There has been no slowdown in the pace of inward tech sector investment this year despite a sharp reversal in fortunes for some of the world’s biggest tech companies, an Oireachtas committee has heard.
However, while there is a “healthy pipeline of investments” from multinationals for next year, there is “definitely a slowing pulse for the year ahead”, IDA Ireland’s head of technology Donal Travers told the Committee on Enterprise, Trade and Employment.
The inward investment agency appeared at the Oireachtas committee on Wednesday, along with representatives of Technology Ireland, a division of employers’ body Ibec, to discuss the challenges facing the global and domestic technology sectors against the backdrop of recent and severe job cuts at Meta, Twitter and Stripe among others.
“Notwithstanding the current challenges and uncertainty in the global environment, IDA client companies are generally optimistic on the prospects for their businesses,” IDA Ireland interim chief executive Mary Buckley told the committee. “We have sight of a healthy pipeline for the first half of 2023, albeit slightly weaker than the first half of 2022.”
Ms Buckley told TDs and Senators in her opening statement that when redundancies occur in IDA client companies, the agency “will do all we can to match these employees to the extensive employment opportunities that still exist across the economy”. She said this involves working with other agencies, including Enterprise Ireland and State training agency Solas, as well as the Department of Enterprise, Trade and Employment, to line up opportunities for affected employees.
Asked by Sinn Féin enterprise and employment spokeswoman Louise O’Reilly whether Solas had already engaged with workers at the companies that have announced job cuts in recent weeks, Mr Travers said the consultation process was “ongoing, so, in many of those cases, nobody has been laid off yet”.
On the issue of housing, IDA Ireland representatives said that some client companies had flagged the lack of available accommodation in the State as a challenge to their ability to retain talent. However, Ms Buckley said multinationals accept that it is a global issue and that the housing crisis “hasn’t stopped investment” into Ireland.
Asked about the nature of the contraction in the global technology sector this year, Una Fitzpatrick, director of Technology Ireland, said the slowdown is mostly affecting those larger multinationals that “grew most out of Covid”.
Consequently, she said the domestic tech sector is unlikely to experience the same level of upheaval, although she acknowledged, “it is an ecosystem, so what will have an impact on the larger companies will have somewhat of an impact on SMEs”.
Ms Fitzpatrick said: “I think that’s really where we’re seeing the impact at the moment because, as the world returns to normality in whatever sense that is, we are seeing maybe a drop-off in things like advertising. So if you take advertising during Covid, it very much moved to online-only. There was huge focus of budgets there. Now we’re back and obviously things have opened up and advertising budgets have normalised.”
In her opening statement, Ms Fitzpatrick said the pipeline of tech sector talent is “under pressure”. She said this was a key concern for the indigenous tech SME sector, which accounts for roughly half of overall IT sector employment in the Republic.
“Obviously [SMEs] have been in severe competition with the FDI (foreign direct investment) community for talent over the last two years,” Ms Fitzpatrick said. “An unfortunate byproduct of some of the recent announcements may be increased availability of staff to the indigenous tech sector.”