The refusal this week by South Dublin County Council of planning permission for a new data centre at a proposed expansion of Google’s facilities at Grange Castle provides a timely focus on the role of the tech giant and the multinationals operating in the state.
The new data centre was turned down on the basis that there is insufficient capacity in the electricity grid to support it, but even the bare economics of the proposal suggest that Google would be getting far more out of this than the Irish state, not to mention the Irish people.
The project was promised to create 800 construction jobs, but with just 50 operational jobs when the centre was up and running. The new centre itself would occupy 50 acres. While the jobs would be welcome, they come at a time when there would appear to be labour shortfalls in the housing construction sector.
That is already driving demands from the construction sector itself – and the likes of People Before Profit – to expand the potential pool of brickies and hod-carriers to persons whose asylum applications have not even been processed, and to workers from countries like South Africa.
It also ought to be borne in mind that it is likely most of the longer-term jobs would be filled by persons coming to work here from other countries – with consequent new demands on housing and other services multiplied by the fact that many non-EU/EEA permit holders are bringing dependents.
How do we know that? Well, the work permits statistics tell us so. In 2023, there were 172,000 people employed in the Information Technology sector. According to the Central Bank there were 37,000 new ICT jobs created between 2020 and 2022.
If we look at the work permits data from the Department of Enterprise, Trade and Employment (DETE) since 2020, 31,214 permits have been issued for persons from outside of the EU and EEA to come to work for companies manufacturing computers, electronics and optics and in information and communications.
That would account for the vast bulk of all the new ICT jobs created assuming that those with the permits do not mostly leave after a year which seems unlikely. It is also supported by Census data on the increased numbers of people from overseas.
In the period between April 2022 and March 2023, companies in the Information and Communications sector were issued with 9,291 work permits. This would also indicate that the vast majority of new jobs being created within the IT sector here are being filled by people coming to Ireland from countries outside of the EU and EEA. The numbers employed do not even include persons coming here from other EU states as they do not require a permit to work in Ireland.
Since 2015, Google itself has been issued with 3,566 work permits for persons taking up jobs from outside of the EU and the EEA. According to Google Ireland’s financial statement for 2021, it employed 4,214 people here. This would strongly suggest that a majority of the people who work for Google in Ireland are persons who have come here to work from outside of the EU.
The Irish Central Bank estimated the number of jobs in the ICT sector in 2022 at 164,000. That accounted for 6% of total employment, 12% of income tax, and companies in this sector generate 21.3% of corporation tax revenue. It is an obvious benefit to the economy as measured by such basic metrics as GDP. Most commentators, however, seem incapable of looking beyond the tax revenue and GDP to consider the overall benefits, and costs, not just to the economy but to our society in its entirety.
This is particularly the case when it is considered that Google and the other large ICT corporations are significant beneficiaries of the 25% of GDP created in the Irish state that is exported as profits. It is surely then a rather odd situation that the Irish state is hosting some of the most powerful and wealthy corporations on the planet on their terms.
They would not be here at all if the tax terms did not ensure that Ireland was an extremely lucrative base to boost their profits. This factor has not gone unnoticed by other EU states and indeed by American politicians and others who have been pondering ways to have the US based corporations pay more tax at home.
Odder still is that those same companies are not only overwhelmingly recruiting from overseas but in doing so are contributing to a whole host of other demands on both public and private provision here. Not least of all in the housing sector.
Apart from the overall impact on demand and rents the companies have directly intervened in the housing market. In 2021, Google were given the go ahead to proceed with the construction of an “urban centre” on the former Boland’s Mills site to mostly house its own employees coming to Dublin from overseas.
Google had bought the site for €300 million from the National Asset Management Agency (NAMA) which had been established to clean up the financial mess. The “village” would have all of its own shops and other facilities. A bit like one of those “company towns” that sprang up around mines and other sites in the United States back in the day. A cooler and more soy based one no doubt.
And all of that combined with the annual exodus from the country of tens of thousands of young Irish people, most of them already in jobs or with a college degree and many even by the law of averages qualified in the very sectors now dominated by overseas workers.
Whichever way all of this is parsed the structure of the Irish economy is clearly highly dependent on the fortunes of a small number of giant overseas corporations. That makes it vulnerable more than most to the aftershock of any global developments that might induce those corporations to downsize their operations here or even to leave.