Silicon Republic had a great article recently reporting on the explosion of jobs in the tech sector. The IDA chief appears to be postively crowing about his success. Well that’s great, but it won’t move the unemployment needle one basis point.
Why? Because The tech in Ireland sector has virtually 100% employment, take a look at the indeed.ie search for software engineers to see the indigenous requirements.
It takes 4 years to make a new graduate engineer and the current intake of computer scientists and engineers is a fraction of what it was ten years ago. This means we get the same number of technical experts chasing a vastly expanded universe of technical employers.
The last time this happened was in the previous tech boom in 2000. Then, TCD was stamping out over 150 computer scientists a year from various different disciplines (Maths, Computer Science, Engineering). Today I think the total output each year is less than 50. Other colleges has experienced similar downturns.
The net effect of this is a spiralling wage inflation for technical staff, which is good if you are an engineer, but rotten news if you are an employer and an absolute disaster if you are a start-up competing for technical expertise.
Foreign Direct Investment companies (think Google, Oracle, Intel, IBM etc. etc.) who are moving here because it is a “low cost” development centre are in for the same surprise that companies who opened up in India got. Huge velocity of staff between jobs, sign on bonuses and rapidly inflating salaries.
In the noughties we could address shortages by importing expertise from overseas but who wants to move to a country that everyone in the world thinks is an economic basket case?
What to do? First of all understand that bringing in FDI companies that pay practically no tax revenue to the Irish government are of little utility to Ireland inc. from a balance of payments perspective. Second of all they create an unbalanced market as they can continue to afford to pay inflated salaries which squeezes the price up for indigenous companies competing for staff. Those companies are generally in worse shape financially and less able to withstand the stress of these salary increases.
Secondly we need to make more techologists and make them faster. In the 80’s companies like Nixdorf ran conversion courses for the thousands of arts graduates who couldn’t find jobs in our devastated economy and the tech colleges provided a huge array of cross training. Their is a huge opportunity to retrain those that are capable of switching to a technology career (like most career choices its not for everyone).
Pity our training agency FAS is a such a busted flush, we could really do with them right now.