2004: The birth of a knowledge economy


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Image: © Tierney/Stock.adobe.com

In a year filled with significant steps towards Ireland’s knowledge economy, Google goes public and a wonder material is formed.

In 2004, while Facebook was being built in a dorm room, O’Reilly Media hosted the Web 2.0 conference, popularising the new buzzword for the participatory, interoperable web now emerging. And on 4chan – just one such website completely reliant on user-generated content – an administrator activated a protocol that attributed all posts to Anonymous, sparking a meme that would later become a collective of hackers.

Mobile devices were multiplying and we now had the Blackberry 7230, the Sharp GX30 camera phone and the iPod Mini to play with. We may not have gained access to the iTunes Store yet, but Irish rockers U2 had their own branded iPod.

The Irish Recording Music Association was feeling the pinch from digital downloads and, at the start of the year, threatened to prosecute companies if work computers were used to download music illegally. Meanwhile, security experts were warning that ‘always on’ internet access posed some serious risks.

The foundations of knowledge

In October 2004, Dublin was abuzz with the visit of Google founders Larry Page and Sergey Brin. The duo came to address the company’s newly formed Irish team at the official opening of its EMEA headquarters on Barrow Street. At the time, Google Dublin had already hired about 150 people and, globally, had reached almost $1bn in sales the previous year.

Earlier in the year, Meg Whitman, then president and CEO of eBay, was in Blanchardstown for the opening of eBay’s European customer support centre and the international HQ of subsidiary PayPal. Also in 2004, Yahoo was building up an Irish subsidiary that was first established in 2003, Chinese telco Huawei first set out its stall in Ireland, Dell announced key EMEA operations in both Limerick and Dublin, and the country was competing with Luxembourg to become Amazon’s new European technical and customer support headquarters.

Ireland’s tech multinational ecosystem was quickly taking shape. Meanwhile, early in the year, Enterprise Ireland signalled a policy change that would see it supporting cutting-edge tech start-ups with more than just investment. On the recommendations of its Enterprise Strategy Group, the agency began building a support system that would fund R&D for product development, and help early-stage companies become investor-ready through sales and management training.

The environment was right for this with Ireland being named the most entrepreneurially active country in Europe in 2004’s Global Entrepreneurship Monitor, owing to the strong growth ambition identified among its founders.

Emerging tech start-ups welcomed the reinstating of the Business Expansion Scheme and Seed Capital Scheme in October, following a nine-month European Commission investigation. The Irish Software Association wasted no time in urging the Government to substantially increase the limits of these schemes.

The next part of the puzzle was the R&D ecosystem. In summer 2004, NUI Galway opened the Digital Enterprise Research Institute (DERI) with a €12m grant from Science Foundation Ireland (SFI) and support from Hewlett-Packard Galway. DERI set out to be a centre of excellence for research on the semantic web with more than 70 full-time researchers.

A later investment from SFI and Siemens saw Siemens Research Ireland established in the Royal College of Surgeons in Ireland to work together on biotechnology, bioinformatics and pharmaceuticals research.

Summer also saw the founding of the Centre for Telecommunications Value-Chain Research (CTVR), the predecessor to the Connect research centre. Based at Trinity College Dublin, CTVR received major funding from both SFI and Bell Labs, and co-director Dr Donal O’Mahony spoke to Siliconrepublic.com of the commercialisation advantages such a dual-funding structure brought.

Academic research also received an SFI stimulus with a €20m joint initiative with the Higher Education Authority aimed at boosting research facilities across Irish universities. Nearing the close of the year, then Minister for Enterprise Micheál Martin, TD, said the Government’s total spend on R&D from 2000 to 2006 would represent a fivefold increase on the previous period at the close of the 20th century.

This 21st century attitude to research and innovation also saw the Government establish the office of chief scientific adviser, installing Barry McSweeney as the first in this role. Also, determined that its National Broadband Plan would succeed, the Government urged Irish telcos to drive further broadband subscriptions, while the drop-out rate in ICT courses at third level started to ease.

And so, in its end-of-year review, the IDA confidently declared Ireland a knowledge economy, officially. Closing out its best year since 2000, the IDA had investments from Intel, Bell Labs, Hewlett-Packard, IBM, Pfizer, Dell, McAfee and more to thank for it.

Google’s stock take

The biggest single news story of 2004 was perhaps the Google IPO. Filing for its initial public offering in February, Google sent a letter to investors stating that the company would be run for the long-term benefit of shareholders, not the short-term gratification of Wall Street. “As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same,” the letter read.

The auction-style IPO came in August, after some last-minute hitches and a brief delay in getting the go-ahead from the US Securities and Exchange Commission following a controversial Playboy interview.

Google finally floated on the Nasdaq stock market on 19 August with a share price of $85 valuing the company at $23bn. Shares ended the day’s trading at $100, upping Google’s valuation to $27.2bn and making billionaires of founders Page and Brin. Two months later, that share price continued on the up. Google’s valuation shot far past that of rival Yahoo, which had itself been issued millions of shares to settle a keyword advertising patent lawsuit.

The beginning of the end of e-voting

With local and European Parliament elections due to take place in June 2004, the Government decided it was time to follow through on its 2002 trials of e-voting machines and roll the system out nationally. Speed and accuracy were touted as the great advantages of e-voting and a €4.5m publicity campaign was launched to warm the public to the idea.

But the decision was not without its detractors. Leading the way was watchdog organisation Irish Citizens for Trustworthy E-voting (ICTE), an umbrella group of computer professionals, academics and concerned citizens. Chief among their concerns were a lack of transparency in the source code and skepticism that the system had been sufficiently tested.

While ICTE was considering legal action against e-voting being introduced, computer professional and election expert Joe McCarthy declared that issues with the system were “rampant” and that it was “impossible for a professional to stand over this system”.

Later, in a twist laden with irony, it emerged that five submissions made to the Commission on Electronic Voting through its website were not detected because they had been stored on another computer.

When all submissions were accounted for, it was clear a huge majority were against the proposed e-voting system and, in April, the plan to use it was scrapped.

Graphene is go

Graphene, a wonder material just one-atom thick, was properly isolated and characterised in 2004. It was achieved via the ‘Scotch tape technique’ of pulling graphene layers from graphite using an everyday piece of sticky tape.

This work would eventually earn University of Manchester researchers Andre Geim and Konstantin Novoselov a Nobel Prize in Physics. The (relatively) simple preparation method they had discovered sparked a graphene gold rush as the exceptional properties of this material found all kinds of experimental application.

In other news

January: NASA’s Opportunity and Spirit rovers land on Mars.

2 February: ESB enters the wholesale broadband market as its €50m fibre optic network is officially opened.

4 February: 19-year-old Mark Zuckerberg launches TheFacebook.com as a Harvard-only social network.

6 February: SiliconRepublic.com reveals plans from the Department of Education to deliver broadband connectivity to all of Ireland’s primary and secondary schools.

27 February: The first of the 19 metropolitan area networks in phase one of the National Broadband Plan is switched on in Cork.

4 March: Tralee-based PulseLearning wins a contract to supply training services to 1,700 NASA staff.

4 March: Michael Dell announces that he will step down as Dell CEO but stay on as chair.

17 March: ComReg reports that almost half of Irish households now access the internet.

19 March: Eircom returns to the public markets, listing shares on both the London and Dublin stock exchanges at a price of €1.55 each, valuing the company at €1.14bn.

24 March: The EU levels its first fine against Microsoft. The €497.2m antitrust penalty was the biggest in European history at the time.

29 March: Ireland bans smoking in workplaces with a new public health act.

14 April: Apple reports a 909pc increase in iPod sales in its quarterly results.

11 May: IBM invests €22m in a new R&D facility in Dublin.

19 May: Ireland’s two main mobile networks simultaneously launch rival versions of the popular BlackBerry handset.

19 May: Intel commits to a further €1.6bn investment in Leixlip.

25 May: Internet advertising revenues reach almost $2.3bn for the first quarter of 2004 – the highest three-month total since records began eight years before.

1 June: Irish mobile phone operators launch a code of practice and guidance for parents amid concerns of inappropriate content being sent in text and picture messages.

21 June: The first privately funded human spaceflight takes place aboard the SpaceShipOne.

1 July: The Cassini-Huygens spacecraft enters Saturn’s orbit.

3 August: US networking technology giant Avaya acquires Dublin-based conferencing technology firm Spectel for $103m.

4 August: An automated system for penalty points – the first of its kind in Europe – is deployed by An Garda Síochána across seven locations.

2 September: HP announces a €21.4m technology development centre at its manufacturing facility in Leixlip.

4 October: Microsoft launches an Irish MSN portal, with local content from RTÉ, Golden Pages and VHI.

8 November: The first Customer Respect Index claims Irish telcos have the world’s worst customer service.

13 November: The European Space Agency’s SMART-1 probe reaches the moon, becoming the first European satellite to orbit it.

23 November: Blizzard Entertainment drops the first release of World of Warcraft.

9 December: ComReg compels O2 and Vodafone, which share 94pc of the Irish post-paid mobile market, to host mobile virtual network operators.

13 December: Oracle buys PeopleSoft for $10.3bn, putting an end to one of the longest-running takeover battles in IT history.

15 December: Brian Salcedo receives the longest-ever prison sentence for hacking: nine years for attempting to break into the unsecured wireless network of Lowe’s hardware chain.

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