Dáil Éireann Debate, Tuesday - 31 May 2005
38 Mr. G. Murphy asked the Minister for Enterprise, Trade and Employment the strategy his Department has developed in order that the solid growth in the software industry is maintained in the future; and if he will make a statement on the matter. [18078/05]
Amharc ar fhreagraSoftware companies and others in the high technology sectors face significant challenges as a result of globalisation and increased global competition. Irish companies must increasingly compete through innovation, increased investment in research and development and a strong focus on export growth. These are the key issues both now and for the future. The software sector is a substantial contributor to export-based revenue generation in the economy. The sector has experienced sustained growth over the past ten years and accounts for exports of more than €14 billion annually. An increasing number of entrepreneurs has started high value added, high export growth and high potential companies in the indigenous sector.
In recent years, Enterprise Ireland has supported more than 470 high potential start-up companies, which employ 7,500 people and have a cumulative turnover of more than €1 billion each year. These companies, which include a strong contingent of software companies, represent a new breed of globally competitive industry based on knowledge and innovation. For continued success, substantially increased levels of applied research in domestic firms will be needed and we must foster an environment where there exists a close working relationship between companies and third level institutions.
The strategy for EI, which I launched on 4 May 2005, outlines a new approach to the development of the industry. To date, a relatively small number of companies has increased sales to in excess of €20 million. Software will represent a key target sector for the development of such companies. Growth worldwide has slowed due to a combination of general global economic slowdown and saturation in some software markets. However, the indications are that the global software industry will have a value of US $126.5 billion in 2007 and, therefore, in spite of growth in the industry having slowed in recent years, this still represents a growth rate of 6.4% on 2002. Four of the top five software companies in the world have significant operations in Ireland including Microsoft, Oracle, SAP and Symantec.
It is a reflection of Ireland's competitive operating environment that it continues to win mobile high quality investment projects from the world's leading technology companies. A number of high profile investments have been announced. These include companies investing in Ireland for the first time. There have also been some notable successes in the digital media and Internet technology areas. Recent announcements by Yahoo, Amazon.com and DC Studios have added to Ireland's excellent reputation as a strategic location for IT services to support business activities throughout Europe.
Innovation and clearly differentiated products, services and customer solutions are key factors in winning business in international markets. Moreover, as an export market driven nation, Ireland needs to continually develop and improve skills in sales and marketing. In this regard, the successful sales star programme, which is a joint initiative of Enterprise Ireland, FÁS and the Irish Software Association and which is focused on the development of the sales capability within expanding software companies, is an example of what can be achieved both now and into the future. I am confident the initiatives we have taken and continue to take will further enhance the reputation of the software industry.
Has the Minister a strategy to commercialise research and development, in light of the major investment by Science Foundation Ireland in universities and institutes of technology? This presents a great opportunity to young graduates to bring forward projects that will generate employment in Ireland rather than abroad. Has the Minister a strategy to harness that potential for employment in this jurisdiction?
Of the 800 companies in the software industry, 600 are indigenous. We are witnessing strong growth in companies, not only in volume but in quality. The key strategic objectives are increased investment in research and development; to facilitate the involvement of those companies in such investment; a strong focus on IT education both at third and second levels; stronger research and development measures in the protection of IT; and the translation and commercialisation of research into new companies within our universities.
Written answers follow Adjournment Debate.
