The Skills Gap in the Irish Software Industry

By Reed, Thomas F.; Kelly, Dawn | Irish Journal of Management, July 1, 2002 | Go to article overview

The Skills Gap in the Irish Software Industry


Reed, Thomas F., Kelly, Dawn, Irish Journal of Management


Introduction

In this paper, we present findings from research on the software industry in Ireland. This research is designed to answer two questions. First, from the viewpoint of software executives, does a gap exist between the requirements of Irish software companies and the skills held by graduates of Irish third-level software engineering programmes? Second, at what degree levels does the skill gap exist?

We chose to study the software industry because it is strategically important to the Irish economy, with revenues exceeding euro;10 billion in 2000 (National Software Directorate, 2003). Since the mid-1980s, the software industry has been one of the fastest growing industries in the economy (O'Gorman, O'Malley, and Mooney, 1997), and has passed out some of Ireland's traditional industrial sectors in size (FAS, 1998).

As the terms the "knowledge economy" or "information society" suggest, people are the main resource in the software industry. Recent additions to our business lexicon include "software developer", "software designer/architect", "localisation engineer", and "database consultant". These positions are occupied by people in a highly competitive, global market for extremely mobile skills (Irish Software Association, 1999).

Concern over lack of skilled workers has already plagued the industry, and several government-funded and industry-backed groups have been formed to study and offer recommended solutions to this challenge. The Irish Government has responded in part by investing millions of euros to allow third-level institutions and FAS to increase their information-technology places. Irish third-level institutions have thus been identified as key partners to help assuage the skills shortage facing the industry.

We organize our paper as follows. In the first section, we present some important facts about the industry and Ireland's key sources of competitive advantage. We also examine the significant challenges and threats that face the industry. In the second section, we present our research question. In the third section, we discuss the methodology we used in the project, including the development of the survey questionnaire, the identification of the population of software companies, and our measurement of the skills gap. In the fourth section, we present a profile of the participating companies, the respondents, and the answers to our research questions. The fifth section contains a discussion of the implications of our findings. Finally, we suggest possible avenues for future research.

The Software Industry in Ireland

Industry Facts

The software industry has become a strategic industry in the Irish economy, with overall industry revenue climbing from euro;2.2 billion in 1991 to over euro;10 billion in 2000 and revenue from Irish-owned software firms climbing from euro;191 million to euro;1.4 billion in the same period (National Software Directorate, 2003). In 1998, electronics and software accounted for 43% of Irish exports, with Ireland surpassing the United States as the world's leading exporter of software goods (Organisation for Economic Co-operation and Development, 2000: 145). In its report on the information technology industry in 2000, the Organisation for Economic Cooperation and Development (OECD) described the growth of the software industry in Ireland as "spectacular".

In 1998, the Irish software industry comprised 760 companies, of which about one-sixth were foreign-owned (OECD, 2000) while, at the end of 2000, the National Software Directorate estimated the industry to be comprised of over 900 firms (National Software Directorate, 2003). Employment has continually increased in the industry, with growth in some years reaching 20-30% per annum (Centre for Software Engineering, 1990). Recent figures show total employment is over 30,000 (National Software Directorate, 2003), and experts predict that the industry will become one of the main sources of employment growth in Ireland (FAS, 1998).

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