BostInno
Why Ireland Is the 'Next Parish Over' for Boston Tech
By: Leo Clancy
For many generations of Irish families, Boston was often referred to as the "next parish over." Such was the level and depth of connections with Ireland.
Today, those same connections remain as strong as ever, through the strengthening of historical ties, deep political connections and the warmth of social bonds underpin relationships that enable business, trade and investment to flourish between Boston and Ireland.
MORE RECENTLY, MANY OF BOSTON’S BOOMING TECHNOLOGY COMPANIES HAVE SET UP VARIOUS FUNCTIONS AND OPERATIONS IN IRELAND.
Ireland has for many decades been the recipient of inward investment from the United States. Indeed the centenary of what is widely viewed as the first ever foreign investment by a company in Ireland will take place in April of this year.
In April 1917 The Ford Company, led by Henry Ford, whose father hailed from County Cork, set up their first car manufacturing plant outside of the United States in Ireland.
In his own words, Ford hoped that the new plant ‘would start Ireland along the road to industry’. By 1929 the plant had become the largest tractor manufacturer in the world.
Today over 1,300 foreign-owned companies have set up operations in Ireland.
Approximately 65% of these companies are American, typically accounting for 70% of investments made in Ireland each year, many of which come from Massachusetts and indeed Boston. More recently many of Boston’s booming technology companies have set up various functions and operations in Ireland. Some examples of these investments include:
- CarGurus: Established its European Headquarters.
- EMC/Dell: Includes Global Solutions Centre & Worldwide Customer Service Centre.
- HubSpot: International HQ.
- Wayfair: European Operations Centre.
- PTC: Research and Development Centre.
- Ipswitch: EMEA Support and Operations Centre.
- LogMeIn: EMEA HQ.
- Mathworks: Shared Services and Sales Centre.
- TripAdvisor: Engineering Hub.
- Smartbear: European HQ.
- Nuance: International HQ.
So why do Boston Tech firms continue to set up in Ireland?
Leaving aside the historical ties, there's the pro-business environment, access to a pan-European talent pool, evidence of the 750 other American companies operating there successfully and the low corporate tax rate. Taken in its entirety, Ireland is a very compelling proposition for any Massachusetts technology company that is considering expanding overseas.
To delve a little deeper, the pro-business operating environment in Ireland is a testament to how successive Irish governments have engaged with and listened to the needs of industry — ensuring that policy, systems and procedures are fit for purpose, remove unnecessary bureaucracy and make it easy for companies to set up and commence operations. In 2015, The World Bank "Doing Business" report placed Ireland in the top 10 percent of 189 countries surveyed.
Talent and access to talent is also very high on the agenda when technology companies are assessing where to locate their operations. In this regard, Dublin has gained a global reputation in recent years as the "Digital Capital of Europe." This comes on the back of the many companies in the technology space (EMC, CarGurus, HubSpot, Ipswitch, TripAdvisor, Wayfair) that have set up in Ireland that have attracted some of the brightest and best talent, not only from within the country but also across Europe.
The excitement and buzz that comes with working alongside smart people in a multi-cultural and diverse environment continues to attract talent to Ireland and engenders a capability and skill set that is much in demand by high-growth scaling technology companies. Furthermore, mobility among and across companies imbues an understanding of the cultural mindset associated with working in technology companies that enables workers to assimilate quickly, contribute on day one and understand the nuances and expectations of working in the technology sector.
With several hundred American technology companies having operations in Ireland stretching back — in some cases, over many decades (EMC, Analog Devices) — many Irish people have spent their entire working careers only knowing of the cultural and operational expectations attaching to that environment. This has created a capable and experienced middle and senior management that have gone on to lead many of the companies listed above, bringing local knowledge with a global mindset in growing these companies from Ireland.
Being able to operate in a country that offers consistency and enables to project with a fair level of certainty is enormously important in terms of doing business. Tech executives have found Ireland to have an open, transparent and consistent regime when it comes to corporation tax. The corporate tax rate of 12.5 percent is stated policy and serves as a cornerstone of policy in attracting foreign direct investment.
Taking all of the above together creates a very compelling proposition as to why Ireland continues to attract some of Boston’s and indeed American technology companies to set up operations. However, it is sometimes forgotten when reflecting on Ireland’s track record in attracting investment, by overlooking the track record of those companies themselves from when they first set up operations in Ireland.
HubSpot, for example, officially launched their Irish office in March 2013 with the aim of creating 150-plus jobs; in March 2016, they announced their intention to create a further 320 roles over the following three years. LogMeIn announced in November 2012 the establishment of their new Dublin office, which at the time was expected to create 50 jobs and subsequently announced a trebling of the workforce in March 2015. It is one thing to attract a company to set up; it is something quite different for them to grow and expand their footprint in a location.
Given the amount of investment expansions by companies, it is perhaps the ultimate testimonial of the importance those companies place on Ireland and its capacity to support those companies and their investments.
