Significant potential for Ireland to become a global FDI leader in cyber security
Increased regulation on data privacy, more sophisticated scamming and phishing, and growth in identity theft are major trends that will demand sophisticated solutions that will lead to significant job creation.
Now is the point in time where this opportunity needs to be embraced by Ireland or it will be grabbed by other countries.
Ireland is well placed to benefit from increased global investment, and has a real opportunity to position itself as a world class cyber security practices, solutions and investment hub, according to a report published by Deloitte today. The cyber opportunity analysis report conducted by Deloitte, in association with the International Sustainability and Investment Centre, found that Ireland has already proven itself to be an innovative technology hub, and this is another area in which it can become a global leader.
While respondents to a survey carried out as part of this analysis identified, unsurprisingly, the US as the number one location for a cyber business, followed by the UK, Ireland ranks well as a potential location of choice, and is ranked alongside cyber strongholds such as Israel, Canada, Australia and India.
There is, and continues to be, a surge in requirements for enhanced cyber security with respondents identifying increased regulation on data privacy (73% of respondents), more sophisticated scamming and phishing (59%), and growth in identity theft (53%) as the major trends in the cyber area over the next five years.
Against this backdrop, the analysis shows that businesses will change how they organise and manage data security, either internally or through third party providers. Indeed, over a third (36%) of respondents to the survey felt there would be a trend towards outsourcing cyber management to third party organisations, and just over a quarter (27%) think that businesses will establish global/regional centres of excellence for managing this function.
The implication of these trends is that a small number of locations will be preferred for establishing centres of excellence in the same way that certain locations became favoured for establishing shared service centres.
Capitalising on the opportunity
In order to capitalise on the opportunity to become a global hub, the report identifies a number of areas which should be addressed by collaboration across government, enterprise, universities, and the research sector.
- Education and training to meet the industry needs - support third level institutions in rolling out cyber security courses and build on the success of some of Ireland’s leading third-level institutions offering cyber specific courses. Areas for possible consideration include enhancing the ICT Action plan to include a high-level action plan for cyber skills. Working in conjunction with industry, third-level institutions could also provide conversion courses to fast-track honours-level graduates from other disciplines into specialist cyber security courses. In addition to the inclusion of cyber on the agenda of third-level instructions, Ireland should also explore the benefits and feasibility of including cyber on the second-level curriculum.
- Start-up and incubation facilities - existing national incubation facilities for start-ups should be enhanced to support those interested in developing cyber products or setting up cyber security practices and solutions.
- Access to capital – the feasibility of existing and/or develop new investment platforms to support Ireland’s growing cluster of cyber enterprise, including but not limited to seed, venture capital and private equity should be explored.
- Promoting Ireland - leverage the excellent existing public and private sector promotional platforms to internationally market Ireland as a location of choice for cyber security practices, solutions and investment.
Skills the most positive…and negative factor for Ireland
Access to specialist skills (identified by 87% of respondents), the cluster effect of similar/related businesses based there (56%), the quality and number of skilled graduates/post graduates (54%), the ease of doing business (46%), and linkages to major universities and research centres are the top five factors for companies in locating a cyber business.
When asked to rate Ireland as a base for cyber security, interestingly, skills came top of the list of both positive and negative factors, indicating that while the technology talent and education systems are well regarded, the depth of the talent pool may not be regarded as sufficient.
The second most positive factor with regards to Ireland is proximity to industry (25% of respondents). This is due to the scale of the technology footprint in Ireland and the technology cluster that already exists – including nine of the top 10 global software companies, and the top 10 ‘born on the internet companies’. What’s more, in addition to having a technology cluster, approximately 10% of the Top 500 cyber companies have a presence in Ireland, with three Irish companies now featuring.
Other positive factors include Ireland’s location and membership of the EU, the fact that we speak English, and the ‘business friendly’ environment, including the corporation tax regime. Areas that were viewed as more unfavourable included access to capital/funding, the cost base, and government policy.
Commenting, Colm McDonnell, Partner, Risk Advisory, Deloitte said: “Ireland ranked well in its relative attractiveness as a location for cyber business and ranks well on the factors that were deemed most important. However its cyber footprint is relatively small and there is scope for further action and development to ensure this ranking is maintained, and indeed improved upon. The good news is that there appears to be no dominant jurisdiction for FDI so it’s all to play for right now. This analysis shows that Ireland has a real opportunity to be at the forefront of cyber security. It has long proven itself to be an innovative technology hub, and this is another area in which it can become a global leader. The skills required, while currently somewhat scarce, would be at the higher-end and would really deliver interesting opportunities for the employee and the economy. We need to act now to capture this opportunity.”
Stephen Nolan, CEO of the International Sustainability and Investment Centre, commented: “Over the next number of years we will see a dramatic increase in the levels of global cyber investment with a significant portion of these supporting energy, water and food technology platforms. For Ireland, its competitive advantages, a growing cyber cluster, and a partnership approach have the potential to allow Ireland develop as a world-class cyber security practice, solutions and investment hub.”
The analysis was carried out to assess how Ireland is viewed as a location for cyber businesses, the important factors when deciding where to locate a cyber business, and how the potential to become a global hub can be capitalised on. It was carried out amidst a number of trends, all of which point to the increasing importance and need for cyber security services. These include the continued growth of ecommerce using fixed and mobile devices, increasing levels and sophistication of cybercrime, the growing threat of terrorism in the developed world and the increasing number of “things” that are becoming connected to the web.
Cyber security in Ireland
Notes to Editors
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About the survey
This analysis was conducted toward the end of 2015 with over 70 people responding to the questionnaire and taking part in interviews. The respondents were primarily Irish senior executives in various industries, most notably the technology and financial services industry and senior public servants. 30% of respondents were CEOs or Managing Directors, and 50% were CIOs, CTOs, and Heads of Information Security.
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About ISI Centre
The International Sustainability & Investment Centre (ISI Centre), is a public-private partnership devoted to helping Irish businesses to develop and manage initiatives around clean technology, the investment of funds in sustainable industry as well as other innovative schemes and ideas that will assist in Ireland’s transition to a low-carbon economy.