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The evolution of Irish based technology subsidiaries within global networks

Explore the growth and transition of Irish technology subsidiaries within global networks, focusing on the shift towards service-oriented models, including outsourcing and offshoring, and the strategic evolution of TNCs like IBM. Discover Ireland's unique niche in supply chain management.

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The evolution of Irish based technology subsidiaries within global networks

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  1. The evolution of Irish based technology subsidiaries within global networks Seamus Grimes Department of Geography/ Centre for Innovation and Structural Change National University of Ireland, Galway Seamus.grimes@nuigalway.ie http://www.nuigalway.ie/cisc/

  2. Introduction • ITS FDI in Ireland – EME(I)A • Technology TNCs • Conceptualising internationalisation of services • ‘holistic’ approach – ‘end-to-end’ solutions

  3. Introduction • TNC organisational experimentation – integrating service activities in GPNs • Shift from manufacturing to services • Outsouring/offshoring • FDI from 1990s – software, financial services, shared services • Ireland: a niche in supply chain management

  4. Conceptualising internationally traded services • Production-oriented models • Statistics – software and internet • Technology sector: hardware – software – consultancy – ‘end-to-end solutions’ • complex GPNs – sophisticated tasks being decentralised

  5. internationalisation • Globalising processes, ICTs and TNC organisational strategies • Centralised control or decentralised decision making and autonomy • Affiliates generating knowledge • Global mandates

  6. Shared services • 2002: services 75% of OECD FDI • TNCs affiliates servicing corporate networks • A TNC market – intra-firm flows • Shared services – financial management, administration, supply chain management

  7. Outsourcing and offshoring • Response to increased competitiveness and technology downturn in 1990s • Outsourcing manufacturing but also services • Eastern Europe, Bangalore, etc • Outsourced services: $235bn by 2005

  8. The internationally traded services sector in Ireland • 1990s manufacturing increasing until peak of 250, 000 in 20001 • By 2010: employment in market services to increase by 125,000 • Foreign-owned sector: 73% of employment and 75% of sales in manufacturing • 2002: Irish services exports grew faster than any of top 30 exporters in world

  9. Fig. 2 Trends in Permanent Full-Time Employment in Financial and other International Services 1993-2003

  10. Evolution of IBM in Ireland

  11. Evolution of technology affiliates • From manufacturing to services • On-going restructuring – changing competitiveness and low cost regions • Considerable expansion – IBM, MS • Additional divisions for EMEA • Movement up value chain • Supply chain management

  12. Conclusion • Conceptualising shift towards services in technology TNCs – holistic solutions • Evolution of technology TNCs • Restructuring – relocation – an ongoing evolution towards value added activities • How Ireland has evolved an intermediary niche in supply chain management

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