E-regions do the business

29 Jul 2004

The rainy afternoon in July could easily have been misconstrued as a typical day in November when I was arrested by something I saw in an email. It was the language contained in the message that stirred my senses and gave me the feeling that new wheels are turning on this little island. The news was that of a new technology cluster, being driven by a forum of IT companies as well as by local employers, business owners and county and city councils in Derry, Coleraine, Strabane, Magherafelt and Limavady.

The creation of technology clusters is nothing new. The fact that it was being driven by a group of businesspeople located in a remote region reminded me that there is movement afoot in regional areas throughout Ireland amongst private enterprises and the community to drive forward economic growth in their regions with or without government decentralisation. The Armagh-Monaghan Digital Corridor, the Galway-Clare Atlantic Technology Corridor, the new ITquarter in Northern Ireland, the Midlands Enterprise Platform Programme and the Midas cross-border digital media enterprise programme are just a few examples.

The Government has also put forward an aggressive National Spatial Strategy as well as bold plans to decentralise core government departments to regional bases across Ireland. Most medium-to-large towns around the country are beginning to see the construction of office parks that could easily cater for new technology/enterprise/decentralised government facilities. Local champions can see that for regions to attract investment going forward and for decentralisation to work as a strategy there needs to be an established vanguard in the form of a strong business culture and attractive social and infrastructural bedrock.

It was not so much the words or tone of Dermot McDermott, one of the ITquarter cluster’s founders, that struck me as interesting, but more the strategic imperative of what they were planning to achieve. He said: “The forum will set a standard for IT here, providing leadership, strategic guidance and practical solutions to improve the management and operation of IT services in the region. The continued work of the forum will facilitate a forum for knowledge sharing, stimulating innovation and wealth creation, which in turn will create a steadfast confidence across the global marketplace in the IT sector within Ireland’s north-west.”

McDermott’s phrasing reminded me of an interview with another Ulsterman a year ago when I listened to Bernard Conlon of the Armagh-Monaghan Digital Corridor modestly list the achievements of a like-minded cross-border group of businesspeople. The cross-border agency is credited with creating more than 500 jobs in the region, based on plans to establish a broadband corridor linking the two counties. Already, some 380 call centre posts have been created in the past year by Answer Call Direct and a further 120 technology jobs at southern companies Eblana and Datacare.

AMDC was established four years ago with £2m sterling in funding from Invest NI, Enterprise Ireland (EI), IDA Ireland, Interreg II, Monaghan County Enterprise Board, Monaghan County Council, Armagh City and District Council, Armagh Economic Development Group, Co-Operation Ireland and the International Fund for Ireland.

AMDC is currently involved in a supercomputing pilot programme with Queen’s University Belfast and a €2.5m broadband initiative. “We don’t aspire to take on the roles of EI or Shannon Development in our region,” Conlon says. “But the truth is that throughout Ireland there are passionate people confident in their ability to make things happen on their home turf. It is not a sporadic thing; people realise that this can be done. Shannon has been a flagship, but it shows that a region can build a reputation for itself. People are becoming more focused on their own home turf and technology has developed to make it happen. We aren’t going to be another Silicon Valley, but we’ve got the infrastructure to attract investment and create jobs for local people.”

The movement that AMDC and others take inspiration from began more than 40 years ago with the introduction of the Shannon Free Zone and its agency, Shannon Development. The Government’s decentralisation plan envisages the relocation of the headquarters of EI to Shannon, involving the merging of 300 Shannon Development staff into EI.

Across the Shannon region today there are 12,500 people employed by Shannon Development clients. The region boasts the highest concentration of inward investment in the country, including major manufacturing operations of Analog Devices and Dell and research and development (R&D) operations belonging to Intel. In the past five years 132 new indigenous companies established in the region, employing 1,000 people. Annual sales of close to €2bn is generated by Shannon Development client companies and all companies in the region collectively boast an annual R&D expenditure of more than €40m. More than half of the companies in the region have R&D activity.

In recent years, Shannon Development pioneered a major economic initiative called the Knowledge Network, involving an investment of €25m, which has approximately 3,000 people employed in 100 companies in five locations, including the National Technology Park in Limerick, Kerry Technology Park, Tipperary Technology Park, the Birr Technology Centre and the Information Age Park in Ennis.

Kevin Thompstone, chief executive of Shannon Development, told siliconrepublic.com it is imperative that the “do it yourself” approach being championed by local business leaders is nourished. “A deeply held view of mine is that if you really want to make things happen, take on the responsibility yourself,” he states. “The days of centralised government departments doing things for you are gone. In my view, it doesn’t matter where you are located geographically. Local champions need a clear view of where they want to go and to succeed they need to put the right elements in place. They’ve got to be connected in terms of broadband as well as air, road and rail access for the shipment of goods and services.”

It was this do-it-yourself attitude that led to Shannon Development developing its own broadband access company, Shannon Broadband. “We identified broadband availability at competitive pricing as a barrier to the region. We formed a consortium of all local authorities in the region and piggybacked on road construction developments to smooth the rollout of broadband. Since then we’ve deployed 50kms of fibre cabling independent of the incumbent carriers and we will make that available at economic cost to other carriers to serve the needs of local businesses,” he adds.

Thompstone warns the new influx of regional players that if they want to create a successful technology cluster it is imperative that they forge close ties with local colleges and universities. “We broke ground on a site for a technology park in Tralee in 1999 and decided to work closely with the Institute of Technology in Tralee. We have today 17 start-up companies on 60 acres of land, employing between them 200 people. To achieve this, the interaction between business and academia is vital,” he explains.

Conlon couldn’t agree more. “Our links with Queen’s University, the Institute of Technology in Dundalk, Dublin City University and Science Foundation Ireland are absolutely vital to what we’re trying to achieve. There is a serious drive around the country towards universities becoming more proactive with businesses, driving creativity. Within three years, not only do we have indigenous call centres employing hundreds of local people and a satellite working initiative in place but we are pursuing funding in the region of €2.9m to support focused R&D efforts into future electronic devices for business such as radio frequency identification. Three years ago we got together to figure out how we could bring broadband into the region and we succeeded in pulling together €2.5m worth of funding from various government agencies.”

The advent of community-led business networks is something that EI has been nurturing over recent years, with some €30m being invested in the creation of more than 84 community enterprise centres. Pat Maher, executive director of regions for EI, explained: “We’ve had a philosophy for some time that it is down to the community to show an interest and express a spirit for enterprise. We’ve divided our investment between community enterprise centres and some 14 incubator developments adjacent to colleges and universities. As well as this we’ve begun the construction of urban-based facilities in cities like Sligo, Waterford and Limerick called WebWorks.

“In terms of how decentralisation will impact the regions’ ability to roll out infrastructure and create the right professional tone, it’s hard to say how it will all work out but it will help significantly. I recently read that 50pc of IT jobs regionally in the UK were state jobs — decentralised services paid for by the UK government. The presence of IT professionals in regional areas creates the right knowledge pool to attract investment,” Maher says. He adds that for a region where business professionals were hoping to drive progress, the key thing would be to make use of as many state resources as possible; be it local authorities, EI or IDA Ireland.

Another form of regional base being established by business leaders is being led by the local heads of multinational companies in the Shannon, Limerick, Clare and Galway area in the shape of the Atlantic Technology Corridor. The consortium aims to drive infrastructure connecting Ennis, Shannon, Limerick, Gort and Galway and consists of indigenous and multinational employers in the region, including Dell, the University of Limerick, Enterasys, Modus Media, Tellabs, Analog Devices, Ennis Information Age Town, APC, Nortel, Siebel and Hewlett-Packard.

The group is understood to have been driven by increased public perception of a regional imbalance in the deployment of infrastructure and foreign direct investment to the western region. It is banding together to establish public-private partnerships to develop road, rail, air and communications infrastructure. In addition, the group wants to turn the region into a cluster of enterprises that will work together to ensure supply of skilled workers and collaboration with local universities and educational institutions. Another facet of the corridor will be to establish linkages between various companies to boost the potency of their offerings to local multinationals and for overseas export.

Dick Meaney, chairman of the Atlantic Technology Corridor, and vice-president of Analog Devices in Limerick, emphasises the need for local leadership in driving infrastructure. “To develop critical mass, it is important to spread the infrastructure wider. The truth is Ireland has become fragmented because infrastructure is so poor. All the multinational, indigenous and academic players in the consortium have a common agenda to boost broadband and road connectivity between the Atlantic cities of Cork, Limerick and Galway.

“It’s ridiculous that executives in these geographically close cities are hampered by poor infrastructure. Our view is that there is need for more Government support for broadening infrastructure. At present there’s a 50pc higher cost for broadband in regional cities compared to Dublin. This can’t go on.

“It is imperative, however, that the recommendation in the recent Enterprise Strategy Group that the Government invests in infrastructure ahead of demand instead of following it be adhered to,” Meaney warns.