Mr John McGowan, vice-president and general manager of Intel Ireland, is a man on a mission to make the Republic a more attractive location for high-tech investment.

As head of one of the State's largest employers, and recently appointed chairman of ICT Ireland, he isn't afraid to ruffle a few feathers among decisionmakers in Ireland Inc.

At last month's launch of ICT Ireland, an industry association formed to articulate the interests of the technology sector, Mr McGowan warned that the State's attractiveness for investment was being eroded.

He is now pressing the Government to rethink its high-tech strategy and address issues ranging from escalating labour costs to poor infrastructure.

"Nobody doubts the willingness of the Government to spend money on investment but what it needs are clear and succinct arguments that stand up to scrutiny," says Mr McGowan.

He highlights several factors that are causing wage inflation and what he describes as "abnormal market forces" that could drive investment away.

"There is the skills shortage that is pumping up salaries. But there are also the huge costs of bringing people in from abroad."

The decision to remove the ceiling on PRSI was a "major own goal", says Mr McGowan.

The PRSI issue is hitting technology firms especially hard because much of their cost base is associated with payroll costs. And this is being accentuated by the difficult market environment, causing firms to focus on costs, he says.

"The great irony is that year-on-year we are doubling the computing capability of the product but the sales price is diminishing," he says.

Mr McGowan denies hightech firms are advocating low wages. On the contrary, the PRSI issue obviously hits people who are quite wealthy, he says.

"Every single sector is competing for business right across the world. We are competing here in Intel for business with other factories, and the question we always ask ourselves is: are we one of the more competitive factories?"

This will be especially important at a time when several eastern European locations such as the Czech Republic and Poland are emerging as major competitors, he says.

The recent slump in demand has forced several technology firms here, including Intel, which employs 3,300 full-time staff at its Leixlip plant, to recommend a period of unpaid leave to its employees.

And if technology sales don't pick up soon the fall-out could become much worse.

"On the plus side, the euro's decline has given us a cushion effect but some day the euro will recover and it is a foolish person who gambles on exchange rates to maintain competitiveness," says Mr McGowan.

Lack of infrastructure and how it impacts on the quality of life is another critical problem, according to Mr McGowan.

"If people get frustrated and their lives are being impacted by having to drive into the city or Leixlip and fight traffic, it undermines the whole enjoyment of going to work and it makes them more likely to jump ship."

Concern over the ESB's ability to supply the necessary amount of electricity to the high-tech sector has forced Intel to consider building its own onsite combined heat and power plant.

However, to build the necessary level of infrastructure to support investment and maintain competitiveness may require a change in culture.

"We have a significant issue in Ireland in that the time it takes to get infrastructure put in place is very, very long by international standards," he says.

It took eight months for Intel to get full planning permission for its $2.2-billion expansion last year. In contrast, permission for an Intel plant in Hudson, Massachusetts, took just 30 days.

"Ireland does have the advantage of being very democratic and the whole process is transparent here," says Mr McGowan.

"But when I sit as a businessman and I compare with other countries who have higher standards of planning - they seem to get through the process much quicker and that gives them an advantage."

Consultants hired by IBEC analysed almost 1,000 companies to establish the grievances and concerns of IT sector firms before establishing ICT Ireland.

Several key issues on which ICT Ireland plans to lobby the Government include: measures to encourage R&D investment, provision of venture capital funding and a programme to encourage school students to study science.

Mr McGowan says he is keen to project a better image for the high-tech industry so that people will choose to spend their careers there.

Next week: how the skills shortage will impact on the indigenous technology sector