Ireland cited as IT growth model

4 Mar 2003

In a report due to be published tomorrow, Ireland has been cited as a growth model by a recent EU-sponsored research project into understanding the dynamics of the digital economy in urban areas.

The cities of Dublin and Cork were featured in a study that looked at eight cities across Europe with developed information and communications technology (ICT) sectors. While the report highlighted the Irish software sector as a model for future development of the ICT sector in Europe, it also outlined several key issues that may hamper further development of the sector in this country.

Infrastructure was one of the key concerns and Dublin’s traffic problems rated highly. “Internal accessibility is dire,” the report reads. “Central Dublin’s medieval and Georgian streets are clogged with vehicular traffic, making movement around the city centre difficult except by foot; the hub-and-spoke street layout makes lateral movement especially onerous”.

The report goes on to say that city centre office space is expensive and in short supply – even those firms that can secure premises often face the constraints of long-term leases. The report also cites concerns about the Digital Hub.

“The new Digital Hub could be a catalyst for a new stage of development in the cluster… but local firms are so far sceptical of its managed clustering model, while local residents have taken a somewhat cynical view of the project, especially the consultation process,” it states. Another issue was policy co-operation between the city’s four local authorities, which it said was ‘non-existent’.

“The authorities see themselves as competitors with one another, so while the City Council pursues the kind of high-density urban development most attractive to small, dynamic firms, the suburban county councils persist in creating the kind of business parks suitable only for call centres, data warehouses and multinational corporations, virtually ensuring the continued geographic and conceptual bifurcation of the cluster,” it reads.

With regard to Cork, it comments that the presence of global heavyweights such as Apple, EMC, Motorola and Siemens, combined with an ambitious indigenous software industry supported by an enthusiastic local government, the ICT sector – especially software – is very well-organised and diversified.

“Lack of scale and competition from Dublin are the main challenges, as is the development of a first-rate knowledge transfer apparatus. There is, however, a high degree of co-operation among key actors. The National Spatial Strategy is now also favouring development outside of Dublin, which should be to Cork’s advantage, as it has been designated a ‘gateway’ city. Cork certainly has the ambition to develop an international class cluster, but the city and region will have to leverage its considerable economies of scope to compensate for lack of scale,” it reads.

The report also cites concerns about education in this country. It finds that Ireland’s third-level institutions played a key role in developing the sector. However, declining interest in IT amongst students is becoming an issue.

“The high profile attaching to recent announcements of job losses in the sector had resulted in a decline in students opting for courses that would lead to a career in the IT sector. The total number of people applying for computer-related courses in universities and institutes of technology fell by 25pc in 2002 as against 2001. Secondly there is an ongoing decline in the number of students at primary and secondary levels pursuing science-related subjects, eg physics and chemistry,” it states.

The report will be published tomorrow at a conference in Dublin Castle. MUTEIS (Macro-Economic and Urban Trends in Europe’s Information Society) is a 30-month research project of the EU’s Fifth Framework Programme that aims to develop a concrete understanding of the dynamics of the digital economy in urban areas especially the linkages between key actors and thus to improve strategic policy interventions.

It brings together teams from Ireland, the Netherlands, Sweden and Finland, and is led by Prof Luc Soete, former chair of the EU’s High Level Expert Group on the Information Society.

The Irish section of the report was compiled by Nexus, a not-for-profit research organisation that engages in a wide range of projects that aim to develop participative solutions to social and economic problems.

By Dick O’Brien