Would you pick Ireland or India for your multinational?
7th of November 2007 by conor
ICT Ireland's latest report claims that Ireland is still a very attractive location for technology multi-nationals. I wouldn't expect them to say anything else but how true is it?
Large corporations go where the ROI is highest and that's it. The good old days of Irish-American VPs and Paddies sealing deals on golf courses are long gone. Whichever country offers the cheapest labour that is capable of doing the job and provides the best tax breaks, gets the gig.
On the upside, there are plenty of positive signs; Google's expansion in Ireland is given as the strongest evidence that all is well. Intel, HP and IBM still have huge operations here and they are generally at worst static and in some cases growing. However the obstacles are getting greater with each passing month; salaries are high, software development is now commoditized, transport infrastructure is a joke and, most important of all, there is a dearth of qualified people available to hire.
You would expect that a start-up like LouderVoice would do all its work locally but we had to offshore all of our work after severe difficulties in finding anyone to do it and then getting an Irish quote which was 4x the non-Irish one we went with. I know of several other Irish start-ups who have teams in Poland.
There are even several Indo-Irish companies where project management happens in Ireland and the coding is done in India. In fact there are many multinationals here where the Irish software development team are now just PMs for Indian teams. How long before the PM jobs go there too?
On the surface, Microsoft's announcement of a $500m datacenter in Dublin is another vote of confidence. But then you see that only 15 people will be employed there. The datacenter has more to do with the enormous fibre pipes that were built during the bubble and tax breaks than the knowledge economy.
As long as times are good, the multinationals will probably continue to come here, but as soon as the squeeze happens, either to the global economy or to individual corporations, they'll be gone as quickly as you can say SFO-BLR. We need to concentrate instead on building great Irish companies that compete globally. Our reliance on multinationals continues to foster an employee mind-set rather than an entrepreneurial one. The cycle must be broken.