How to Build a Global Tech Sector

Mr. Reade has been asked to speak at various venues around the world and in Washington, DC, about how a country or region can develop its technology sector Although there is no magic answer, there are some things that are common to many regions that have created high value tech centers.

Countries like to develop their tech sector for a variety of reasons. First is that it creates well paid jobs, often near the top of the region in terms of pay. Second, they create small businesses, which sometimes grow into larger ones. This creates wealth that gets reinvested in the home market, and it helps the region save money by doing things faster, better and cheaper. Third, the tech sector tends to be less polluting, safer, and creates less problems than traditional industries. Finally, technology is needed everywhere in the world, and it’s better for a region to buy it’s own technology than import it from somewhere else.

So how can a country develop a tech sector? The following are some observations that have proven true over time. It’s not likely that if a country has just a few strengths that it will automatically jump start it’s tech economy, and there are no guarantees. Nonetheless, if most of these are observed and acted upon, there is very good chance of success. However, it should be cautioned that it might take a generation for a region or country to reap the benefits. All the more reason to get started now.

1) Education.

This is really the key beginning point, in my view. Have the highest quality education from early grades through the graduate schools. Emphasis should be on technology and the latest IT, especially at the university level. In addition to developing the highest degree of literacy, schools should encourage students to travel to other colleges to see what is the latest technology, and encourage visitors to come to NI to interact with students. Be the opposite of isolationists; have a global outlook.

2) Up-to-date Infrastructure.

Not just modern airports and roads, but also the latest in broadband Internet, IPv6, and telecommunications. Government investment may be required to achieve basic infrastructure.

3) Partner Academia with Private Industry.

Professors can and should serve on the board of directors of small startups and other SMEs. Businessmen should teach at the university level. This way, bright new ideas can be quickly tested and brought to market. This partnering is essential for smaller economies to leverage what they have.

4) Access to Capital.

Encourage people or companies that have made a lot of money to invest in new enterprises. However, it is important that the government NOT be a part of the process. Venture capital should flow only to the best ideas that can be brought to market, with the best business plans to back them up. Encourage VC investment with tax breaks and other incentives.

5) Favorable Tax Laws.

I once spoke with a speech writer to the President of Ireland in the 90s. I asked him why the software industry had taken off so fast in Ireland. He said that it was because they lowered taxes on the industry. Favorable tax treatment of the types of industry you want to attract will likely attract that type of industry. Make start-ups as easy as possible.

6) Lenient Bankruptcy laws.

Companies and their principals should be allowed to take risks, and risk taking means that there will be a certain failure rate. Allow companies and individuals to take risks without losing their homes or life savings.

7) Encourage a Culture of Risk Taking.

This is a cultural issue, and therefore it is difficult to measure or promote. Nonetheless, through a combination of government recognition, the press, educational institutions and other venues, a society can foster admiration for those who take risks, even if they fail. Give awards to best new ideas or companies, profile risk takers in the local media, encourage “out of the box” thinking, discourage the safe and conforming.

8) Encourage Immigration.

You want the best and brightest to come to your region. Therefore, promote policies that encourage the educated or those with venture funds to resettle in NI. Attract top students and faculty members to your schools. Make visas easy to obtain, and that there are good global transportation links.

9) Establish a Trade Association.           

All tech companies should be members of a local Technology Trade Association. This would be an association of companies that can meet from time to time to exchange ideas, learn from each others mistakes, and promote the region to the rest of the world.  It also helps for employment, as companies can pool talents. Additionally, tech employees and executives are more likely to stay in the region if they know that they can move easily among companies. 

10) Establish a Presence in the U.S.

Although trade missions are fine, they are only the very first step in getting an international profile. Opening an actual full time office in the US will go a long way towards showing that you are serious about investment and promoting your region or country.

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