Software industry faces collapse, says ISA

THE Irish software industry faces collapse without radical steps to reinvent itself, the industry’s representative body said yesterday.

The Irish Software Association (ISA) called for greater government support and a series of groundbreaking projects on the scale of Dublin’s IFSC to drive innovation and investment.

ISA chairman, Cathal Friel said the industry was at a crossroads. “We must take a series of bold, politically-backed projects to ensure that this industry not only survives but thrives as we go forward,” he said.

The ISA wants to see the Irish software sector repeat the IFSC’s success.

It said Ireland could become the European leader in patenting and licensing intellectual property, as well as a hub for teaching technology-related sales and marketing skills.

The Irish software industry could lose out to lower-cost economies like India and China and go into rapid decline if initiatives like this were not put in place, the association warned.

The ISA also hopesd to see the government bring in greater incentives to fund investment in Irish software.

It said raising the ceiling for investment under the Business Expansion Scheme to €5 million would make it easier for software businesses to grow and develop. The budget raised this ceiling from €750,000 to €1 million earlier this month.

The ISA also called for an easing of restrictions under the Seed Capital Scheme, which supports small business, and the introduction of tax breaks similar to the United States’ €401k scheme, which encourages wealthy individuals to invest in risk-based enterprises rather than property.

The government should also commit to buying 25% of its technology from small and medium enterprises to help drive the sector, according to the association.

Mr Friel, who was speaking at the launch of the ISA’s working document on the software industry, said Ireland was losing its competitive edge even though it had a favourable tax regime and a good supply of skilled labour.

He said Ireland, like California, could operate successfully as a high cost economy if the correct policies were followed.

The software sector currently employs over 30,000 people here and its exports are worth more than 13 billion, or 14% of total exports.

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