Skills shortage may cost us thousands of IT jobs'

The "Irish Software Landscape" study claims that a lack of technically skilled staff posed a danger to the continued strength of the IT sector in Ireland.

The report, which was compiled by Lero - the Irish Software Engineering Research Centre; the University of Limerick, and the University of Cambridge, highlights the growth in the IT sector in recnet years. Irish firms who took part in the report grew their staff by 39pc, while overseas firms increased their headcount by 23pc.

However, the report claims the shortage of technical staff as well as sales and marketing expertise pose a real threat to the long term future of the sector.

"There is a danger that thousands of jobs could be created overseas rather than in Ireland," commented Professor Brian Fitzgerald, chief scientist at Lero.

"The challenge is particularly acute for our vital indigenous sector as graduates tend to be more attracted to multinational household names.

"Even amongst multinationals there is the danger of an 'arms race' whereby firms compete for top graduates, salaries are pushed up and, as a result, Ireland loses competitiveness," he added.

The report echoes concerns that have been raised by numerous executives in the technology space in Ireland in recent years.

Google's country manager here John Herlihy has flagged the relatively weak standards among graduates when it comes to maths and sciences, while PayPal boss Louise Phelan touched off a storm of controversy after she claimed that some graduates joining her company carried a "sense of entitlement" about them when they started work at her offices.

The Government has highlighted the IT sector as an engine for economic recovery in the years ahead but the report claims Ireland is facing huge competition from other countries.

"The UK has now moved ahead in relation to incentivising investment and a number of Eastern European countries have eliminated income tax for software employees.

"Ireland needs to review its current investment and taxation policies to ensure that it does not lose out to more highly incentivised models in the UK, including Northern Ireland, and Eastern Europe."

More and more businesses are looking overseas for staff.

"Currently somewhere between 40pc and 55pc of jobs are filled in this manner," said the University of Limerick's Helen Lenihan.

"These immigrants make a major contribution to Ireland but more attractive tax regimes may attract them home. It would be a real missed opportunity if the success of the Irish software industry had more employment significance for Eastern Europe than Ireland."