Saturday 24 September 2016

Time to take gloves off and poach Brexit tech firms

Published 28/02/2016 | 02:30

Central Bank Governor Philip Lane
Central Bank Governor Philip Lane

With Brexit uncertainty afflicting Britain, it's time to start picking off our nearest neighbour's US tech multinationals.

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Tech firms employ 700,000 people in London alone. Many of the bigger tech employers in that region - giants such as Microsoft and Google - are known to be uneasy about Britain leaving the European Union's single market. They think it's a stupid move that will only hinder business for companies like theirs.

For the next 12 weeks, they need to be crudely made aware that Ireland has no such hesitation about membership of the EU. US tech multinationals, in particular, need to be reminded that Ireland is an English-speaking country that loves Europe and has growing reservoirs of tech skills, cheaper property, lower tax rates and direct flights to big US cities. Also, that we have seamless, barrierless, permanent access to the second largest market in the world.

To be blunt, the IDA's budget for the next 12 weeks should be tripled to whisk tech companies away from Britain and into Ireland.

Chivalry? Restraint? Sorry, no. It's a simple case of putting our national interest before theirs. We should not feel guilty about giving disillusioned US tech firms a better home here. British or Northern Irish business interests would not hesitate to do the same thing to us if the roles were reversed.

(Nor would we really have any right to whinge about them if they did.)

If Britain is actually determined to leave the EU, it will hurt Ireland. We need to soften the blow by legitimately targeting multinationals to relocate here.

As it happens, there are many indications that we might be pushing an open door on the issue.

Last week, a poll of 700 British and German companies operating in the UK found that over a third would consider moving jobs out of the country following a vote to leave the European Union.

The Bertelsmann Foundation poll found that 41pc of tech companies said they would either "reduce capacities" in the UK or move to another country in the event of a Brexit.

These are firms such as the British smartphone chip company ARM, which designs the chips that power many of the world's smartphones. A few weeks ago, ARM's chief finance officer said that Britain leaving the EU would leave it at a disadvantage to other EU countries for generating tech jobs.

"It would slow us down," said Chris Kennedy. "Our main concern is the ability to attract talent and be able to get the necessary papers for them to work in the UK in the event of a Brexit."

Kennedy needs to be brought out for a quiet pint - or whatever the industrial tradecraft is these days - and told about Dublin's growing position as a European talent pool.

Then he should be hooked up with a commercial office space agent, a legal firm and a tax accountant.

Last week, I rang up the IDA to ask whether they would consider swooping in this manner to take advantage of Britain's Brexit fumbling and stumbling.

The executive I spoke to was diplomatic. He didn't want the idea to get out that we were "vulturing" over the process, saying only that the IDA "continues to be very active" in persuading companies to relocate to Ireland.

With respect, if the State agency really is showing this sort of restraint, it may be letting the side down. Ireland's national interest is not the same as Britain's, at least not in this instance. Now is not the time to be chivalrous.

Only last month, the head of Ireland's Central Bank said that he has "no doubt" multinational firms considering a UK investment are putting off those investments because of the Brexit referendum.

"It has to be the case that any sensible, major firm considering where to make a location decision, if the competition is between UK and Ireland, is going to stall for a few months," Philip Lane told a Dail committee.

So what are we waiting for? We shouldn't hesitate to compete aggressively here. Better to boost our own economy than that of a non-EU neighbour.

"Almost three-quarters feel Brexit would make Ireland more attractive for multinationals to invest," said Ruth Curran, a partner at Merc Partners, which conducted a survey on the issue among 330 senior Irish executives.

Good. Let's get in there.

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