Companies situated in Silicon Valley on the west coast of the US are also prevalent on the west coast of Europe, in Ireland, land of the shamrock. However, that good luck charm may be wearing thin.
From the potato famine of the mid 1800?s to the banking crisis of today, Ireland?s economy has been uncertain. However, taxes are often the deciding factor for a company selecting a business location. Ireland?s corporate tax rate of 12.5 percent is inviting, compared to the 35 percent rate in the US.
Many moons ago, HP and Intel were kissing the Blarney Stone. Lately, Seagate, Zynga, Facebook, and Google have opened European operations in Ireland also. Will that coziness continue if Ireland?s government is being pressured by its EU neighbors to raise taxes to help refill its coffers?
HP?s 4,000 Irish employees may be looking for another employer should HP rethink their position. One executive stated that could happen if Ireland starts monkeying with the tax rate. Google?s Dublin operations head, John Herlihy, also indicated concern over the corporation tax. Might Google?s 2,000 employees be seeing pink slips in their future?
Other companies have already moved into, and subsequently left Ireland. SugarCRM, an open-source-based customer relations management company located in Cupertino, California, has a world wide presence with a software product that is supported in 14 languages. They originally established their European offices in Dublin, Ireland, but soon closed shop in favor of a Munich, Germany location.
Ireland Technology Leadership Group Logo
Still, Silicon Valley eyes the potential in Ireland. The Irish Technology Leadership Group [ITLG], a recently formed organization made up of tech leaders from Silicon Valley, sponsor an annual trek overseas. This year, 25 executives and venture capitalists from the US tech capital showed up in Ireland, unfortunately at the onset of the country?s meltdown. They held a conference on education and a competition for Irish startups.
Ireland?s technology has been largely based on well known companies opening a branch in their country. More recently Ireland has been encouraging start-ups drawn from their own ranks. There are 14 institutes of technology within the Republic of Ireland which claims to be one of the world?s largest exporters of software in the world.
Silicon Valley, itself, promotes technology from Ireland. The ITLG sponsors a panel of venture capital/CEO?s that give Irish companies the opportunity to interact with their counterparts in Silicon Valley. During the Silicon Valley Comes to Ireland event, they select twelve companies from amongst the participants to take part in private workshops. Two companies are selected to receive awards at the Stanford University Irish Times Innovation Award event held later.
In Ireland, Deloitte acknowledged Irish successes with their Deloitte Technology Fast 50 Award Winners 2010. To qualify, the parent company must be headquartered in the Republic of Ireland or Northern Ireland. The average growth rate of the Fast 50 companies named this year was an impressive 623 percent.
Software Asset Management [SAMI] came in at #1 on Deloitte?s list. Partnering with Microsoft, SAMI provides mainstream information technology to educational facilities at discount prices. Opennet, which ranked #50 on the list, provides services to communication and media service providers, such as Vodafone, Orange, and Verizon, to assist with their billing.
No matter which side of the ocean you view it from, the link between Ireland and Silicon Valley has been beneficial to both sides. The question is: how much strain is being put on that relationship considering Ireland?s financial woes?