1. The evolution of Irish based technology subsidiaries within global networks Seamus Grimes Department of Geography/ Centre for Innovation and Structural Change National University of Ireland, Galway Seamus.grimes@nuigalway.ie http://www.nuigalway.ie/cisc/

2. Introduction ITS FDI in Ireland – EME(I)A Technology TNCs Conceptualising internationalisation of services ‘holistic’ approach – ‘end-to-end’ solutions

3. Introduction TNC organisational experimentation – integrating service activities in GPNs Shift from manufacturing to services Outsouring/offshoring FDI from 1990s – software, financial services, shared services Ireland: a niche in supply chain management

4. Conceptualising internationally traded services Production-oriented models Statistics – software and internet Technology sector: hardware – software – consultancy – ‘end-to-end solutions’ complex GPNs – sophisticated tasks being decentralised

5. internationalisation Globalising processes, ICTs and TNC organisational strategies Centralised control or decentralised decision making and autonomy Affiliates generating knowledge Global mandates

6. Shared services 2002: services 75% of OECD FDI TNCs affiliates servicing corporate networks A TNC market – intra-firm flows Shared services – financial management, administration, supply chain management

7. Outsourcing and offshoring Response to increased competitiveness and technology downturn in 1990s Outsourcing manufacturing but also services Eastern Europe, Bangalore, etc Outsourced services: $235bn by 2005

8. The internationally traded services sector in Ireland 1990s manufacturing increasing until peak of 250, 000 in 20001 By 2010: employment in market services to increase by 125,000 Foreign-owned sector: 73% of employment and 75% of sales in manufacturing 2002: Irish services exports grew faster than any of top 30 exporters in world

10. Fig. 2 Trends in Permanent Full-Time Employment in Financial and other International Services 1993-2003

15. (c) Evolution of IBM in Ireland 1956Sales and Service – mainly Irish market 1990sImpressed HQ with software project 1995300 1995+400Acquired Lotus (operation in Ireland since 1986) 1996650$350m Mulhuddart campus – manufacturing servers and electronic products for EMEA – chosen against China, Mexico, Eastern Europe Customer support for 29 countries including US 1997Microelectronics division added 1999Centralised EMEA operations 29 countries 12 languages Direct sales and marketing International Solutions Unit IBM Corporate Treasury EMEA at IFSC (now Ballsbridge) Sales and Services operation, Cork 1999Staff redeployed Relocation of laptop maintenance Relocation of call centre to low cost location 2001$100m expansion at Mulhuddart – worldwide management of chip business – expansion of server and micorelectronics 2001Lotus integrated – one of 4 main pillars of IBM software group Localisation, software engineering Consolidation of customer support for UK, France, Germany to Dublin 2001No redundancies Relocation of hard disk drive operation to Germany

16. Evolution of IBM in Ireland 2002+100Acquired PWC consultancy operation 2002To shut telesales centre (sold PCs, etc to UK, France and Germany) 2002Global Services – fastest growing division (800 in Dublin and Belfast) 200240007 separate divisions 2003Geodis logistics €50m contract investment in IBM campus 2003Several new missions, including E-commerce suppler portal 40% of IBM global web-based procurement 2003+200Sales and Marketing – less emphasis on support – more on sales 2003Mulhuddart €301.9m campus manages all internal and external websites + technical support for international clients 2003Dublin Software Lab designated as one of 7 Centres of Advanced Studies R&D investment 200437007 divisions: software development, manufacturing, business and technology services

20. Evolution of technology affiliates From manufacturing to services On-going restructuring – changing competitiveness and low cost regions Considerable expansion – IBM, MS Additional divisions for EMEA Movement up value chain Supply chain management

21. Conclusion Conceptualising shift towards services in technology TNCs – holistic solutions Evolution of technology TNCs Restructuring – relocation – an ongoing evolution towards value added activities How Ireland has evolved an intermediary niche in supply chain management