Magazines under the ocean. Company in Ireland serves American publishers
Limerick, Ireland — Sometime after nightfall engulfs the Irish midlands, a pair of cables beneath the Atlantic will be busy making sure Americans are happy with their magazine subscriptions. In the process, they promise to save a Boulder, Colo., firm the kind of money that is supposed to result from extra productivity.
Neodata, the huge magazine-subscription data-crunching operation head-quartered in the Boulder suburb of Louisville, processes as many as 150,000 batched customer service transactions each evening in Ireland and sends them across the cables along with an estimated 200,000 on-line order entries. They arrive in Colorado in time to be handled by the Neodata staff before they go home that evening.
The system, which involves sophisticated IBM mainframe computers and minicomputers from Data General, plus more than 140 computer terminals, serves 130 magazines in the United States and one in Ireland, published by Borde Falte, the Irish tourism agency. Irish employees say they prefer it to the old system.
``We used to have to ship magnetic tapes back and forth to Colorado,'' reported John Hayden, system supervisor at Neodata Limerick. ``Now we're looking forward to transmitting with satellites by the end of 1986.''
Neodata, a subsidiary of A. C. Nielsen Company, which is itself a subsidiary of Dun & Bradstreet, is one of about 350 US firms that operate facilities in the Republic of Ireland. Another 500 firms represent Britain, the European Continent, and the Pacific, mainly Japan.
Many concentrate on manufacturing products in high-tech industries like electronics and software. Some, like Neodata, provide data-processing services for the folks back home.
Banks, insurance companies, or ``any company with any kind of data entry application on a mainframe where they want to use nonprime time for development work'' benefit from such an operation, Mr. Hayden said.
``They would also get the benefit of a tax writeoff. And it would alleviate what I imagine is a major problem for MIS [management of information services] managers in the States -- especially those in large metropolitan areas -- that of finding the right staff and keeping it. That's a lot easier to do in Ireland.''
Too many workers and too few jobs; not an unusual lament through the whole of Irish economic history.
But now the surplus work force is trained in skills that bring higher prices in much of the developed world. Not true in Ireland, where the unemployment rate hovers at 17 percent. This ready English-speaking work force, combined with an attractive package of incentives offered through the government's Industrial Development Authority (IDA), is one reason foreign firms are beginning to look at Ireland as something more than horse farms and peat bogs.
The new labor pool is the result of a turnabout in the way the Irish think about education. Once, college level study meant a thorough, scholarly pursuit of the classics. Now, following the lead of Limerick's National Institute for Higher Education, schools are as likely to offer a bachelor of technology degree as they are a bachelor of arts.
``Until recently, our policy was to go it alone; to manufacture everything we could manufacture in Ireland and export any surplus -- including labor, which is why you have so many Murphys and O'Gradys running about the US,'' says P. J. Daley, and IDA vice- president.
In 1973, however, Ireland joined the European Economic Community (EEC), and IDA began luring firms like General Electric and Digital Equipment with a package that typically includes nonrefundable cash grants of up to 60 percent of start-up costs, as much as 100 percent of the cost of initial training, and a maximum tax of 10 percent between now and the year 2000.
The IDA program is not without its critics, however, even at home. They agree with Prof. Antoin Murphy of Dublin's Trinity College, who says the concentration of assembly-only plants in Ireland means the full value of the product cycle, from research and development to marketing and sales, stays with the home company -- and country. Further, they say the Irish should continue where they excel, in the dairy, beef, and horse breeding industries.
It was Dr. Murphy who embarrassed the government last year by finding a $750 million (US) Central Statistics Office accounting error.
Although it had no effect on the real assets or liabilities of the Irish economy, the office had failed to account for money being ``repatriated'' by foreign firms. Such repatriation, although legitimate and legal, can be misleading.
``It was a very dumb error, and what it means is that IDA are the victims of their own hype. Their figures make it look like there is a massive amount of value added from Irish operations when, in fact, we get very little,'' Dr. Murphy said in a recent interview.
``How else do you account for the fact that year after year we lead the rest of Europe in unemployment?''
Padraig White, IDA's managing director, explained that Ireland is the only EEC member with an increasing population.
``The growth in Irish industry has been extraordinary, but so has the growth in the labor force,'' Mr. White said as he groused about ``a thinking in Ireland that all you need to to get R&D here is to ask for it.''
For firms like Neodata, however, what Ireland offers works fine. Bill Thompson, vice-president for communications of the Colorado firm, said one of the extraordinary things about the technology is that it allows an Irish employee ``to hit a release key and, after a three-second interval, a post card is printed in Boulder and dropped in the next morning's mail.''
Nor do Neodata's Irish operations appear bereft of research and development.
``Most of our software we write ourselves,'' said Mr. Hayden. ``During the past five years we've done three new software systems.''
Michael McMahon, managing director of Neodata-Limerick, concluded: ``In America, they're so tied up with big volume that they don't have time for experimentation. Here we do.''