Venture capitalists were the biggest factor in developing the new Internet economy but they were subject to excessive regulation in the Republic and throughout the EU, sociologist Prof Manuel Castells told the International Conference on Software Engineering in Limerick this week.
He said the State needed to shift its software development sector towards Internet technologies and create the right conditions for the financing of start-up companies, including easing the strictures on having initial public offerings (IPOs).
Prof Castells, professor of sociology at Berkeley University in California, said the Republic had come too soon to information technology and needed to be less dependent on multinational corporations.
"Ireland, to some extent, was successful too early," he said.
The Internet would be the centre for the information technology world for the next 50 years.
"You do not have a good market of venture capital. The greatest factor in developing the Internet economy is not technology, it is the presence and dynamism of venture capital regional markets," he said.
While the Republic had managed financing with Government-based venture capital, it did not have the necessary flexibility in capital markets to support the new wave of technology companies. It also needed the full liberalisation of the telecoms market.
"Your electronic exchange markets are under-developed. In order to have an IPO today in Ireland or in most of Europe, you have to fulfil a number of requirements which are quite complex and quite numerous," he said.
At the conference, being held at the University of Limerick, Prof Castells spoke on the theme of "Is the new economy socially sustainable?".
In order to achieve sustainability, issues of social inequality and limited market expansion would have to be tackled through the creation of new institutions, based on public/private partnerships.
The "international Keynesianism" would require tens of billions of dollars, but part of the funding would come from international aid money.
The software profession was the fastest growing one in the world. But in the Republic, as elsewhere, work practices would tend towards individualisation and a network economy instead of a society built around institutions, groups and corporations.
In California, only 33 per cent of the labour force conformed to the traditional model of having a long-term contract with "a predictable career in the company". People were working in part-time consulting, were self-employed or employed through "temping" agencies, and "moonlighting during the day".
The Internet was the centre of technology in the new economy. "I think in five years in most advanced countries, companies will be either new economy or dead," he said.
The family model of a father, mother and children was changing. In the US, just 23 per cent of males were in households. There was a shift from the homogenous conditions of the industrial revolution, centred on men as employees to "the flexible woman as a form of labour". Women were delaying marriage and delaying having children.
Although accounting for just 3 per cent of families, the fastest growing family model was the one of the single father with children and the trends were similar in central and northern Europe.
