Business Irish

Monday 15 July 2019

Ireland means more than low taxes to Autodesk chief

In person: Andrew Anagnost autodesk CEO

Building for the future: Autodesk CEO Andrew Anagnost says construction is going to be vital for some time as nations improve infrastructure and meet growing demand for housing in Ireland and beyond
Building for the future: Autodesk CEO Andrew Anagnost says construction is going to be vital for some time as nations improve infrastructure and meet growing demand for housing in Ireland and beyond

David Chance

Dublin's tech corridor welcomed a new addition last week when US company Autodesk, which specialises in construction and manufacturing software, formally opened its European office, completing a move from Switzerland.

The company has been working in Dublin already and has 170 staff moving into its new headquarters, which house its engineering and support functions for the region as well as support, sales and human resources.

It may not be a household name among tech royalty like Google, Facebook and Apple that already have a big presence in Ireland. However, the chances are that if you have not stepped into a building whose construction involved Autodesk, you soon will.

While Ireland's low-tax environment for companies certainly helps, CEO Andrew Anagnost told the Irish Independent it was not the sole reason behind the move from Neuchatel, which itself is hardly a high-tax environment.

"It certainly helps," Mr Anagnost said of the tax status here.

"It changes the cost structure and it gives Ireland an advantage over other locations where the tax structure is not like that.

"But we have a 20-year lease, so we are here and we are committed."

Autodesk has been around since 1982 and is a provider of computer-aided-design software for the construction and manufacturing sectors.

It has moved recently to a cloud-based subscription model for its software services. Last year it completed two large acquisitions to bolster its presence in the construction market, spending $875m (€771m) on PlanGrid, a construction software company and $275m (€242m) for BuildingConnected, a specialist in bid-management software.

All of this sounds very esoteric, but the end product of the company's software can already be seen in the streets of Dublin and on its skyline, including the Guinness Storehouse, the Central Bank and the Samuel Beckett Bridge.

Its recent acquisitions and the opening of the Dublin office are all part of a long-term plan that aims to put the company at the centre of the construction industry's workflow, which Mr Anagnost believes will enable the company to ride out the volatility of stock markets and the tech sector in general.

Even the prospect of a dip in global economic growth, as the US economic cycle pushes on a 10-year expansion - the longest in history - doesn't dismay the company chief executive, an engineer with a PhD from Stanford whose career includes a stint at Nasa.

"You can't plan by economic cycles, that is for companies that are just watching their profits and nothing else. There's a 'now' opportunity in our world," he said.

If anything, a slowdown in economic growth and cost pressures in construction will intensify the push to use Autodesk's software. During the last downturn it was noticeable that IT spending in the industry expanded.

"In the last downturn, construction IT spend continued to increase. The reason for that is if you are competing for a smaller pool of products then the digital contractor wins," Mr Anagnost said.

For those commissioning construction projects, the key elements are to know how accurate a bid is and whether the project can be delivered on time, while for the building company it is essential to know whether a bid will be profitable.

"There are lots of reasons to think that construction is going to be important for quite a long time.

"Highways are in decline in countries, bridges need to be rebuilt, roads need to be rebuilt.

"Right here in Ireland, there is a housing crisis [and you can] cut and paste that housing crisis to just about anywhere," he said.

While the 'future' has already arrived for Autodesk in construction, it is still some way off in manufacturing. A productivity revolution, driven in part by software, has yet to be unleashed.

The lack of productivity gains over the past decade and more has been taxing governments and economists, some of whom believe the 'productivity revolution' that drove incomes higher in the US and elsewhere has stalled.

Without higher productivity, it becomes more difficult to keep mature economies growing. Despite the advent of life-changing tech in recent years, such as the smartphone, there has yet to be a second or third industrial revolution.

That may be coming Mr Anagnost believes, and although it will yet again change the kind of jobs people have and cause disruption in the workplace, it will feed through into the wider economy.

"Everybody you talk to in manufacturing knows a tsunami of change is coming, but the technology is not yet ready," he said.

That will be unlocked by new technologies such as the rise of 3D printing and new design which will open a path to highly automated micro-factories where lots of different things can be built.

For Autodesk to share in that future, it needs to compete in the global battle for top talent, which brings the focus back to Dublin.

As a tech company based in the San Francisco Bay Area, Autodesk and Anagnost know at first hand what it is like to operate in an environment where there is a premium for the best talent and immense completion for the best brains.

Despite frequent talk of a skills shortage in Dublin, there is a large pool of high-quality workers and Ireland is committed to free movement of people.

"You can hire people here, you don't have any trouble getting people to move here.

"We have relocated quite a few people. We have a lot of Irish talent, but we have been able to get people to move here - even from Singapore," Mr Anagnost said.

Autodesk may even have found a way to keep hold of workers in the Dublin market, although it appeared to be a new one on Mr Anagnost.

“Did you see the pub? It’s a real pub, I was a little shocked, there is a pub here.”

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