Digital economy action plan


29 Jul 2009

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The Government has moved to put the digital economy centre stage in its strategy for economic growth, recovery and job creation.

The launch of ‘Technology Actions to Support the Smart Economy’ this month recognises the national imperative to secure Ireland’s digital future and what actions need to happen to make it a reality.

The strategy brings key components of the digital economy together – infrastructure, innovation and green technology – into one programme.

The wide-ranging plan includes the creation of an Exemplar fibre network and an International Content Services Centre, similar to the IFSC. If successful, the plan has the potential to create 25,000 new jobs, according to the Government.

Courage, conviction and cash will be needed to deliver the actions set out in this report. It remains to be seen if a costed version will be included in the next Budget. Given that the digital economy will form the basis of any national job creation strategy, we have to hope it will be.

We asked Ireland’s technology leaders to give their reaction to our national technology action plan …

In a crowded room at Government Buildings in Dublin last week, the Government unveiled its digital vision for Ireland. The Minister for Communications, Energy and Natural Resources, Eamon Ryan TD, and the Minister of State for the Information Society, Conor Lenihan TD, outlined a plan that – if successful – has the potential to create at least 25–30,000 new jobs.

At the heart of this strategy is jobs. If Ireland can put in place the digital infrastructure to win investment, enable entrepreneurs and operate smoothly and efficiently as a nation, then there is no reason why the nation’s economy can’t rise again. The bottom-line result – Ireland will emerge as a low carbon and smart economy and will recover economically.

But will the 10-year plan deliver?

Fundamentally the plan addresses concerns around fibre infrastructure, the environment, investments in innovation and science and ensuring the country is battle fit to capitalise on opportunities in emerging areas such as cloud computing and digital content.

But other core areas that constitute a successful digital nation need to be included, ranging from education to healthcare and social inclusion.

Will the knowledge society strategy of the Irish Government be far-reaching enough or will it be like the curate’s egg, good in parts?

Fundamentally, for a plan to succeed, the cost of investment will need to be outlined and included in subsequent Budgets. This will be vital if the private sector is going to feel encouraged to row in upon the plan and drive the pace and energy that befits a digital economy.

At the heart of the Government’s ‘Technology Actions to Support the Smart Economy’ is an ethos of Minister Ryan’s that we need to stimulate as well as to save.

The report identifies 30,000 jobs as a baseline target to be achieved over the next five to 10 years. If these initiatives succeed in attracting inward investment – as well as enabling entrepreneurs to set up businesses from any parish in Ireland and compete equally against companies in the US, China, the UK and mainland Europe – the job benefits could be manifold.

Ireland’s infrastructure deficit when it comes to digital is, as far as Minister Ryan is concerned, a matter of semantics. He points out that, aside from the regulatory issues around next-generation access and who is going to invest in this, Ireland actually has an abundance of fibre networks owned by CIÉ, Bord Gáis and the ESB, as well as ducting owned by the National Roads Authority, and compares favourably with other nations if you think about it.

Keeping Intune
The construction of an Exemplar network, which will dovetail with the Government’s One Stop Shop and will tie-in with the 94 Metropolitan Area Network (MAN) towns, will be spearheaded by a young Irish technology company called Intune Networks. The investment will result in 350 new jobs at the company.

Intune Networks has developed the world’s first programmable fibre optic platform, which is critical to building an Exemplar smart network. The technology effectively uses different colours of light to prioritise web traffic to ensure it arrives at its destination faster.  This innovation has already excited the interest of City of London traders who are passionate about fibre, while the Government will present the technology before the EU Parliament and the World Economic Forum.

Tim Fritzley, CEO of Intune Networks, says that the plan is to kick off straightaway by creating a template based on a geographic area known as a ‘captured network’, which will be replicated across the country throughout 2010.

The plan includes making use of the rich tapestry of data centres to support cloud-computing businesses and using wireless spectrum efficiently to make Ireland a test-bed for future wireless services.

It is estimated that more than 5,000 direct jobs and a further 5,000 indirect jobs will be created over a five- to 10-year period from the network investment.

However, the core network is only one aspect. Ireland’s next-generation access network needs to be built and few operators, apart from Magnet and Smart Telecom, provide fibre-to-the-home. A pioneering joint venture between Vodafone and BT will see the companies pool resources to sort out the existing problems with copper exchanges, give homes and businesses 24Mbps speeds and could result in further progress around next-generation access via fibre.

The second part of Ryan and Lenihan’s plan involves creating energy-efficient data centres and cloud computing infrastructure. Ireland has a rich trove of data centres such as Data Electronics and Servecentric in Dublin and the Cork Internet eXchange. Choosing to prioritise the development of these centres across Ireland, the Government says, will result in 10,000 high-value jobs over the next 10 years.

The new IFSC
The plan also includes establishing an Internet Content Services Centre (ICSC) that will enable digital rights holders for movies, music and video games to go to market with intellectual property rights firmly and clearly established.

“We believe the ICSC could replicate and even excel beyond what we achieved with the IFSC,” says Neil Leyden, one of the contributors to the Government’s report.

“The ICSC will be truly innovative and will help place Ireland and bring the content generation and distribution industries together,” Minister Ryan says. “This is about our ambition of bringing Ireland to the centre stage in attempts to negotiate between piracy and content owners. This plan will leapfrog Ireland’s credentials in a relatively short time.”

The IFSC, which created 25,000 jobs, was roundly attacked when it was conceived in the Eighties. The ICSC – which aims to capture the business and the spirit of the emerging digital economy – will support over 1,000 digital companies already in Ireland and has the potential to create 20,000 jobs by 2020.

The ambition of making Ireland a low-carbon economy ties in neatly with our digital aspirations and the Government says it plans to roll out an electricity network that allows for two-way flow of information from devices like smart meters. The onset of smart meters and electrical vehicles may soon result in a situation where punters can sell electricity back to the grid. The ESB is currently creating 3,700 new jobs to develop its future smart electricity network.

The plan also features a novel WorkFlow scheme aimed at using web-enabled mobile traffic sensors and communications tools to reduce congestion and lower carbon emissions. A pilot for this scheme will be rolled out in 2010 by the Department of Transport.

The six-point plan includes capitalising on the nation’s investment in science through Science Foundation Ireland, and Minister Lenihan points out that Ireland’s output of patents has doubled since 2005. “We now have a situation whereby 40pc of all foreign direct investments (FDI) last year were R&D investments by global firms,” he says.

Jobs for the future
The Government’s plan also includes a vision for making Ireland a low-carbon and smart economy by creating a roadmap for smart, clean electricity provision and sustainable development around ICT, energy efficiency and clever innovations around making use of green energy such as the IBM SmartBay initiative.

“While there is a correct focus on the amount we need to save and the spending we must curtail, we must also plan for the jobs of the future,” Minister Ryan says. “We need to stimulate the economy as well in order for recovery to occur.

“The ‘Smart Economy’ document pledges to make Ireland a centre of high-tech jobs that cannot be outsourced; one that uses our natural resources and our expertise to Ireland’s competitive advantage. The series of innovations in Government policy today will make the smart economy a reality.

“We have identified the challenges the world will face in the next decade. These are climate change, a peak in global oil production and the fight for scarce resources, including energy and water. Understanding the challenges means there will be great rewards for the country with the solutions.

“Building on our existing strengths, this is an innovative plan that will put our small, open economy on a strong footing for a global upturn. We are targeting 25,000 jobs from the outset; today’s 350 from Intune is only the beginning,” Minister Ryan adds.

Positive reactions
Reaction to the plan by business and academic groups has been generally supportive.

University College Cork president Dr Michael Murphy says that Intune’s recent recruitment of a number of Tyndall National Institute PhD-level researchers is a practical example of how universities can contribute to the development of a smart economy. “Mindful of its strategic regional and national roles, the university will continue to supply graduates of the highest calibre to this vital area of the economy,” he adds.

Internet traffic is growing at a rate of 50pc per annum, as more and more users are online, for longer, using new bandwidth-hungry applications. With the internet becoming more embedded into our every- day lives, an advanced and energy efficient telecommunications network is essential to compete and prosper in the global economy.

“Tyndall is developing a range of new optical fibre communication technologies that will address the needs of future smart networks both at the component and systems levels,” says Professor Paul Townsend, head of Photonics at Tyndall National Institute.

The Telecommunications and Internet Federation (TIF), the IBEC group that represents Irish telecoms providers, has welcomed the new strategy for digital and clean technology.

“The strategy is a very positive initiative, which aims to position Ireland at the forefront of the digital and clean technology revolution. Investment in these areas is crucial if Ireland is to compete on the global stage,” says Tommy McCabe, director of TIF.

The telecoms industry contributes €4.6bn to the economy and employs over 15,000 people.

“The Exemplar smart network, the deal between the Government and the Irish telecoms equipment design company Intune Networks, is an example of how industry and Government can work together for the benefit of the country. More public–private collaboration of this sort is required if we are to deliver the state-of-the-art telecommunications infrastructure necessary to make the smart economy a reality,” McCabe adds.

However, the Alternative Operators in the Communications Market (ALTO) asserts that the new network does not resolve ongoing regulatory issues around access, the bringing of digital networks from the exchanges to the home and business. “We welcome that the Government has recognised the need to prepare for growing internet traffic, but the new network is not a panacea for the problems of the exchange-to-home part of our network,” says ALTO chairman Ronan Lupton.

“Actions outlined in the report can be accomplished more quickly

if the issue of competition in a properly regulated market is addressed first.”

The visionary move by the Government in the midst of a tough economic climate deserves to be applauded and supported at all levels.

But, to work, to be truly successful, these plans need to be backed by a timetable and included in the forthcoming Budget. Areas that also need to be included in a wider national digital development plan include education – we need to ensure our students are equipped for the digital age and that quality of graduates improves – healthcare and social inclusion.

Once again, we point out that a national digital development plan matters more to the country’s future than tarmacadam roads. The digital roads of trade, inclusion and knowledge need to lead directly to the people.

By John Kennedy

This story is part of the Digital 21 campaign to encourage Ireland to develop a National Digital Development Plan, ensuring the country and itseconomy are strategically well placed to thrive in the 21st century. For more stories, and to add your comments, visit www.digital21.ie