Information and Communications Technology: A Value Chain Analysis 2019

Two key inputs are used in the production of ICT services: the highly educated work force in Ireland delivers the human capital and this is combined with the intangible capital developed in ICT R&D activities, mainly abroad. This chapter describes the composition of the labour input in the ICT sector in Ireland. In the first section, we use the 2016 Census of Population to look at the education, sex and occupations of workers in the ICT sector. We then use 2019 survey and administrative data at the end of the chapter to look at employment numbers and pay. 

There is a difference between occupation and sector of employment. Occupation statistics are collected in the Census of Population and look at what a worker does rather than what their employer produces. Employment statistics from the CSO are presented by the activity of the employer, rather than the occupation of the worker. For example, an accountant in an IT firm is included in the ICT sector employment, but their occupation is financial. Similarly, an IT manager in a pharmaceutical factory will be included in the employment statistics for manufacturing, even though their occupation is not the production of medicine.  

The 2016 Census provides detailed statistics on the population. While this data pre-dates the reference year of 2019, it offers the most accurate detail of the workers in the sector for any recent year and gives the most in-depth view of occupations. The Census data shows that the ICT sector had one of the highest-educated labour forces in the economy in 2016, with most workers attaining at least a third-level qualification, and almost a quarter of workers earning a postgraduate qualification. Unsurprisingly, the most common occupations in the sector were ICT-specific, such as programming and software development. The majority of the workers in these occupations were male, which is a feature of employment in the sector.

The ICT sector in 2016 had one of the highest-educated workforces when compared to the overall economy, with 63% of workers having achieved at least an undergraduate degree, and 24% of workers earning postgraduate and doctorate qualifications. Of the three ICT subsectors, IT and Other Information Services (62-63) had the highest-educated labour force, with 69% of workers having achieved at least an undergraduate degree, compared to 60% for Software and Other Media (58-60) and 46% for Telecommunications Services (61). Looking at higher level qualifications such as postgraduate and doctorate degrees, IT and Other Information Services had the second largest proportion of its workforce educated to this level (27%), only behind Education (36%). The other two ICT subsectors, Software and Other Media and Telecommunications Services also had a significant proportion of highly educated workers, at 22% and 15% respectively.

In the economy as a whole, there was a lower female participation rate in the labour force of 56% when compared to the male participation rate of 69% in 2016 (Women and Men in Ireland 2019). In general, most sectors in the economy in 2016 had more male workers than female workers, with the notable exceptions being Education (75%) and Human Health and Social Work (79%). The imbalance is particularly pronounced in employment in the ICT sector (68% male, 32% female). Looking at the ICT subsectors, Telecommunications Services (29%) and IT and Other Information Services (30%) had an even smaller proportion of female workers employed, with Software and Other Media (44%) having less of an imbalance compared to the rest of the sector.

Software and Other Media (58-60) comprises two further subsectors, Publishing Services (58) and TV, Film and Music Production Services (59-60). While neither of these subsectors appear to be directly related to ICT, Publishing Services (58) is important as it has two distinct components: Publishing of Books, Periodicals and Other Publishing Activities (58.1) and Software Publishing (58.2). For confidentiality reasons unrelated to employment, these subsectors have been aggregated together in this publication. As shown in the Producers chapter, output and value added in Software and Other Media is very large owing to software activity. As a result, the most significant occupations in Software and Other Media were related to Journalism (17%) and Arts (14%), while none of the top ten roles in the sector were related to Software Publishing. The top ten roles accounted for 61% of the employment in the sector.

Unsurprisingly, the most significant occupation in Telecommunications Services (61) was Telecommunications Engineer (20%). Interestingly, only 5% of Telecommunications Engineers were female. There were several other ICT-specific roles in the top ten occupations in the sector, namely IT Specialist Manager (8%), Programmer and Software Developer (4%) and ICT Professional (4%). The remaining significant occupations in the sector relate to Sales and Administrative positions, which tended to have less of a male majority than the ICT-specific roles in the sector.

The top ten occupations in IT and Other Information Services (62-63) in 2016 related to ICT, Sales and Administrative roles. Programming and Software Development (21%) was by far the most significant occupation in the sector, with only 16% of these employees being females. The occupations outside of the top ten roles had slightly less of a female minority (40%). The top ten occupations accounted for 58% of the employment in the sector.

While the ICT sector employs many occupations other than IT specialists, other sectors also employ thousands of ICT professionals. Most programmers and other ICT occupations are working for companies that are focused on ICT services, but a considerable proportion (43%) of specialists work outside the sector. The Manufacturing, Financial and Insurance Activities and Professional, Scientific and Technical sectors were the next largest employers of ICT specialists in 2016, with many more working for Retail, Business Support and Education enterprises. This publication focuses on ICT companies, but clearly many more people are involved in ICT in Ireland other than those working for Internet or software companies. So, while there were around 90,000 workers for ICT companies in 2016, the total number working in ICT in Ireland was likely closer to 120,000.

Number of Workers and Earnings

This section returns to the ICT sector in 2019 and focuses on employment and pay in the sector. Nearly 91,000 people worked in this sector, which accounted for 4% of total employment in Ireland. Table 2.1 shows the employment in the sector by size of firm, ownership and activity.

Most of these people are in the IT sub-sector (57,858), with some 22,000 in Software and Other Media and around 11,000 in Telecoms. Nearly 41,000 people work in Irish-owned enterprises, either as employees or self-employed. About half of the workers in domestic firms are in small enterprises with fewer than 20 employees.  

While most ICT companies are Irish- owned, most workers are employed in foreign-owned corporations. There are 4,419 domestic corporations and only 759 foreign firms, but these 15% of firms that are foreign owned employ 55% of the workers. Over 45,000 people work for large (50+ employees) foreign-owned ICT companies, out of the total 90,766 in the sector. The distribution of workers within the three sub-sectors also varies between the domestic and foreign firms. Domestic firms employ 7 in every 10 workers in the Software and Other Media sub-sector, but only 4 in 10 in IT and Other Information services and just 2 in 10 in Telecommunications.

The significant presence of large global corporations here in Ireland and the many domestic firms in the sector creates opportunities for exchange of expertise between the indigenous enterprises and foreign firms. Table 2.2 shows the transitions of people who moved jobs within the ICT sector between 2018 and 2019.

Nearly 9,000 people changed jobs in 2019 but stayed in the ICT sector, while many more moved in and out of the area. The majority who were hired by domestic firms came from another domestic firm, and similarly most of those taking up roles in foreign-controlled companies had previously been employed by an inward-investment ICT corporation. However, a significant minority – 22% of the movers within the sector – went between the domestic and foreign sub-sectors. Around 950 people who worked for a foreign-controlled firm in 2018 brought their experience to a domestic company in 2019; and a similar number who were working for Irish-owned ICT entities in 2018 took up jobs with multi-nationals in 2019. There is evidently significant knowledge exchange or spill-over of expertise between global corporations and indigenous enterprises.

As we saw, workers in the ICT sector are among the most highly educated in the overall economy. This is part of the reason why average total earnings per worker are the highest of any sector, as shown in Figure 2.7. This sector has fewer part-time and seasonal workers than activities like hospitality, and this higher proportion of full-time workers also contributes to the level of earnings for each employee.

The total wages paid in the sector depends on the number of workers as well as the wages each receives. Figure 2.8 shows the total wage bill for each sector. While average earnings are highest in ICT, other areas employ more people, so Manufacturing, Health, and Wholesale and Retail Trade are higher in total pay to workers. ICT remains ahead of labour-intensive activities such as Hospitality and Construction. While this sector accounts for 4% of workers, it makes up 8% of total pay.