Ireland needs to catch up on digital economy – quickly

4 Aug 2011

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Ireland’s broadband fortunes are improving, but we need to go further to make sure Irish firms are ready for tomorrow’s digital business landscape.

It’s been said that Ireland has a two-speed digital economy. On the one hand you have a collection of some of the world’s best digital firms located in the country that are pushing the boundaries and making the digital economy happen around the world. But, unfortunately, the vast majority of Irish SMEs don’t fit this mould.

The CEO of the Digital Hub Development Agency, Philip Flynn, nailed it last week when he summed up the most glaring opportunity: “Despite the huge advancements of recent years, many organisations have been slow to embrace the internet opportunity. Recent surveys indicate that only 20pc of SMEs in Ireland are truly active on the internet, for example, compared to 40pc in our nearest competitor market, the UK.”

Effectively, other nations have grasped the reality that the internet is not a novelty but a serious business platform. Arguably, Irish SMEs and state institutions have not.

Cost savings from online work

There are reasons to believe things could improve, but firms have a steep learning curve. Last week, Jobs and Enterprise Minister Richard Bruton announced that so far 1m documents have been filed with the Companies Registration Office (CRO), with 58pc of documents filed with the CRO now done online. He said this form of filing saved businesses €3.9m in administrative costs in 2010, but added how a further €2m could have been saved if all companies had availed of the online filing facility.

A recent study carried out by Cisco and Saïd Business School at University of Oxford demonstrated how Ireland has succeeded in moving from the fringes of the online world to be ranked out of 72 nations. Download speeds were up 87pc in one year.

However, out of 14 countries that were prepared for the “internet applications of tomorrow”, such as high-definition internet TV and high-quality video communications services (consumer telepresence), which are expected to become mainstream in just a few years, Ireland wasn’t one of them.

The country needs to move fast, otherwise not only will Irish firms and ordinary citizens find themselves behind the curve, they could find themselves economically irrelevant.

A recent European Commission study revealed that 58pc of Irish households now have broadband internet access (up 4pc since the end of 2009) compared to an EU average of 55pc. It also found that 69pc of Irish households now have a computer (up 5pc on a previous survey) compared to an EU average of 68pc (up 4pc).

According to the Cisco Visual Networking Index, the average broadband speed is expected to increase fourfold from 7Mbps per second in 2010 to 28Mbps per second in 2015. By 2015, some 1m video minutes – equivalent to 674 days – will traverse the internet every second.

More work to do, more quickly

“I think everybody appreciates the positive economic impact of super-fast broadband in Ireland,” says Cisco Ireland country manager Mary Lou Nolan. “We’re just about meeting the needs of today’s applications and that’s the worry.

“We do have an infrastructure that delivers a good enough penetration but more needs to be done quicker if we’re to make the progress ahead of the increased demand.”

In terms of the kind of applications of tomorrow’s business world, Cisco has an R&D operation in Galway that is already figuring out the future workplace powered by cloud and gadgets like tablet computers.

A recent survey by Seefin Data Management of 212 Irish businesses found that while 60pc of firms have included cloud computing in their current IT strategy, 30pc believe that the country’s broadband infrastructure is sufficient to support next-generation cloud apps.

With Cisco delivering leading-edge technologies like cloud and unified communications to Irish-based organisations, Nolan says: “We haven’t found it a roadblock. It can take some time and I think it can delay projects so there are customers who are ready to go ahead with a project and by the time we’re ready to go ahead, we realise that the infrastructure needs to be upgraded and that can delay in customer projects. We have seen some delays but it hasn’t completely blocked improvements.”

She also predicts that unified communications is going to be a game changer.

“Being at the coalface and interfacing with those customers when we deliver value every day to their business has made a big impression on me. It’s about being able to improve customers’ productivity, which brings better time to market for their product, or improves the productivity of their people through the use of better collaboration tools.

“A number of trends are coming down the line and while a lot of people talk about cloud computing, cloud is no longer a trend – it is a reality. So one big thing to keep an eye on is ‘the internet of things’. Cisco predicts that the number of devices on the internet is going to reach 50bn by 2020 – that equates to more than six devices for every person on earth.

“Now that the internet of things has been created it’s going to have the ability to sense things, translate, collect, analyse and distribute data on a massive scale. Humanity will have the information it needs not only to survive but also to thrive in a world that is changing at a rapid pace,” says Nolan.

New technologies for Irish businesses

EMC country manager for Ireland Jason Ward believes Irish organisations, private and public, need to get to grips with new technologies such as analytics and data automation that will improve decision-making and help them cope with the vast quantities of data being created.

To give a picture of the quantities of data being generated, a recent Digital Universe Study by IDC and EMC revealed that some 1.8 zettabytes of data will be created in 2011 alone – the equivalent of 57.6bn 32GB Apple iPads.

This means data volumes are doubling every two years. The amount of data in the world today is equal to every person in the US tweeting three tweets a minute on Twitter for 26,976 years, or more than 200bn high-definition movies that would take an individual 47m years to watch.

“IT departments will see the amount of data they have to manage grow at a rate of 50 times,” Ward warns. “If you think about it – you could build the Great Wall of China twice as high with 57bn iPad computers.”

He says that despite the rise in the volumes of data, the amount of IT professionals available to manage all this data will grow at a rate of 1.5 times. “Automation will be key.”

Analytics at work

What will also be critical will be the analytics to crunch through this amount of data in real-time. Ward points to the recent revelations of social welfare fraud as an example and urges the Government to use data analytics technology to allow its departments to gather data on abuses of the social welfare system and pinpoint offenders and gather key facts.

In recent weeks, Bruton announced the creation of a cross-Government implementation group focused on ensuring the State is seen as a leader in deploying cloud technology and an integral step towards securing the 8,600 local jobs that could be created in the cloud computing space.

At a time when Irish businesses need to get to grips with the applications of tomorrow, the Government has an opportunity to set a powerful example as we hurtle towards a world where connectivity and analytics will be fundamental.

EMC’s Jason Ward and Cisco’s Mary Lou Nolan will be panelists at the upcoming Digital Ireland Forum in Dublin on 30 September 2011. For further information on speakers and panelists go to the website.

Photo: Joining the digital dots – Ireland’s digital infrastructure must be improved if Irish firms are to compete equally against international counterparts, warns Cisco Ireland country manager Mary Lou Nolan (left). Firms are also going to need to have the analytical tools to crunch vast volumes of data, adds EMC country manager for Ireland Jason Ward (right)

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com