Dáil Éireann Debate, Thursday - 23 November 2023
12. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment for an update on the ongoing volatility in the tech sector given the slowdown in the sector as indicated by Central Statistics Office and data from the Revenue Commissioners. [51438/23]
View answerOver the past year, there has been significant volatility in the tech sector. We have seen this in the media but we also know it ourselves. According to data from the CSO and Revenue Commissioners, the information and communications technology sector has experienced a sharp turnaround, with jobs growth swinging from 8% in December last year to 2.7% in September this year. Is it possible for the Minister to give me an update on his engagement with the sector, Enterprise Ireland and IDA Ireland regarding the tech sector?
Other Deputies are now arriving so I hope we will get to some of the questions that were skipped. I hope we will have the flexibility to return to them if Members want to.
It depends on whether people keep to the time rules.
We are not short of time given how fast we are moving through the questions.
On every side of the House.
In reply to the Deputy, I will refer to Monthly Estimates of Payroll Employees, published by the CSO, which should be read alongside the CSO's labour force survey. The latter has shown that employment in the ICT sector rose by 2.2% on a quarterly basis in the second quarter on 2023 to reach a new record high of over 174,000. We have more people employed in ICT now than we ever had. Of course, there have been some setbacks since the start of this year but there have also been strong gains at the same time.
As we all know, global economic headwinds have led to contraction for some tech clients over the past 12 months, particularly in the first quarter of the year. However, for Ireland the impacts have, in very many cases, been less significant than the global reductions announced. For those directly impacted, the Government has a range of supports in place.
At a sectoral level, IDA Ireland continues to actively support our technology base, with 320 IDA Ireland client companies employing 64,000 people in Ireland. Moreover, the commitment of technology companies to Ireland continues to be exceptionally strong as Ireland remains an attractive location of choice for companies. For example, in the past year several new investments in microelectronics and semiconductors, in cloud computing and in data storage have been announced in Ireland, including by Analog Devices, Intel, Qualcomm and AMD.
We have seen this year some to-ing and fro-ing in the sector. Certainly in the earlier part of the year, many big names internationally made decisions to reduce the numbers they were employing worldwide, having had extraordinary growth in the previous two years. That affected Ireland because many of the companies have headquarters for Europe and elsewhere in Ireland. In general, the percentages of losses in Ireland were not as high as they were globally, but they were still impactful. We know that. What is not often talked about is the number of companies taking on people in the tech sector. The vast majority of people who lost their jobs earlier this year found employment pretty quickly because of their skill set. Of course, we will continue to work with them.
The number employed in the sector might be as high as it has ever been but it is down. The Minister himself has expressed concern over volatility in the technology and communications sector. It is of concern to workers. As the Ministers said, Ireland is one of the most important technology centres in Europe.
What engagement has the Minister had with IDA Ireland and Enterprise Ireland to understand the skills profile of impacted staff and to be able to say people have actually been re-employed? Are the profiles of staff being let go shared with the client companies? Is the Government keeping track of the number of people who are gaining employment, having lost their jobs in this space? Could the Minister give me an update on his direct engagement with the sector to understand who the people are who are losing their jobs, whether they are being re-employed and how quickly.
I assure the Deputy that I speak to representatives of companies all the time. We have investment announcements all the time. I have been to the US three times this year and I suspect I will be going again early next year. The US is where most of the tech multinationals are coming from, although not all of them. We were in South Korea recently seeking to attract more tech interest and investment. Regarding some of the global giants that have been built in South Korea, we would like to see an increased footprint here in Ireland, if possible, as they seek to diversify and expand in the European market.
The way IDA Ireland works is such that it does not just bring companies into Ireland but also ensures that, when they are here, they are properly looked after and that we hear from them when they have concerns. Yesterday, I had an hour-long meeting with representatives of a very large tech company in Galway to make sure we fully understand its view on competitiveness in Ireland by comparison with other parts of the world.
Those interactions happen all the time. Later today I will visit Intel for an hour and a half or so to fully understand its perspective on competitiveness in Ireland.
The Minister will get a chance to contribute again.
My final point is that it is not true to say that fewer people are employed in tech now than there were at the start of the year. The CSO would suggest that there are more.
We are way over time.
That does not mean that we have not had significant job losses in certain companies. That is important to recognise.
I ask for co-operation on time. It is not fair that I keep interrupting but we need to let all the other speakers contribute in due course.
As the Minister said, there have been significant job losses; that is a fact. I met representatives from Intel a couple of weeks ago. While these big employers are incredibly important, the jobs that are being lost are not just in large companies but also in the smaller companies. For every job lost in those industries, there is also a knock-on consequential impact on others depending on that job, right down the chain. We know there are issues. I want to hear if the Minister is engaged specifically. In general terms, he will obviously meet many businesses, trade unions representatives, etc., in his role but is he engaged specifically with the tech sector? Is he concerned or is he content that people are being re-employed in this area? While the headwinds might be choppy and the situation might fluctuate, is he content that the job losses are not something to be overly concerned about?
The Minister has one minute.
I was and am very concerned about any job losses, which is why, at short notice at the start of the year, I went to the US to meet as many key decision-makers in some of the big tech companies as I could to really understand their mindset about what was happening. The answer we got was that the decisions they were making had very little to do with Ireland. In fact, it was nothing to do with Ireland at all. Instead, it was about reducing global headcount in many of these companies which had expanded extraordinary quickly in the previous 18 months to two years, as it happens probably too quickly during and post the Covid pandemic. Am I saying that all the announcements of job losses in the tech sector are over? We do not know that for sure. We are, of course, following the matter closely but there is also strong growth in the tech sector. For example, Apple, the largest company in the world, is continuing to recruit and take on more people.
Thank you.
It is spending a fortune on building-----
Thank you.
I met representatives of the company yesterday. It has a recruitment freeze at the moment.
No, we are over time.
We are seeing-----
I am really sorry. We are way over time.
All right.
I am going back to Question No. 10 in the name of Deputy Griffin.
