Government Collaborations with Industry

   

Ireland has adopted a pro-business attitude and her businesses are loosely regulated . The IDA makes a policy of going to great lengths to ensure that the needs of every new foreign company locating in Ireland are met, and understands that interceding with local and national authorities might be necessary to facilitate the process and achieve its economic objectives.

Because of the nature of the electronics industry, change is very rapid, particularly in the ICT sector. Although companies often are unable to foresee the changes, they want to be assured that whatever problem they may face in the future, the Irish government will be there for them. It is the willingness of the governmental system to "go the extra mile" to help companies solve these unexpected problems that tips the scale for Ireland as a favorite destination to do business.

Dr. David Hanna has held several key positions with the IDA, including manager of the Financial Services Division. He now is director of information and communications technologies, focusing on development in the south of Ireland.

David Hanna

MIDAS is an example of structural innovation in government relations to industry sectors

We are trying to build up, in Ireland, a very strong industry in integrated circuit design. And one of the things that became clear was that we had a shortage of integrated design engineers . The industry and the IDA got together and we decided jointly to create an industry-representative group called MIDAS (Microelectronics Industry Design Association), a lobbying group . We did our level best to facilitate the creation of MIDAS. And MIDAS is now in existence, and its members are drawn from 16 or 17 companies involved in integrated design in Ireland.

Its functions are similar to those of the Silicon Valley Manufacturers Group, but just for this sector. And its secretariat is in the National Microelectronics Research Centre in Cork. So here you have a group of both the industry and government, one of whose major functions is to put pressure on government. So in fact, the system is open . In other words, one bit of government is quite content to join with the private sector and pressure the other bits of government to get things done. That's because a group of people and a group of companies have decided that integrated circuit design is strategically very important for the future of the electronics industry.

Access is key to the Irish success story ” Microsoft

Because the lines of communication are so short, we can get an issue on the table of the deputy prime minister (Mary Harney) by our chief executive. The relationship is such that our chief executive can phone the deputy prime minister and say, "Look, we really do have a problem here."

Assuming that he convinces her that there is an issue, she can actually get the system working immediately. That's a unique thing. Several years ago, Microsoft was looking to put a big server farm into Europe. We thought we had it because Microsoft had made major investments in Ireland. I was the first person in our group to meet with Bill Gates of Microsoft. I just walked up to him at a PC conference in Phoenix in 1985, and quickly put the proposition to him about setting up in Ireland. They did in 1986, a year later.

And we were close with Microsoft. It was a big operation and we expected to get the server farm. But they looked at Ireland and said, "No, we are not going to do this." That really caused a shock in the system. Microsoft took a look and said, "There's a deficit in bandwidth." You've no idea how quickly the Irish system worked to sort that out. A task force was put together involving the IDA. And the Irish government actually bought increased bandwidth and brought it into Ireland with a company called Global Crossing.

We persuaded the government to buy massive bandwidth from Global Crossing. GC brought it, and then we said, "Okay, we will be responsible. If no one wants to buy it, don't worry, we will pay for it. We then helped to sell it, and of course, it's all sold. Microsoft has recently set up its major software distribution system, so that anybody in Europe who wants to download Microsoft software, comes in to the server right here.

This involved tens of millions, maybe even a hundred million dollars. It was big money for a small country. Essentially, the government took the risk. As I say, it worked out fine, because, the government is, of course, not completely powerless. We then, in IDA, started peddling Ireland as a major center for server farms and e-business, confident in the knowledge that there was reasonably priced bandwidth because we owned the system . . . Come along for this ride! Come to Ireland!

A model for development agencies

During periods of high unemployment, IDA's main focus had traditionally been on job creation. IDA continues to play an important role in promoting economic development. However, one of IDA's main objective functions is to raise the quality of both new and existing overseas companies and to strengthen their sustainability and strategic value in Ireland. IDA has seen impressive results for taking proactive steps in establishing Ireland as a significant e-business platform in Europe and for its capacity to quickly respond to international trends as well as indigenous needs. As such, IDA has become a model for development agencies all over the world.

IDA acts as a link between academic institutions and industries to ensure the necessary skills needs of the international companies.

The strength of the educational infrastructure

One of the ingredients of the success of Silicon Valley came from Fred Terman, the visionary dean of engineering of Stanford University. He saw the contribution that educational institutions could make as being broader than just producing 500 computer scientists. Ireland's educational infrastructure is equally visionary . We are driven by the fact that Ireland is a relatively poor country, and that we have only had about five or six years of prosperity in the last 200.

The educational institutions in Ireland feel they have a duty to capitalize on the economic development and well-being of the country. Not just producing engineers per se. But producing them with an entrepreneurial bent; encouraging them to set up new businesses in incubator units; sharing faculty with companies who want to get a step up on the ladder of R&D; or taking scientists from companies into faculty, to help them in some way. All of that is part of a process of economic well being, very similar to the California model.

Universities changed their purpose to the public good

We had a traditional university sector, very much along the lines of Oxford and Cambridge, where there really was very little social responsibility as far as the broader economy was concerned . They were regarded as engines, producing well- educated , in the broadest sense, well-rounded people, people who could speak Latin ” excellent philosophers . All of that is great. But a country that is sinking economically has to be a bit tougher and demand more. We set up a network of 11 regional technical colleges around the country. They were to produce the first generation of technicians. People with two-year certificates and three-year diplomas could find employment in the big electronic companies, which were coming to Ireland at the time. They are now called Institutes of Technology and they produce thousands of well-qualified young people each year.

And then we decided to set up two more advanced educational institutions, the National Institute for Higher Education in Dublin and the National Institute for Higher Education in Limerick. We looked at Stanford and MIT as the models. We said, keep your academic respectability even though you are much closer to the commercial world than the traditional universities. You are happy to work with companies, share staff, share faculty, have your Masters Degree students in companies rather than the academic world.

They developed and became very successful. One of them is now Limerick University and the other is Dublin City University. So we did things like that to force the system to change, because, from an evolutionary point of view, it wasn't changing fast enough.

Ireland can move quickly and cooperatively across sectors ” Analog Devices

The system, when it has to, marches in step much more easily than in most countries . The reason for that is that everyone in the country, from a government minister to a university president to someone sweeping the streets , was affected by the same plague, which is that their kids had to emigrate. To let the kids stay at home, so they don't have to emigrate, was one of the reasons that we marched in step.

Just to get back to universities. I brought in Ray Stafford, president of a company called Analog Devices, about 23 years ago. He was thinking of setting up an operation in Europe. He chose Limerick and Analog Devices has been there for 23 years. He was very impressed by The University of Limerick and by the fact that Ed Walsh had come back from Michigan to run it. He knew that with that U.S. philosophy, that if he needed help, in a master's program, a course, or a consultancy, he would get it. So he chose Limerick. He set up an IC (integrated circuit) design group ” this is 22 years ago ” which has now flourished, and employs around 500 people.

That was a tangible outcome. The university has an openness and a willingness to change to work with companies and that is why AD is in Limerick, because Ed Walsh had a philosophy, which was to cooperate with industry and to help them in any way possible.

Walsh's concept was that he could do far more than just provide industry with graduates. He could help them with their R&D, and with their design. That fit, if you like, between the education and industry is actually incredibly important, probably one of the most important things that we offer ” highly skilled people. Tax is the other one. That's why the system works well in Ireland, driven by people with a U.S. economic and political philosophy.

Ireland, in terms of its economic and political philosophy, is somewhere between Europe and the U.S. The model is not the German-French model. It's not even the Silicon Valley model; it is somewhere in the middle, which actually makes U.S. companies comfortable.

The Irish government has been outstanding in its initiatives and commitment to attract , retain, and grow foreign direct investment ” not only for job and wealth creation ” but also to continuously work up the value chain. Ireland's most talented people now have an incentive to stay in Ireland and make their contribution at home.

Their efforts at home have been matched by their efforts abroad to attract business through their outstanding marketing and advertising campaigns that are the marvel of regional development agencies throughout the world. In the next chapter we will profile these efforts along with the perspectives of two of the large MNCs that have European operations based in Ireland: Intel and EMC Corporation.

   


Creating Regional Wealth in the Innovation Economy. Models, Perspectives, and Best Practices
Creating Regional Wealth in the Innovation Economy: Models, Perspectives, and Best Practices
ISBN: 0130654159
EAN: 2147483647
Year: 2002
Pages: 237

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