IDA outpost networks to send big business home

In a nondescript building in Northern California, a little corner of Silicon Valley is forever Irish. Here amongst the sprawling, mirror-windowed headquarters of the technology powerhouses and start-ups, an outpost of the IDA calls San Jose home. This is appropriate since the technology capital is a sister city to Dublin.

Out of this small office, three marketing executives work their contacts and strive to convince yet another Valley company that the one and only location for their European expansion is a little island hanging off the western edge of Europe.

Ireland currently wins 30 to 40 per cent of inward investment in greenfield manufacturing sites from the US into the European Union, despite having only 1 per cent of the EU's population. As the IDA knows well, it's not as if the hard-headed business minds in the Intels and IBMs of the world have suddenly found a great affection for the Irish. It's the result of countless hours of work by people like the IDA's representatives. The IDA has maintained a Silicon Valley office for 20 years.

"In our business, marketing is a long-term process," says IDA west coast director Mr Jim Whelan. "The selling cycle to a company can range from one year to 20 years. IBM, H-P, Intel - they require a lot of marketing energy on our part before they'll consider locating in Ireland."

Mr Whelan first took a group of Intel executives around Ireland in 1982. They set up their first chip manufacturing plant in 1989, and are in the process of building their second, billion-pound plant. Hewlett-Packard visited in 1981, and decided to build 14 years later. On average, it takes three years to woo a company.

Mr Whelan spent eight years in Boston, talking to high-tech companies up and down the east coast before moving to California in 1996. He oversees the IDA's two west coast offices, one in Los Angeles in addition to the San Jose office, each with three marketers. There are also east coast offices in New York and Boston, and a midwest office in Chicago.

Although the west coast office covers 14 states, about 65 per cent of business comes out of California. The west and east coast offices each contribute about 40 per cent of total investment into Ireland, with the midwest making up the remaining 20 per cent.

Mr Whelan says the IDA can sum up its sales pitch to California firms in nine words: "We want a chance to bid on your business." And bid they do. Not just to any firm in the phone book, (there are more than 50,000 technology firms based in the US) but through a careful process of sifting, analysing, and targeting specific companies.

"It's a very competitive business we're in and we have to be focused," says Mr Whelan. "Our traditional market over the last 20 years has been with young, successful high-technology companies. The small companies are the big companies of the future. We try to stay on the wave, so we're out there talking to the companies who are carving out niches for themselves."

An obvious target would be a company like Netscape, a few miles away in Mountain View, which now dominates the market in Internet browsers. Netscape took off like a shot at its launch and is still considered the archetypal tech phenomenon company in Silicon Valley.

"We were talking to Netscape within three months of them starting, because they were an exciting start-up," Mr Whelan says. Netscape announced it would open an Irish office this year and is currently employing about 100 in Dublin. It eventually hopes to employ 250 people.

The IDA breaks the technology market down into 12 sectors, such as computer systems, computer networks, telecommunication companies, semiconductor companies, and storage subsytems. It identifies the lead players, with each sales executive focusing on 100 target companies.

Each of those is then ranked according to whether an investment would be likely within a year, within three years, or whether it simply has potential for investment.

Eighty per cent of companies fall into the latter category. Mr Whelan says from that base of 400 companies in the Silicon Valley (100 for each of the three sales people in the office, 100 for him) they gain perhaps 10 projects a year for Ireland.

"Guys like me are on the shopfront, trying to convince companies to consider Ireland," says Mr Gavin Egan, an IDA sales executive based in the San Jose office. These days, with Ireland's high profile in the tech industry, the job is considerably easier.

Mr Egan says that after some time working with technology companies on the Dublin end of the business, he moved out to California. He was the main contact for Hewlett-Packard when they were planning their printer cartridge plant across the road from Intel in Leixlip. A typical day for him starts bright and early at 7.30 a.m. The first hour or so is spent on the phone to the IDA office in Dublin, then three days a week, he's out on the road, visiting companies and meeting people.

Other days are spent working the phones, producing an analysis of business sectors and companies, and just keeping up with a complex, constantly-changing industry. Reading newspapers, the trade press, magazines, Internet sites, and analyst reports consumes hours every week.

Mr Egan says he looks for companies who have "IPO'd" (gone through their initial public offering) because these are the ones who have had time to develop a strong US market and are probably looking for a European expansion. Then he works to develop a relationship with senior management.

Once a company is seriously interested in Ireland as a European site, the IDA brings a small group of three to four executives over and shows them around the country, introducing them to companies already in Ireland who are in a similar area, and setting up contacts with services such as banks, legal bodies, and Telecom Eireann.

Once or twice a year the Silicon Valley IDA office arranges a visit to various California companies by a high-ranking Government minister as well. "It reassures them that there's a close relationship between the Government and the IDA," says Mr Whelan. Last week, they did the rounds with the anaiste, Tanaiste and Minister for Enterprise, Employment and Trade, Ms Harney.

"The thing is to keep on breaking new ground," says Mr Whelan. "If we fail to keep upgrading what's happening in Ireland then we're on the slippery slope."