Ireland could be ‘poster boy’ for digital economy jobs growth

19 Nov 2010

For decades, Silicon Valley has been the poster boy of innovation and jobs growth in technology. If Ireland resolves legal and regulatory issues, it too could be the location of choice for emerging companies in the digital sector.

Legal and internet experts have agreed that Ireland has an unrivalled opportunity to grow jobs and investment in the digital sector but not without critical legislative and regulatory reform.

In terms of inward investment, Ireland is becoming the internet capital of Europe with firms like eBay, Google, Facebook, Zynga, LinkedIn, Amazon and Yahoo basing themselves in Dublin, companies like Avaya and Electronic Arts basing themselves in Galway and companies like Apple and Big Fish Games expanding their presence in Cork.

“The digital economy offers huge and exciting opportunities for job creation and economic growth,” said TJ McIntyre, lecturer in law in University College Dublin and chairman of Digital Rights Ireland.

“What we have to do is create the right environment to attract these companies to Ireland and to make it easier for indigenous businesses to establish themselves and generate jobs.”

McIntyre chaired a seminar which was addressed by speakers from UPC, Google and, as well as singer/songwriter Nick Kelly and digital thought leader Johnny Ryan, author of A History of the Internet and the Digital Future.

McIntyre said the presence of global companies such as Google, Facebook, LinkedIn, eBay, Zynga and Big Fish Games provided a significant base from which to grow Ireland’s international reputation in the digital economy, but that legislative and regulatory changes were needed to foster this growth.

Job creation in young, fast-growing businesses

“Between 1980 and 2005, nearly all net job creation in the US occurred in companies under five years old. It’s the same picture in Britain, where 6pc of high-growth firms generated over half of net employment growth between 2005 and 2008.

“These companies are doing business on the internet and our legislative regime needs to reflect the needs of this new marketplace,” he said.

“Building the ideas economy – creating the ‘innovation island’’ is a key action area in the Irish Government’s framework plan ‘Building Ireland’s Smart Economy’.

“If we are to achieve this goal, we need to look at our legislative regime and reform those areas where it is not fit for purpose for business now being conducted on the internet,” he said.

The issue of libel laws, the role of intermediaries and Ireland’s copyright regime received particular attention at the seminar. Under existing legislation, Irish internet intermediaries face the prospect of being held liable or even put out of business as a result of what users say, even though they are in no way at fault. This acts as a deterrent to online businesses that wish to establish in Ireland and threatens the rights of internet users.

“The emergence and continued growth of the digital economy has also led to a situation where ISPs are increasingly finding themselves in the middle of competing rights. ISPs are key to the digital economy,” McIntyre continued.

“For end users, they are a gateway to a new multimedia world and for content providers – whether they are of the traditional or user-generated kind – ISPs provide an additional platform over which content can be distributed. Ireland needs to examine how this issue is treated in other jurisdictions and seek to address this issue here,” said McIntyre.

The seminar heard how a flexible copyright regime was becoming increasingly important to the latest wave of Silicon Valley start-ups and this area needed to be examined by both Ireland and the EU.

Fair use doctrine

“US copyright law includes a doctrine known as Fair Use, which effectively permits the use of portions of a copyrighted work so long as the normal economic exploitation of the work is not undermined. No equivalent to the flexible doctrine of Fair Use exists in the EU copyright regime, which instead provides for a finite list of specific and narrow exceptions to copyright.

“This prescriptive approach deprives EU-based digital innovators, in particular, of the flexibility that has proven such a boon to Silicon Valley’s web-based start-ups.

“Silicon Valley is the poster boy of innovation and jobs growth. It is the hub for high-tech innovation and development and Ireland can learn much from the Valley. In particular, the US has been very successful in creating the right legal and regulatory balance which promotes the creativity of digital entrepreneurs and has benefitted from the economic and social benefits which flow from their endeavours,” he said.

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