Ireland is not doing enough to incentivise employment in information technology leading to a shortage of talent and a resultant failure to grow the industry to its full potential.
A report by the Universities of Limerick and Cambridge has found the sector here has experienced significant expansion in the last three years — in indigenous companies by 39% and in foreign/multinationals by 23%.
However, the Irish Software Landscape Study, added: “Despite the growth potential, there is a risk that the extra employment will be created in offshore locations as the availability of skilled technical staff in Ireland is the key barrier to growth. Accessing personnel with appropriate sales and marketing expertise is also a major challenge.”
The universities high-lighted a number of areas where Ireland is falling short in the IT sphere. They said investment in software companies could be “much more highly incentivised”.
“Much more is needed than what has been provided through the BES [Business Expansion Scheme] and its replacement in 2011, the EIIS [Employment and Investment Incentive Scheme].
“These schemes largely resulted in property investment which led to well- documented problems for the country. Also, employee share option schemes, which can help lower costs by providing employees with equity stakes, do not work well in Ireland.”
They pointed out that countries in eastern Europe, such as Romania and Moldova, have eliminated income tax for employees in the software sector.
“This has the effect of retaining human capital within the country who might otherwise emigrate. These initiatives appear to be quite successful.
“Such imaginative policies are worthy of active consideration in Ireland.”
Furthermore, the authors of the report pointed out that Britain had made significant improvements in the area.
“This is already resulting in Irish companies choosing to open as start-ups in the north or the UK.
“Given that we have a land border with the UK, it is critical that we do not allow the disparity between supports for software start- ups here and in the UK to become a major factor in companies choosing where to establish their base.”
One of the authors of the report, Brian Fitzgerald of the Irish Software Engineering Research Centre at the University of Limerick, pointed out that in the census of 2011, almost 100,000 people said they had a software-related occupation.
“We have not been able to produce enough people to satisfy that demand,” he said. “Our industry is both indigenous and multinational and both sectors have slightly different challenges but the availability of talent is a key one.”
Mr Fitzgerald told RTÉ radio there are 1,500 people coming through four year degree-level programmes each year.
“The key thing for us is, some skills are more important than others, some technical skills. so we need to identify the most important ones and ensure they are the people we bring through,” he said. “We also need to start at primary and post-primary level to make ICT or software jobs more attractive to people. There is a high attrition rate currently from our courses, its 36% in some institutions.
“That’s a real waste. It would be better if we could prepare people to enter the profession who are more aware of what it is about.”
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