Ireland's technology sector is thriving, with exports, revenues and confidence climbing, but there are still threats posed by a lack of financing and the skills gap, according to a new survey from the Irish Software Association.
Homegrown firms could also benefit from deeper collaboration with multinationals that have established their European bases in Ireland, the second edition of the Digital Technology Index found.
The study, which was conducted in association with Tenego Partnering, spoke to founders and chief executives of more than 800 Irish technology firms to gauge the health of the indigenous sector and highlight the opportunities and challenges facing firms.
There are more than 100,000 people employed in the tech sector in Ireland in more than 1,000 multinationals, start-ups and SMEs. The indigenous sector accounts for annual revenues of more than €1.8 billion, with the majority of the companies based in north Leinster.
Room for more growth
Although the tech sector has survived the downturn, there is room for more growth, the study argues, with only a few companies breaching the 100-employee mark or making more than €10 million in turnover.
In the survey, 94 per cent of the companies believed their revenues would rise, with about three-quarters of firms planning to hire more people. That ties in with an increased confidence among 81 per cent of Irish tech firms, up from 62.5 per cent in August last year. "The sentiment has become even stronger," said association director Paul Sweetman. "That's a significant jump. The sentiment has improved from a strong position already."
International expansion is also on the cards, with 87 per cent of Irish tech firms expecting their exports to rise. Some 67 per cent of firms said they planned to increase research and development costs, up from 58 per cent in August last year.
Threat to growth
Meanwhile, the number of companies planning to hire more people has fallen slightly, recording 78.1 per cent in August last year.
However, the report identified a skills shortage as posing a threat to growth in the industry, despite a concerted effort in recent years to address the issue.
Mr Sweetman said Ireland wasn’t unusual in facing this problem, but the State might have a competitive advantage in that steps had already been taken to remedy it. The problem was no longer just technical skills, he said.
Investment is still a challenge for start-ups, with the report noting that despite the presence of a strong network of angel and private investors, new tech firms were finding it difficult to get the funding they needed. Second- and third-round funding was often coming from overseas, it said.
