Time to prepare for the next generation of digital industries in Ireland

9 Jul 2009

Ireland needs to capture the next industrial wave, says Data Electronics’ CEO Maurice Mortell

A decade ago Dublin swiftly became the data centre capital of Europe as start-up players invested hundreds of millions in large state-of-the-art buildings that would be the engine rooms of the internet.

Then the dotcom bust happened, with many of these players going bankrupt, their assets snapped up promptly by wily investors who saw the bust as an interruption of a digital tide that would once again break on these shores. They were right. The internet continues to achieve stratospheric growth and the need for data centre space continues.

Those assets are the prime reasons why major internet giants such as Google, Amazon.com, Yahoo!, eBay and Facebook located major operations in Ireland. Today, the build-out continues with Microsoft constructing a $500m data centre in west Dublin. These activities will put Ireland at the heart of future revolutions in commerce, film, music and media.

Watching all of these developments closely has been Data Electronics, an indigenous data centre company with over 30 years’ experience in the field. In 2002, the company expanded its Dublin city operations by acquiring a 22,000 sq ft data centre in Kilcarbery Park in west Dublin. And, in recent months, the company opened a second major data centre in Ballycoolin, with over 40,000 sq ft of data centre space, representing a capital investment of over €25m.

The move will eventually double Data Electronics’ workforce to 100 people, while the company will have data centre capacity of over 100,000 sq ft in the next five years.

Data Electronics is an example of how nimble indigenous companies can be and how, with cool calculation, they can be at the spearhead of the next generation of digital industries. The company is as much an enabler of the multinational and financial industries that are here as it is an exporter of services, serving businesses in Europe and elsewhere.

For Ireland to ensure it is relevant to capture the future wave of digital industries and services, CEO Maurice Mortell says it is key to remember that down through the ages identifying future trade routes was a requisite business skill.

“The challenge for Ireland is ensuring it will be at the heart of the next generation of activity. The IDA has done a good job in attracting the industries that are keeping the country relevant and much of that has been around the fact that we are English-speaking, have good tax breaks and a young population. But those advantages aren’t going to be here forever and its time we supported our young entrepreneurs better.

“The key is to have the fiscal incentives and the infrastructural incentives to foster the innovation and entrepreneurial capability that is endemic in the Irish psyche,” he says.

“We have a lot of bright people here prepared to take risks and invest what they have in their own ideas. But there’s an infrastructure element to that in terms of enabling businesses to operate from anywhere on the island – look how successful Kerry-based Jerry Kennelly was with StockByte – as well as the need for a vibrant investment community. These systems aren’t fully in place. In the current economic environment, this needs to change.

“Some 45pc of Ireland’s exports are services-based, so we definitely need the infrastructure.

“In the late Nineties, the proposition was that Ireland could be the digital hub for Europe and, backed by a deregulated telecoms market, we would attract all the key providers. We punched above our weight and most of this has been a success. But the thought process to enable young home-grown businesses to be part of this vision has been lost along the way.

“We’ve made investments in pockets in things like the Metropolitan Area Networks in 90 towns, but we have nothing linking these together. There are pieces of the jigsaw that are missing and we can’t afford to leave it incomplete. What is needed is a co-ordinated plan to map it all together and give the nation control over its destiny,” explains Mortell.

“One good way would be to start with the schools. Another key action would be to outline to investors what the potential return could be. But that’s not an easy thing to do because the return will be the type of economy we will have in 10 or 20 years’ time. Will we have games industries, will we be providing digital healthcare, will every worker be engaged in continuous lifelong learning to up their skill levels?”

As a father, Mortell believes a major opportunity has been missed by the Department of Education to invest in computers in schools to give every child in the country a chance to gain 21st century work/learning skills.

“I have sons in national school and secondary school. The primary school has 43 computers all networked together and put in place by the teachers and parents. They have 10 year olds working on Excel spreadsheets. The

secondary school, however, is years behind the curve and computer-based learning hasn’t been embraced at all.

“The Department of Education should be pushing the infrastructure agenda and curriculum agenda much harder to teach, inform and empower our young. The IQ of each generation is supposed to improve 10-20pc each time and maths skills are a big worry.

“So, are we producing the type of people we need to support the next level of expertise needed if our economy is to bounce back and thrive over the next 10 years?

“It’s Irish people working in companies like Intel, Wyeth and Pfizer who are developing tomorrow’s technology. Why aren’t career guidance teachers saying this?”

Ireland’s achievements in these fields are going unnoticed, despite the fact that efforts of Irish people in such multinationals are driving exports that are “defying gravity”, according to National Irish Bank. The Expert Skills Group says the country is still experiencing skills shortages in ICT and biopharma industries – at the same time an entire generation of under-25 males face the spectre of long-term unemployment because of the collapse of the construction industry.

“There is a job that needs to be done in pushing the digital and knowledge industries and careers like engineering to all levels of society. Much of this goes back to the schools and how the Department of Education is preparing children for their futures.”

Mortell also believes that the reform of the public sector and the delivery of a digital plan for the nation go hand in hand.

‘Ireland needs a government CTO. We should be investing in technology to save money and make the country more efficient,” he concludes.

By John Kennedy