Author: Edel Creely, MD of Trilogy Technologies and chair of the Irish Software Association In June, the Irish Software Association (ISA) launched the second edition of the ISA’s Digital Technology Index (DTI). The index examines sentiment of CEOs and founders of Ireland’s indigenous technology companies and is the only report of its kind in Ireland. With the number of Irish-owned technology companies continuing to grow – some 806 indigenous companies with total annual revenues of over €1.9 billion – confidence is high. The technology sector as a whole has weathered the economic downturn and prospered relative to other sectors in the Irish economy, with sentiment up across the board. However, we must not be complacent. The indigenous digital and software technology sector has yet to realise its full potential, with only a handful of companies scaling beyond 100 employees and €10 million in turnover. While challenges remain around the availability of finance and skills, opportunities exist for enhancing and deepening the collaboration between the significant cluster of foreign direct investment (FDI) companies operating in Ireland and their Irish contemporaries, as clearly demonstrated by the DTI. Looking at the report, over 81 per cent of respondents stated they were more confident about their business than they were three months ago, 94 per cent stated they expected revenues to increase over the coming three months and 87 per cent stated increase in export revenues. Research and development expenditure is expected to rise for 67 per cent of participants, up from 58 per cent in August 2013 and company profitability is expected to rise for 70 per cent of firms compared to 66 per cent in August 2013. On a less positive note, almost 17 per cent of respondents indicated that their input costs have increased over the past year. MAXIMISING GROWTH POTENTIAL In relation to opportunities for indigenous technology companies to grow their business, collaboration with the FDI community was identified as providing major growth potential. In the survey:

• Collaborative research: 82 per cent of companies identified collaboration between indigenous companies and multinational companies as a stimulus for growth;
• Licensing unused IP: 88 per cent indicated that licensing unused IP to indigenous companies on preferential terms would be beneficial;
• Access to in-company executive education: 72 per cent of participants said that they would benefit from in-company executive education programmes;
• Bundling/licensing of products: 70 per cent expressed their belief in the value of bundling/licensing of FDI and indigenous company products as a single offering.

The indigenous technology sector is powering ahead. The DTI reflects a very positive story. Ireland's strong international reputation means that new indigenous companies are setting up and multinationals are being attracted by the competitive business environment. But the key challenges need to be addressed for the sector to realise its full potential. Access to finance is a challenge. The Central Bank numbers show that the level of credit outstanding for the technology sector has been largely unchanged over the last two years, despite growth in the sector. The tech industry has benefitted from the experience of successful entrepreneurs investing and advising new start-ups, but more need to ensure that they have adequate access to finance. The Government must enhance tax-based investment schemes and the venture capital environment, as well as introduce state-backed capital funds. Ireland ranks first for availability of skilled labour. However, the talent demand in the sector remains a concern. We must continue to work with Government and the education institutions to increase the uptake of science, technology and maths subjects, and provide quality conversion courses to ensure people have the right skills. We must also encourage the development of critical communications and broader business skills. The ISA is all about scaling. We exist to raise the competitive environment in Ireland so that the indigenous technology sector can flourish. The sector has proven to be resilient and innovative during the crisis and by continuing this leadership, we will be able to deliver more jobs and sustainable growth. To see the full ISA DTI report, or for more information on the work of the Irish Software Association, see www.software.ie. As group managing director and with over 25 years’ experience, Edel Creely leads Trilogy Technologies, a market leader in ICT solutions and managed services. This year, the company expanded its Irish presence with the opening of new facilities in Dublin and it acquired a technology company in central London, from where it is driving its UK presence. Creely is an engineering graduate of Trinity College Dublin and is currently serving her second year as chair of the Executive Council of the Irish Software Association.