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Attracting (and keeping) the right customer – The software industry in Ireland

The major difference between a person with a lean mindset and one who has not, is that the lean head is always asking ‘Who is my customer?’, ‘What does my customer want?’ and ‘Do I know how well I am satisfying my customer?’ If we regard Ireland Inc. as a supplier of resources to potential overseas customers (i.e. the multinationals), there are many bodies corporate who ask those questions on our behalf, in order to attract and retain the right customer. The National Competitiveness Council, the IDA and our educational institutions, are just a few of the agencies who are active in ensuring that Ireland Inc. has the right mix of resources to attract the right customers.

These resources, or wealth enablers, come in a variety of forms and include political systems, tax incentives, regulatory and legal systems, availability of talent and geographic and climatic factors, to name the some of the most influential. They are not wealth generating in themselves, however they create the right environment to attract the right customer, and associated wealth, into the country.

If we take a look at the software sector as an example of ‘the right customer’, many companies have been attracted to set up in Ireland. As of 2018, Amazon, Cisco, EA Games, eBay, Facebook, Google, Groupon, Mastercard, Microsoft, SAP, SmartBox, TripAdvisor, and Yahoo have all established centres here. Outside of the United States, IBM Ireland’s Software Lab is one of its largest research & development labs focusing on cloud, analytics, mobile, social, and security. Ericsson’s operation is Ireland’s largest agile enterprise software development site, creating their next generation Network Management Systems, whilst Intel’s Quark family of processors was developed in Ireland. Even Aon established their Global Innovation Centre in Ireland.

The fastest rise in recent years has been the implementation of cloud and digital services bringing a new wave of software development and analytics. Millions of euros and dollars have been invested and thousands of jobs have and still are being created. (Please don’t anyone mention the disaster that was Apple’s proposed data centre in Athenry, Co. Galway).

But why Ireland? What have been the specific resources we supply to attract such customers and their investment? Well quite simply, Ireland was ranked 1st in the world for attracting and retaining talent in the 2017 IMD World Competitiveness Yearbook. Of course, having the highest education participation rate in Europe and the youngest population also helps the country become the fastest-growing tech population in Europe.

We all know of Ireland’s corporate tax rate of 12.5%. What is less well known is that Ireland also has a 25% Research & Development Tax Credit and a 6.25% preferential tax rate on income arising from intellectual property. Not alone that but there are also foreign direct investment benefits for Multinationals when engaging with organisations like IDA Ireland.

Okay so we have the talent, an educated young workforce, attractive tax rates and incentives – but just as importantly is our ease of doing business. Last year (2017) Forbes ranked Ireland as the 4th best country in the world to do business. This is where good lean management and building a strong track record helps businesses excel in the global market. Even the Irish government are planning to increase the number of people working in tech to 3,000 per year through the Tech Life Initiative.

So, although Brexit is bringing a certain amount of uncertainty, it is still a time of positivity as a lot has been achieved since the arrival of IBM in 1956, and if we manage it properly we can expect a lot more growth and development over the coming years.

Not bad for a little country with such a short independent history. With every upside of course comes a downside. Our model is easily copied and competitiveness ebbs and flows. As long as the corporate bodies in whom we trust to manage our competitiveness keep asking ‘Who is my customer?’, ‘What does my customer want?’ and ‘Do I know how well I am satisfying my customer?’ we will continue to thrive.

 

See IDA infographic here