The computer sector in Irish manufacturing: past triumphs, present strains, future challenges

Abstract

The health of the computer sector has come to symbolise the modernisation and rapid growth of the Irish economy during the 1990s. Any threats to its sustainability strike at the heart of broader economic and industrial strategy. After a brief statistical overview, this paper examines the wider strategic factors that facilitated the rise of the Irish computer “agglomeration”. It describes how domestic policy evolved within a series of coherent frameworks that took account of the nature of the external environment (opportunities and threats) as well as realistic views of domestic capabilities (strengths and weaknesses). Within these frameworks, the decisions of individual policymakers shaped an industrial strategy that took decades to bear fruit and was a key contribution to bringing about convergence to EU standards of living. The paper also explores the likely future of the Irish computer sector, as it attempts to deal with an unfolding recession that started in the United States, the source of almost all high technology inward investment, but threatens to spread to Europe and elsewhere, key destinations of Irish computer-related exports. When the recession passes, the paper suggests that the Irish computer sector is unlikely simply to pick up where it left off in the buoyant latter part of the year 2000, but will undergo fundamental evolution and change in order to meet new global technological and economic challenges.