The global IT industry will spearhead economic recovery, with 5.8 million new jobs in sight
DESPITE the global recession, some of the most exciting new developments in mobile and internet are still being unleashed, from Twitter, to Facebook, to apps on mobile devices.
In fact, the growth of the IT industry is set to continue at three times the rate of other industries. This is why it is vital Ireland plays to its advantages, harnessing not only the presence of IT giants like Intel, Microsoft, HP, Cisco and Google, but also developing a plan to deliver next-generation broadband networks and pump-priming hoards of new start-ups to generate thousands of new Irish jobs.
In Dublin this week to address the annual ComReg conference is one of America's most acclaimed digital futurists, Dr Robert Atkinson, of The Information Technology and Innovation Foundation, who has advised the US government on areas from broadband to digital health.
"In America, for the first time in its economic history, industries such as automotives are all pulling back on their investment in R&D. However, industries like technology and telecoms have increased their investments in R&D by 9pc," explains Atkinson, highlighting the continuing strength of the sector.
He says countries with clear plans around infrastructure, science and social connectedness are likely to emerge stronger, pointing to Japan - whose digital strategy has evolved beyond broadband, where penetration is 99pc, to provide better digital healthcare for its citizens - or Denmark, where 95pc of the population has digital records.
According to the CEO of Microsoft, Steve Ballmer, the countries that have a strategy will emerge strongest. "Countries that foster innovation and invest in infrastructure, education and skills development for their citizens will have a major competitive advantage in the global marketplace."
An IDC study commissioned by Microsoft predicts that the IT industry will create 5.8 million new jobs and more than 75,000 new businesses over the next four years - three times the rate of employment in other industries.
In the figures for Ireland, IT spending in 2009 will be €2.9bn and will grow at 0.4pc a year, compared to GDP growth of -1.3pc a year. IT-related activities will generate €4.8bn in taxes in 2009. Over the next four years, IT-related taxes are expected to increase to nearly €5bn.
That spending growth means employment in the IT industry and of IT professionals in IT-using organisations will rise by 8,000 jobs in the four years from the end of 2009 to the end of 2013, up from a 2009 base of 148,000. That represents growth of 0.4pc a year from now through to 2013, while overall employment is expected to shrink.
The IT market will drive the creation of nearly 150 new businesses between now and the end of 2013. Most of these companies will be small, locally owned organisations.
As a group, companies in the Microsoft ecosystem in Ireland - partners and firms that supply Microsoft technology - will generate more than €989m in revenues for themselves in 2009. For every euro Microsoft will make in Ireland in 2009, companies in the local ecosystem will make €9.22.
To generate those revenues, companies in the local ecosystem will drive nearly €328m of investment, most of it here.
Commenting on the figures, Colin Cassidy, partner strategy lead at Microsoft, agrees that Ireland needs to embrace technology - from citizens to policy-makers - and get over the fear of the unknown.
"The one thing that will get us out of this situation is the knowledge economy. IT is ubiquitous and we need widespread broadband adoption."
Pointing to the recent $500m data centre investment by Microsoft, he explains: "We see the internet cloud as the future and what will be pervasive to that future vision will be businesses and consumers equipped with high-speed connections."
Companies in the Microsoft ecosystem in Ireland employ 41,000 people; IT-using organisations employ another 17,000 IT professionals who work with Microsoft software or the products and services based on it.
Donal Cullen of technology firm Spanish Point Technologies and president of the International Association of Microsoft Certified Partners says IT spending in Ireland is holding up. "Software sales aren't down, IT has held up, but all players have to be more competitive. Employment in the area is holding up well too, but we need more graduates.
"We want to hold more conversations with the educational sector and let teachers and parents know that the world economy has been reset and IT is a good place to be for a long-term career."
The head of Enterprise Ireland's software division, Jennifer Condon, says the IDC figures show that, based on the evidence of 41,000 people employed in the Microsoft ecosystem, Irish software start-ups should leverage the fact that many multinational IT organisations such as Microsoft, IBM and Google are here in Ireland.
This fits neatly with Enterprise Ireland's strategy, The New Software Economy, which urges greater interaction between multinationals and the indigenous sector and predicts cloud computing could grow the local sector to €2.5bn in revenues by 2013.
"The recent BizSpark initiative from Microsoft saw more than 300 Irish companies take part - the highest participation in all of EMEA," Condon says.
"Working with multinationals opens doors and gives credibility to smaller companies - it is an endorsement of the quality of their software," she explains.
IBM also has it sights set on the entrepreneurial space in Ireland, specifically with the goal of a smarter, greener planet. Its networking and mentoring event, SmartCamp, was over-subscribed.
"We had originally planned on interviewing only 10 or 12 companies, but the quality was so impressive that we ended up talking to 22," says Noel Crawford from IBM Ireland's Emerging Business Centre. From this, IBM whittled the competition down to five finalists, with a wide range of innovative technologies, including a real-time cloud analytics service from CloudSplit and software for sustainable forestry from TreeMetrics.
But if Ireland is serious about ensuring its entrepreneurs and graduates benefit from the onward march of technology, it needs a plan that puts broadband and skills development to the fore for all.
As Atkinson concludes: "You need a strategy that focuses on the broadband network, but also the applications that will emerge like digital healthcare and electronic payments.
"If you don't get these things right, the whole country could lag behind. And in this space that's very difficult and problematic. Once you lag behind, it's hard to catch up."
© Silicon Republic Ltd