A chara, – In a side panel accompanying a major article on Ireland’s export prospects (Business, This Week, September 7th), Michael Hennigan argues that Ireland’s service exports have “limited impact on the real economy”, asserting that, in 2011, about 9,500 Irish workers were responsible for 73 per cent of all services exports.
This is a distortion of the actual situation. According to the annual Forfás survey of the economic impact of firms in receipt of assistance from the State enterprise development agencies, in 2010 foreign firms based in Ireland generated sales of €53.3 billion and employed some 46,600 workers. Since 96 per cent of these sales were export sales, it follows that about 44,800 people were employed in export services.
On the same basis, we can calculate that about 18,500 workers in Irish firms were engaged in export services, giving an overall total of some 63,300. This does not include firms engaged in export services which are not in receipt of State support.
These figures are a far cry from those suggested by Mr Henning and show that export services are a major source of employment creation.
Furthermore, this is generally high-quality employment, and the average payroll cost of workers in foreign services firms in 2010 was €61,000.
In addition, foreign service firms spent over €6 billion on Irish materials and services in 2010, over 40 per cent more than was spent by foreign manufacturing firms based here.
Combined with the total payroll contribution of these firms (€2.8 billion in 2010) and their corporation tax contribution, total expenditure of these firms in the Irish economy was of the order of €10 billion. And this is not counting the considerable contribution of services exports by Irish firms.
This hardly constitutes the “limited impact” suggested by Michael Hennigan.
Mr Hennigan is also wide of the mark with his assertion that the computer services sector has seen no growth in employment levels since 2000.
According to population census data, the number of people in computer software occupations rose from 19,598 in 1996 to 37,770 in 2002 and 50,282 in 2011. That’s an increase of over 150 per cent in 15 years. – Is mise,