The Irish tech sector has an elephant in its room. It is this: we are arguably now spending more taxpayers' money on
grant-aiding indigenous tech firms and tech research than we are
reaping.
So here's the thing: should we continue investing in tech firms? Or is it time to step back and reassess our
priorities? Should we hold our hands up and say: 'we've achieved a bit
in this game, but not much by way of indigenous success stories,
compared to other first world countries'?
If Irish tech startups are to ask for grants, they need to have a good case why. It is not good enough to fall back on received wisdom of recent times -- that 'tech is the way forward'. That may well be. But that does not mean that it will be Irish firms leading the way. Or even keeping up. And we need to ask ourselves: will we compete? If so, in what areas? If not, why not? And if so, are tech firms deserving of grants over other industrial sectors?
Take an alternative Irish industry -- fiction publishing. Last year, at least 12 Irish novelists made the top 10 fiction bestsellers list in Britain.
Of
these, three or four are global superstars, selling millions
of books.
Now if I were in the publishing business, I would make the following argument: Not only does our industry bring in a lot of hard currency to the
country (they all live here), but it also brings in other major publishers
who scour the country looking for the next Irish best-selling novelist.
In other words, it's an expansion industry.
And the key innovators, those from whom everything spurs, are Irish.
If I worked for Penguin Ireland, I would also argue that authors create ecosystems (of varying
sizes) around them, both through the establishment -- and maintenance
-- of publishing houses in Ireland and consequent films, plays and
other productions that are generated from a single novelist's work.
(Often it is foreign money paying for the film production, making it a
big net gain for Ireland.)
Now relate this back to Irish tech companies. Which ones have the impact that, say, Maeve Binchy has (in economic terms)?
If
you gave, say, €1 million to a selection of tech startups and €1
million in parcels of €40k each to 25 novelists, which group would
provide the bigger return? I can't say for certain it would be the
novelists, but wouldn't you say that they have a pretty good chance?
True, novelists do
benefit from taxpayers' indulgence. Authors of fiction do not pay any
income tax on sums up to €250,000, a large amount of money. But in this
case, the tax exemption has worked. Authors now bring in far
more money than they cost.
As unfashionable -- and taboo among this blog's readers
-- as this sounds, we now need to provide evidence that it is worth the money we are investing. And why it would be worth investing more.
One big weaknesses to the tech sector's case: the low priority that Irish people place on working in technology. Even today, even after all the guff from the establishment
and the media about the need for kids to pursue technology courses in
third level, our young people are still far more interested in pursuing
liberal arts or law or sales & marketing courses than they are
engineering or computer science courses.
In other words, our
young people are just like our old people -- largely uninterested in
creating companies that innovate using technology.
Instead, they are more interested in writing, in story-telling, in selling things.
When people talk about high tech Ireland, what they really mean is that we have had a solid track record in executing the work plans and engineering schematics of foreign companies. Companies like Dell, Intel, Apple and HP.
But we have been in this game a long time, now -- where are world-beating technology companies? Indeed, even if we don't have any of them, where is the substantial cluster of large Irish tech companies?
If we do not have an answer to that question, we need other reasons to convince the taxpayer why tech companies are worth investing in, as a national strategy.
Unfortunately, large elements of the indigenous tech sector seem to have joined other industrial sectors in calling on taxpayers' money to crate their own viable companies. Call it a grant, call it a stipend, call it a bursary, call it whatever you want. But it's the same cry that goes out from the farmers, the builders, the
bankers, the equine industry, the GAA and countless other industry
lobbies that are looking for taxpayers' money to support their
industrial pursuits. It's a handout from the public purse to whoever receives it.
Many in the tech sector would ask the farming sector: can you stand on your own two feet without our tax money? This is an excellent question. But it equally applies to anyone else asking for public money. Show us the proof.
I'm not saying that no grants should be given to tech companies. And I am not dismissing as 'crap' their efforts.
But I do think that, in a crisis, we have to consider all arguments. And perhaps we need to go back to first principles: look to what we excel at, relative to other countries.
And if that means addressing a few sacred cows, so be it.
