Ireland Makes Hard Pitch to Attract E-Business

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LOS ANGELES - The Irish government wants to make Ireland the "e-platform of choice" for US companies entering Europe and has invested $80 million to connect Ireland to Global Crossing's broadband infrastructure.


"US companies are demanding extensive access to reliable and competitive bandwidth so we needed to make sure that we acted quickly on deploying it," said Kieran Morris, the vice president for the Irish Development Agency based here.


The Irish economy has been booming through the nineties and is now known as the "Celtic Tiger." Much of the boom was based on installment of a $3 billion state-of-the-art telecom system in the late eighties.


An incentive and public relations program then brought American outsourcing call centers and computer manufacturers such as Dell, Gateway and IBM to Ireland to make, sell, market, and ship product into Europe, Africa and the Middle East.


"To get our economy to the next level we must make sure that all the building blocks for an e-platform are in place and that's precisely what we are doing," Morris said.


Ireland is a member of the EU but was one of five countries given extra time to free up its telecom market to outside competition. Liberalization went into effect in the rest of the EU on Jan. 1, 1998.


The Irish take pride in liberalizing earlier than they had to, but Eircom, the national monopoly carrier, got more than an extra year to prepare for foreign competition.


"Eircom is undergoing a lot of structural changes that will make the company leaner and meaner and better prepared to deal with competitors coming into the country. It has to or otherwise it will go under," Morris said.


"We needed to deregulate the telecoms to bring in more competition. Most of the world's major telecoms will have major points of presence in Ireland so there will be no inhibiting factors for their clients to come and establish operations here."


The advent of the Internet offered the Irish more opportunities and greater challenges. The call center boom had crested. The Irish model - pan-European, multi-lingual call centers located in one site - was under challenge.


Sitel, Convergys and others opted for local call centers set up in the different European countries and manned by native speakers but managed and controlled centrally.


The pool of native speakers in Ireland began to dwindle even though 24,000 foreigners now live there. One result was that the Irish had to advertise in the European press to attract native speakers to work in Irish call centers.


Morris conceded the need to import labor - Ireland is 100,000 short - but argued that call center attrition rates, while rising in Ireland, are not rising as fast as "in cities like Phoenix. We're still relatively well positioned."


But he also said that IDA was "not going after pure play call center anymore but shifting our focus to e-business because the Internet is fundamentally changing how companies interact with customers, suppliers, employees and business partners.


Dell has been in Ireland for years and today does $8 million worth of business a day across Europe, Africa and the Middle East from its 23 Irish based Web sites.


Viking office products has its Web sites for the UK and Germany in Cork where it went live just a year ago selling office supplies online. Customers in those markets don't realize that it's backended into an Irish site.


EDI links from Ireland hook to Viking warehouses and other infra-structure in Europe. Let a customer in the UK buy something from Viking and the Irish Web site will put the order into the warehouse nearest to the customer.


Morris argued - and it is an argument many would still challenge - that catalogers going on line get customers at a fraction of the mailing costs and that they don't return to paper catalogs because "they have created a stickiness to their Web site, making it easier to order there."
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