Pre-Budget submission: The National Digital Development Plan

26 Nov 2009

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Right now our economic future depends on the digital economy. If we are to move from plans to action then we need a new National Digital Development Plan – it is time to reset the National Development Plan (NDP) so it delivers the infrastructure today’s Ireland needs. We need digital roads more than we need tarmacadam. We need Digital 21 to be given the same level of importance as Transport 21 in terms of national development.

This will require a major effort by Government and a fundamental rethink of what constitutes infrastructure. It will involve all stakeholders buying into the shift from tarmac roads to digital roads. It will guarantee a whole-of-Government approach because the capital expenditure and development budget will prioritise the infrastructure of the knowledge economy.

"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.
We need to stimulate the economy as well
in order for recovery to occur."

– Minister Eamon Ryan, July 2009, Digital Ireland, May 2009

If we are to have a smart economy we need a smart NDP that builds the digital infrastructure without which the smart economy cannot exist. A digital development plan will make this a reality, and send a clear signal to all stakeholders that the knowledge economy is actually going to happen.

This is not a matter of either/or. We will still need physical infrastructure, but we must prioritise our digital infrastructure if we are to generate the recovery and jobs to pay for that physical infrastructure. Therefore the National Digital Development Plan must be a central part of any future NDP.

Over the past six months Siliconrepublic.com has covered the core areas of: digital infrastructure; entrepreneurialism; creating an innovation nation; and talent and education. Over the course of the campaign we have interviewed stakeholders and leaders from Ireland and abroad. Now prior to the December budget we present a summary of actions that sets out what needs to be done and how it can happen.

The digital jobs dividend

Ireland is the 10th-highest exporter of services in the world (financial services, technology, engineering, etc). We provide 5pc of the world’s services. The country has a target of 70pc of exports being services-based by 2020.

This will rely on world-leading digital infrastructure.

“For any economy, failure to work out the security and supply
of fit-for-purpose communications means you are failing your
public-services duty if you are the
government of the day.
If you don’t have a coherent plan, move on and think of something else.”

Lord Stephen Carter, architect of Digital Britain, Digital Ireland, June 2009

An IDC study commissioned by Microsoft predicts that the information and communications technology (ICT) industry will create 5.8 million new jobs and more than 75,000 new businesses over the next four years – three times the rate of employment in other industries.

The ICT industry is set to continue to grow at three times the rate of other industries. This is why it is vital Ireland plays to its advantages, harnessing not only the presence of ICT giants such as Intel, Microsoft, Dell, BT, HP, Vodafone, Cisco, O2 and Google, but also developing next-generation broadband networks and supporting scores of high-potential start-ups to generate thousands of new Irish jobs.

In the figures for Ireland, ICT spending in 2009 will be €2.9bn and will grow at 0.4pc per year, compared to GDP growth of -1.3pc per year. ICT-related activities will generate €4.8bn in taxes in 2009. Over the next four years, ICT-related taxes are expected to increase to nearly €5bn.

That spending growth means employment in ICT-related companies will rise by 8,000 jobs in the four years from the end of 2009 to the end of 2013, up from a 2009 base of 148,000. That represents growth of 0.4pc a year from now through to 2013, while overall employment is expected to shrink.

In its own Technology Actions to Support the Smart Economy report, launched in July 2009, the Government predicts that up to 25,000 new jobs could be created in the digital economy over the next decade.

“If Ireland breaks its faith with its science commitment the reputational
damage to our smart economy will
be enormous.”

Frank Gannon, director-general of Science Foundation Ireland, Digital Ireland, July 2009

Government action

Over the past year the Irish Government has focused its attention on putting in place key components to support the development of a digitally enabled smart economy. If implemented, these plans have the potential to actually deliver the digital dividend of jobs, foreign direct investment and economic recovery.

In its Technology Actions to Support the Smart Economy report, the Government set out to identify key actions that will deliver the “critical technology infrastructure necessary for the development of a Smart Economy”. This plan, and in particular the promise to develop the strategy as a “whole-of-Government” approach, in consultation with all key stakeholders, was widely welcomed by the Irish technology

What is clear from this report and from the subsequent smart-economy delivery plan is that there is no shortage of commitment and good intentions from Government. The Government should be rightly applauded for its visionary investment of €150m in the ‘Smart Schools = Smart Economy’ computers for schools initiative.

However, historically in Ireland attempts to create a cohesive, integrated, world-leading digital economy have fallen well short. The Information Society Commission report of the late Nineties remains a blueprint.

“Continued innovation and investment in information technology will help
jump-start recovery from the current
recession. If you don’t get these things
right, the whole country could lag
behind. And in this space that’s very
difficult and problematic. Once you lag
behind, it’s hard to catch up.”

Robert Atkinson, leader of the Climate Change and Chemicals Team
of the US
Government’s Global Environment Facility, Digital Ireland, August 2009

A decade on, we have the opportunity to turn good intentions into specific actions. This time it is the only show in town in terms of jobs and sustained recovery. It is what we do now to turn these plans into reality that will decide the future of jobs in Ireland.

If the current plan is to receive buy-in from the digital leaders and from society at large it will have to quickly move from planning to development and execution. The approach and possible barriers are clearly recognised by Government in the Technology Actions report of July 2009:

“Extensive stakeholder consultation will take place and the strategy will be developed in a whole-of-Government approach. Society at large will need to understand and embrace this new direction. The benefits and impacts of this knowledge-based approach will have to be clearly defined in order to ensure a wide buy-in and the active involvement of the public.” 

The construction of critical fibre infrastructure is more vital to the Irish nation than the construction of future roads. Ultimately the issue of access for homes and particularly business needs to be resolved. Various estimates put such an investment at between €2bn and €3bn over the next five years. This needs to be enshrined in the National Development Plan (NDP).

A National Digital Development Plan

The future of job creation and economic recovery in Ireland is dependent on prioritising the digital economy and investing in the infrastructure that will power it.

Nations across the planet are in a race to be in the vanguard of the global digital economy. Countries are investing now in digital infrastructure and services because they recognise that these are vital to economic growth, recovery and job creation.

The digital economy underpins our whole economy and its competitiveness. Investment in digital infrastructure and services must take precedence over almost everything else. It is the bedrock on which all other sectors depend; it is the key to our recovery and future economic success.

If we prioritise digital, we will create the growth to fund other development. If we fail to make this a national imperative, then all other future revenue will be adversely affected.

"We should be supporting our young right now,
instead of scaring them to death. For10 million a year,
you could have 200 companies a year."

Dylan Collins, founder and CEO of Jolt Online Games, Digital Ireland, September 2009

So, the fundamental challenge is how to move the smart-economy plan onto a development footing and how to get stakeholder and society buy-in for the plan and to send a positive message out to the global players in the eco-knowledge economy.

Right now our economic future depends on the digital economy. If we are to move from plans to action then we need a new National Digital Development Plan – it is time to reset the NDP so it delivers the infrastructure today’s Ireland needs. We need Digital 21 to be given the same level of importance as Transport 21 in terms of national development.

This will require a major effort by Government and a fundamental rethink of what constitutes infrastructure. It will involve all stakeholders buying into the shift from tarmac roads to digital roads. It will guarantee a whole-of-Government approach because the capital expenditure and development budget will prioritise the infrastructure of the knowledge economy.

If we are to have a smart economy we need a smart National Digital Development Plan that builds the digital infrastructure without which the smart economy cannot exist. A digital development plan will make this a reality, and send a clear signal to all stakeholders that the knowledge economy is actually going to happen.

This is not a matter of either/or. We will still need physical infrastructure, but we must prioritise our digital infrastructure if we are to generate the recovery and jobs to pay for that physical infrastructure. Therefore the National Digital Development Plan must be a central part of any future NDP.

"Broadband leadership will be a precondition
for economic growth in the next 10 to 20 years."

Eric Schmidt, CEO, Google, Digital Ireland, October 2009

The creation of this National Digital Development Plan will be a clear statement of intent from Government and will send out a positive message to international markets that Ireland is the place to invest if you are in the digital and green-economy space – exactly the type of investment we are looking to attract. It will provide existing multinationals with the certainty they need to secure the investment they are pitching for.

Our existing critical mass of knowledge-based industries, combined with our industry and Government partnership model, means we are in a unique position to become a world leader in the digitally powered, knowledge-based economy of the future.

The creation of a National Digital Development Plan 2010–2021 will send a message to the world of Ireland’s digital credentials, and offer wider society a clear vision of a strong future for them and for future generations. It will send a strong message to our fellow Europeans that Ireland is ready to lead a strong digital Europe into the future.

We, the Irish technology leaders, call on the Government to take action now to secure Ireland’s digital future. Our future prosperity and the well-being of our society depends on it.

To read the 15 key actions of the National Digital Development Plan, click here.

By John Kennedy

www.digital21.ie – Digital 21 is a campaign to highlight the imperative of creating an action programme to secure the digital infrastructure and services upon which the success of the economy depends.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com