Team effort needed to spread 21st-century business know-how

26 Apr 2011

In his look back on the week, editor John Kennedy believes that while Ireland can rightly claim the title Internet Capital of Europe, this claim will only ring hollow as long as indigenous firms struggle with e-commerce.

I had a niggling thought over the weekend that was inspired by conversations I had in recent weeks.

For months now, I have extolled the very dangerous situation that Irish SMEs have found themselves in. Not only the obvious economic situation that is consuming jobs and businesses on a daily basis, but the fact few firms have succeeded in grasping e-commerce.

Electronic transactions are the lingua franca so to speak of the 21st-century economy. I have rattled these figures off before – only 66pc of Irish businesses have websites and of these a mere 21pc have an e-commerce capability.

This compares with around 40pc of their UK counterparts. On a daily basis, Irish SMEs are losing business to overseas firms who are proving themselves to be more web savvy and appeal to a web savvy local consumer base in Ireland.

There is nothing unfair about this. It’s 21st-century business. If firms lack the know-how and don’t try to use tools like the web, Facebook, Twitter, Groupon and other technologies to increase footfall in their premises physically or virtually, then their lunches are there for the eating by competitors who do get this stuff.

Many people I’ve spoken to recently, including Sage’s Liam Mullaney, point out that the key factor here is education. I have to agree and wonder that no matter how many articles are written about Ireland’s poor broadband penetration and equally poor e-commerce penetration will anything change?

Google’s head of marketing Dan Cobley recently pointed out that the most advanced some of Ireland’s leading retailers seem to be in terms of the internet is web pages for selling gift vouchers. That’s not good enough.

The problem is both education and broadband penetration. My instinct is the economic travesties of recent years distracted from the real issue and as we all got consumed with bricks and mortar speculation, no one was telling firms they need to modernise or how they can do it. The failure of the previous Government to enshrine broadband infrastructure in overall economic strategy is telling.

The result is insufficient awareness or standing of web strategies in firms’ overall business plans.

So what do we do to build a 21st-century digital economy?

I believe we have in Ireland a two-speed economy. The first economy is booming, consisting of multinationals in the digital and pharmaceuticals space and an increasing number of Irish indigenous multinationals, such as Curam, making waves on the global stage.

The second economy is the one that is shedding jobs and businesses at an alarming scale. I believe it is the sector of the economy in most need of modernisation that needs to embrace concepts like e-commerce, cloud computing and unified communications to survive and grow internationally.

The first economy, I believe, is busy dealing with burgeoning exports and is laser-focused on growing exports and developing products. However, elements of these businesses also trade within the Irish economy.

Surely it is no great leap to think that many of the technology giants based here, like Facebook, Google, Microsoft, Amazon, eBay and PayPal could play a greater role in sharing their expertise with ordinary Irish firms.

It is inconceivable to think that operations that are responsible for billions of revenues globally doing some of the most cutting-edge business activities – run by Irish people in the main – could not somehow share that learning and know-how with SMEs that are struggling and who are just a stone’s throw away.

I spoke with PayPal’s Louise Phelan and she agrees and says there is scope to engage with Chambers of Commerce across the country as well as universities to spread 21st-century business know-how to Irish SMEs who are struggling and don’t realise that the biggest gift to business yet – the internet – is within their grasp and theirs to perfect.

There is a massive opportunity here. For the State, the opportunity is a top-down digital strategy that encompasses technology in schools, a jobs and skills strategy and of course deployment of critical broadband infrastructure.

For the multinationals based in Ireland there could be no better case study than helping turn a struggling economy around by helping local firms to right purpose themselves for the digital economy.

Ireland has indeed assembled a who’s who of technology companies, from Intel to Google, Apple, EA Games, Amazon, Facebook and LinkedIn, with more to come. To truly be the Internet Capital of Europe Ireland needs to share this knowledge to create lean, efficient, technology-enabled SMEs and let them, too, share in that success story.

There is a missing link between the strategies of securing inward investment and growing indigenous high-potential export firms. That missing link is basically about being better at business. To be better at business it means education and connectivity in order to excel in today’s digital economy. This in turn will yield more entrepreneurs, more seasoned executives and of course, more jobs.

Would that not be a true economic miracle?

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