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JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION díospóireacht -
Tuesday, 4 Oct 2011

Skills Requirements: Discussion

I welcome Ms Joan Mulvihill, CEO, Irish Internet Association, Mr. Iain McDonald, founder, SkillPages and Mr. Kevin Marshall, head of education, Microsoft. I also welcome Mr. David Sweeney, CEO, Interactive Games Association of Ireland limited, Mr. Barry Kehoe, senior director, Activision Blizzard and Mr. Barry O'Neill, chairman, Games Ireland.

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence you are to give this committee. If you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable.

Before I ask Ms Mulvihill to start, I appreciate the first session was lengthy and I am glad the delegates did not leave. I hope they found the previous discussion useful. Members had to leave because of various votes. We re-examine every presentation and will have further discussions before we make any recommendations.

I invite Ms Mulvihill to begin her presentation on the skills needed to take up job opportunities in the respective industries, followed by Mr. Sweeney. Members can then ask questions.

Ms Joan Mulvihill

I thank the Chairman for inviting us to attend the committee today. It is great to see we acknowledge there is a skills shortage, something which was debated earlier. This is a significant issue in our sector where there are currently 2,500 jobs lying vacant because we cannot find people to fill them.

I wish to refer specifically to a comment that was made in the last session by the university representatives. They said that Irish graduates were extremely employable internationally, which is a fact. They are extremely employable by all other countries seeking to have a smart economy. They are proactively incentivising Irish graduates to work overseas. A number of our members have lost staff who went to work in Australia, New Zealand, the United States and the United Kingdom. All of these employers are pursuing their own strategies to attract digitally skilled staff.

I want to take a practical approach to today's meeting by providing the committee with a set of proposals and recommendations. Earlier this year, the Irish Internet Association, IIA, launched its own policy proposal on retaining skilled workers in Ireland. The IIA proposes a short to medium-term strategy specifically targeting employees to stay here. We want people who have gone through the education system in Ireland to be incentivised to take up the 2,500 jobs, if not more, in the sector. This would be done through the development and implementation of a tax credit programme for them to incentivise them to invest their futures here.

In addition, we would like to consider the possibility of a repatriating and relocation grant specifically targeting this important indigenous Irish industry. At the moment, international organisations in the sector here can pay to relocate international workers to take up such positions. Indigenous businesses do not have the same opportunity, so we propose a relocation grant to help in the short term Irish SMEs, which could not ordinarily afford to do so, to source people overseas to take up these positions here.

The second issue is that of attracting students to take up study in this area. I was particularly impressed by one of the previous witnesses who said we need to promote careers, not jobs. We are conscious of that too and for that reason we are proposing a qualifications and accreditation programme for developers. The developer community currently includes everyone from self-taught teenagers to experienced postgraduate students. In other professions and trades there is a minimum requirement for either a primary degree or a postgraduate qualification that would afford them some professional status. That does not exist for the developer community at the moment, but we think the benefits of having such a system would be manyfold. It would ensure that in the recruitment of an employee or the engagement of a company's services, the employer-customer is able to make a reasonable, objective and timely evaluation of that candidate's skills.

With such a system, standards in the industry would rise as rogue traders leave the market or, at the very least, would be forced to reach minimum standards of professionalism to compete for jobs. Currently, many people who have gone through a 13-week course, and have done a few hours on Ruby and Java, can legitimately say they are web developers when in fact they are not. That is the reason I have grown men ringing me in tears because they have just paid €9,000 for a poor standard e-commerce site. They have not received what they were supposed to get. Traders like that exist, but professionalising the sector would eliminate it. It would provide greater clarity, as well as a structured education and career path for those investing their futures in this field.

The previous speaker alluded to the importance of promoting careers. We want people to take up jobs in our sector but we need to minimise the risk for them. We do not want to go through an experience that we went through in 2000 where, as was claimed earlier, students were frightened off studying these subjects. In fact, students were not frightened but their parents and career guidance teachers were. They were influencing 15 year olds when they were choosing what to study in the leaving certificate. Much of the time, those students look to their parents and teachers for that level of guidance.

There is an old adage in our sector - I hope my colleague from Microsoft will excuse me for saying it - which is that no one ever got fired for buying IBM. No parents ever got disowned by their children for recommending that they become an accountant, solicitor or engineer. No career guidance teacher took that kind of risk either. We want to eliminate or remove some of the risk in studying these subjects and taking up careers in this field.

The proposed system would also promote assurances of standards for businesses investing in Ireland. For example, if a multinational organisation was planning to establish a business in Ireland, we would be unique in recognising the developer community as a profession with recognised standards. Following what the previous session discussed concerning continuing life-long learning, it would include an element of continuous professional development. This would ensure that graduates in this subject matter would be compelled to comply with a number of continual professional development hours throughout the year.

I have already mentioned the importance of career guidance for second and third level students. Despite a movement in this year's CAO applications towards science and technology, we believe that there is still room for improved career guidance support for students from parents and teachers in raising awareness of how these subjects can not only lead to a secure, but also a fruitful career. Many students are not aware of this. Additionally, graduates of arts and business degrees do not fully explore the opportunities of postgraduate specialisms in these fields. Teachers and parents are more likely to influence students towards traditional professions until we can eliminate some of the insecurity around what the future holds.

We have just heard an extensive review of third level education. As regards our sector at this time, at best, most third level syllabi are reflective of the previous 12 to 24-month historic needs of industry. However, by the time students graduate from a technology course in this country, it is entirely possible that their studies are in fact three to four years out of date.

Ballyfermot, which was alluded to earlier, has produced outstanding, world-class graduates who have gone on to perform internationally, as well as winning Oscar nominations for their animation work. Animation currently employs 800 people in Ireland but it could easily employ double that figure. I recently attended the launch of an animation business where three CEOs were arguing over who would be first to ring a person who was available in the market. They were fighting over that one person. I know of one animator who is seeking 25 new people but he cannot find them anywhere. Ballyfermot used to deliver the graduates required by this sector but it is now slipping backwards.

We propose more frequent and consistent industry consultation based on future thinking for syllabus development. We need to ensure that all our graduates are equipped with the skills needed for a modern economy. This includes technical and engineering, as well as business and arts programmes. It is our experience that relatively recent graduates of marketing and business, for example, are undertaking further postgraduate studies. The Irish Internet Association runs its own diploma in digital marketing. It is alarming to see the number of newly graduated marketing students who are now undertaking diplomas in digital marketing. This is because the digital element of their studies was, quite clearly, not reflected in the universities or colleges they had attended.

Students in corporate finance and accounting need to reflect that business models have changed and are now based more on internationally-traded services and cloud businesses. We also need to provide a stronger emphasis on entrepreneurship for technology students. We need our best and brightest developers equipped with the requisite degree of commercial acumen to make the transition from being a "techie" to being a technological entrepreneur and business founder.

Current secondary school computer rooms are equipped to teach students the European Computer Driving Licence or ECDL, but this module is almost 20 years old. We are teaching 14 year olds how to use PowerPoint and Excel, which is the equivalent of teaching them how to use a mobile phone. They have been doing it since they were six. We need to teach them not how to use, but how to develop the applications because that is where the opportunities lie.

Computer rooms should be language labs but as well as teaching French , German and Spanish in schools, we need to be teaching the international languages of Java, PHP and Ruby. In that way, students would have international computer languages thus allowing them to compete for jobs internationally. In addition, it would allow Ireland to compete for such jobs to be located here. Once one has grasped a foreign language, it is relatively easy to learn others and this applies equally to programming and coding. Currently, we do not have teachers who are qualified to teach computer studies, which is frustrating for teachers and students alike. I was recently talking to a secondary school teacher qualified to teach mathematics and geography. She was asked this year to go into the school to teach computers. She said she knows how to use a computer but not how to teach computers. We devalue the teaching profession by asking people to teach subjects they do not know how to teach. We need to equip them to do this. At present, that service is being provided by a 19-year-old boy from Cork. I do not know if the members are aware of James Whelton; he won our "Best Rookie" award last Friday night. James, at the age of 18, set up computer clubs for students between the ages of 12 and 18 to learn programming languages. He is currently filling the gap that should be addressed by the education sector. The IIA is wholly committed to recognising the needs of all of our members from global technology corporations, such as Microsoft, to individual developers, start-ups - this is why Mr. Iain Mac Donald of SkillPages is present - and SME consumers of technology. We want to make sure that our industry, our shared economy, has the necessary human capital to ensure sustainable growth, and we believe that the skills shortage needs to be addressed immediately by a coalition of those associated with education, industry and good governance.

Mr. David Sweeney

On behalf of my colleagues from the Interactive Games Association of Ireland, I thank the committee for the opportunity to speak today. It certainly has been educational thus far. We listened with great interest to what the education institutions had to say. Since this is the first time my organisation has appeared before the committee, I will introduce the industry representatives. I am accompanied by the chairman of the Interactive Games Association of Ireland, Mr. Barry O'Neill, and the senior director of Activision Blizzard, Mr. Barry Kehoe, who will help me in my responses. The two complement each other quite well. Mr. Barry O'Neill will speak about the experiences of small and medium-sized enterprises. Mr. Barry Kehoe is the senior director of the biggest employer in the games industry in Ireland and the world, Activision Blizzard. We have an harmonious message that the games industry does suffer from a skills shortage. Like Ms Mulvihill, we have a shopping list that we would like to make known.

The Interactive Games Association of Ireland represents companies involved in the creation, development, publishing and distribution of computer games on the island of Ireland. We see ourselves as an advocacy group seeking to drive sustainable growth in the industry at a very crucial time for this country. We want to create better awareness of the Irish industry as it stands and lobby for initiatives that could help the local industry grow, in addition to expanding the scale and scope of the international industry in Ireland. Our members include international stakeholders such as Activision Blizzard, Big Fish Games, PopCap and local pioneers including Havok and Demoware.

As members may know, the video games industry is the most dynamic player in today's entertainment industry. Its global value is scheduled to grow to €80 billion by 2015, and its unique mixture of creativity, technology, interactivity and fun give it a head start on the competition. Ireland is ideally placed because its rich reservoir of talent, technique and tenacity means it is placed perfectly to play a leading role in today's video games sector in Europe. The industry has grown rapidly in the past 30 years from one involving early home and arcade consols, which members may remember, to today's ever-diversifying scene, which is increasingly online, mobile and social in terms of connections to very popular applications such as Facebook. Games have been found to have clear educational, social and communicational benefits and are increasingly used as part of educational programmes in schools. The Europe-wide Games in Schools programme, for example, is run by European Schoolnet. It is run in co-operation with the industry and it successfully integrates digital games into school curricula.

There is currently an excellent opportunity to expand the industry in Ireland. The biggest companies representing the entire games value chain already have operations here. Consol, online, social, mobile and middleware, a software that makes games work, are all in this country. We have a dynamic, locally developed industry that has spawned world-class companies such as Havok and Jolt and a start-up scene with some very promising early-stage operations. These companies run into the hundreds.

We see our association's role as supporting these companies, providing a strong lobbying voice for the industry and working with the Government to introduce incentives that will increase development and the size of the industry, with a widening of the types of activities that are carried out in Ireland. We point to examples such as Canada, where the size of the industry was quadrupled over a five-year period as a result of targeted Government support.

My organisation is very grateful for the early recognition of the industry's key role in the coalition's programme for Government, and it is especially happy that senior Government figures will be addressing international industry events, to be held next week in Dublin, on the games industry.

We have five pillars on which we build our agenda. The first four are to ensure Government incentives fully cater for the industry; to encourage inward investment, new enterprise and entrepreneurs; to attract creative talent to foster local talent; and to market and develop education and skills. We want to ensure the courses offered by third and second level institutions are clearly in line with and anticipate the needs of the industry. We need to transform young people's passion to play video games into a desire to make them while equipping them with the right skills for the industry today.

Our members often tell us that graduates from Irish third level institutions all fall short of the standards required for certain roles in our games industry. Too few graduates are produced to meet industry needs. My colleagues will speak about this. As a result of the deficit, local companies are often forced to look outside the country to fill certain key positions, as Ms Mulvihill explained in her presentation.

We will shortly set up working groups with educational institutions and State agencies to advance the following objectives. We want to align educational institutional curricula with industry needs, to foster better awareness of the industry among career guidance teachers and lecturers, and to encourage industry and academia engagement and peerage, including through industry incentives and sponsorships. We want educational institutions to consider the acquisition of curricula and resources from overseas universities and we want prioritisation, fast-track processing and the granting of visas for suitably skilled non-EEA citizens needed to fill the hundreds of job vacancies that exist in the Irish games sector. We hope all the aforementioned issues will be addressed in the imminent Forfás study of the Irish games industry.

My organisation is dedicated to putting the Irish industry at the forefront of the international games sector. We want Ireland to be the best place in Europe to develop a games enterprise. The Irish industry needs to position itself for further development within Ireland and abroad and move away from being a service-only industry to being an indigenous and robust high-growth one with consequent high-quality or "sticky" job creation. This can happen only if our educational institutions and games industry are aligned to foster the talent that this diverse, rapidly changing sector of our economy needs to continue to divide and prosper.

I have a couple of questions, the first of which is directed at Ms Mulvihill. I read the presentations before hearing them today. My first question is on secondary schools. I totally agree that we are teaching the equivalent of the alphabet in IT education in second level schools. All the material has cobwebs on it at this stage. We are really not meeting the demand, such as demand for education in Javascript, PHP, etc. What needs to be done in order for this to change? The process of introducing a new subject would take time. Is Ms Mulvihill aware of whether the Department is open to this? Has she had discussions with it?

I will address my next question to Mr. David Sweeney. Gaming has become a policy priority in Canada, as he mentioned, and in France. The United Kingdom is also looking into it. The countries have all used tax incentives to bolster growth in these industries. Is Mr. Sweeney aware of any educational policy responses the countries have employed in addition to the tax incentives?

We all know the value added is in software application development. If I am correct, this is where the real money is. Third level needs to change to meet the demands of being able to build on the software application level. Will Ms Mulvihill elaborate on this?

Ms Joan Mulvihill

Deputy Lyons asked whether the education sector is aware. It is unfortunate that the representatives who were present earlier have left. We have not approached the education sector. We understand that bringing in an extra course would be a challenge and would take time. That is one of the reasons we put in the critical skills retention policy as an immediate short-term solution. We will not change the entire system overnight. Industry, as was highlighted earlier, cannot wait.

The reform of the education at second and third level must be done but we need to do something immediately and that is where, to go on to the Deputy's next question, the tax incentive element comes in. He asked whether this is being done elsewhere. It is being done in Canada and Korea and Mr. Sweeney referenced the issue of visas for people to come and work here. This is something we support but just because someone can work here, it does not mean he or she will choose to do so. All Irish citizens can work here and they are choosing not to do so. They are choosing to invest their careers, for their security and for their families, overseas. We need to put in the visa policy in the short term but we need to couple that with a meaningful incentive to encourage people to come here and that is why we want it to be an employee-related tax credit system, which is not dissimilar in model and principle to the artists' tax exemption. We must apply all the learning we got from the misuse of this exemption.

We are not talking about a 100% exemption or a blanket application to everyone in the sector but about looking at the critical skills required in the list I provided in the briefing pack. If an accreditation programme recognised where the digitally skilled were in place, one would know who to apply it to because it could be applied to a standard. Everything we have presented is about having a cohesive strategy that addresses everything once a child is 12 years and enters the secondary education system to the end of his or her career in the pursuit of lifetime learning and having the mechanisms in place to incentivise them throughout that entire process whether it is through tax or the selection of the correct subjects.

Mr. David Sweeney

I find myself echoing most of what Ms Mulvihill says because when she gave her presentation earlier, she covered many of the issues which equally apply to our industry. The two big success stories internationally for the games industry are Korea and Canada in terms of the growth of the industry and employment. In both territories, there was engagement between the companies and the education institutions. We talked in our presentation about sponsorship and issues such as that whereby some of our member companies would consider engaging with third level institutions regarding course direction and sponsorship.

With regard to the question of tax treatment and a favourable environment to attract key talent, we have made it clear in our discussions with Oireachtas Members that if we were to get favourable tax treatment for people coming in to work in the industry locally or from abroad, that would be tied to a situation where that key talent would be responsible for training five or six other people as part of their contract in order that ultimately those people would be able to rise to a similar level to the key talent?

Is Mr. Sweeney saying short-term contracts will be provided for people coming in to do training and they will be eventually be replaced?

Mr. Barry O’Neill

We referred to tapered relief, which would only be applicable if the employer took on five people and as part of the contract for the person availing of the tax benefit, the relief would taper over three years and he or she would have to train in those five people. For every incentivised position filled, five new jobs would be created and, ultimately, those people brought to a higher skills level. Most of the Irish companies in this sector say there is a huge amount to be said for internal training programmes and providing as much context to external skill or raw skills coming out of universities. The context is important.

Mr. Kevin Marshall

I would like to come back to the question of what we could do with the schools. The proposed reforms of the junior cycle, which will be presented to the Minister shortly, offer us an opportunity to provide short courses, which could look at the issues of programming and languages. They will not necessarily deal with the short-term issue but we need to consider the short, medium and long-term issue. In the industry in which I am involved, we need a pipeline and it takes time. The overarching issue is if one does not expose all children to the programming languages and the technologies when they are aged between 13 and 15, it will be too late by the time they get to university for them to have a deep understanding and to see what is the potential. That is the opportunity we are missing.

There is a lot of discussion about the skills gap in the ICT sector but for a more fruitful solution to that, we need to be clear what we are talking about. There are three buckets for what is required in the area in which I am involved. Software engineers have a skill set. There is then business information systems encompassing applications, project management and programme management and then the emerging cloud skills that are required. This is a follow on from the previous two, particularly in applications such as CRM. The skills required there are the ability to sell and market underpinned by the technology. A more fruitful debate with our friends in the third level sector should address how we tailor initiatives such as Springboard to meet the demands in the short and medium term.

With regard to quantifying the problem relating to skills shortage, will Ms Mulvihill firm up the numbers? Qualifications and accreditation are important for the industry but she stated the rookie of the year is doing great work. Would the need for qualifications cut off an avenue for someone like that? With regard to accreditation and how it would work, she referred to the need to teach students how to develop the application rather than teaching the application at secondary and primary level but given the lack of skills in the teaching profession to even teach the basics, how can that gap be filled through in-service training and so on? She referred to Irish people choosing to invest their career elsewhere. Do they have the skills required?

Ms Joan Mulvihill

Yes.

Why are they choosing to do that? Is the package the industry offering not good enough to attract them? Is that part of the problem?

If international companies decide to locate there, it is counterintuitive that they would do so if there is a skills shortage. Many issues have been raised and I am sure the Forfás study will address some of them. Are both groups happy to wait for the study or do they need to us accelerate something ahead of it?

Ms Joan Mulvihill

There are 2,500 jobs documented as being vacant. That is not an absolute number and I suspect another 1,000 in addition to them are not currently advertised.

Our rookie of the year is aged 19. I do not suggest that 19 year olds are fine on their own. He is building a computer club for 12 to 18 year olds and teaching them how to write code in an accredited format. If a 14 year old writes a great line of code, he starts off with a brown belt and he works his way up to a black belt, depending on how often the line of code is reused. That would be similar.

To answer the third question on how we would apply an accreditation programme for this industry overall, I do not want to bring anything overly bureaucratic or burdensome into the debate.

The fourth question asked why are people are choosing to leave. It is because we are not offering them enough money. A study done recently by Prosperity Recruitment stated that gross salaries in Ireland for the sector were on a par to what they were in other countries. People were choosing to emigrate because they felt that their quality of life in terms of net income would be better elsewhere. Therefore, even though they were paying more direct tax in the United Kingdom system they would be better off in terms of their net income because of the basket of goods that income could buy them. They were electing to work there not because there was any significant difference but that they were better off in terms of their net income working somewhere else.

This is an issue we must face in the sector because many of the employees they were talking about with those skills are young and mobile. This is not like other sectors. We are talking about a very young, unique, dynamic group of people who are being sought after proactively by other countries and we need to give them an incentive to stay here or relocate here.

On a point of clarity, is that a recent trend or has it been a problem for a number of years?

Ms Joan Mulvihill

One would suspect-----

I will not suspect.

Ms Joan Mulvihill

Sorry. The emigration position is something that has occurred more in the past two years. It is an emerging trend. For example, one of our members, a digital agency, currently has six vacancies. Three people who were working for a global brand here walked into the office one day and said, "Hi, we are off. We are going to New Zealand to set up our lives there." That was prior to the Rugby World Cup and therefore it has nothing to do with the match. That was at least 12 months ago.

Mr. David Sweeney

I echo what Ms Mulvihill stated. Ms Mulvihill has a much bigger constituency than the one we represent. We were solely in the game industry whereas Ms Mulvihill represents a plethora of different industries aligned around the Internet. We have figures running into the hundreds in respect of jobs that are not filled.

There are two sides to the issue as far as we are concerned. We want to develop the industry here in such a way that the jobs on offer are the type of jobs that are attractive and encourage our talented youth to remain here, as well as attracting people in to mentor those who are here. We are looking at it from both sides of the coin. We have similar issues to those outlined by Ms Mulvihill. Does Mr. Kehoe wish to add anything on the vacancies?

Mr. Barry Kehoe

I can give a specific statistic from this year. One of the groups, Activision, has a large footprint in employment. One of the groups is a research and development middleware company. Part of its group is based in Vancouver and it had a certain amount of open internships for this year. It planned to put most of them into Dublin and a few in Canada and so far this year it has recruited 11 successfully in Vancouver and one in Ireland, which was specifically put down to the quality of the applicants as opposed to any other reason. The preference for the most part was for them to be in Ireland. In the areas that require high level mathematics, advanced physics and so on, which are integral to certain aspects of making games, it is finding that many of the graduates cannot compete with people leaving colleges in other parts of the world, and that is where the jobs are going.

Mr. Iain McDonald

If I can respond to Deputy Ryan's statements and questions, I run an Irish entrepreneurial company. There is much talk about foreign direct investment and the importance of satisfying the needs of foreign direct investment into the country, particularly in the area of ICT, but I come from the perspective of supporting indigenous companies involved in ICT. We are business which employs 28 people, mostly with a mathematics or computer science postgraduate qualification. We run a skills based social network and our raison d’etre is to connect people with skills to people who need them on a global basis. We launched the platform in January of this year and nearly 2 million people from 160 countries around the world, but predominantly from the United Kingdom and the United States, have joined us. In terms of growth, that would put us on a par with the likes of the early days of LinkedIn or Facebook, which would be our international peers who have been very successful in growing significant Irish businesses.

I will give some real life examples of the way the issues referred to here by my peers in the industry affect a company like ours. In terms of the access to talent, we find it extremely difficult to acquire the talent necessary for us to succeed. That is because we are not competing against other Irish companies. Our competition is in Silicon Valley, Singapore and other countries. Competition in terms of us succeeding is directly relevant to the calibre of our staff. There is no disambiguation between those two factors. For us to recruit we have attempted to recruit heavily in Ireland. Less than 50% of our workforce is Irish. We have had to recruit from Romania, Poland, Italy, Spain and more recently from India.

In terms of the requirement for skills, in our Irish workforce we find the quality at the upper level of computer science, which is our main area, to be excellent but there is not enough of them. It is not a problem that can be solved overnight but that is our issue. I will leave it to my colleagues to describe how that can be addressed on a long-term basis.

With the majority of our users located in the US and the UK we are increasingly asked the reason we continue to locate in Ireland. We do that because we believe there are advantages to locating in Ireland. The tax regime is attractive. There are significant advantages from a research and development tax credit perspective, which are essential to us staying here. If they were not available I could not justify it, neither could my board.

The reality is that increasingly as we scale our employee numbers must grow. Our expectation is to grow towards 70, 80 or 90 employees by the end of next year but my No. 1 concern as regards our ability to continue to succeed against our international competitors is the access to talent. I cannot overstate the importance of that.

In terms of providing a demonstrable and immediate solution, which is required, what Ms Mulvihill referred to in terms of the wage gap is our biggest issue by far. We can pay somebody €100,000 to come and work for us in Ireland but it is not attractive to move from Poland, Romania or Italy to do that because the cost of living here and our tax burden on the employee is so high. It is simply not possible for us to compete, even if we can attract people here.

To encourage them to come we offer them opportunity which does not relate to pay. That is the role or the experience they are being given in a fast growth consumer Internet business but there are only so many people who will agree to do that and as the company gets bigger, that attraction decreases because they are not involved in such an early stage and taking a job with us would be the same as taking a job with our competitor in a foreign country, and it will not be possible to do that. That will require us to seriously consider the future of our head count drive and its location in terms of whether it will be in Ireland or elsewhere.

It is interesting that this discussion follows the previous discussion. The previous witnesses spoke about flexibility, a responsive curriculum and so on but unfortunately the reality in that regard is quite different.

I was surprised to hear about the 2,500 vacant jobs. I did not realise it was at that scale. I would be interested to hear the witnesses expand on the visa problem in terms of people coming here but I am more interested in the tax credit system. The witnesses might expand on that or if they have a paper on it they might forward it to political parties in the House. It would be difficult to sell, however, because people would say if we can give these credits to people coming here why can they not get them. I accept it is primarily to grow the industry. The same argument could be made regarding the artists' subvention, bringing in film crews and so on. It makes sense in that regard.

Approximately 70 graduates leave Ireland every week. Part of the difficulty is that unless we can offer them something that will keep them here, such as a programme or whatever, they will move to New Zealand, Australia or elsewhere. The difficulty is that the system is slow to respond to that.

Ms Mulvihill mentioned the lack of response to the needs of industry. There are links between the universities and ITs with industry but there are no links with schools. In my local authority area, the Connect project ties in with the local authority but we do not see companies taking part, even though we all accept that 13 and 14 year olds are like sponges and would benefit from these connections.

How are the new sciences, like web design, graded and how does the system respond to that challenge? We have all heard of people who have claimed to be one thing but are not exactly all they say. How do other jurisdictions manage this? If it is done properly somewhere else, we could jump on the back of it.

Ms Joan Mulvihill

I included the document on tax policy in the briefing pack which we presented earlier this year. We had a couple of meetings with the Department to explore how it would be practically implemented. On the tax incentivisation programme directly relating to an individual, we absolutely appreciate it is a challenge to even countenance the idea of a tax break for any individual group but we are very practical on how we want to apply that. It is not a blanket tax credit for anyone working in the sector, it is directly linked to the skills required at present and then it would be reviewed annually. The measure of the tax credit might be as little as the difference between what someone was taking home and the quality of their life in 2008 compared to now. We would be bridging the gap between where we were after everything starting to go wrong. We are interested in pursuing that and this is the opportunity to bridge the gap immediately. We understand that involves longer-term reform of education.

How do other countries grade this? We would defer to the expertise of the education sector on how to grade it but it is taught in other countries. We could go to a high school in the United States and learn to programme from an early age. That is not possible in Ireland. We are not proposing something that would be totally unique. The professionalisation of the sector in a postgraduate sense, however, would be unique to us.

Mr. David Sweeney

Any tax incentive would be carefully structured. There are precedents in other European countries for this in the past ten to 15 years. We have a carefully refined proposal that takes account of the current market conditions and the economy; we know it is sensitive at this juncture.

We want to get into talks with both second and third level institutions. A certain flexibility was shown today in the contributions by the educational institutions and we would like to see more of that. We hope to drive a working group to bring the needs of industry closer to the forefront of what is being considered. There is a gap at the moment and there are areas like computer science where needs are being met but we hear again and again that maths and science are very weak. Those are subjects that people get to grips with at second level and that are important for future participants in the industry.

Ms Joan Mulvihill

Our membership base is so broad that half of our members would be technology consumers, where they see Internet capability as being fundamental to the growth of their business; they are more on the sales and marketing side. While there are a number of multinationals based in Ireland because of research and development tax credits and incentivisation programmes in that space, they are also here because we have a long and strong tradition in sales and marketing. Where we are failing to educate our marketing graduates and our business students is in the use of digital marketing technologies for the growth of those businesses. We know for certain that there are more vacancies for SEO experts and pay-per-click experts than we have people to fill them.

Mr. Barry O’Neill

Deputy Crowe asked about visas and it is a difficult situation. There are companies in the games industry here who have found that candidates that have been issued with documentation to attend Ireland for job interviews are being turned away at the airport for some obscure reasons. We have seen situations whereby visa applicants have been denied visas for programming jobs because a company made people redundant on the commercial side in the previous six months. There is also an overly bureaucratic appeals process that can last up to four months, during which time any reasonable candidate will find a job elsewhere. The example I cited of someone being turned away finished with that person going to the USA and securing a visa for an engineering role in that country. It is strange to find it is harder to get a work permit to work in Ireland than in the USA.

Ms Joan Mulvihill

They are currently lobbying in Silicon Valley for a special visa programme for start-ups. That is what we are competing against. We will have a situation where US companies founded by Irish people based in Silicon Valley will want to locate in Ireland in ten years time and if we had had the good sense to incentivise them to stay here in the first place, that would be working in reverse. I do not even want to countenance that possibility when we have the opportunity to keep them here and incentivise them to work here.

So the visa category is allowed by the system.

Mr. Barry O’Neill

The system allows it but it moves so slowly that it is difficult to fulfil it.

I have one question for Mr. Sweeney, who referred to the need for educational institutions and the games industry to be aligned to foster the talent that is so scarce. How are the discussions with individual colleges going? Are particular colleges being targeted?

Mr. David Sweeney

It is interesting that we have just started the process in the past few months and the first institutions that came to talk to us were commercial colleges, the privately run third level institutions in Dublin, that were very open to working with us. We understand that bigger institutions move more slowly but we hope, with the co-operation of the Civil Service and Government agencies, to work with some of the institutions here today in the short to medium term and we hope this issue will be dealt with in the Forfás report when it is published on Monday.

We appreciate the delegation coming today. Some of us attended the presentation by Deputy Donohoe on the industry's behalf and it was very informative. Most of us realise there is a gap and that we must address it. Anything we can do to help, we will do. Clearly we want to tackle this.

I am surprised there has not been contact with the colleges before now. In recent months this has become a very important issue but was it ignored before then?

Mr. David Sweeney

Frankly, we were not organised. There are trade bodies that represent the gaming industry in many different countries around the world. Ireland was not one of them but that has changed. Since we got organised last year we have had immense traction with Government, State agencies and the industry itself. We are starting our discussions with people who want to move things along quickly. Those people at the moment are to be found in the private colleges.

Ms Joan Mulvihill

The breadth of our membership is so extensive that we are talking about every syllabus in every college. This is our first foray into this question. Ballyfermot has an excellent track record. We can do it. We simply need to identify and organise what needs to be done.

If the right decisions are made this year how long would it take to tackle this problem and solve it? Is time on our side?

Ms Joan Mulvihill

Some of the proposals related to the convergence courses for unemployed architects and civil engineers who have proven their ability at mathematics in their primary qualifications and are currently redundant. There is a misconception that they will miraculously appear out of a university in 12 months time and jump straight into a job writing code. That is not going to happen for at least another 24 months. We need to be realistic about how we address the problem immediately.

Funding has gone to courses which, ostensibly, provide training to make people into developers, but do not do so. People are coming out of ten week courses, having spent an hour doing this and an hour doing that. They have had something like the generic first year which the university representatives spoke about earlier but they cannot function realistically in this sector. They are still far behind the grade. We seem to think that patching will address the issue. We are talking about highly-skilled experienced people whom we need immediately.

An immediate solution would be to take the tax incentivisation proposal, put it in the budget as quickly as possible and give people a reason to stay who will otherwise hop on an aeroplane in January. Once they see what we all know is coming down the track in December they will go. Any chance of recruiting anyone else to come here will also be gone. The Oireachtas must do that immediately to stem the flow of emigration and attract others to come here and, in parallel, work on the visa side of things. We will address longer-term educational challenges relating to convergence courses. We could then buy ourselves 24 months.

My greatest concern is that the next Twitter will announce it is going to set up here and I will be paralysed with fear that they will realise we do not have the people they need. That will be a real problem. We want them to come and stay and be happy with their experience so that we can have long-standing relationships with these organisations, as we do with Microsoft, which has a strong investment in the ecosystem through its BizSpark programme, and with all the other companies it supports and invests in in Ireland. We need to have that kind of sustained growth from those businesses here. That will only happen if we give them an assurance of supply of highly skilled individuals.

Mr. David Sweeney

I endorse all of that.

I would not recommend disagreeing with Ms Mulvihill.

Mr. David Sweeney

The big names in the game industry are all in Ireland now. We spoke about encouraging the creation of medium to high-level jobs which would attract the right type of graduate here and bring in the right type of skills. That is where we see things as being very important in the next few years.

As Ms Mulvihill has said, changing the curriculum will take more time and will not be an immediate solution. We must have other solutions in the short term. They are aligned to a tax incentive to get the right people in, train them in-house and make sure the level of expertise grows. In the game industry that would ensure that games are increasingly produced and developed in Ireland, as opposed to being produced and developed outside of Ireland with various service aspects being catered for here. We want these high quality jobs in Ireland and the industry to grow, based around the nucleus that is there now. Every day we hear of more opportunities. An additional 200 jobs were announced last week at BioWare in Galway and a couple more job announcements are on the way.

The companies are here. The two biggest publishers Activation and Electronic Arts are both present in the Irish market. If the climate is right and the talent is there, those jobs will be created and those companies will grow. Ireland will then have a headstart in the game industry, as it should have.

Ms Mulvihill made a wonderful pitch for a tax incentive to attract people. Has she made a submission to the Department of Finance on this proposal? She will appreciate how difficult this issue is now and what the reaction would be to singling out one sector for special treatment under the taxation code. That is not going to an easy one. On the other hand, I can see the need to do something. The Department of Finance would have strong views on this issue. It is important that a submission be made to the Department highlighting the difficulty of retaining and recruiting people and the short-term difficulty for the next 24 months. If that case were made something could be done on a short-term basis so that we can hold onto the companies we have and attract badly needed people from overseas.

Ms Joan Mulvihill

As the Chairman has said, I do not like it when people disagree with me. I have not gone to the Department of Finance yet. We started with the Department of Jobs, Enterprise and Innovation because this is not about profit. It is, genuinely, about the people in the jobs and having the talent we require. This is a jobs question and we need to invest in it. We started with the Department of Jobs, Enterprise and Innovation.

Is Ms Mulvihill sending a copy of the proposal to the Department of Finance also? That Department calls the shots.

Ms Joan Mulvihill

I thought they could shoot the messenger rather than me.

The committee will send a submission to the Department of Finance. The Minister for Finance has specifically requested proposals for job creation. It would help to send a written submission to the Joint Committee on Finance, Public Expenditure and Reform. This committee will also follow it through.

Ms Joan Mulvihill

Chairman, you mentioned the possibility of a short-term solution. That is all we ever wanted to suggest. I am a taxpayer too. I would be humiliated, embarrassed and would not be able to live with myself if, in 20 years time, I realised I had been responsible for an idea that involved sectioning a certain group of society for special treatment in the payment of tax. This is a short-term solution for a very urgent challenge.

We had an initial meeting with the Department and will have a further meeting on Thursday next to examine the practical mechanics of making this work. We are not proposing anything we have not calculated to be cost neutral, at the very least.

There are 75,000 people employed in the tech sector in Ireland and a further 200,000 employed in ancillary jobs supporting those. In filling the 2,500 job vacancies other jobs will be created. In addition, someone who has emigrated is not paying any tax. No tax is being paid on the 2,500 jobs that are currently vacant. The scale of the tax credit is not significant. It would be cost neutral.

Mr. David Sweeney

In the games industry, we looked at proposals for creating new jobs. We were looking at proposals that would be 100% accretive to the Exchequer. These incentives would not mean a loss to the Exchequer. The training incentive would create five new taxpayers.

We can consider that proposal in detail. What level would those five people need to be at in order to benefit from the training?

Mr. Barry O’Neill

We have a very good games industry but we are less strong in Ireland in the creation of games, which requires a different skills base. We do not have game producers, game project managers or art directors. The training would take people who might have studied the humanities or arts or even computer science and who might have a knowledge of the games industry and its processes. We would line those positions up and bring in a superstar type position from overseas to impart those specific skills over a period of time, when the tax relief would taper.

I have a final question on that subject. If Mr. O'Neill does not have an answer to it now he can forward his response to the committee clerk . What number of trainee positions would Games Ireland be willing to create?. In making a case on its behalf, we would need to be able to say whether 100 or 200 places will be created. Even 50 would be great but we need a rough estimate of the number of positions likely to be created if we are to back it up.

Mr. Barry O’Neill

Figures on what Forás believes the industry can grow to will be available next week. I do not wish to pre-empt that. There is scope in terms of the way that the Canadian industry increased its industry size five-fold to more than 8,000 people over a period of five years.

Mr. David Sweeney

It increased from 5,000 to 14,000. The figure now stands at 15,000.

Mr. Barry O’Neill

Mr. Kehoe may be able to say more about Activision Blizzard in that regard as, in terms of levels of employment, it has worldwide involvement in studio positions.

Mr. Barry Kehoe

Activision Blizzard in Ireland currently employs 40 people in high end research and development type roles and approximately 1,100 people supporting the development of video games, be it in localisation, which I run on behalf of the company, or in supporting World of Warcraft, which is the biggest MMO game. A core couple of thousand people are supporting that.

We are currently losing high end roles to Canada because we cannot attract the people or work through the graduates here to fill the roles we require. In the online space, we are gathering data on, for instance, what players do, namely, shooting someone in the head or leg and so on. There are many jobs in the area of mining that data, figuring it out, twisting it and turning it around to give us information to help make better games or provide better feedback information to consumers. These are highly based on mathematics, calculus and mathematical modelling and so on.

Teamware worldwide has doubled in the past year from 20 to 40 people and is expected to grow to approximately 120 people in the next 12 to 18 months. All those jobs could be located here but will not be because we cannot get the right people.

Ms Joan Mulvihill

We proposed an accreditation scheme. The challenge for quantification of all of this training and on-the-job training is that we do not have any accreditation. We do not have any professionalism of the sector. If we are to invest in the appropriate education measures for addressing this skills shortage we need to have a proper accreditation system for continuous professional development so that people can invest in a career and not just a job.

We can look into that and perhaps make a recommendation in that regard. We have had a useful discussion today. Following our earlier discussions it is easy to identify the gaps, which we will work to close. The groups may feel free to feed into the committee on an ongoing basis in terms of our addressing this challenging issue. The delegations appear happy that the Forás report will reflect their views on this issue.

Mr. David Sweeney

We were given an unofficial preview of the report about two weeks. What we heard was positive.

It was positive.

Mr. David Sweeney

Yes. We have been involved.

That is key in all of this. We have come across many groups that are not permitted to get involved in certain reports.

Ms Joan Mulvihill

We have not been consulted at all.

Perhaps when she receives it Ms Mulvihill will forward us her views on it. We will then have them reviewed.

I thank everyone for attending this afternoon and for their submissions, which will be beneficial.

The joint committee adjourned at 5.15 p.m. until 9.30 a.m. on Wednesday, 15 October 2011.
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