The Knowledge
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3rd August 2023There is a reason why Ireland is known to some as the Silicon Valley of Europe: It’s home to 16 of the 20 global tech providers and the top three enterprise software providers. Half of these firms have been in Ireland for more than 10 years and 33% of them have been in the country for more than two decades.[1] Employment in the Information and Communication Technology (ICT) services sector increased over 29% to 164,600 in the last quarter of 2022 as compared to the same period in 2019.[2]
While venture capital investment in Irish tech firms and SME’s remained flat in 2022 at €1.33 billion, global venture capital funding fell by 35% that same year. All told, Ireland remains attractive for tech companies and offers significant opportunity for growth.
Innovation, however, generates risk – and tech companies must protect against it so they can continue to grow. Their needs aren’t one-size-fits-all, so they require tailored options. At Travelers, we have designed products to meet the specific needs of tech segments like IT and telecommunications, electronic manufacturing and hardware, and medical technology and life sciences – all sub-segments that have been flooded with investment and are constantly evolving.
We’re also seeing several tech sub sectors gaining momentum:
Artificial Intelligence: As ChatGPT has cast a spotlight on the possibilities of generative AI, it has encouraged organisations across sectors to examine how AI chatbot technology can be used to gain efficiencies – as well as how easily inaccuracies can slip past it. Rapid innovation in generative AI, combined with the need for human intervention to ensure its effective use, make this an area that calls for strong risk protection as it evolves.
Quantum computing: Quantum computers have the potential to revolutionise the technology landscape. They use phenomena such as superposition and entanglement to perform operations on data. In plain English, this means they are superfast computers that require incredibly cold conditions to operate. At the moment, quantum computers are largely theoretical, but they have the potential to introduce radical change in fields such as cybersecurity. Quantum encryption could take cyber protection to a new level, helping organisations safeguard highly valuable data. But the complexity and fragility of the technology in its current form have prevented any significant adoption. If and when that changes, we will be monitoring the risks and applications of this technology.
The Internet of Medical Things (IoMT): Much like how the Internet of Things turned products like Alexa and smart watches into everyday household conveniences, the IoMT has elevated the efficiency of healthcare, enabling remote monitoring and real-time data collection. Deloitte estimated the global IoMT to be worth over $158 billion in 2022. The promise of IoMT is exciting, but its devices are often small and have historically lacked robust cyber controls. This is worrying, particularly in medical technology where there is potential to impact human health if valuable, medically sensitive information is stolen by a threat actor. The development and regulation of this space is something we’re watching closely so we can underwrite it accordingly.
Protecting innovation
The Irish tech sector is generating new business opportunities all the time. But the rapid developments also expose new vulnerabilities.
Innovators are sometimes averse to the idea of carefully considering risks, but thinking about vulnerabilities doesn’t have to inhibit growth. On the contrary, businesses that monitor and manage their evolving risks can put themselves in the best position to thrive where others fail. They will be poised to take best advantage of the new opportunities that continue to emerge in the sector.
Stuart Hawkins is Senior Development Underwriter at Travelers Europe. Learn more about the Travelers technology offering and contact the technology team with questions.
[1] https://www.idaireland.com/explore-your-sector/business-sectors/technology/
[2] https://www.centralbank.ie/docs/default-source/publications/quarterly-bulletins/quarterly-bulletin-signed-articles/the-role-of-ict-services-sector-irish-economy.pdf
