The current boom in military spending is increasing sales by Irish-based technology firms to the defence industries. But are these sales being logged as military exports? Jamie Smyth reports
The prospect of war with Iraq may be abhorrent to peace campaigners camped out at Shannon Airport but for many Irish-based technology firms the upsurge in US defence spending is helping to stave off a debilitating recession.
Spending on defence by the US administration in the year to October 2003 will be at least $355 billion, and a large slice of this is being directed towards a new generation of weapons based on complex computer chips and software.
Strike aircraft, tanks and even ground soldiers who may fight in Iraq, will all require a host of technologies ranging from communication to combat hardware for the battlefield. And increasingly, firms based in the Republic are discovering their technology - which may initially have been developed for commercial use - can also fulfil a range of military applications.
The type of technologies used in the commercial world are fundamentally the same as those which the military are using, says Dave Mulholland, business editor at Jane's Defence Weekly. "You can't divorce the two anymore. The big upsurge in defence spending is going into computer systems and communications systems . . . high frequency computer chips used in mobile phones can also be used by the military."
ParthusCeva, a Dublin-based firm that develops this type of sophisticated communication chip technology, is benefiting from higher military demand as the prospect of war against Iraq increases. It recently signed a deal with QinetiQ, a spin-off from the British Ministry of Defence, to supply it with global positioning system computer chip technology.
This is a technology that will shortly be embedded in all US mobile phones. It will enable companies to locate a person using a mobile handset to within a few metres in a city, and offer them a range of services. But it is also useful for the military who need to locate soldiers or military equipment on the battlefield.
Iona Technologies, one of the biggest Irish technology firms, said this week the share of its business conducted with the defence industries had increased to 15 per cent, up from 10 per cent last year. Recognising the growing importance of the defence sector, last year Iona set up a new subsidiary staffed only by US citizens to enable it to gain clearance to sell to the US Defence department. Iona's software links disparate computer systems together and is currently being used in the firing mechanism for Tomahawk cruise missiles and by the US Army Tank Command for simulation research into battlefield exercises.
Likewise, Timoney Technology, a Navan-based firm which develops independent suspension systems for vehicles, has also successfully tapped into the international military market. Shane O'Neill, chief executive of Timoney, says 60 per cent of its sales currently go to the military, although he is hopeful commercial sales will also increase soon.
One of the most interesting projects which the firm is working on is the development of an unmanned military vehicle in partnership with Boeing. This will be remote-controlled and is an acknowledgment by the military that soldiers dying is not politically acceptable, says O'Neill.
A recent report by Amnesty International, Ireland and the Arms Trade - Decoding the Deals, pinpointed more than 60 Irish-based firms which manufactured or distributed military, security or police products between 1980 and 2001. Many of these firms are multinationals, such as Moog or Data Device Corporation, which make components for export to the US. The Government, which this week faced uncomfortable questions over the use of Shannon airport by the US military, is understandably keen to distance Irish companies from the trade in arms. The Republic is not a producer of arms in the normal sense of the word, says a spokesman for the Department of Enterprise, Trade and Employment. "In an economy such as ours with its high technology base, goods will be manufactured and exported which have both civilian and military applications . . . In fact all licences issued in 2002 were for civilian end-use."
But pressure groups such as Amnesty and AFrI (Action from Ireland) complain the Government's system of issuing military and dual-use licences - for products that have commercial and military uses - lacks transparency. Under the present regime the Government does not identify firms which apply for military or dual-use licences due to "commercial sensitivities". It also does not compile statistics on the value of military and dual-use exports, making it impossible to gauge trends within the industry.
Of potentially greater concern are claims made by Amnesty International this week that the Government is hiding behind generic descriptions of technology products to protect the industry. It made the claims after the publication of the findings of a Government inquiry into the export of software by the US firm, HP Ireland, which was ultimately used to monitor US nuclear weapons.
Amnesty claims HP Ireland in Galway should have applied for a dual-use export licence to enable it to sell this type of software abroad. However, the Government ruled that HP did not need a licence because the software was "not designed for any specific end-use".
Amnesty believes the ruling could enable companies based in the Republic to export powerful software with military applications to be sold to states with poor human rights records in the future.
This is rejected by the Government which says it operates one of the most transparent systems of reporting in the European Union.
However, the rapid growth of the indigenous software sector in the past five years, and the current boom in defence spending, will almost certainly increase Irish sales to the defence industries. Whether these sales will be logged as military exports or require a licence is another matter entirely.