eBay decision to locate in Dublin a major boost for tech sector

The Government's success in attracting eBay, the world's biggest internet auction firm, to Dublin will provide a much needed boost to the economy and the technology industry.

eBay is one of the world's most recognisable dotcom companies, and its decision to locate a support centre in Dublin will add momentum to the State's goal of becoming a European e-hub.

The firm, which was founded in in 1995 as an online marketplace for collectable items such as stamps and old coins, now provides an online platform for the sale of about 35,000 different categories of products.

It has 75.3 million registered users worldwide and is growing in Europe, where it already has local websites in at least 10 states, including Ireland.

Attracting the eBay subsidiary PayPal - which provides online transaction services to eBay and other Web merchants - is a bonus that should also boost the State's reputation among internet firms.

Despite the shake out in the global internet sector over the past two years, IDA Ireland has attracted several of the biggest dotcoms, including the popular search engine Google and the online advertising firm Overture.

By focusing on attracting the big names in the sector, the IDA has managed to sidestep some of the volatility within the dotcom sector.

These brands should help the Government attract other internet firms to the State, creating a "cluster effect" similar to the one that persuaded many of the world's top software firms to set up in Ireland in the 1990s.

But the obvious success associated with creating 800 new skilled jobs in Dublin was correctly mixed with some regret at eBay's decision to reject extra grant aid to set up in a regional town, believed to be Athlone.

Just seven of the 20 IDA projects announced in the first half of 2003 were based outside Dublin or Cork, despite the Government's policy of directing the majority of new inward investment projects to the regions.

eBay and PayPal's decision to reject higher Government grants in favour of locating in Dublin demonstrates that many of the new economy projects that are being targeted by the IDA are more suited to city locations.

Google, Overture, eBay and PayPal have all chosen to set up their operations in Dublin, a city that offers the type of young dynamic workforce that many dotcoms believe they need for the fast-paced internet sector.

Mr Brian Osbourn, PayPal's senior director of marketing, said yesterday Dublin was particularly strong in the type of financial and technical skills required by the firm.

But he also admitted that better infrastructure was also one of the deciding factors.

Undoubtedly the weaker telecoms, road and airport infrastructure in the regions when compared to Dublin will inhibit these types of internet firms from locating in smaller Irish towns.

But if grant aid - which will probably only be available to firms in the period up to 2006 because of EU rules - cannot lure technology firms to the regions, the Government will have to reassess its own investment strategy.