such remarks, it ignores basic economic expansionary arguments. As former Twitter Ireland boss Stephen McIntyre wrote in a recent blog post, tech firms that bring workers into the country expand the economic cake for everyone.

That said, there are some inherent challenges that a boom in city employment brings. Because Ireland doesn't do residential planning particularly well, Facebook's new building in East Wall will cause rent hikes in the area, as there aren't enough houses or apartments to go around. Ultimately, this may mean quite a lot of people being priced out of East Wall.

Then there are the doomsday questions. What if a company like Google decided to leave?

Physically, the buildings Google occupies would obviously still be here. In the current climate, they would fill up pretty quickly. Many (or even most) of the staff employed by Google here would also probably remain, with dozens of rival employers eager to snap them up. But it's hard to see why Google is any more likely to scale down than a native Irish employer. Business is risky and, ultimately, impermanent. But if there are enough talented, skilled people around, replacement ventures almost always crop up.

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