Why good tech firms will always weather the stock market storms
Northern Ireland may have its political problems, but we should not despair too much. If we compare ourselves to where we were 20 years ago as a society, a huge amount of progress has been made. Admittedly, if we all pulled together this place could be so much better. Our potential is truly endless. But realistically it may take a generation or two before we get to the desired level of political maturity that will allow this country to fully flourish.
In the meantime, it is good to see that Northern Ireland's business community is doing what it does best. Local businesses are putting their heads down and getting on with it. Importantly, they continue to look for opportunities, invest and generate income. Here at Danske Bank, our head of corporate banking tells me that his division has lent more money to local firms for investment purposes in the first half this 2015 than it did during the whole of 2014.
In actual fact, you don't have to look too far in Northern Ireland if you want to see some real progress. That is the conclusion I have come to as Danske Bank prepares for an upcoming science and technology event we are hosting in the Northern Ireland Science Park later this month. The public are very much aware there is an unstoppable global technology revolution going on in the wider world, but what most people do not realise is that Northern Ireland is actively playing its part.
Technology is changing the way we work, exercise, communicate, gather information, educate, bank, travel, diagnose health problems and prevent illness. Across the world there appears to be an insatiable appetite to do things more efficiently, quicker and in a secure way. The sheer pace of change in the technology sector is extraordinary. And yet here in Northern Ireland many people are unaware of the vast number of local firms that are tapping into this area to generate income, create jobs and sometimes even improve our quality of life.
There are now more than 700 companies in Northern Ireland in the information, communication and technology sector and over 20,000 people working in this area. The numbers get even larger if we were to incorporate many of the large health companies in Northern Ireland that focus on technological developments to drive their growth. In addition to the Belfast-based Northern Ireland Science Park at the Titanic Quarter, Northern Ireland also has a newly created innovation centre in the north west.
These parks not only provide flexible workspace for start-up companies, but they also provide invaluable links to the world-class research that is being carried out at our local universities. Spin-out companies are being formed with the help of local academic research, nurtured by experienced, entrepreneurial minds and then supported into the global economy with the help of agencies such as Enterprise NI and Invest NI.
What is great about the technology sector is that start-up costs can be small, social media can provide the marketing for free, and the internet allows access to customers right across the globe. The necessary infrastructure is available across most of Northern Ireland with broadband connectivity and this will hopefully get even better as the UK pushes for a head start in the development of 5G. Experts argue that 5G will be instrumental in the development of the "internet of things". For the non-technical reader "the internet of things" is essentially about making our technology devices even smarter and even more connected.
Of course, many countries are keen to develop a thriving tech sector and the competition is fierce. There have also been rumours circulating lately that investors and venture capitalists have been over-exuberant when it comes to the funding and valuations of some of these tech companies.
Of course, investors are always hoping to get a small slice of the next Google or Facebook, but in reality most tech companies will never scale up to that level and indeed, just as in every sector, some will even fold. But regardless of ripples in stock markets for those multi-billion pound tech companies, the viable firms with realistic valuations and innovative products will always weather the storm. Technological progress will not be halted by stock market blips and Northern Ireland is confidently racing on with the delivery of innovative technological products and services to customers worldwide.
In next week's Economy Watch, we hear from PwC chief economist Esmond Birnie