ICT Ireland and the Irish Software Association by RIM6jr

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									The need for language skills in the high-tech sector

February 2011




     ICT Ireland and the ISA are business sectors within IBEC│the Irish Business and Employers Confederation
                                                              Table of Contents

Introduction ................................................................................................................................................. 3
Results from the Survey ............................................................................................................................. 5
Impact of language skills for foreign firms ............................................................................................. 9
Impact of language skills for indigenous firms ..................................................................................... 10
Recommendations .................................................................................................................................... 11
References .......................................................................................................................................................




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                       Introduction


                       It is clear that the Irish economy and Irish
                       businesses have adjusted rapidly to the
                       increasingly tough economic times of recent
                       years. We are currently facing new and

ICT Ireland and the    difficult challenges which, coupled with the
                       need to establish Ireland as a smart

   Irish Software      economy, will require our education system
                       to adjust to these changed times.

    Association
                       Ireland’s national recovery will be rooted in
                       the exporting sectors of the economy, which
                       will provide the necessary growth and
                       employment in the next phase of our

   The need for        economic development. With the increasing
                       globalisation of the world economy, and the

 language skills in    rise of emerging markets as the main
                       sources of growth, the importance of

the high-tech sector   foreign   language     skills     cannot   be
                       overestimated.    An      Irish     workforce
                       possessed of significant foreign language
                       capabilities would serve to make Ireland a
                       considerably more attractive destination for
                       investment, as well as providing the skills
                       required by our indigenous companies to
                       expand into overseas markets.

                       On foot of concerns surrounding the level
                       of foreign language proficiency in ICT
                       Ireland & ISA member companies, and
                       recent Eurostat research which shows that
                       Irish primary schools have the lowest level


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of foreign language tuition in Europe, the           has one of the highest concentrations of
ICT Ireland & ISA Education & Skills                 employment in ICT and 9 of the top 10
working group undertook a survey to assess           global ICT companies have a significant
the magnitude of the situation.                      presence in Ireland. The sector is therefore
                                                     critical to the Irish economy.
This report considers both current level of
foreign language skills in Ireland and the
current and future requirements of these
skills for two vital sectors of the Irish
economy - the exporting indigenous firms,
and   foreign-owned       firms    engaged     in
international service activities. In the face of
the   global      economic     downturn,      the
resilience of our exports in both supporting
our indigenous base and developing our
services trade, will be the most likely driver
of our emergence from recession and return
to economic growth. It is the country's
interest to lay greater emphasis on ensuring
our young people’s proficiency in foreign
languages.


The ICT industry in Ireland employs over
74,000 people across an array of diverse
industries, including leading technology
multinationals,      indigenous       start-ups,
telecommunications companies and digital
innovators. ICT Ireland and the ISA are the
business sectors in IBEC that represent the
views of these companies.


The    ICT     sector    is    responsible    for
approximately      25%    of    Ireland’s    total
turnover, representing one third of Ireland’s
exports by value. Within the OECD, Ireland


                                                                                               4
Key results from the Survey


Our survey takes a snapshot of foreign                 meet the requirements of a rapidly changing
language requirements in the high-tech                 linguistic environment.
industry and identifies some of the key
challenges, priorities and growth areas of             The survey results and issues detailed in this
employers with regard to language skills.              paper should serve as a guide to policy
The member companies of ICT Ireland and                makers in addressing the language skills
the ISA who participated in this survey                faced by high-tech companies in Ireland.
represent over 15,000 employees.


The expected demand shifts, as outlined in
this     paper,     should     be    taken      into
consideration when examining how the
education system can be transformed to




             Use of foreign language skills in the high-tech sector

       Does your company use foreign language
            skills in conducting business?
                                                       Respondents were asked to identify whether
                                                       their company utilises foreign languages in
                                                       conducting    business.    Some     66%    of
                                                       respondents reported significant use of
                                                       foreign languages in their business. This
                                                       figure   suggests   employers     are   strong
                                                       participants in the global economy where
                                                       language skills are of great importance.




                                                                                                   5
              Recruitment of staff with native language skills

   Have you ever-recruited staff with native
               language skills?
                                               Clearly, the recruitment of native language
                                               speakers    is   a   widely      used   language
                                               management       technique,   with      79%   of
                                               companies who require language skills
                                               employing native speakers.


                                               68% of companies who require language
                                               skills noted that they have recruited staff
                                               with specific language skills in the last twelve
                                               months. Of these companies, over 42% had
                                               experienced difficulty in acquiring skilled
                                               language personnel.




            Languages used by Irish SMEs & MNCs in business

                                                Please indicate the languages that are used in
                                                                your business
For companies requiring foreign language
skills, French and German were the most
widely used languages.


79% of firms using foreign languages
require employees with German and French.
Spanish, Italian, Portuguese and Russian are
also highly sought after. Of note however,
is the use of non-European languages such
as Arabic, Chinese Japanese and Hindi.




                                                                                                 6
 Company departments where foreign language skills are utilised


For companies using foreign language skills,           Which divisions of your company use foreign
the customer service department is the                                 languages?
greatest    user      of   languages.    63%    of
companies use foreign language skills in
their customer service department. Sales,
marketing,         financial    and     managerial
departments were the next highest users of
language skills. Clearly, daily communication
through foreign languages is an important
element in all aspects of business for the
high-tech sector.

                                                     Of those departments that reported a need
For     businesses      that   compete    on   an    to use foreign languages to converse with
international stage, the employees who can           global counterparts on a daily basis,
competently communicate in the locales               employers questioned the low level of
where      their     company     does    business,   fluency in foreign languages amongst Irish
experience a greater rapport with customers.         graduates.




                               Future foreign language skills needs


62% of respondents indicated that they               languages such as Russian, Chinese and
would require additional language expertise          Arabic will be needed.
in the next three years. Commonly taught
languages such as French, German and                 With more employers moving further afield
Spanish will be heavily sought after, but also       into Far Eastern, Central Asian and Latin
                                                     American markets, the scope of required



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language abilities is widening. It is of        Equally as concerning is the low uptake of
noticeable concern that of the languages        languages in Ireland to meet this demand.
required over the coming years by industry,     Eurostat, the statistical office of the
Mandarin Chinese - the most commonly            European Union, recently published a
spoken language in the world (1.05 billion      survey entitled Linguistic Diversity in Europe.
speakers) - is not currently on the Irish       The report highlights a lack of foreign
curriculum.                                     language proficiency amongst Irish school
                                                pupils. Only 3% of Irish primary school
 What additional language expertise will your   pupils learnt French in 2008, while 1%

   company require in the next three years?     learnt Spanish.




                                                                                             8
                                                 foreign language skills in order to guarantee
Impact of Language Skills for
                                                 the supply of future Foreign Direct
Foreign Firms
                                                 Investment.
Upon examining the contribution of foreign
languages it is evident that in terms of         The growing importance of Mandarin,
employment and future revenue generating         Spanish, Arabic and Russian and the
opportunities, language provision is of great    linguistic       impact   of   these   dominating
importance.                                      languages on world markets should be
                                                 heeded, as English speaking countries only
Trends show that organizations looking to        account for about 30% of World GDP. To
gain a competitive edge are progressively        disregard the rise of these influential
seeking the following specific talents:          languages could mean quite substantial
                                                 losses of potential markets.
     The ability to understand cultural
        contexts;
                                                 With an ever increasing need to gain access
     A global perspective;
                                                 to emerging markets (such as Brazil, Russia,
     Fluency in foreign languages.
                                                 India and China), language skills are an

With organisations conducting an increasing      important way in which market presence can

amount of work virtually and remotely, and       be extended. There is a clear

with mergers and acquisitions taking place       acknowledgment by multi-national

on a global scale, multinationals are very       businesses of the need to retain personnel

cognisant of the importance of foreign           with language capabilities in order to meet

language capability in doing business.           global needs and economic realities.


While English remains the lingua franca of       Recognition of the strategic role foreign
international business, many companies are       languages play is more important than ever,
increasingly placing major consideration on      given their ability to permeate virtually every
foreign-language    fluency    in    decisions   aspect of business activities. Recent analysis
regarding hiring, promotion and retention.       from The National Skills Bulletin (July 2010)
Internationally Traded Services, Business        noted        a     shortage     of     multilingual
and Knowledge Process Outsourcing, and           telesales/customer care workers with IT
EMEA Sales and Marketing are just some of        skills – particularly persons proficient in
the areas where it is essential that key         Nordic Languages and German. With many
stakeholders ensure internal supplies of         of the top multinationals basing their



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European operations in Ireland, significant            cultural skills. Furthermore, eight companies
analysis of why positions are traditionally            lost over $1 million of business due to
filled by non-nationals using their mother             language and cultural miscommunication.
tongues, rather than Irish people with                 According to the Enterprise Strategy Group,
foreign language skills, is essential.                 firms lacking linguistic fluency will find
                                                       themselves at a considerable disadvantage in
                                                       moving closer to their customers. A new
Impact of language skills for                          Higher Education Authority report on the
indigenous firms
                                                       role of Arts, Humanities and Social Science
                                                       in public policy noted that in the coming
Despite the recession, Ireland continues to
                                                       years foreign language proficiency will
have a strong, resilient indigenous software
                                                       become a pre-requisite requirement for
base on which to build future growth.
Export growth in this sector grew by 6% in             employers.

2009.The Irish software industry is a strong
                                                       A strong ability in linguistic fluency is
example of an export-oriented knowledge-
                                                       essential for an SME to increase its
led industry.
                                                       penetration into overseas marketplaces.
                                                       With this sector’s heavy reliance on its sales
In order to continue to help indigenous
                                                       and marketing functions, it is vital that any
firms grow their exports, it is necessary to
                                                       future language policy take account of these
strategically align our graduates’ foreign
                                                       industry shortcomings. With an ever-
language skills talent in line with new market
                                                       increasing export market dominating the
opportunities and companies' international
                                                       Irish economy, we need to consider how to
business plans.
                                                       address this problem of inadequate linguistic
                                                       skills in the SME sector in the short term
From a business point of view, proficiency
in   foreign    languages,    especially      when
combined with knowledge of, and skills in,
another professional area is highly desirable
in   the   marketplace.      Indeed,        language
proficiency is a noticeable key requirement
for determining export success. A global
report     entitled   ‘Languages       at     Work’
highlighted that 20% of respondents had
lost business due to insufficient language or


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Recommendations                                    Currently foreign language education in
                                                   Ireland is overwhelmingly directed towards
We have identified two clear issues with           already mature European markets such as
Ireland’s foreign language education policy,       France & Germany. With little or no
as it stands. Firstly the level of fluency         provision for fast growing large emerging
attained by Irish students entering the work       markets it is recommended that emphasis be
force is not of the required standard.             placed on these languages to help increase
Secondly the range of languages taught is          the pool of highly educated multilingual
not sufficient to enable Irish companies to        talent in Ireland.
fully exploit what are, and will continue to
be, some of the fastest developing markets         According to the OECD, China could
in the world.                                      overtake the United States and Germany to
                                                   become the world's largest exporter in the
Despite a series of welcome initiatives in the     next five years. By 2030 the top six world
education cycle, Ireland persists in lagging       economies could be China, followed by the
behind the European average of 60%, with           United States, India, Japan, Brazil and
only 8% of Irish secondary pupils learning         Russia. An analysis of the BRIC economies
two or more languages. While pockets of            calls attention to their growing trading
positive projects have been incorporated           influence, with estimates pointing out that in
around the country such as the Modern              less than 40 years, the BRIC’s economies
Languages in Primary Schools Initiative            could grow to be larger than the G6 in US
(MLPSI), the Post Primary Languages                dollar terms.
Initiative, Ireland, and other such formal
educational     memoranda    of   understanding,   As our survey shows, even with the current
Ireland is the only European country where         dearth   of     language      skills,   Irish-based
study   of a     foreign    language   is not      companies       intend   on     expanding      into
compulsory at any stage of the educational         markets such as Russia, the Middle East,
system. It is important that an integrated         China, and so on. This trend is only likely to
approach be adopted to affect change at all        increase as time goes by, and it is vital that
levels of study, so that the level of teaching     we act now to ensure that the skills needed
at any given stage, is challenging but             to take advantage of such expansion will be
manageable for students entering that stage.       available as soon as possible.




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   Outlined below are some key initiatives,
   which would aid in effecting change.
                                                    We urge the Department to consider the
 It is clear that a national modern language       degree     to       which        Ireland’s      export
   education strategy is required. Without one,     performance         may        be    improved      by
   the uptake of foreign languages at second-       remedying its weakness in foreign language
   level will continue to fall. ICT Ireland and     skills. Language skills greatly facilitate the
   the ISA recognise that it will take time to      resourcing and exploitation of networks in
   develop such a policy but believes that the      foreign markets. Without any degree of
   process can be speeded up by a serious and       language    capabilities,        indigenous     firms’
   significant level of engagement between          growth and ability to forge international
   industry and the Department through the          business relationships, both now and in the
   formation of an Advisory Group to oversee        future, will be seriously stunted.
   its implementation.
 A number of more practical language               We hope that this paper serves as a good
   learning modules are required throughout         starting point in the debate on the role of
   second and third level curricula and need to     foreign languages, and the need for a
   be supported at a national level. ICT Ireland    modern language education policy. The first
   & the ISA supports the use of ICT as an          step in putting such a policy in place is to
   enabler to help foster the sharing of best       call on interested national bodies to facilitate
   practice in, and innovative approaches to,       the dialogue that will be required to move
   foreign language learning.                       Ireland forward. A coherent language policy
 Attainment of the European Council’s              would lead to efficiency gains in business,
   objective, set out in 2002 at the EU summit      and so ICT Ireland and the ISA will
   in Barcelona, for children to learn at least     support, and play an active part in, any
   two foreign languages from an early age          endeavours      by        the       Department      of
   must be reached in order to truly make           Education and Skills to form a policy that
   Ireland a multilingual country.                  addresses what we teach and how we teach
 It is crucial that any Irish foreign languages    it.
   policy    incorporates       prevalent   world
   languages, rather than maintaining a focus       Government policy must support the
   on already mature European languages             private    sector        by    removing      potential
   traditionally taught in schools such as          impediments         to        competitiveness     and
   French & German.                                 employment creation, and by pursuing an



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appropriate foreign language education
policy to encourage export growth and
ensure future skills needs. Without such an
initiative, we run the risk of being left
behind.




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ICT Ireland and the ISA are business sectors within IBEC │the Irish Business and
                            Employers Confederation
             Confederation House 84/86 Lower Baggot Street Dublin 2
                  TELEPHONE + 353 1 6051527 FAX + 353 1 6381527
                       E-MAIL info@ictireland.ie www.ictireland.ie
                              isa@ibec.ie www.software.ie




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