In the early 1990s, I used to take the Dart from Dalkey to Pearse Station every day. Back then, Lansdowne Road station was the frontline. It marked the border where the leafy back gardens of upmarket south Dublin gave way to the gritty urban reality of the canals, old railway carriages and the abandoned commercial landscape of warehouses, docks and run down scrap metal yards. It was an urban wasteland.
The only beacon was Windmill Lane studios. And what a beacon it was! This was U2’s recording home and U2 was the biggest band in the world, in fact the only Irish endeavour that was actually world class. We may talk about world class this and that, but U2 were and still are, the only world beating artistic project that this 26 county Republic has actually produced. Even now, 40 years after getting together, their upcoming world tour is practically sold out. In the early 1990s, just after the release of Achtung Baby, the fact that they were still recording in Dublin was one of the very few thumbs up for this part of the city. U2 aside, there wasn’t much to sing about.
Having worked over in London during college summers and seen how Londoners were retaking old industrial buildings and converting urban spaces into high-end residential and commercial hubs, it always struck me as odd that Dublin developers wouldn’t reinvigorate this part of the city.
Take the same Dart journey today and the place is transformed.
Architecturally, the transformation is complete, but something much more interesting has happened. An industry is there that didn’t exist before; this is enormously important.
The industrial story of this part of Europe, I mean north western Europe, over the past 100 years is the story of the decline of industries and the redundancy of not only large swathes of the industrial population, but the industrial landscape too. The birth or re-birth of an industry is a significant development.
According to the IDA, the multinational technology sector here is conservatively worth over 40,000 direct jobs and about €2 billion in wages, excluding indirect jobs. It also accounts for close to €1 billion in corporate taxation, despite the low tax rate. Regular readers of this column will know that I have problems with the paltry tax that these companies pay. (They should pay more on a corporate level and their employees should pay less on a personal level, but let’s leave that to future articles). The point is that the days when I got the Dart into Pearse, these industries didn’t exist. Today, the Silicon Docks are transformed.
For Dublin, the transformation of the human capital and know-how of the employees is much more significant than the visual physical transformation of this part of the city. New industries bring new knowledge, new ways of doing this, new networks and new initiatives. If you are working with companies that are world leaders then, by definition, you will up your game as a worker. You will learn things that you might never have imagined and you will meet people who you may do business with in the future on different projects.
For example, your chances of setting up a small tech business on your own are made immeasurably more likely by having experience in a big global company because you will be having conversations with like-minded people. You will see opportunities, you might get an insight into finance or marketing or sales that you might never have had.
All these aspects of business are crucial and have a profound impact on the people who work in an industry. These networks are not quantified by immediate tax take or number of jobs or whatever metric the political class wants to apply to their cost/benefit analysis of an industry.
Sometimes, what is important is the things you can’t measure! The soft things, such as experience, know-how, networks or simply knowing who to pick up the phone to as a potential buyer. An overlooked aspect of business is that we do business with people we know, therefore, thousands of people working together in the Silicon Docks in Dublin is an enormously vibrant commercial organism that has nothing but positives for the city and the city’s economy.
Just consider how much experience and knowledge is wrapped up in this roll call of leading companies that are present in the Silicon Docks: Google, Facebook, Twitter, Amazon, Yahoo, eBay, PayPal, EngineYard, Dropbox, LinkedIn, HubSpot, Yelp, Tripadvisor, airbnb, ZenDesk and Zynga.
All these are enormous companies. All have become world beaters and changed the way we live. Sure they are American and they are here for lots of reasons – tax being clearly one of the most significant – but every city deploys what it can to attract industry that it couldn’t otherwise conceive of starting up. They were not here before and they are here now and we are only beginning to understand what their legacy might be in terms of new industries and start-ups that will come from the people who work there now and go on to other things.
If you doubt the impact that an initial core of knowledge and expertise can have, consider airline leasing. This is not an industry you would automatically think of when you mention Ireland. After all, we don’t manufacture any planes. We don’t have any aeronautical industrial pedigree, yet 55 per cent of all planes that are leased in the world are leased out of Dublin.
How did this come about?
It came about because in the grim 1970s and 1980s, an Irish company called GPA managed to come from out of nowhere to be the biggest airline leasing company in the world. GPA crashed and burned following an unsuccessful flotation in 1992, around the same time I was getting the Dart to Pearse, however, its legacy has been enormous. Not only is Ryanair – founded by Tony Ryan of GPA – the biggest airliner in Europe by a country mile, but Dublin is full of seasoned executives who learned their trade and made their contacts in GPA.
In short, a significant industry was created by people who initially worked together in the 1990s, then branched out on their own and taught others the ropes. Now we have a niche business in the city.
The commercial legacy of the Silicon Docks can be much, much greater than the airline leasing business can ever be.
It may well be another generation until we appreciate that.
David,
There is indeed a lot happening with these new businesses. They are bringing a lot of know-how and fresh thinking in to the country.
I run a monthly meetup for early stage and aspiring entrepreneurs and we see a lot of tech employees there. The next meetup is on Jan. 27 in Dublin. Details are here: http://johnmuldoon.ie/entrepreneurs-anonymous/
John
Morning.
Hi David.
When GPA crashed Ryan got 34m in debt written down for 4m ponied up. Maybe the bankers and politicians could take a lesson that writing down debt allows for recovery as in the Tony Ryan case.
Michael.
Having these multinationals is definitely a positive for Dublin but there is a down-side… We are at 100% employment in IT in Ireland and a shortage of staff is one of the biggest issues facing the industry. These multi-nationals are being enticed in by the IDA and then they poach staff from indigenous Irish companies. This is killing innovation in Ireland, the large American companies are not focused on innovation; they are focused on supporting their European sales operations. To boot, there is evidence that the multi-nationals get preferential treatment from the government and Revenue thus adding to the uneven… Read more »
U2 are not world class. They have used Ireland for what it is worth. And in return Ireland got SFA – just ask the revenue commissioners. Completely overrated in the media in this town. And well connected with Irish America, and the worst elements that patronize both America, and Ireland to abject boredom. Does Irish America know of U2’s tax affairs ? Is this a good role model, to be following ? U2 are the original low-tax Thatcherite toy boy band. Some of us have more self-respect that to be grovelling like gobsh!tes in front to Screw U2. Not in… Read more »
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Just consider how much experience and knowledge is wrapped up in this roll call of leading companies that are present in the Silicon Docks: Google, Facebook, Twitter, Amazon, Yahoo, eBay, PayPal, EngineYard, Dropbox, LinkedIn, HubSpot, Yelp, Tripadvisor, airbnb, ZenDesk and Zynga.
]
Question : how many of those corporate making a profit ? Or a profit that is beyond 2% return on market capitalization.
Dom Com Bomb 2.0 here we come ?
[
Just consider how much experience and knowledge is wrapped up in this roll call of leading companies that are present in the Silicon Docks: Google, Facebook, Twitter, Amazon, Yahoo, eBay, PayPal, EngineYard, Dropbox, LinkedIn, HubSpot, Yelp, Tripadvisor, airbnb, ZenDesk and Zynga.
]
Question : how many of those corporate making a profit ? Or a profit that is beyond 2% return on market capitalization.
Dom Com Bomb 2.0 here we come ?
Actually David.The majority of aircraft leasing in Ireland is GE capital aircraft leasing in Shannon.They have a show office in Dublin ,but the work and brains are nowhere near Dublin.Also,the same attitude of privilidge and “only me” ism that infected GPA is alive and well in GE.Not surprising as a quarter of the top ranks were inducted into GE,so the contamination of failure is inbuilt.
David,
Did you get invited to that shindig today?
Or are dissenting voices excluded?
Groupthink again?
Cheers,
Adam.
New Oxfam report says half of global wealth held by the 1% http://www.theguardian.com/business/2015/jan/19/global-wealth-oxfam-inequality-davos-economic-summit-switzerland I love this comment in the comments section under that article: Oxfam said it was calling on governments to adopt a seven point plan: • Clamp down on tax dodging by corporations and rich individuals. • Invest in universal, free public services such as health and education. • Share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth. • Introduce minimum wages and move towards a living wage for all workers. • Introduce equal pay legislation and promote economic policies to give… Read more »
3D My earliest memories in the 50’s travelling to Dublin four times a year was by train to Kingsbridge ( now Heuston) and taking the bus to Westland Row ( now Pearse) .We never went to Amiens Street ( now Connolly ) .The reason was it looked too dangerous then.Too many poor people dressed in rags and filty and hungry . I use to have to visit Westland Row to make a train connection for Wexford . I remember in those early days my train arrived in Westland Row for boarding at around 6 pm and this station had the… Read more »
Strumpet City I agree with David Dublin was grim in the 70s and 80s . That was not true for the Mid-West Region of Thomond . This part was thriving and wealthy and expanding . It was here that GPA was conceived and founded and grew to be the mighty company it now is .Shannon was the magnet for the whole region and national politics supported the local efforts and promoters . Shannon had then a comparable significance and leadership now enjoyed by Dublin today. Sadly all that changed after Charlie took political decisions to focus on Dublin and copied… Read more »
Enterprise Ireland
What has never been discussed is the risk factors in Enterprise Ireland . It is like the Central Bank on steroids .No regulators are appointed to access the financial risks it takes on behalf of the taxpayers and the viability and security it may or may not hold.They hold the biggest private investment funds in Europe . This means billions of euro borrowings .
Has no one seen this Elephant ?
Silicon valley may float your docks but central banks will sink your economy and reduce you to economic serfdom. Did the Swiss people, possessors of the last bastion of democracy authorize any of the actions of the Swiss central bank? No! Ironically the BIS that bastion of a totalitarian banking system is based in Switzerland. http://www.gata.org/node/14989 “Is any nominally democratic country aware of the full range of market intervention being practiced by its own central bank? Do mainstream financial news organizations even inquire about it, much less report about it? This is essentially a totalitarian system, except that central banks… Read more »
According to ICTIrleand 5% of the employed Irish workforce are engaged in the IT sector, with multinationals accounting for 75% of that IT workforce. In the context of the real world this ‘sexy’ industry has been, is and will always be a niche employer. Constantin Gurdgiev had a great piece a while back deriding the fantasists harping on about the great white hope of IT as the solution to the mass unemployment in Ireland. In my own experience of having had 20 years in the industry I would estimate, apart from a few outliers, that no IT company whose product… Read more »
According to ICTIrleand 5% of the employed Irish workforce are engaged in the IT sector, with multinationals accounting for 75% of that IT workforce. In the context of the real world this ‘sexy’ industry has been, is and will always be a niche employer. Constantin Gurdgiev had a great piece a while back deriding the fantasists harping on about the great white hope of IT as the solution to the mass unemployment in Ireland. In my own experience of having had 20 years in the industry I would estimate, apart from a few outliers, that no IT company whose product… Read more »
Jeez, a nice positive, reflective article, which then projects forward future potentially positive spin offs from current industries and the comment section gets progressively hijacked by the bitter moan, doom and gloom merchants….. woeful responses to a wonderful piece. Ye are pathetic!
Cut and paste: This little article says it all, FRANKFURT, Germany (AP) — Europe’s struggle with economic stagnation is raising questions about whether its prized project — the shared euro currency — can bounce back or even just survive. Fundamental gaps left at the euro’s creation in 1999 are haunting its policymakers. The euro’s missing pieces have come into sharper focus as the European Central Bank prepares to decide Thursday whether more monetary stimulus is needed to ward off crippling deflation and as Greece faces a Sunday election that could conceivably lead to its leaving the 19-nation eurozone. ADVERTISEMENT Richer… Read more »
Silicon docks is of little employment use to Irish people. Companies want staff who speak Turkish, Swedish etc. I can’t imagine the Finnish govt giving grants to companies who want to recruit Irish speakers in Helsinki !
Thanks to MNC’s rent levels in Dublin are only 10 % below 2007 levels. Lower paid employment is squeezed as a result.
Posted at http://www.lemetropolecafe.com Following the Swiss reset of currency “The IMF’s SDR may soon become the intra-central bank reserve currency, denominating even new bond issuances. With such a system we would still use our regional fiat currencies (dollars, euros, yen, pounds, yuan, etc.) for day to day transactions. The Chinese Renminbi aka Yuan will be added to this IMF SDR currency basket in 2015 followed with China updating its official gold reserves. Many experts believe the IMF in concert with central banks around the world, will revalue the gold price to give the next monetary system an appearance of legitimacy.… Read more »
Eventually it gets to the point that there is so much positivity spin from the government, from the media, and from business in Dublin, that even DMcW is drifting with the commentariat flow.
The Irish public discussion is bullshit.
It was bullshit in the Ahern era. It was the same in the Cowen era. And it remains the case in the Kenny era.
I learn more about Ireland from newspapers from London, than I do from newspapers from Dublin.
Is there a better description of the sheer wall of nonsense in the Irish public discussion than that ?