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Coverage – Sunday Business Post “Digital still the way forward for Ireland”

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Sunday Business Post, Digital still the way forward for Ireland”, 28 December 2008

The IIEA says the state should take the lead in promoting technologies by hastening its adoption of e-government initiatives, writes Dick O’Brien.

Anew report from the Institute of International and European Affairs (IIEA) has warned that if Ireland fails to embrace the transition to a digital economy, it risks falling behind its competitors as conventional industries migrate to lower cost locations and the wider business sector is transformed by high-tech innovations in which Ireland does not have the expertise or infrastructure to capitalise upon.

Noting that it is now 50 years since the publication of TK Whitaker’s First Programme for Economic Expansion that inspired development under the Lemass government, the IIEAs aid that it was now time to adopt a similarly bold initiative and recommended a reorientation of the education system to prioritise ICT and the creation of a ‘Digital IFSC’ to foster start-up companies.

On the subject of education, it pointed out that there was no national approach to digital education in primary schools and that the Department of Education’s own 2008 Inspectorate report on ICT in schools had found that almost a third of primary students were still ICT illiterate.

As a result, the IIEA recommended revision of the primary curriculum to embrace ICT skills. Moving further up the line, it argued for the allocation of weighted marks in the Leaving Cert to all higher level science subjects and higher and applied maths. Meanwhile, savings could be improved by introducing centralised purchasing for educational ICT equipment and the introduction of a Vat exception on such items.

In order to build upon the success of the Digital Hub in fostering new high tech startups, the IIEA called on the government to appoint a panel of Irish business leaders to plan how the project could be used as the starting point of the creation of a digital equivalent to the IFSC and investigate any possible tax incentives that could be utilised to foster the same level of growth as has been seen in the financial services sector.

It also believed that further attention should be given to the issue of venture capital funding, in particular that provided by the state through Enterprise Ireland. While it made sense to have public servants assessing funding applications from a legal and due diligence point of view, there was a also a case for involving private sector expertise in assessing the business viability of start-ups, it said.

Moreover, the state itself could take the lead in promoting new technologies by hastening its adoption of e-government initiatives.

Many stakeholders interviewed by the report’s authors believed that there was still a lack of digital literacy at government level that was hampering understanding of the potential of the digital economy.

The IIEA called upon the government to adopt practices such as e-payment and invoicing systems for suppliers and tenderers, which would not only kick start adoption across the wider economy, but would also improve the cost to income ratio for businesses.

Perhaps one of the most radical recommendations of the report was a call for a complete re-evaluation of the role RTE plays as the state broadcaster.

Noting the phenomenal growth of digital media, whether it be user generated content online or the rapid expansion of the gaming industry, it pointed out that such developments will invariably undercut the importance of traditional television going forward.

An opportunity existed for RTE to embrace digital media and it could provide capital and expertise to support content producers. This was a strategy that Channel 4 in Britain has already pursued, with the establishment of an investment fund for digital media projects.

Some concern was also expressed by the growing trend of outsourcing IT services outside of Ireland. With the advent of software and services delivered online, the physical location of where they are provided from becomes less important.

Ireland already has a reputation for providing strong legal protection to financial services, gambling and Enterprise Resource Planning providers.

In tandem with the possible development of a Digital IFSC, it was believed that there was potential to introduce new tax incentives that could turn Ireland into an attractive location for the hosting of digital intellectual property.

Finally, the IIEA believed that there were definite opportunities presented by the movement towards greener technologies.

In order to reverse the trend of hosted services moving offshore, one possible strategy was to brand Ireland as a green data centre location. While Ireland does have relatively high energy costs, it also has a natural advantage as a data centre location given its temperate climate, since it costs less to cool equipment, a significant expenditure in the running of any data centre.

Should the country meet its target of providing 33 per cent of all energy from renewable sources by 2020, such a branding initiative could prove successful. If the government wants to take the challenge of shifting towards a digital economy seriously, the IIEA believed that it should create a national mission statement that would crystallise clear targets for the decades to come.

It also believed that there was some merit to the idea of establishing a national digital strategy unit at the Department of Communications, Energy and Natural Resources to manage delivery on any national strategy.

© Thomas Crosbie Media, 2008


Written by johnnyryan

29/12/2008 at 02:41

Posted in Coverage, The Next Leap

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