If more Irish businesses adopt digital it will contribute to a rising tide that could potentially lift all businesses, says Dr Stephen Brennan, chief digital advisor to the Irish Government.
Dr Stephen Brennan was speaking with Siliconrepublic.com at the Smart Business Show in Dublin. Just days before we spoke, a damning new report published by the IE Domain Registry (IEDR) claimed that 91pc of Irish SMEs can’t process any sales online whatsoever. Worse again, the same week that Google introduced a new mobile algorithm that favours websites that are mobile-friendly, it emerged that an alarming 53pc of Irish websites are not mobile-friendly.
To illustrate the dire straits that Irish businesses are in due to a failure to adopt e-commerce, Dr Brennan points out that within the few minutes we talk some €34,000 will have been spent online by Irish consumers but only €10,000 of that will remain in Ireland as more digitally-savvy businesses overseas prosper.
While this is happening, retailers including the butcher, baker and candlestick maker are lamenting the lack of footfall on their high streets. While they can blame emigration, the recession and the economy, the haunting question is could things be different if they go digital and beat competitors at their own game?
The evidence is there to suggest that Ireland could do very well out of digital. Dublin is widely regarded as San Francisco’s twin digital city in terms of the internet giants headquartered there, including Facebook, Twitter and Google. Dublin also has Microsoft and Amazon, while Cork has Apple and Limerick has Dell. These are the companies transforming the global digital economy. Yet on the ground, on Irish high streets, nothing is happening.
According to the Second UPC Report on Ireland’s Digital Economy, published last year, the internet economy in Ireland employed the full-time equivalent of 49,000 people in 2012 and more than 150,000 new jobs could be created in the area by 2020.
The value of Ireland’s internet economy is forecast to grow from its current level of €8.4bn to an estimated €21.1bn by 2020, with consumer spending contributing 60pc (€13bn) to this figure.
Currently, €3.5bn of spending by voracious Irish digital consumers leaves the country every year, meaning Irish SMEs are letting business effectively walk out the door.
“I think the challenge that businesses have is that for the longest time we’ve been thinking about the internet, we think of digital a little bit like how we think about a telephone directory or poster or an ad. It is something you do once, you invest in it, and put it out there and things will happen.
“The challenge is to introduce this new world of internet to businesses in Ireland in a way that they realise that the new world of the internet is dynamic; it is interactive, it changes constantly, because it is a conversation.”
It is high time Irish SME owners got the message
Dr Brennan has a point. Facebook, for example, is powering ahead with plans to integrate e-commerce, customer service and product-tracking services straight into Facebook Messenger.
“Part of this is talking about the difference between a web page and trading. Because trading is your business, it is what you know how to do everyday – you have a shop window and you provide services to your customers.”
Last year, the Department of Communications launched the €5m trading online voucher scheme to enable small companies to embrace the digital economy. The target was to get 2,000 SMEs trading online over a two-year period.
“What we are finding as we deliver these vouchers, to almost 1,000 companies at this stage and another 1,000 to go this year, is that businesses that are taking that leap and bringing digital in to be part of their business, they are succeeding.
“The level of enquiries is going up, their customers are going up. What is important about that from the Government’s perspective – if we can help a number of companies in every high street to do that they will help other companies and inspire other companies to rethink what the internet is.”
Dr Brennan admits that there are a lot of moving parts to a web strategy, which would no doubt discourage traditional, non-techy SME owners, such as payments, SEO, mobile and social; the key is to get started and businesses are helping other businesses out.
“I travel around the country and talk to businesses supported by Local Enterprise Offices when trading online. In Castlebar recently I spoke with 50 companies and they discover because they are talking digital and not about their businesses two doors down or two doors up, they are saying ‘we can collaborate’, maybe on a small thing like packaging, sending to the UK.
“There are opportunities with digital that businesses are starting to discover, they can think about customers in a different way and one way is to collaborate more.
“A rising tide will help us all.”