EU competition - Hi-tech industry must shape up

The importance of the hi-tech industry to employment and the economy in this country is immense, but too heavy a reliance on it could prove detrimental to both, unless it is geared up for greater competition from the new EU member states.

Although not a doomsday warning, a EU survey points out that Ireland’s economic dependence on the hi-tech industry will face serious competition from the new members next year.

The fact is that 30% of workers in manufacturing are involved in the IT, electronic and pharmaceutical sector, which is twice the EU average.

A quarter of hi-tech workers in Ireland are employed in IT and computer services, compared to the EU average of just 5%. In the five years up to 2000, employment in the sector here rose by 9% annually, in contrast to all other EU countries where the number of workers in these industries actually declined.

The problem in attracting new companies in the sector is that Ireland is no longer a low-cost country in comparison to the East European countries, and that is to their advantage.

Companies here that have not repositioned themselves for the competition, by diversifying, might have to brace themselves for a far more competitive future.