Sponsored Feature: A bright future ahead
Published 15/04/2014 | 10:31
Ireland’s technology SMEs are feeling positive about the road ahead
The majority of Small and Medium Enterprises (SMEs) in the Irish technology sector have a positive view of the future. According to the AIB Technology: Outlook report, 92 per cent of SMEs are planning to expand their business in 2014 and 74 per cent are planning to grow their workforce this year.
The report also pointed out that, of the SMEs surveyed, 71 per cent had increased their turnover in 2013. This demonstrates that the technology sector is not just surviving but thriving in difficult trading conditions.
“Whilst we have a superb FDI track record in Ireland with global technology companies, our SMEs are also significant economic contributors to both jobs and export performance,” says John O’Dwyer, Head of Technology, Media and Telecoms Banking at AIB.
As you might expect, the report highlights that many of these companies have made significant commitments to innovation. In fact, it found that six in 10 of the companies invested in research and development (R&D) in 2012 and 2013, with half of these companies claiming R&D tax credits.
O’Dwyer says that government led initiatives have helped to create positive momentum in the technology sector, although some fine-tuning may be required to ensure this positive momentum continues.
“Whilst Ireland undoubtedly possesses a progressive corporate tax system, the Amarach research has highlighted areas where our industry partners felt some taxation changes would be required to cater for the needs of the sector into the future particularly in the areas of R&D and investment”
The survey reveals that six in 10 of the ﬁrms surveyed (58 per cent) are currently exporting their products and services. Some 42 per cent of the companies surveyed cited Ireland as their main market, while 22 per cent identiﬁed the USA and 19 per cent the UK.
“It will be no revelation to those in the tech sector that it is global in outlook and nature. Tech businesses have to compete globally from the outset - the competition isn’t local. Enterprise Ireland does a great job on this front and has an excellent network of overseas offices to help.”
“But we really need to continue to drive this and get companies to scale-up past the €50m and €100m in turnover. So, as well as being a great place to start a business and build a product or service, we need to become a great place to grow and scale an international business.”
Despite the overall good health of the sector, the report does highlight some challenges, which companies are facing.
The recent Government Action Plan for Jobs 2014 estimated that 45,000 new technology jobs could come on stream, over the next four years, with expansion and replacement. However, as the Irish Internet Association, ICT Ireland and the Irish Software Association have pointed out, considerable efforts will need to be made in improving the standard of education in Science, Technology, Engineering and Maths (STEM) at all levels in the education system, while at the same time increasing the output of honours level graduates from third level STEM courses.
Indeed, 38 per cent of respondents in this survey highlighted recruitment of employees as a big challenge in the future.
“Notwithstanding the broader issue of scale which affects companies in this sector, another key issue is recruitment and talent management,” says O’Dwyer. “We need to continue to see improvements in STEM graduate numbers. At secondary level, it’s encouraging to see that over 17,000 students have indicated an intention to take higher level maths this year, up some 70 per cent on this time three years ago.”
To download a copy of AIB’s Outlook: Technology report, visit www.aib.ie/Outlook