Options for Government Action
A common theme in stakeholders’ responses was the opportunity to establish a “digital IFSC” and provide the conditions for the emergence of an Irish Silicon Valley. In light of the momentum generated at the Digital Hub, this digital IFSC proposal might be considered a phase 2 to the Digital Hub. As a first step, Government could appoint a panel of Irish business leaders, including some of the individuals involved in the establishment of the IFSC, to consider how the Digital Hub could be built upon to create a “digital ISFC”. At present, the Digital Hub provides rented office space, internet connectivity, and some opportunities for CEOs to network. Additional and more strategic services, such as mentoring and legal advisory services, are required if the Digital Hub is to become a “digital IFSC” that supports and attracts growing businesses competing in global markets. Closely related are the proposals for a digital legal hub and Global Rights Clearance Centre in trends 4 and 6, below. An additional step is to investigate what tax incentives might be feasible to promote digital development, particularly in areas of EU derogations such as audio visual services, while at the same time respecting EU rules on state aid.
Raising capital for initial ventures and expansion was a concern among many stakeholders. This concern is particularly relevant to the new sub-sector of tiny 1-2 people firms. The Digital Hub reports that 79% of its resident companies are either in start-up or early growth phases, and that 33% see their funding coming from business angels, VCs and the BES scheme. Government could establish a working group to develop new, innovative ways of generating a national pool of venture capital. One way of consolidating and efficiently disbursing capital might be to replicate the success of “Y-combinator”, a seed capital initiative in the US, and “seedcamp”, the recently established EU emulator of Y-combinator, style venture capital competitions. A key aspect of these two examples is that established industry leaders, rather then civil servants, judge the viability of proposals. A number of stakeholders noted that while Enterprise Ireland rightly assigns civil service experts to judge the due diligence and legal aspects of a proposal, it is important to leverage the knowledge of the private sector when judging cutting edge technology and market aspects of proposals.
Many stakeholders in industry and research saw the nexus of research and commerce as an area of concern and opportunity. There were diverging perspectives on the question of whether intellectual property should be retained or shared by academic/research or commercial partners. On the other hand, there was a common consensus among many stakeholders that cross-disciplinary endeavours were generally positive, and that an environment for positive cooperation between industry and academia must be created. To pursue this aim Government, or Enterprise Ireland, could support the establishment of “niche exploration” groups to investigate possible areas of national expertise and excellence. Building on Enterprise Ireland’s initiative of National Competence Centres, Government could consider supporting neutral organisations or venues to host small stakeholder meetings in areas where consortia could eventually develop. Ireland is home to many indigenous and international businesses and researchers with expertise in promising niche areas. These areas are as diverse as gambling, financial services software, security software, biometrics, wireless R&D, life sciences, food science, gaming. Interested parties of any background could request to use this facility to meet peers in industry, research, investment, customer base, and the development agencies.
The Next Leap 
My friend, I think someone’s missed the point of the NEW WORLD here.
The Digital Hub?? WHat on earth has it achieved, beyond costing a quantity of taxpayers’ cash. This was another half-baked project. Many old IDA industrial estates have done more for IT, or for that matter several university incubators. And someone wants to build on that?
Why try to make artificial physical locales, when we are talking about a NEW, VIRTUAL world. Distance does not matter, as the guys in India, China or Singapore would be happy to explain. Or for that matter, the next generation in some Arab states, the Baltics and Brazil. Not to mind much of the USA.
Tax incentives, sure, yes, that worked. And niche study groups, possible. But not all areas, Ireland needs to pick from the list above 2-3 areas where we can excell.
And keep the Dead Hand of Government away, or we are doomed. For now Ireland still has a chance, if we smarten up, wise up (invest in kids) and speed up.
P Thomas
18/12/2008 at 10:00
Two great points here, on the need to use real-world commercial people to judge market demand and financial viability for projects, and on the imperative to have academia and business cooperate.
Don’t overestimate Y-Combinator or copycats – these are great folks but all such outfits between them have funded under 200 businesses *worldwide* – and their culture is far from that of most Irish “entrepreneurs”. We will need something more home-grown.
Aside from providing a refuge for some old familiar faces, the Digital Hub has not impressed – if it were a business unit, it would be buried by now – but the related idea about gathering a team of “wise men (and women, but please, no Laura M’s)” is valid. Many of the really smart ones are tax exiles, but since they do get to live in Ballsbridge, Kildare, Meath and Glandore for up to 180 days, they could offer some time in lieu of tax. If the boys over at the Indo could take a break from the war, O’Brien sure knows how to run a tight business, and O’Reilly may actually have a vision on media – and at least two of his sons, Cameron “Anthony” and Gavin, sound like they have a clue – and with Desmond to play some money games, yes, we might be talking.
R Almatev
18/12/2008 at 22:54
I wish we had an “Irish Silicon Valley,” and I think there were chances around some of our colleges, but we did not get there. I share some of the scepticism above about the Digital Hub, a typical example of a poor implementation of a not-altogether bad idea. I do not fully agree with what one other commentator seems to imply, that the virtual world makes physical proximity non-useful: I do think it can be good to meet and mix. It certainly helped during the first “‘Net boom.” And I like the idea of harnessing some of our proven businesspeople (and they must have some useful folk they could nominate from the next generation leaders of their businesses).
I am less sure about the VC part, in part because I am not sure that industry, for and with which I have done some work, always operates in a way compatible with all suggestions. Certainly we need more “angel investors” and other low-demand initial facilitators (such as, yes, Y-combinator and seedcamp). And absolutely, we should have more business people involved in assessment and mentoring. Small, focused, limited-time “niche working groups” are a fine idea, and would fit well with online collaboration tools.
J Doyle
20/12/2008 at 11:41
The DIgital Media Forum has further outlined the concept of a Digital IFSC – or an International Content Services Centre – and what it might look like in the following article:
http://www.calico.ie/2008/10/it-was-definitely-ray-of-sunshine.html
The comments on the article come from our members – all innovative companies in the DIgital Media space – and make for interesting reading. We hope to work with the IIEA in 2009 to put further bones on this concept.
Our experience in the DMF (running the Skillnets programme) would be that such an initiative needs to be enterprise-led – not government-led – in order for it to succeed. However, government support is certainly valuable – if not obligatory – in order to make something like this happen i.e. tax incentives, utilizing the IDA and EI in order to draw Foreign Direct Investment, ensuring infrastructure etc.
Also, whilst the promise of a “virtual business environment” is tantalizing, in reality we find that good old fashioned face-to-face networking is still the most valuable way of getting business done in the short term – especially in a convergent industry whose mainstay – content – is still quite a traditional industry. However, a specific geographic location shouldn’t limit “virtual networking” either.
N Leyden
29/12/2008 at 10:32
The good news is that Government has embraced the idea of a Digital Content Services Center. This is one of the key strands of the strategy announced in July. A digital IFSC is finally in sight. Presumably people agree this is a good thing?
johnnyryan
18/08/2009 at 23:59