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SPECIAL ADVERTISING SECTIONIRELANDInnovationicant consequence for international companies looking to make ahome here. A clear and competitive corporation tax regime iscoupled with great government support and tax breaks for areasincluding research and development. However, O'Shea is quick topoint out that, while these are certainly attractive to investors,there is more to the development of a technology cluster inIreland. ‘The biggest attribute Ireland has is the way it has providedcertainty and clarity of treatment to international investors.Tech companies who are making significant investments herewant to know that the rules won’t change overnight, and in fairnessboth to the current government and its predecessors, Irelandhas been unambiguously and consistently clear in how it treatsmultinational investors’.Recovery positionGiven the well-documented turmoil experienced by Irish banks asa backdrop to the success of the technology sector, it is unsurprisingthat Irish companies are quick to seize upon this burgeoningsector as some sort of economic deliverance. However, whilethis would be a tidy result, is the industry really hardy enough toprovide a hopeful future for the Irish market, and balance outsome of the recent strife?Garrett points out that the continued success of the tech sectorand wider Irish export sector has been a key factor behind thePhilip Nolan, Partner and Head of Commercial at Mason Hayes & CurranIrish economic recovery over the last four years and ‘has helpedcounteract the large drop in the domestic economy. For example,five of the top ten exporters in Ireland are technology companiesand the sector is credited with contributing approximately onethird of the country’s turnover’.However, there are serious lessons to be learnt from history,which has seen the economy relying too heavily on one industry,such as the property sector. It is crucial that Ireland does notadopt a recovery approach which depends almost entirely on thetechnology industry to instigate long-term economic stimulation.‘For Ireland to successfully overcome the fallout of Irish bankingcollapse and have a more stable and balanced economic growthpattern in the future, we need to reignite our domestic economyand local consumer confidence. I have no doubt that this will happenbut it will take time. With the tech sector leading the way andproviding an excellent example of performance and growth,other industries in Ireland will gradually take confidence and theIrish domestic economy will recover’ Garrett adds.And while this sector has certainly proved itself to be resilientin the face of some pretty testing times, Ireland must continue tostrive to attract further international interest in order to fill in thegap left by the exit of older international players who have notweathered the storm. ‘Equally foreign capital will be required tofund expansion of the next generation of Irish emerging technologycompanies. Only by growing companies of scale in Irelandwill the sector make a meaningful contribution to recovery’ saysRafferty.The domestic economy in Ireland is currently experiencing aperiod of deleveraging, the effect of which has inevitably led to adecrease in funding. As Nolan points out, ‘this is negativelyimpacting upon some capital intensive industries’. That said, thetechnology sector is fairly well protected, and a dearth of localfunding proves less problematic for global players who benefitfrom an alternative source of funding such as group treasury. ‘Thecurrent crop of Irish start-ups are hardy, lean and highly competitiveby necessity’ he adds.However, the problems that the banking system still facesaside, there is certainly the sentiment that Ireland has paid itsdues, and now is the time to face forwards. ‘On a wider level,there is recognition internationally that Ireland has taken its medicine,that it is taking the right steps towards recovery’ notesO’Shea.Byte MarksWhile the technology sector certainly has provided some solacefor the Irish market at a time when it needs it most, it is essentialthat the country continues to tap into the demands of the globalcompanies that have headquartered here. This sector, arguablymore than any other, is the last word in fast changing industries,and it is crucial that Ireland and its legal service providers continueto provide an environment that caters for its requirements.‘Over the last 50 years, the Irish economy has evolved dramaticallyfrom a largely agri-based economy to a low skill manufacturingbase – such jobs have now migrated eastwards – to the cur-mergermarketAilish FinnertyarthurcoxGary McSharry212 782 3299March 2012 | americanlawyer.com