OPINION:We can create 50,000 jobs over five years by doubling companies doing business online
IRELAND PRIDES itself on attracting digital giants like Google and Facebook to locate here.
Terms like cloud computing, smartphones and wifi have entered the vernacular. We are intrinsically linked into the global digital economy, estimated to be worth $20 trillion. Despite this, Ireland has no national digital strategy and is under-performing in the digital economy.
According to research by Oxford Economics, financial crises tend to hasten the adoption of key technologies, transform businesses and spark new waves of wealth creation.
Microsoft predicts that cloud computing can create 20,000 jobs in Ireland, but we also have the potential to create 50,000 digital jobs within five years by doubling the number of companies doing business online.
If the digital economy was a sector, it would be bigger than agriculture and energy, but unlike these areas, digital is difficult to define. However, change the orientation from portrait to landscape and it becomes a major horizontal driver of economic growth across all sectors. Associated predominantly with media and technology companies, it will eventually have an impact on up to 90 per cent of businesses worldwide.
Countries that have digital strategies tend to outperform those that don’t. Digitally-enabled firms grow their exports at twice the rate of traditional businesses and create 2½ digital jobs for every traditional job lost.
Ireland has 185,000 registered companies, only 20 per cent of which are doing business online. Doubling this figure over the next five years will result in 37,000 additional firms undertaking some degree of digital transformation, creating an average of 1½ digital jobs in each case, or more than 50,000 jobs in total.
Compared with the meagre 20 per cent of companies that are doing business online, 75 per cent of the Irish population have internet access. Two-thirds of online spending, worth more than €3 billion a year, takes place abroad.
Encouraging more Irish companies to do business online would reduce this deficit by expanding the range of domestic options, reducing spending on foreign websites and creating a platform to attract business from international markets.
Digital may primarily be a consumer phenomenon, but we need to go further and make it part of our economic landscape. Developing a national digital strategy is essential in order to set growth targets, not only for Ireland’s national digital economy but for its share of the global digital economy as a whole. Every component of the digital strategy should contribute either directly or indirectly to economic growth.
We must turn policymakers into digital champions and develop strategies quickly. The challenge is to create jobs, salaries, revenues, exports, royalties, taxes and societal benefits.
To do this, we need to change the emphasis from connectivity to adoption and get buy-in from small and medium-sized enterprises who comprise the vast majority of Irish businesses.
Innovation is needed not just in what the strategy delivers, but also in the way it is developed. The Government appears to take a similar approach to strategy development no matter what the subject is. That won’t work this time because it doesn’t have people with the right combination of knowledge and enthusiasm.
A team needs to be created, comprising external digital experts from different sectors and a digital advocate appointed by each relevant Government department including communications, finance, education, justice, and jobs and enterprise.
It would consult with stakeholders, develop a road map and ultimately deliver a digital strategy using innovative means. The team would transcend inter-departmental politics and would not be distracted by day-to-day Government business. Cynics will no doubt suggest that the team should adopt a flying pig as its mascot!
Radical steps like these must be taken if a successful digital strategy is to emerge. Without it, the Government might still achieve its objective of making Ireland the best small country in the world to do business in by 2016, but it will be doing business only with countries that also have under-achieving digital economies like ours.
The rest will have moved too far ahead.
KIERAN O'HEAis Kieran is Senior Digital Strategist with Digitigm.com