Information Technology
in Ireland
Analysis: Impacts on Business
Analysis of
the impacts of the information technology on the business environment in
Ireland
Business has boomed in the last
decade in Ireland and information technology has been largely responsible.
Given the strengths of the IT sector in Ireland and the relative prudence
of the government and other public sector institutions (academia, etc.),
there is every indication that this flourishing of commerce, e
and otherwise, will continue.
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Success fosters success: as the
growth continues, new companies are encouraged to form, existing firms
relocate to take part in the surging economy, and capital is attracted
by the commercial activity.
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IT in general shortens distances and
lowers barriers between companies. The time difference between Ireland
and the east coast of the U.S., combined with a high-quality telecommunications
infrastructure and an English-speaking population, will allow for a lengthening
in the work day for multi-national firms.
The government of Ireland has adopted a decidedly pro-business
posture in the past several years. Although IT constitutes only a
portion of the targeted industry segments, the technology community has
been one of the first to exploit the governments liberal tax policies and
other incentives for business. As the technology grows through foreign
direct investment, joint ventures, and homegrown entrepreneurial activity,
the island nation will appear more and more attractive to manufacturers
and distributors of traditional, non-technical goods and services.
Consider the case of High Profile American Snack Food Maker, Inc. (HPASFM,
Inc.)
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Having saturated the U.S. market, HPASFM, Inc., seeks new
markets abroad, and finds the EU nations particularly...tasty.
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As an EU member nation, an Ireland-based and incorporated
firm will avoid quotas and tariffs marketing to other EU nations.
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Ireland currently offers a 10% corporate tax rate to manufacturers.
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The excellent transatlantic fiber optic connections allow
for effective, easy, and rapid implementation of HPASFM, Inc.'s wide area
network, allowing the home office in Refinery City, New Jersey to stay
in constant communication with the Kilkenny branch headquarters.
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A large stock of skilled telecom, hardware, and software
engineers ensures smooth installation and operation of HPASFM, Inc.'s communications
system.
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Lower than EU-average wages contribute to the suppression
of fixed costs.
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Given the 10% tax rate, Ireland may even provide a cost effective
base for manufacturing operations for export back to the U.S. (depending
on the effect of tariffs).
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A sales and marketing headquarters in Ireland would enjoy
easy transportation and communication links to the Continent and to the
home office in New Jersey. Ireland's native English speaking population
communicates effortlessly with Americans, all the while possessing and
exploiting a higher degree of second language skills than most American
sales forces. Culturally, the island provides a useful bridge between
American and European sensibilities.
The successes of Dell, IBM, Compaq, many other American firms
documents the willingness of both the official and business sectors of
Ireland to work with foreign firms that bring jobs and revenue to the nation.
In addition to the tangible benefits any single new employer provides,
the concentration of more and more, and higher and higher-visibility firms
lends credibility and prestige to the Irish effort to transform its economy.
The ready availability of a willing, relatively inexpensive, educated,
English-speaking workforce, in addition to government incentives in the
form of tax holidays and other concessions, amplifies the roar of the Celtic
Tiger.
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Last update: December 17, 1999 by ED/MM.