Digital economy will underpin Ireland’s competitiveness – Intel’s O’Hara

24 Jul 2009

Education, a vibrant R&D ecosystem, a relevant digital infrastructure and pro-business Government polices are the cornerstones of what would be a successful digital economy, the general manager of Intel Ireland said this week.

Jim O’Hara, who was addressing the MacGill Summer School in Glenties, Co Donegal this week, reminded the audience that Ireland is paying the price of stalled productivity, explosive growth in the public sector, lost competitiveness in manufacturing, stalled export growth and the continuing need to build an innovation-based economy.

Looking back on Intel’s 20 years in Ireland, O’Hara said: “We have observed that R&D cannot thrive in a vacuum isolated from advanced manufacturing. We need a base of manufacturing industry interacting closely with the academic system to create future sustainable growth based on innovation, practical application and collaboration.

“We can train a certain proportion of our society to be true knowledge workers but fundamentally if we are to operate as a knowledge society then we must also build on the competencies currently existing in the large majority of the workers of this country and find new applications for these skills and build from the foundation of the past,” O’Hara said as he considered Ireland’s future as a knowledge economy.

Therefore, he said, the focus must be on four key strategic areas: education, research and development systems, digital infrastructure and pro-business Government policies.

Focusing firstly on the need to cultivate an educated and skilled workforce, he said: “In order to build a truly world-class smart economy, it is self evident that we must have a world-class, digitally connected education system and a coherent strategy that maps across all four levels of education and beyond into lifelong learning. The core ingredients necessary are well-trained teachers, using the right digital tools and physical facilities, and supported by a clear Government strategy.

“We have to have the best teachers teaching in the subjects vital to the country’s economic interests. From my perspective these are the STEM subjects: science, technology, engineering and maths. These subjects will be the fundamental building blocks for this country in the digital economy of the 21st century. Teachers need appropriate tools and training in advance of students in order to be able to lead and mentor them and effectively transfer their knowledge.

“Our students should have access to the best computing power that we can provide, and be connected to ubiquitous broadband in the classroom and beyond so the learning experience can continue after school, with the best facilities that we can afford. Laptops and projectors have been identified as the core components in using technology to enhance the learning experience.”

O’Hara said that it would cost €65m to roll out these tools nationwide. He warned that education systems around the world are beginning to invest in one-to-one e-learning environments where children can develop the 21st-century knowledge and skills to thrive in today’s global economy, including media literacy, critical thinking, abstract problem solving, global awareness and civil literacy.

He said that if the Irish Government is serious about its smart economy it would develop programmes to ‘incentivise students’ by communicating what exciting future careers are open to students who pursue STEM related courses.

He added that lifelong learning will be a fact of life in the 21st century, where the average person will have five careers over their lifetime. “As such, we cannot educate them simply for a particular job – we must teach them to constantly re-educate themselves for life: We need to build an entrepreneurial culture, and prepare children to own their personal employability. We must promote a vision that people will create their own employment to service global needs, rather than prepare them for jobs today that are geography specific and may not be around tomorrow.”

On the subject of R&D systems, O’Hara said the next step should be to build a collaborative efficient national system that shares information and resources between SMEs, multinationals and the research centres.

Such a system would prioritises goals and ‘weed and feed’ research projects to divert resources to those projects that have the best chance of solving real problems and generating real intellectual property (IP) and jobs.

He also said it is important to monitor and measure the outputs of research such as patents and spin-offs, rather than arguing about how much a percentage of GDP we put into R&D.

On the subject of digital infrastructure, O’Hara said he was a strong supporter of the Digital 21 initiative that looks to prioritise the completion of our digital infrastructure in the way that the physical road infrastructure has been developed over the past decade.

“The digital economy underpins our whole economy and its competitiveness. At this point, investment in digital infrastructure and services must take precedence over everything else. It is the bedrock on which all other sectors can build and it is the key to our recovery and future economic success.

“At the moment, it seems there are good but fragmented individual initiatives but no clearly communicated overall national strategy. From an Intel perspective we would strongly recommend that a future plan should also make provision for the creative use of Ireland’s abundance of wireless spectrum to encourage next-generation operators to use this country as a test bed for future services such as WiMax. Ireland as a nation is ideally suited for the digital economy of the 21st century.

“Geographically, we are not really in the centre of anything – we are a small island off the coast of the European mainland. However as a digital economy, with ubiquitous broadband, we would eliminate the physical barriers of our geography. Rapidly embracing a digital future and building out our digital infrastructure will allow people throughout the country to participate in economic activity from wherever they are.”

He cited the example of the Technology Research Centre for Independent Living (TRIL) a collaboration between Intel, Trinity College and St James Hospital Dublin that focuses on technologies that will help elderly people to live independently.

“By digitally connecting the whole of Ireland and using our population as a kind of test bed for 21st-century healthcare solutions, we could simultaneously achieve multiple aims. We could increase the utilisation of our healthcare resources, improve the care we provide to our citizens, while also creating ground-breaking research that could create massive worldwide market opportunities for Irish companies to develop products and IP that shift the burden of care from institutions to the home, reducing the cost of care and improving the quality of life of older people.

“On a linked point in this area, I’d like to stress that in addition to being digitally connected, it is critical that we remain personally connected and networked. Ireland, as a small open economy, cannot afford to be other than superbly networked with our trading and political partners worldwide in order to leverage our geographical advantage as a bridge between east and west and create new business models as a trusted broker.”

O’Hara warned that in terms of multinationals Ireland must not get complacent and must not allow itself to be overtaken by competitors for foreign direct investment. “At a minimum we must retain the low corporation tax rate, while avoiding tax gimmicks that invite scrutiny. In general, any incentive initiatives that encourage investment in Ireland as a genuine business location is to be welcomed.

He said that Ireland’s future prosperity must be built on both multinationals and SMEs, and as a country we must do everything in our power to create more entrepreneurs and to help them be a success.

“We must as a nation imbue our young people with the vision, ambition and confidence to create start-ups and believe that they can grow all the way to be the so-called Irish Nokia or Google. We must help give them access to funds, access to markets, and access to experience of multinationals who know the system internationally. I fundamentally believe that Ireland has the ability, using these small indigenous firms, to recreate ourselves.”

O’Hara warned the Irish people not to forget the massive lift that multinational companies have given this country. “From the US alone we have over 570 firms operating in Ireland today. These US companies export over €80bn worth of product every year and collectively employ over 100,000 people. In all, these US firms have invested almost €100bn into Ireland and contribute a hefty amount of corporation tax, almost €2.5bn per year. So, it is quite clear that Ireland will continue to rely on a large influx of multinational investment in the years to come.”

For this reason, he said, it is vital that Ireland remains strongly integrated with EU partners and is seen to be at the heart of Europe. He said a Yes vote in the Lisbon Treaty elections will ensure Ireland’s continued prosperity. The stakes, he warned, are too high for Ireland not to do so.

“A Yes vote is a signal of Ireland’s intention of being at the heart of Europe and a No vote can be interpreted that we want to go it alone – a decision that will be taken into account by any business considering investing in Ireland. I will be advocating a Yes vote.”

In conclusion, O’Hara reminded the Irish people that Ireland has weathered economic storms before and will do so again.

“In these highly competitive and rapidly changing global markets, success is hard earned, and founding future sustainable growth on education, investment in our digital infrastructure and an efficiently functioning R&D network is the way forward for Ireland.

“There is no reason why we cannot return to our previous growth levels and build on the achievements of the past. Our small size and flexibility as a nation can be our greatest strength. Remember, it’s not the big that eat the small, it’s the fast that eat the slow,” O’Hara concluded.

By John Kennedy

Pictured: the general manager of Intel Ireland, Jim O’Hara