Newry is not the sort of town that you’d automatically expect a dynamic, home-grown multinational to spring from. Yet, in a converted old corn warehouse at number 3 Canal Quay in Newry, a company called First Derivatives is doing just that. This is one of only three listed companies in the North and its business extends out from the centre of Newry to Tokyo, Singapore, New York and across Europe.
Just across the road, Daniel Lebeskind, the world-famous architect who designed the stunning Holocaust Museum in Berlin, has pitched to design a landmark building overlooking the Quays. If anything underscores the ambition of this town, it is a monument like this.
But ambition and trading are not new for Newry. Over 200 years ago — before Belfast took off as the dominant city of the North — Newry was a crucial exporting town. The canal and the quays were all constructed to facilitate trade. If you take a stroll around the town, you can see the architecture of trade everywhere, complete with fine Georgian buildings, a Cathedral and numerous echoes of its mercantile past. There is a rich commercial pedigree in this part of the country and now it is beginning to re-emerge after the Troubles.
The renaissance of towns like Newry — which last year had the fastest rising house prices in the UK — is what the peace process is all about.
It is also what globalisation is all about.
And, if the example set by First Derivatives can be followed, there is no reason for any provincial town in Ireland to feel anything but confident about the future.
First Derivatives provides technical software to the world’s biggest banks. It has been growing exponentially since it was founded in the 1990s. Like hundreds of thousands of young Irish people, the founders are returned emigrants. They are the professional echo of our economic and political failures in the 1970s and 1980s.
They left and many resigned themselves to the idea that “home” was a place to go back to at Christmas, for weddings and, ultimately, funerals. But that has changed. The economic migrants of the late 1980s and 1990s have come home and they are possibly the best asset the country has.
They are cosmopolitan and globalised, yet understand the value of the local. They have made invaluable connections with foreign peers. Many have learnt the most advanced ways of doing things and have brought home a work ethic and know-how that those who stayed put might not necessarily have. All around the country they are making their mark. This is a brain-gain, which has reversed the previous brain-drain.
Equally, globalisation — far from condemning provincial towns — provides a platform for companies that want to fuse the best the local economy has to offer with the opportunities that the global market affords. In the years ahead, all our industrial efforts should facilitate local companies that want to compete on international markets.
This should be a priority over and above the present policy of trying to get multinationals to set up here to provide jobs. Jobs alone are not enough.
In the years ahead, Ireland has to own what is termed the “intellectual property”. This means that Ireland needs to become the natural home of entrepreneurs wanting to set up businesses, deploying their inspiration as well as their perspiration.
This is what the founders of companies like First Derivatives have done. Using contacts and know-how learned abroad, they have come home and set up locally.
When you look a little closer, the question becomes not why they’d pick Newry, but why wouldn’t they chose Newry? This is a region where over 33pc of the population are under 15 and 1,900 students leave school in the area each year. But you might ask, aren’t they a bit far away from the buzz of London, the IFSC or indeed Wall Street, where many of the company’s clients are based?
But this is the change, globalisation and the roll-out of telecoms infrastructure has led to, a process that can be best described as “the death of distance”.
It doesn’t matter where you are located as long as you can be plugged into the global world.
South Down is as close to the southern tip of Manhattan as you need to be. Distances are only inside the head of workers.
Newry has one advantage over many other similar towns — infrastructure. The finest, but least busy motorway in Ireland, connects Dublin to Belfast and Newry is arguably the main beneficiary. It is now only an hour from Dublin and less than an hour from Belfast.
In the year ahead, if the transport infrastructure is complete, there will be a significant rebalancing of economic growth as provincial towns and cities can compete with Dublin. It is sometimes not appreciated just how small our country is and just how the geography of the country could change if we were to get our transport infrastructure right. Newry is the leading indicator.
The main change is a mindset change. Irish entrepreneurs are crucial to our success and facilitating this process must be the most important goal of the State.
If we create wealth, sustainable wealth, not the sort of stuff built on selling over-valued property to each other paid for by other people’s money, there will be the cash around to solve many social ills.Sustainable wealth is made with brain power and, to move into this area, Ireland must see the world differently.
The old idea that we can attract foreign investment with a combination of tax breaks and cheap labour is over. China and India will win this game. Equally, the era of easy money from property is over.
The property market is only going to weaken further from here. Now Ireland has to create value by owning the intellectual capital.
In the past, Irish start-up companies were often happy to sell out to bigger, usually foreign buyers before their companies had grown to a world-beating size. In the future it will be essential that we protect these new companies as they try to grow, by providing capital and, more importantly, management techniques.
We have a long way to go because our misplaced infatuation with property has led to huge amounts of Irish money invested in an asset that is now falling in value worldwide.
Check out this figure — last year we invested €159m in high tech start-ups but €8bn in overseas property!
If Ireland wants to profit from globalisation and ensure that the success of towns like Newry is repeated all over the country, we have to invest in brain-power.
Spot on observations as usual David. The guys up there are are getting their knowledge based approach together in short order. However, let’s not knock property investment and other “trad” methods of getting wealth completely. These will be a factor in firing up 1st Derivative companies. The reality is that BOTH infrastructure (rapidly coming on-line) and access to wealth/ leverage will be needed. You mention the people coming back (our diaspora) will be a 3rd element. I think this is a nice idea, but it will not be enough and one thing you forget is the North’s attitude to training… Read more »
I first visited Newry about ten years ago when we took my aged parents on a quick holiday up north (they’d always wanted to go but like many they wouldn’t have tried it on their own) and my mother remarked on how down-beaten the locals appeared (admittedly it was a funeral she was looking at). I always had an interest in the place as we had a formidable spinster from the town as headmistress of our primary school back in Blighty, so it’s great to see the improvements. Philip, your own comments also hit the spot although for me that… Read more »
Before anyone points out the deliberate error in my earlier post above, Irish trad music is of course not “unique” but wonderfully unique. Uniquely unique in fact.
Those bloody Nordies in Newry robbing our jobs too (Kingspan announced 40 new jobs today) and the have cheap shopping – the cheek!!
What do we get Daveeeed – 800 new start up jobs. This can be your article for next week – Ireland casts of the US Multinational crutches.
Keep up the good work!!
A norn iron reader
Great to see a young company whose stuff is being exported doing well, it really doesnt matter if its north or south;
.
After my last post I thought I’d try to offer something a bit more positive. I seem to recall reading an interesting comment in the archives here about the lack of an R&D culture here (possibly by Philip?) and what needs to be organized if we are serious, and also another post from someone whose company just could not get broadband organized in their chosen location, Someone else mentioned the success of Finland’s Nokia.and this got me thinking about the role of the state in fostering home-grown world beating companies. Revisiting Hutton’s The World We’re In last night it seems… Read more »
Newry is in a different country and it’s of little benefit to the south. Does it purchase anything from the South? The South, on the other hand is of great benefit to it – a new motorway to Dublin, giving it a link to the greater world through the Airport and then there are its retail parks benefiting from Southern shoppers. While we provide infrastructure for it, we downgrade our own at Shannon and have failed to provide decent communications between our capital and our other cities. The motorways are way behind schedule and now we’re having to borrow in… Read more »
It would be interesting to analyse just how what you propose would in fact challenge the FDI model.
I would think that boosting home grown innovative companies may in fact challenge the MNC agenda,
in that they would have to compete for talent, thus driving their costs up, not to mention a host of competitlors
challenginf their business. Furthermore they may be asked to pay more tax in order to support the development of the country along the lines you suggest.
I have to agree with Ed. We really do need to get our own house in order, and fast. I have recently moved (to a secret location) and there is great potential from a tourism point of view in that area. The place is controlled and run by a town/urban council who do not seem to have any vision whatsoever regarding the development of the place, one way of the other. In fact, most of the participants of the council are small business men and women looking after their own small interests (sometimes to the detriment of everybody else’s). As… Read more »
agree with you on somethings Ed but … Definitely Newry is in a different jurisdiction and yeah a different country if your politics is that way. but its only up the road and its great to see businesses taking off there again. It will benefit us, even if from the viewpoint that if everyones making a few bob then people wont be distracted by the colour of the postboxes. As regards downgrading Shannon, I think the country is only big enough for one decent airport with good connectivity, our airports are competing against manchester, glasgow, charleoi etc who have similar… Read more »
David, have noticed a “quest” in your latest writings to find answers to our future direction. A welcome change from the populist stuff. Some of the things I think that will help in finding a direction is how we change the way we do things. A few suggestions. Make the gombeeners redundant… I get the sense that more and more people realise how detrimental the scattered small-minded short-term gains are in the bigger picture. Resist the blame game… a real challenge, but the more we seek the scapegoat, the more we take our eyes off the ball. Support and celebrate… Read more »
Wessel, we need more talk about our future direction. Just watched ‘The American Dream – Dead or Alive ‘ on RTE1 with Mark Little talking about immigrants, the Mexican border and the future of the USA under a range of headings and it was excellent. Why can’t RTE do that here? I’d like to see them portray illegal immigrants coming here in the same manner as was done in that programme but not a chance in that left-wing looney establishment. David, any plans to shoot a new series? ‘The Celtic Tiger-Dead or Alive?’ A more balanced view on modern Ireland… Read more »
I think the dream of the Diaspora returning is not backed up by a serious commitment from the Government and so will not amount to much. Ive been in California for about 16 years now and travel home often. I married an american 11 years ago and have two step teenage children. About 5 years ago I seriously looked into returning home with my Family to live in Ireland. My wife and I are IT and work for fortune 500 companies – we fit the profile of the type of people that Ireland says it want to get to return.… Read more »
DublinSF, It’s a difficult situation for the government because of our free third level education. They have obligations to our European partners, most of which have good educational systems of their own. The fear is that the Diaspora would descend upon us to avail of free education and then, at the end of the process, would up a go back to the their country of origin. Our free educational system is creaking at present and it has to is to be protected at all costs.
Exactly Ed and a lot of other things would creek too if people like DublinSF were let back in with their foreign wives etc. People like DublinSF give me a pain in the face, why don’t they stay here and work hard here? Oh the plight of the poor Irish going off to work for fortune 500 companies, boo hoo. As it is certain parents can’t get their kids into schools here because of foreigners taking their places. DublinSF, if California is so wonderful send your step children to Stanford. Oh no you want to do it cheap. You made… Read more »
What a nice sort you are John Q. Public. The word is getting out among the diaspora about you lot, meaning they won’t want to go there and spend their money in your tourist traps either. Ireland is too big to accept tourism dollars these day with the grand EU and all. Not to mention, you would rather have foreigners from Asia and Eastern Europe move in on your welfare state rather than returning bread winners that might compete with your feeble skill set. Don’t fret, the rejected diaspora will forget about you in a generation along with your Guinness,… Read more »
I’ve been asking where a potential Irish Nokia might be hiding. ‘First Derivatives’ sound like an interesting research project. Long-term economic prosperity has to come from product and service innovation. It’s that whole Finnish 80s ‘vision-thing’. Leap-frog to a higher plane of ambition, etc. It can’t be based on endless cost reduction within an existing ‘off-shore production/distribution paradigm‘. We had that baloney here in the UK when some Tory nutcase announced that Liverpool could be the next Hong Kong if it’s denizens weren’t so lazy and feckless. When it was sarcastically pointed out that Liverpool didn’t have exactly the strategic… Read more »
Sean, you are talking crap. I agree that this country rips off everybody especially tourists. I don’t want foreigners coming here to live in the welfare state from Asia or anywhere else. The feeble skill set should be jizzed up and made to think for themselves. In fact now that you mention it, we have a feeble-minded approach to starting businesses in this country, we mostly rely on US multinationals to come here and employ our workforce. I wish the ‘rejected diaspora’ would forget about us and shut up as they are a pain in the ass! Especially the ones… Read more »
John Q Public, you and I and the Irish Government are in complete agreement. When I left Ireland, I knew what I was giving up and what I was going for. It was a good deal for me and still is – there is no whining from me. The Irish Laws are also pretty clear. Ireland is for its own residents and its hard to become a resident. When you leave the law says that you are putting things in motion that will make it hard to return. That is all fair enough. Also members of the Irish public like… Read more »
In fairness to you DubinSF, I would rather allow your type back in to Ireland rather than the countless tens of thousands of Africans who claim asylum and every other cock and bull story so they can stay here. We import criminals by the boat load who have been turned away by the rest of Europe and we are polluting our society. If there was an intelligent minister in charge of this we could tap into the diaspora as and when we need to and keep out the useless undesirables. DubinSF, it’s different for you now as you have a… Read more »
Over this past week we have had the unemployment records published. Records show a increase. But does not show that of those unemployed many are not counted, those who went home to Eastern Europe. A good thing many will say, but what of the dept’ of Finance and not being able to predict future income. The core of this post requires an ability to reasonably predict. Both from the position of the business and Finance. And while foolish volatility is inbuilt to the system nothing can be predicted within reason. This is evident with the University’s, a group not known… Read more »
VincentH, It’s not looking good , the increase in unemployment and the fall in revenue is serious. I was shocked to see so few trucks on the Naas road last Wednesday. They’re a great barometer of activity – if they’re not moving , nothing is selling. To add to our problems, American companies are coming under pressure back home, so there could be cost cutting/restructuring at their facilities here. Some of them are so desperate that they’re resorting to strange tactics. I manufacture and export to numerous countries and last week my Australian distributor informed me that he can no… Read more »
Maybe the company chosen as an example in this piece wasn’t the best – IT spend by banks is being severely reduced because of the need to get capital ratios in line. And Derivative is going to become a dirty word when banks start going under.
15 years ago it was fashionable for Irish people with money to have the money abroad and to fly to it. 10 years ago it was fashionable to be into tech. Three years ago it was property, and whereever Eddie Hobbs recommended. It is not always intelligence that causes people to chose good investments, often status obsession, and the rear view mirror are more influential determinants. Somebody commented about Will Hutton. I read an article by him concerning the way forward for the British economy circa five years ago…he was concerned with fashion, media celebrities, etc…the old economy of coal,… Read more »
“The place is controlled and run by a town/urban council who do not seem to have any vision whatsoever regarding the development of the place, one way of the other. In fact, most of the participants of the council are small business men and women looking after their own small interests (sometimes to the detriment of everybody else’s).” This scenario is played out the length and breadth of this Island, this is why our infrastructure is a shambles. Everyone is working against one another, it is favours for the lads and feck everyone else, it has always been like this,… Read more »
Hi John Q, Do you think it was ok for thousands or Irish to go to the UK and draw benefits ?, alot of them fraudulently. This only really dried up during the 1990’s and the start of this Celtic Tiger, until then I knew many Irish people who were drawing false claims in England, but of course it must be ok for Irish people to do this, and it is not ok for Africans to do it. Remember, we shipped all our criminals to the UK in the 80’s and 90’s, well, they left for the UK, because they… Read more »
John Q, your views are your own, not ‘ours’ and you sound like a fairly close minded individual to me. If that guy wants to return home and has expertise and skills then he should faciltated and welcomed. If anything the irish govt should have put up a points scale like australia did and look at skills, education etc of potential immigrants instead of the farcical ‘i’m a chief of my tribe on the run’ rubbish we heard from nigerians. Certainly there is a case for taking in genuine refugees like the people from iran we took in recently. I… Read more »
This paranoia about immigrants is removed from anything factual… checkout the CSO site and you will find nowhere near the “influx” some people believe to be the case; checkout the rental sites (daft.ie etc.) and guess what, loads of places available for rent; checkout the actual numbers of “non-Irish” residents and the majority are UK and euroland citizens. Let’s get back to a discussion on where we could find a competitive advantage in a changing world for Ireland. We have to face up to a looming recession, uncompetitive cost base, losing out in the educational/skills stakes and lack of a… Read more »
Paul, I am well aware of the fraudulent Irish. I don’t think it is ok for any person to go to another country and claim anything illegally, and I never said I did. Ship them home is what I say, they should not be a problem to the UK, they should be our problem. Rob, ‘close minded’ hmmm. ‘that guy’ you mention has a wife and two step kids. We can’t all bring home foreign people though, be fair. I agree about the points system though and the Nigerian situation. Wessel, we are not paranoid, we just don’t want to… Read more »
John Q, That Irish guy wants to return with a wife and kids. Thats even better news. Here this guy, obviously quite able, wanting to contribute to Ireland and raise a family. We should be welcoming these with lámha oscailte. You hardly expect him to return alone? That doesn’t make sense? We should do our best to attract these Irish people and foreigners with talent and ability. Whats the problem? It will freshen up the blood and the talent! If anything we need people of ability to prop up this joke of a country of ours. Sin a bhfuil atá… Read more »
I’ve never in my life seen such envious, spiteful begrudgery as expressed by one of the posters above to one of his own who happens to be living in the US. Irish begrudgery in all its poisonous glory. And yes, I’m Irish, living in UK, so f**k you, you pathetic little gombeen.
Begrudgery, hmmm, I don’t think so, in fact good luck to the guy and I hope he makes a million dollars. Money aside, I hope he finds true happiness there and integrates well. The truth is few really do and it is quite often they who are spiteful and jealous of us back home and moan endlessly. Maybe if more people like you did not piss off at the first sign of trouble and focused-in at home, the country might be better equipped for the future.
Disgusted, I’m curious, did go abroad to gain experience or did you have to leave to get a job.