The digital miracle cure for Ireland

31 Jan 2011

In his look back on the week, editor John Kennedy argues more Irish firms and budding entrepreneurs need to get tuned into e-commerce if they are to pull through to better times.

I received an email over the weekend from an enterprising chap called Gary Tiernan who has launched a new online venture called Ubode, which sells designer homeware products like Bodum coffee makers and Normann Copenhagen cognac glasses. In that one email, Gary encapsulated everything I’ve been thinking lately about Irish enterprise and the country’s current predicament.

Gary wrote: “Last year, I lost my job with a major retailer in Ireland and I started the journey to where I am now. I had always wanted to start my own business but found it easier to just work away and get on with life. If you were to ask me two years ago would I start an online business I would have said no. I was not even on Facebook. The challenge of a technophobe taking on technology left me rethinking the way we conduct business in Ireland and so I decided to launch

“I spent a lot of time looking at websites selling homewares in Ireland and found that it was an area of the market I could work to develop. I started to develop the website in July this year and I went live in October. I have had a reasonably good first few months and I look forward to the challenges ahead,” Gary wrote.

Gary’s email hits on two important points: we need more entrepreneurs and we need more people in the business world to switch on to the online promise.

Let’s be clear, the internet and e-commerce are not a silver bullet for business or economic woes. But yet I can conceive of no greater gift to the business world than the creation of the internet. It delivers the entire world to your doorstep and if you’re canny enough and imaginative enough, it should be the gateway to more sales and more exports.

The business world of the 21st century

The business world of the 21st century will not only have big corporations and scaled up SMEs, it will largely consist of micro-enterprises run largely through the filter of broadband and platforms like Google, Facebook and Skype. That’s the beauty of the whole thing and for people like Gary it has awoken a whole new range of possibilities.

It breaks my heart to think of all those talented young people who are emigrating from this land on a daily basis and I often wonder if many or any of them even thought it was within their power to establish a business venture.

I’m not naive enough to think that it could happen just like that, people need capital and they need to feel brave enough to take risks. The internet has removed so many barriers to entry for establishing a business. Microsoft’s cloud computing report compiled by Goodbody Economic Consultants estimated that as well as ICT companies creating up to 8,600 jobs in the next few years, Irish SMEs who connect to the cloud and conduct business digitally have the potential to create a further 11,000 jobs.

Things need to change. People need to feel they can take a risk in the first place. Our country’s outmoded bankruptcy laws mean that people fear that if a business failed they would be blacklisted from holding directorships for up to 12 years. Entrepreneurs and sole traders whose businesses flounder can also find it difficult to obtain social welfare, despite making PRSI payments in the previous years.

This is in contrast with the culture in the US where people aren’t considered experienced entrepreneurs until they’ve clocked up a few failed businesses. As Swedish entrepreneur, venture capitalist and Skype founder Niklas Zennstrom told me during the Dublin Web Summit in October: “In the US when your business fails, people say: ‘Good on you, what did you learn?’” In Ireland people fear what others think about them or worse; ending up in The Phoenix or Stubb’s Gazette.

Wake the nation up to e-commerce

The other thing that fundamentally needs to change is Ireland’s attitude to e-commerce and utilities like broadband. My attitude on the latter subject of broadband is clear – while Ireland has done a remarkable job on catching up, our nation’s attitude from the top down in terms of deploying the infrastructure during the pivotal years 2000 to 2009 was criminally negligent. Here was the most important utility a business would require to survive in the 21st century and yet no one seemed bothered that businesses in rural and urban areas could not get connected at the time. As we are about to close the last 1pc of the nation that needs broadband, wise minds should be focusing on how we can up speeds to be in the world’s top 10 for broadband quality.

But on the subject of e-commerce, I was saddened to learn in November as the IEDR launched a €100,000 fund to encourage SMEs to get connected that only 66pc of Irish firms are online and only 21pc of these have the ability to handle e-commerce transactions. This has grown a marginal 3pc since 2000.

The CEO of the IEDR David Curtin put it perfectly at the time: “Three years ago, many would have said that broadband was an issue but I don’t think that is the case.

“There is a clear digital divide and this is attitudinal and because they aren’t receiving the message from the policymakers or the technology industry that the power of the web can not only boost revenues but make their businesses more efficient.”

Curtin illustrated the stark contrast between multinationals based in Ireland, such as Google and Microsoft, whose entire businesses function on the internet, and bricks and mortar Irish businesses staring bleakly at an uncertain future.

“SMEs and SOHO workers need to step up to the plate, educate themselves and find out more about getting connected and being 21st-century businesses. There are 350,000 self-employed people throughout Ireland and you can be sure not all of them are using the web.

“Think about it, firms should be using automated invoicing, handling electronic payments, which enables them to do more productive things and still add a personal touch to their business. If customers can pay for products at 2am, the businesses can make money while they sleep. Why don’t more of them see this?”

Indeed why don’t more of them see this. Like I said, the internet is no silver bullet, but it provides undreamed of opportunities for people like Gary Tiernan to take control of their own destiny.

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