In Focus South-East Ireland - A Burgeoning Tech Hub

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Brimming with history, the South East of Ireland is fast becoming a tech hub. We examine what the region has to offer for business and why it has resisted adopting a silicon label. 


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Highlights

  • The South East of Ireland – which includes the counties of Waterford, Kilkenny, Wexford and Carlow – is a burgeoning tech hub, with 7,500 people now working in the sector

  • Up to 95% of professionals reported that their work-life balance had improved after relocating to the region, thanks to easier commutes and a better quality of life

  • However, critics argue the South East is still trailing other regions in terms of investment while unemployment is above average at 7.2%

When tech entrepreneurs in south-east Ireland set up a group to promote the region as a tech hub, they resisted adopting a silicon label.

“We decided to use a name that really means something in this area,” recalls Elaine Fennelly, a start-up and tech veteran in Waterford who helped launch the group last year and is now its chief executive. They went for Crystal Valley Tech, harking back to the famous local Waterford Crystal business and the area’s history of design excellence and fine craftsmanship.

The South East still has strong design credentials, hosting the Crafts Council of Ireland, the National Heritage Council, the Kilkenny Design Workshops and a bustling art and crafts industry. But the fact that most Waterford Crystal has been made outside Ireland since 2009 symbolises the tough economic times the region has suffered over two decades.

Recommended reading: Ireland Proves Fertile Ground For Fintech Sector

Rebuilding for the future

Struggling before the Celtic Tiger bubble burst, south-east Ireland crashed harder than other regions – unemployment reached 21%, 5% above the national average. Like elsewhere, it has rebounded strongly, but the jobless rate for the first quarter of 2018 was still 7.2%, 1.5% above the national average. To attract new businesses, public agencies and business groups are emphasising the area’s low costs and high quality of life.

A reclassification of regions by the EU saw South Tipperary taken out of the official south-east Ireland grouping in the first quarter of this year, leaving the counties of Waterford, Kilkenny, Wexford and Carlow with a population of 422,000.

The region is a tourism hotspot, boasting Ireland’s sunniest weather and most iconic sites and scenery – Kilkenny is Ireland’s medieval capital while oldest city Waterford was founded as a Viking trading post 11 centuries ago. The region also has the most prosperous farmland with a population spread evenly across villages, market towns and bigger conurbations.

Against this background comes the tech entrepreneurs. “There are 101 tech companies that have popped up here in the last 15 to 20 years,” says Fennelly. “And the sector employs 7,500 people, so we want to let people know that we have reached a critical mass as a tech hub.”

A place for business and pleasure

Crystal Valley Tech’s launch in November 2017 attracted 85 firms and it hopes to involve even more for its next tech showcase this November.

“We are going to schools to tell students and career guidance counsellors that they don’t have to leave the area to find good quality jobs,” says Fennelly. One initiative is for employers to share the CVs of job applicants, so that those who miss out on one role may be contacted by other potential employers. “And we are telling foreign investors and Irish companies that this part of the country has a fantastic quality of life,” adds Fennelly.

It’s the same approach taken by Brendan McDonald, regional manager for the South East at IDA Ireland, the government agency tasked with attracting foreign direct investment (FDI), who pushes the region’s low cost of living and short commuting times. And it is working.

In partnership with recruitment firm Collins McNicholas, IDA Ireland produced the South East Relocation Survey 2018, which questioned 288 professionals new to the South East. They found that 95% of respondents said their work-life balance had improved; 76% reported a rise in disposable income; 86% said their work commute was less than 40 minutes; and 75% said rental prices were lower than in their previous locations.

The competitive advantage

One firm won over by this was CipherTechs, a US cyber-security specialist which chose Kilkenny as its European headquarters in 2015. It has grown to employ 30 analysts and engineers.

“The quality of life here is a definite competitive advantage in attracting top skills,” says general manager Laurence Conroy. “We have also got resilient broadband, good motorway connections, excellent relations with very progressive third-level education institutions in Carlow and Waterford, and a lot of support from IDA Ireland and local authorities.”

“We are going to schools to tell students and career guidance counsellors that they don’t have to leave the area to find good quality jobs”

Elaine Fennelly, CEO, Crystal Valley Tech

McDonald says the agency is planning a new push to attract FDI by targeting high-value engineering, pharma, bio-pharma, medical technology and other technology firms. The region already has a strong pharmaceutical and medical device cluster, including global brands Opko Health, West Pharmaceuticals, Bausch & Lomb, Sanofi, MSD, Teva, and GlaxoSmithKline, with Boston Scientific, Abbott and Amneal Pharmaceuticals in nearby Tipperary. There’s also a growing tech cluster including the likes of Red Hat, Unum and Bluefin Payments.

The Brexit dilemma

Income levels in the South East are about 4% below the national average, explains Simon Barry, chief economist of Ulster Bank, with an average of €19,500 compared with €20,300.

Jobs in the South East are slightly more dependent on agriculture and manufacturing when compared with the rest of the country, making the region vulnerable to any new trade restrictions with the UK that may be posed by Brexit.

While the UK takes 15% of all Irish exports, it buys more than 40% of food exports. Irish-owned manufacturers also have a much higher dependence on the British market than do multinational firms, which tend to have moved to Ireland to service clients around the world.

“That means it is very important to get more multinationals into the South East to reduce that dependence on the UK,” says Barry.

The South East’s share of jobs at foreign firms backed by IDA Ireland is lower than the region’s share of the labour force, but in 2017 IDA-backed jobs in the area rose by 9.2%, the highest of any region in the country.

A financial opportunity not to miss

A possible Brexit benefit, however, could be the migration of finance roles from London. And IDA Ireland says it is trying to resist the natural tendency of such firms to move to Dublin, rather than other areas such as Kilkenny and Wexford, which have their own small clusters of financial services firms.

However, finance lecturer Dr Cormac O’Keeffe and colleagues at the Waterford Institute of Technology (WIT) last year complained that the South East had not won its fair share of funding for business promotion, universities and research by bodies such as the Science Foundation of Ireland (SFI). While the SFI backs 17 research centres of excellence around the country, none are in the South East. The WIT academics estimated that less than 1% of SFI funding goes into an area home to about 9% of the population.

An SFI spokeswoman said it funded the best research projects on a competitive basis, rather than directing equal funds to each region, and noted that €4.1m had been committed to WIT through its links with three SFI research centres.

O’Keeffe said the problem was that many national programmes were based on competitive tendering, which gives an advantage to regions with more universities and industry hubs. “The IDA and Enterprise Ireland (which supports home-grown firms with more than 10 employees) have lifted their performance in the South East recently, but there is still a long-term gap that needs to be closed,” he said.

On the move

Meanwhile, the South East is well positioned as transport hub, explains Fiona Deegan, head of Kilkenny’s Local Enterprise Office. It is 70 minutes from Dublin airport and Belview Port provides Ireland’s closest rail-and-road-accessible port to Europe. Nearby, IDA Ireland’s Business Technology Park has already attracted Glanbia to build the largest milk processing plant in Europe.

Major urban renewal projects are also under way, including a €280m project for North Quays in Waterford City, while backers of a 10-acre Abbey Quarter development in Kilkenny are hoping it will become home to a new precision agriculture research centre and a higher education facility focusing on animation. The latter would build on the presence of two thriving animation firms, Cartoon Saloon and Lighthouse Studios.

By Peter Wilson

 

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