US TRANSNATIONALS AND THE IRISH SOFTWARE INDUSTRY - ASSESSING THE NATURE, QUALITY AND STABILITY OF A NEW-WAVE OF FOREIGN DIRECT-INVESTMENT

The attraction of foreign direct investment (FDI) is increasingly a ke y economic development strategy for many countries in the EU. With FDI becoming more prevalent in producer service sectors, this article con siders the example of non-market based investment in the computer serv ices and, in particular, the software sector. Although the emergence o f offshore data processing and programming are well chronicled, as sof tware becomes increasingly standardized, international divisions of la bour are also developing within the leading producers of standardized software packages. By the judicious targeting of FDI since the mid-198 0s, Ireland, and in particular Dublin County, has developed into one o f the leading centres for software package production in Europe. Many of the market-leading US companies have now established plants in Irel and, from which they manufacture and localize their products for the v arious European markets. This article will critically examine the role and nature of the overseas software sector in Ireland, with particula r emphasis on the quality and stability of these investments. It would appear that while the promotional evidence and data may exaggerate th e strategic importance of the Irish software industry, the nature of F DI in this sector is of a higher quality than previous rounds of manuf acturing investment in Ireland.