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 ENN: Around 3,000 ICT jobs were created last year under IDA supported schemes. There has been something like 1,100 jobs created within the last month; does the IDA expect this year to be better than last for job creation?
Ryan: We do. In the last four or five weeks, we have noticed a return of confidence in the boardrooms of North America. They seem to be willing to actually start making decisions in terms of capital investment again. That is quite a change from the previous nine months.
Everybody expects that, once I say that, things are going to go through the roof and it will ramp up over the same scale that it has ramped down over the past 18 months. But the IDA doesn't see that happening. What we see is a growing confidence, which we believe because we have some other projects in the pipeline.
ENN: What do you attribute the new confidence to? Some figures recently from the IMF said the recovery is going to be slower than originally anticipated. If globally things aren't vastly better, why are companies more confident?
Ryan: I think it all depends on the propositions that they are considering....The days of the IDA arriving at US companies and suggesting in general terms that they should consider investing in Ireland are long gone. When we go over to companies now, it's with specific propositions aimed at their company, showing the benefit to them of restructuring or reorganising their European activities.
ENN: What do you say to a company to get them to invest in Ireland?
Ryan: Generally what we tell them is that, of the top 25 high tech companies in the world, 20 of them have substantial operations in Ireland. That gets us attention itself, as to how a country like Ireland can build up a portfolio like this. We tell them about the recent decision by Intel to recommence work on Fab 24, which means a USD2 billion investment and will bring Intel's investment in Leixlip to over USD5 billion in 18 months. That registers with most companies.
We go on to tell about the way we have evolved our education systems, how we are continuing to increase our number of people with MsCs and PhDs, how the government has established things like Science Foundation Ireland with a budget of EUR750 million to fund half-and-half the IT industry and biotechnology.
ENN: Things have changed here over the last 5 years. The cost of operating in Ireland has gone up; is that an issue for companies?
Ryan: It is an issue for some, to be honest. Some of the companies that were involved in a lower level of value-add than others will probably drift from Ireland to low cost locations. We don't want to be one of those locations. Our objective is to be at the mid to high end of complexity.
ENN: How about infrastructure, is that a concern?
Ryan: Infrastructure has improved greatly with the amount of broadband capacity from Global Crossing that the government bought. We have 160 STM-1 lines, so we have enough telecommunications capacity for any application.
ENN: What about roads, airports, those kinds of things? Are they ever an issue?
Ryan: They are, but they don't in themselves add value to a particular product or service. They tend to be convenience items. They are important, don't get me wrong, but the ability of Ireland's technical people is of far more importance. The creativity, the innovation that can be achieved here, that's of more interest to them.
ENN: You mentioned the government's and the IDA's stated goal of bringing more "high-value investment" to Ireland. What does that entail?
Ryan: We have a strong focus on attracting further research and a development activity here, which is obviously pure value-add. But what we are doing also is looking across the value chain...historically we would have been strong in manufacturing; we are still strong in manufacturing, but 5 years ago we started to look at other functions that could be undertaken here. Many of the large companies would have their shared services for Europe here, their European and global supply chain management function is here, they're doing research and development here, they are doing centralised customer technical support here, as well as manufacturing.
ENN: How do you define what is a higher value investment? For example, Starwood announced an investment that comes with 190 jobs -- call centre jobs. Are those considered high value?
Ryan: One of the ways we would differentiate is whether there is third level education required to do the job. Or whether there is, as in Starwood's case, a strong linguistic capability, which is knowledge in another form. Not everybody is an engineer or technician. I was in Cork when the Starwood expansion was announced, and they look after 35 countries in 14 languages; now that's knowledge in another form.
It's jobs that knowledge is associated with, as opposed to a straight assembly skill.
ENN: Does this mean that you aren't really interested in traditional sorts of manufacturing jobs any longer?
Ryan: We are. But I think there are two types of manufacturing: they are either very big automated manufacturing facilities, employing maybe 700 or 1000 people plus. Or they are smaller, and they are the people who are engaged in customised manufacturing. What we have noticed over the past couple of years is that we either win a very big manufacturing plant, or we win one that employs 50 to 75 people.
ENN: Last year there were some pretty big closures here. This year the trend has continued somewhat. How far will the IDA go to stop a firm from leaving Ireland?
Ryan: At times there are things we can do, at times there are things we can't. What we won't do is back something that's fundamentally not commercial. It's a commercial IT industry here. You need to earn to earn your living every day and make profit every day, and everyone involved knows that.
What we have done is to change the activities that they have undertaken in Ireland. Let's take someone like Ericsson, who have been in Ireland maybe 20 years and who originally set up here to manufacture electromechanical exchanges. They moved on then to produce the new high technology AIC exchanges, and moved from that to engineering services where they employ 1,600 computer science people in Ireland.
The trick is to evolve with the investment. We obviously have an objective of evolving on to higher value-added investments activities.
ENN: Has the IDA saved companies from leaving that might have been on the verge?
Ryan: We don't operate on the basis of a black and white situation, where if you are taking on people, it's great, and if you are letting them go, it's bad. All companies go up and down over time. You have to ride the business cycles with companies. In business, as in life, it's the people that stand by you when things are not going so well that you really value.
Unfortunately, closures do happen, and in any modern economy there is drop-out at the bottom and there is inflow at the top. Ireland can't be distanced from that law of business.
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