Digital economy will help ensure Ireland’s economic recovery, Rabbitte says

15 Nov 2012

Ireland's Communications Minister Pat Rabbitte, TD, during what has been a pivotal day for Irish telecoms

The digital economy has the potential to contribute €11.3bn annually to the Irish economy by 2016 and add 18,000 jobs, Ireland’s Communications Minister Pat Rabbitte said today, urging the need to seize the opportunity of the internet to contribute to the nation’s economic renewal and recovery.

Rabbitte was speaking in relation to new research by Amarach, commissioned by UPC, that identified the internet will contribute €11.3bn to the Irish economy by 2016, up from €4.7bn in 2010.

“I welcome this useful and innovative research which provides further insights into the potential of the internet to contribute to economic renewal and recovery,” Rabbitte said.

This morning, Rabbitte announced that four operators – Meteor, Telefónica (O2), Vodafone and Hutchison Three Ireland – were awarded 4G licences in a process that will automatically add €450m to the Irish exchequer.

Key ingredients for achieving Ireland’s digital potential

“We know that key ingredients in achieving our potential are high-speed broadband and digital participation – by citizens and businesses. As a progressive knowledge economy, trading goods and services globally, we need to be better connected than most in the world and we need to embrace the opportunities the internet makes possible.

“This report indicates many of the benefits that are achievable through greater digital uptake and internet usage across Ireland,” Rabbitte said.

At present, according to the Amarach report, the internet economy accounts for roughly 3pc of Irish GDP and this is set to double to 6pc in the next four years.

However, this isn’t a patch on the UK economy which in 2012 can already claim more than 8pc of its GDP comes from the internet economy.

According to a different report from Boston Consulting Group, the UK’s internet economy will represent 12.4pc of GDP by 2016. In 2010, the internet economy represented 8.3pc of the UK’s GDP – making it the G20’s most web-dependent country.

According to the Amarach report, online shoppers in Ireland will spend €3.7bn in 2012, rising to €5.7bn (equalling 7pc of all consumer spending) by 2016.

The report estimates this can translate into increased employment of 18,000 or more if Irish society can keep pace with the digitisation levels of UK Scandinavian counterparts.

Contrasting this with the Boston Consulting Group study, this will be a hard act to follow.

All the same, according to the Amarach report, internet usage in Ireland is growing exponentially, with an 800pc increase in total internet traffic since 2009.

UPC CEO Dana Strong said people in Ireland are spending 2.6 hours online every day and nearly 70pc of us frequently shop online daily.

“We must ensure that these developments are met by Irish-based productivity and innovation in the future,” she said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years