Prosperity warns of hard times in tech

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The housing crisis, not skill shortages, is the biggest threat to the digital economy



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11 August 2017 | 0

Billy MacInnesThe introduction to the Prosperity Digital Salary Survey for 2017 makes for sombre reading. Understandably, much of the attention has been focused on the negative effects of the high cost of living and accommodation in Ireland on efforts to recruit skilled personnel from other EU countries.

According to Prosperity, the rejection rate from candidates living abroad has doubled to nearly 30% over the past year and, for the most part, it’s down to the cost and availability of accommodation in Dublin. The problem is so acute that Prosperity has decided it makes sense to service digital and technology companies in other European countries, opening an office in Paris and planning others in Berlin and Lisbon.

The introduction contains examples that highlight the extraordinary disparities in rental costs between Dublin and Lisbon, Berlin and Amsterdam. Things have become so bad that foreign nationals are starting to leave good jobs in Dublin to move to jobs in places where they can get similar work but pay much cheaper rents.

This state of affairs is obviously exacerbating skills shortages in the Irish market. The problem is that any difficulties the multinationals and large enterprises might have in recruiting candidates in the current climate are multiplied several times over for indigenous companies. If it becomes increasingly difficult to recruit foreign workers, that leaves companies based in Ireland, including channel businesses, scrapping over a limited pool of homegrown talent.

But if workers recruited from overseas don’t believe they can afford the rents and cost of living, why should people born here think different?

Something has to give or the situation will become unsustainable.

One possible way out of the impasse would be to try and locate more businesses outside the capital where rents are cheaper and the overall cost of living is less. Sadly, there appears to be little political will to force through the measures to build up cities and towns to provide viable alternatives to Dublin. True, Galway and Cork have made some progress but much of the country’s economic activity is being swallowed into a Dublin-shaped black hole.

The problem is that too many people are profiting from this state of affairs to change it. And the Prosperity study shows that market forces are unlikely to provide any corrective to the situation until the effects of high rents have inflicted unnecessary damage on Ireland’s position and reputation as a technology centre.

It would be best for Ireland if the politicians took heed of the situation and sought to gain some control over it rather than leave themselves and the country at its mercy. How hard would it be to implement plans to break the over-reliance on Dublin and spread the prosperity to other parts of the country by building infrastructure and housing to encourage businesses to look beyond the capital and to accommodate their employees?

Spreading the load around the country should be much easier than trying to squeeze more and more people into Dublin with the all-too predictable effect on the price of accommodation and services. And it’s surely preferable to make it attractive for people to work and live in places like Cork, Galway, Limerick, Sligo, Athlone, Waterford or Letterkenny rather than choose not to come to Ireland at all. Or to leave it.


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