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Developing a

Knowledge City
Region
A TEN POINT PLAN
Contents

Foreword Page 1
Committee List Page 2
Executive Summary Page 3
10 Point Plan for 2012: Recommendations Page 4
Section 1: City Regions: The Seeds of Growth Page 5
Section 2: Building a Learning Society Page 11
Section 3: Upgrading the Knowledge Infrastructure Page 17
Section 4: SMEs and the Knowledge Economy Page 23
Section 5: Arrival of a Knowledge Capital Page 27
Conclusion Page 33

Appendix
International Examples of PC Incentive Schemes Page 35
Past Reports and Submissions Page 36
Foreword

In 2008, Dublin is a vibrant, growing city. As our We are fortunate that we have attracted
capital continues to attract a record number of contributors from the highest levels of education
workers and tourists, it is essential that we and industry who have inputted into the
leverage the city’s potential by realising our vision development of this report and its
to transform it into a leading knowledge city recommendations. I would like to acknowledge
region. Dublin has enormous potential to the vital role that each member of the Committee
develop as a city region in which technology and has played.
science take root, where talent gathers and where
innovation and creativity occur. The recommendations outlined in this report will
give vital momentum to establishing Dublin as a
In 2006, the Knowledge Economy Committee was world leading knowledge city region. We must
established within the Dublin Chamber of now call on government, members of industry
Commerce to examine the existing policy and education, entrepreneurs, small business
landscape and to draw up a set of owners and all of the city’s inhabitants to
recommendations that would ensure that the embrace this change so that the Dublin City
Dublin City Region can compete with other city Region is firmly established on the global map.
regions across the globe. These recommendations
are practical and achievable and will ensure that The global knowledge economy is evolving
Dublin plays a vital role at a national level to apace. If Dublin is to stake its claim on this
stimulate and support Ireland’s economy. economy, strong leadership and conviction are
needed. It is now a national imperative that we
take action. Government has a vital role to play in
shaping our legacy for future generations.

Martin Murphy
Chairperson

1 ‘Digital Prosperity: Understanding the Economic


Benefits of the Information Technology 1
Revolution’, Atkinson, R. & McKay, A.
Committee
List

Martin Murphy, Hewlett-Packard Ireland – Chair

Des Fahey, Dublin Business Innovation Centre


Niall Feely, Eircom
Karen Forte, Allianz
Catherine Godson, University College Dublin
Jacqueline Hall, Political Communications
Trevor Holmes, Intel
Terry Landers, Microsoft
David Lloyd, Trinity College Dublin
Eva Maguire, Irish Management Institute
David Martin, Google
Tom McCarthy, Irish Management Institute
Brian Norton, Dublin Institute of Technology
Joyce O’Connor, The Digital Hub
Liam Quirke, Matheson Ormsby Prentice
Ferdinand von Prondzynsk, Dublin City University

2 Dublin Chamber of Commerce


Executive
Summary

This paper, by the Dublin Chamber of The foundations for a successful Dublin City
Commerce, draws together views from business Region have been laid. We need to build on
and higher education institutions from across the these by implementing policies that support the
Dublin City Region. It presents a case for taking attraction of specialised labour and capital to our
prompt action in a number of targeted areas in city, and creating an education system that is
order to allow Dublin, and Ireland, to reap geared towards producing the graduates that are
rewards from the knowledge economy. Our central to the successful knowledge economy. We
inspiration comes from international best practice should aim to foster a technology literate society
and is firmly grounded in national policy. through both infrastructure and education. We
also need to look beyond the nuts and bolts, to
International experience shows that the create a full knowledge eco-system that is
competition for investment and employment in recognised across the world. This means
high value added activities is not between developing a strong knowledge brand for the
countries – it is between city regions. It also Dublin City Region and investing in landmark
demonstrates that future growth growth will be projects that emphasise our commitment to the
based on competition for key knowledge ethos underlying the knowledge economy.
workers. The Irish Government has worked hard
to cultivate a supportive environment where This paper identifies a number of practical
business and education can combine to maximise recommendations that can be implemented in
growth and productivity through development the next four years to maximise return on the
and innovation in ICT. To leverage this investment planned by Government. These steps
investment, a co-ordinated and concerted plan – will underpin the development of the Dublin City
taking on the mantle of the Whitaker Policy Region as a world class centre for knowledge
devised in 1958 – is required to attract skilled activities and will serve to further Ireland’s
human capital. As our capital city, Dublin must aspiration to become a leading location for
take its place at the heart of this strategy. innovation investment.1

Dublin Chamber believes that among Irish cities,


the Dublin City Region has unique potential, in
terms of resources, skills, people and
infrastructure, to develop as a "Knowledge City",
capable of competing on the global stage. As
such, it will stimulate national growth and
demonstrate Ireland’s commitment and capacity
to deliver on innovation investment.

1 Dublin Chamber of Commerce is acutely aware of the importance that


1 many
treatment of Intellectual Property has in the location decision for
companies. For this reason Dublin Chamber will be publishing a separate 3
report on this issue in the future.
10 Point Plan for 2012:
Recommendations

Developing, attracting and retaining 6 Complete ICT in Education Strategy and


entrepreneurial, skilled and creative workforce begin implementation by 2008, drawing on
1 Develop short-term programme of the support of business where it is needed to
financial/tax incentives to assist in the achieve this aim.
recruitment and retention of key workers with
(Department of Education and Science).
the skill sets essential to developing the
knowledge economy.
Branding the Greater Dublin Area as a
(Department of Enterprise, Trade and knowledge city region
Employment). 7 Introduce WiFi across Dublin’s public
transport system to reinforce the knowledge
2 Introduce SME ‘Knowledge Acquisition brand of the Dublin City Region.
Grants’ to encourage R&D and expand
(Department of Transport / Dublin City
‘Innovation Voucher’ Scheme to improve SME
Council).
management capacity through expert
secondment programme.
8 Establish world-class science museum to
(Department of Enterprise, Trade and stimulate interest in science and encourage
Employment / Enterprise Ireland). international recognition of Dublin as a
knowledge capital.
3 Encourage tailored and practical training for
(Department of Education and Science).
SME managers through the ‘Management
Development Council’.
9 Optimise early learning in the child care
(Department of Enterprise, Trade and system and up-skill those working in the early
Employment). learning industry.

(Department of Education and Science).


Embedding a next generation IT infrastructure
4 Introduce VAT-free scheme for purchase of
10 Move key Government services for business
PCs to stimulate a technology-literate society.
to be available online only and implement an
(Department of Enterprise, Trade and e-government plan for all Government
Employment). Departments and Local Authorities.

(Department of the Taoiseach).


5 Amend the Strategic Infrastructure Act to
include advanced telecommunications to
facilitate development of next generation
networks and amend National Building
The Dublin Chamber of Commerce will continue
Regulations so that new homes are built to be
to bring together business, higher education
"next-generation ready".
institutions and local government to effectively
(Department of the Environment, Heritage voice the City Region’s concerns with regard to
and Local Government). developing a knowledge economy.

4 Dublin Chamber of Commerce


1
The New Paradigm

City Regions:
Ireland has recognised that its future lies in the ‘Knowledge
Economy’ – successfully promoting, embracing and
exploiting innovation through science and technology. We

The Seeds
have also realised that the creation of the right conditions
for the development of this economy cannot be left to
chance. If this transformation is to be realised in Ireland, a

of Growth concerted and co-ordinated plan is required to attract


skilled human capital, foster indigenous talent and create
effective networks between science, education and
industry. As our capital city, Dublin will play a pivotal part in
this transformation.

The Whitaker policy of 1958 demonstrated Ireland’s ability


to perceive a new economic paradigm and develop a
successful strategy to compete. Fifty years on, the Dublin
City Region needs to build on the Foreign Direct
Investment that was the result of this strategy and Ireland
must, once again, demonstrate foresight by creating an
equivalent enterprise strategy that accounts, not only for
the global competition in capital, but that also tackles the
new competitive arena of talented and creative labour.

5
City Regions:
The Seeds
of Growth

6 Dublin Chamber of Commerce


1
Creating a Knowledge Capital workers, enjoying an excellent quality of life.
Imagine Dublin 2020 presented Dublin Chamber The logic for developing the Dublin City Region,
of Commerce’s vision of our city as a knowledge so that it is capable of competing internationally
capital within Europe; an internationally within the new knowledge economy, is
recognised centre of excellence in high-level undeniable. At a national level, it will stimulate
education, an engine of creativity and innovation and support Ireland’s entire economy. As a result,
in science and technology and a city-society in it will also serve to accelerate regional growth,
which technology has taken root and is second allowing Ireland’s other cities to reach their full
nature. In this vision, knowledge is the source of potential. Ultimately, it will provide a road map
competitiveness and productivity. for other regional cities as they reach the critical
mass needed to compete internationally. There is
a clear case for Government policy, at both
A National Economic Generator regional and local level, to embrace a vision of
Rapid urbanisation has dramatically increased the Dublin as a ‘Knowledge City’ capable of
economic strength and importance of competing with other city regions across the
metropolitan regions worldwide. While nation world.
states determine the broad economic
environment in which a city operates, decisions
relating to international investment and jobs are People Focus
increasingly made at the level of competing city In the new economic paradigm that defines the
regions. In 2006, the OECD confirmed this trend knowledge economy, the City Region must
and acknowledged that city regions have now compete with other international locations
become the real engines of their national through its ability to train, retain and attract
economies.2 There is also compelling workers. In order to gain competitive advantage
international evidence that clustering is a key and ensure innovation, the Dublin City Region
component of successful knowledge based must supply the knowledge workers required for
economies. Clustering creates added value ongoing collaboration between science and
through the interaction of creative, technologist industry.
and commercial people who interdependently
develop next generation products and services. The workers who are the linchpin of this
This type of dynamic naturally occurs in city knowledge economy have been conceived as the
regions. "creative class", by Richard Florida in Rise of the
Creative Class. This "creative class" is made up of
The Greater Dublin Area is the dominant city people working in the fields of science, maths,
region of the Irish economy. Among Irish cities, engineering, communications, the arts, design
the Dublin City Region has the best balance in and entertainment, and is complemented by a
terms of concentration of resources and broader group of "creative professionals"
infrastructure to allow it to develop as a working in knowledge intensive industries
‘knowledge city’ - a place that develops, attracts including business, finance, law, healthcare and
and retains a talented and professional class of related fields. They are "creative people who

2 "Competitive Cities in the Global Economy",


OECD (2006).
7
City Regions:
The Seeds
of Growth

prefer places that are diverse, tolerant and open develop our city in this way, there is a real risk
to new ideas." The Three T’s are central to that the Dublin City Region may simply attract
successfully attracting and retaining these talent in the early stages of its career and that
workers in any economic region. They are: this talent will then move on to other, more
attractive and stimulating cities.
Technology – an ability to embrace change
and new ways of doing things;
Good Foundations
Talent – an ability to attract and welcome new The Irish Government has laid the policy
people and ideas into a location; and foundations for a new Irish economy with strategy
documents such as Ahead of the Curve; Ireland's
Tolerance – an ability to be non-judgemental Place in the Global Economy; the Strategy for
and open to diverse life style choices that Science, Technology and Innovation; and the
these ‘new’ people may prefer to embrace. report of the latest Task Force on Small Business.
Although these policies are at differing stages of
implementation, an environment is being created
Culture Matters where business and education can collaborate
The Dublin City Region is in direct competition creatively to move Irish products, processed and
with other major cities as the place where talent services up the value added chain. Dublin
gathers and innovation occurs. To date, our city Chamber believes that, in time, Ireland can reap
has been a success as a gateway to Europe; a the rewards of these policies through higher
melting pot, attracting and integrating talent productivity, employment and incomes.
from across the globe. However, we cannot
assume that this will continue to be the case. In particular, the Dublin Chamber wishes to
Direct action needs to be taken to ensure that, as acknowledge a number of pro-business tax
the city continues to develop economically, it also fundamentals that the Government has had the
grows as a vibrant cultural, social and educational foresight to introduce. These include Ireland’s
centre in order to attract and build its own corporate tax regime, a low corporate and
"creative class". Offering the right working and employment tax environment and improvements
economic environment is only one part of the to the Research and Development Tax Credit, the
equation necessary to the knowledge economy. Business Expansion Scheme and the Seed
We must take a strategic approach to ensure that Capital Schemes.
our City also offers the cultural, social and
recreational lifestyle options that position Dublin The business sector has contributed positively to
as an attractive and fulfilling place to live for this strategic debate. Papers such as Retuning
talented knowledge workers. the Growth Engine by the American Chamber of
Commerce of Ireland and A vision for ICT Ireland
Balanced growth of this kind is an integral part of by ICT Ireland also plot a course for Ireland in the
the successful city region in the knowledge knowledge economy.
economy. Unless a determined effort is made to

8 Dublin Chamber of Commerce


1
Developing the Dublin
City Region
The national strategic overview is set. As a result,
this paper by the Dublin Chamber focuses on a
number of practical recommendations that will
advance the development of the Dublin City
Region within the national framework. These
recommendations work hand in hand with the
Dublin Chamber’s other policy papers,
particularly on the governance, infrastructural and
transport needs of the City Region.3 The Dublin
Chamber represents views from across the
commercial and education spectrum in the city.
All believe that these recommendations will lend
vital momentum to establishing the Dublin City
Region as a world-leading knowledge city – and
this also offers a real opportunity to fuel growth
across our national economy. The global
knowledge economy is evolving apace. If Dublin
is to stake its claim in this economy, now is the
time to take action.

3 A list of Dublin Chamber of Commerce Reports and


Submission is included at the end of this document.
9
10 Dublin Chamber of Commerce
2
Context: Competing to train, retain
and attract knowledge workers

Building a Attracting an international ‘creative class’ will allow the


Dublin City Region to develop the foundations of a

Learning
knowledge economy. Yet to be a booming success, Ireland
will need to inspire and train its own creative class from
Ireland’s children. Once inspired, these children will need

Society an advanced ICT infrastructure, and the tools to access it, at


home and at school. Our knowledge economy will require a
higher education infrastructure geared to foster highly
skilled, educated and creative knowledge workers, so we
need to put the basics in place to allow us to create this.

11
Building a
Learning
Society

12 Dublin Chamber of Commerce


2
2.1 Attracting Internationally-
Experienced Talent
KEY ACTION competitive funding process and a focus on
increasing production of Ph.D. graduates. These
Develop short-term programme of are undeniably important elements in achieving a
sustainable economic model, however Dublin
financial/tax incentives to assist in the
Chamber fears that this Strategy will fail unless
recruitment and retention of key
steps are taken to attract new blood to the
workers with the skill sets essential to education sector in Ireland.
developing the knowledge economy.
Experienced senior researchers - or Principal
The combination of a strong Irish workforce Investigators - who oversee a research team, are
coming on line with world class knowledge the essential building block of the Strategy for
workers will provide the highly educated and Science, Technology and Innovation. The graph
creative body of labour necessary to maintain the below illustrates that Ireland cannot meet the
knowledge economy. This economy requires a demand for people with the necessary skills to
robust higher education infrastructure that can act as Principal Investigators (PIs). There are
produce highly skilled, educated and creative relatively few people in this country in the age
workers. Recognising this, Irish Higher Education groups associated with these senior positions,
Institutions have been set an ambitious goal of and it is certain that we do not currently have the
doubling their annual output of Ph.D.s to meet a numbers of senior researchers required to deliver
growing demand. The Dublin City Region’s on the targets for Ph. D.s envisaged in the
position as the centre for learning in Ireland is Government Strategy.
already well established, with three out of four
Percentage of Population with Third Level
Irish Ph.D.s coming from County Dublin alone.
Education or higher by Age, 2005
45%
Graduations data for selected Dublin institutions, 25 - 34
classified by type of qualification (Full/Part Time 2004) 40% 34 - 44
35% 45 - 54
55 - 64
Certificate/ Honours PhD Total 30%
Diploma Degree Masters
25%
Dublin 2,199 18,564 508 21,271
20%
Ireland 18,783 36,386 683 55,852
15%

Note: The following institutions are included in 10%


the totals for Dublin: DIT, UCD, TCD, DCU, Royal 5%
College of Surgeons and St Patrick’s. 0%
US

OECD

UK

IRELAND

EU15

The objective of the Government Strategy for


Science, Technology and Innovation is to develop
a sustainable model of research through a
Source: National Competitiveness Council’s
Annual Competitiveness Report 2007. 13
Building a
Learning
Society

A number of factors also limit the speed at which difficulty in recruiting internationally experienced
Ireland can build its Ph.D. reserve, while still PIs cannot be tackled and our ability to increase
maintaining quality. At present the level of Ph.D.s the number of Irish Ph.D.s will be restricted.
in Ireland is lower than the EU15 average.
Internationally it is recommended that Experience abroad gives us some insight into
supervisors/PIs have no more than 5 Ph.D. mechanisms that can be used to attract essential,
students. World class Principal Investigators, who skilled workers where a shortfall exists. The
have the requisite education and experience, are example of the Netherlands is typical.
required to train Irish Ph.D.s but, as illustrated,
these are in short supply locally. The Dublin Chamber advises that a short-term
programme, similar to that of the Netherlands,
If we are to increase production of Ph.D.s we should be developed to assist in the attraction
need a ‘jump start’ through the repatriation of and retention of key knowledge workers in
suitably qualified and experienced Irish Ph.D.s Ireland. Some form of financial or tax incentive
living abroad. Unfortunately, this has proved can be effectively used to bridge the gap
difficult to date due to differing standards of between Dublin and other university towns of
living in Dublin compared to other international international standing, thus addressing the
university towns. Dublin Chamber believes that shortfall in essential knowledge workers, such as
some form of intervention is required to tip the Principal Investigators.
balance in favour of Dublin. Without this, the

2.2 ICT Skills as the new ‘three Rs’


International Case Study:
The Netherlands KEY ACTION
The Dutch Government has focused on improving
Prompt completion and initial
the attractiveness of the country by allowing an
implementation of the ICT in
employer to pay international employees 30% of
their salary as a tax free allowance. This ‘30% ruling’
Education Strategy by 2008, drawing
applies to international employees with a specific on the support of business where it is
expertise that is scarce or absent in the job market needed to achieve this aim
in the Netherlands. To qualify for the scheme
employees must demonstrate compliance with a ICT competence from an early age is a critical
variety of requirements, including level of building block in a knowledge society, however in
education, relevant work experience and Ireland there is a deficit of basic IT skills across
consistency of remuneration with prior employment the general labour force. Dublin Chamber
(pre-30% allowance). The categories of business believes that every school leaver today should
that this applies to are based on the importance have a defined ICT skill set, in the way previous
which specialised knowledge has to the role. generations had the ‘three Rs’ as a rite of
passage. The ICT strategy in education provides
a welcome road-map to take Ireland in this

14 Dublin Chamber of Commerce


2
direction. If this strategy is to make a meaningful continuous investment in ICT that can only come
impact, it also requires a detailed plan for action from Government. If Government demonstrates
with specific tasks, targets and timeframes, clear this leadership, businesses will enthusiastically
responsibilities and a definite commitment of follow.
resources from current spending plans.
Dublin Chamber believes that there is an urgent
Primary and secondary education facilities need for the Government to complete the ICT in
provide students with the necessary learning skills education strategy and that this should be tightly
to reach their full capacity at third-level. Ireland coupled with an action plan for speedy execution
has seen an encouraging increase in secondary beginning in 2008. Business can make a positive
school participation rates. Provisional data for contribution towards achievement of these goals
2005 indicates a participation rate of 86%, which and this support can be easily harnessed and
surpasses the Lisbon Agenda’s target of 85%. mobilised, probably through the establishment of
However, in the crucial area of scientific and an Advisory Structure to assist in the planning
mathematical ability, Irish 15 year olds were found and execution process of the strategy. With the
to be below the OECD average in 2003. While strategy and process in place, Dublin Chamber
more recent figures show some improvement (to recommends that pilot projects be launched for
marginally above average/average) in science the start of 2008/2009 school year.
there has been no movement in Ireland’s maths
ranking. Equally worrying is the fact that there 2.3 Early Embedding of
were over 9 students to every computer in Irish
schools, according to the EU’s Benchmarking Learning Skills
Access and Use of ICT in European Schools 2006. KEY ACTION
These are not the statistics on which a successful
knowledge eco-system can be built.
Optimise early learning in the child
care system and up-skilling those
If we are to collectively sustain the type of
competitive economy desired, Dublin Chamber
working in the early learning industry
believes that ICT skills need to be more ingrained
in the secondary and primary education Child development studies have shown that from
curriculum. Dublin Chamber strongly advocate the first days of life children begin to ‘take in’ and
that some form of IT skills requirement be ‘react’ to their surroundings, developing the
introduced to the curriculum across the schools learning skills of a life time. Recognising this,
system and that these skills should be subject to many countries make a concerted effort to merge
formal examination and accreditation. the two tracks of child care and early education,
in an effort foster early childhood development.
Business is more than willing to play its role in
this area. Member companies of the Dublin In Ireland the two tracks of education and child
Chamber are already committed to pro-bono care have continued to develop separately. The
support of IT in the learning environment. National Economic Social Forum’s report on Early
However, such involvement can never be a Childhood Care and Education estimated that for
substitute for the leadership, direction and every Euro invested in early childhood care and

15
Building a
Learning
Society

education in Ireland, a return of ¤7.10 can be


expected.4 The report also highlighted
weaknesses in national early childhood policies:
several Government departments share
responsibility for policies affecting young
children; the sector is weakly regulated; and child
care is conceived not as a learning opportunity
but mainly as a child minding service for working
parents.

As the number of working parents increase and


the issue of childcare moves up the social and
political agenda in Ireland, this is a time of
unique opportunity to foster a learning ethos in
our child care system. Priority should be given to
integrating the two tracks of child care and early
education and, in the process, up-skilling the
education levels of those working in early
learning industry.

4 "Early Childhood Care and Education",


NESF, Report 31 (July 2005).

16 Dublin Chamber of Commerce


3
Context: ICT as a
Platform for Growth

Upgrading the In the new global economy, ICT is the major enabler, not
just of improved quality of life, but also of economic

Knowledge
growth. The gains from ICT will be felt beyond the confines
of the ICT industry. They also benefit other knowledge
intensive industries - financial services, pharmaceutical,

Infrastructure digital media, bioscience – areas that have been


traditionally strong for Ireland and are earmarked as vital to
future national growth.

The Information Technology and Innovation Foundation,


notes that ICT hugely impacts in five key areas:
productivity, employment, more efficient markets, higher
quality goods and services, and innovation of products and
services.5 Timely recognition of this fact has inspired the
Government’s investment programme through the National
Development Plan (NDP) and other mechanisms.

The Small Business Forum has called for continued


investment in next-generation networks and services, and
online public services. If the Government is to maximise
return on its proposed investment in ICT it must create a
technology literate society. The first step in creating a
strong ICT foundation for the Dublin City Region is PC
penetration. This is followed by high speed access to the
internet and the promotion of the use of online services.

5 ‘Digital Prosperity: Understanding the Economic


Benefits of the Information Technology 17
Revolution’, Atkinson, R. & McKay, A.
Upgrading the
Knowledge
Infrastructure

18 Dublin Chamber of Commerce


3
3.1 PC Penetration
Dublin Chamber recommends the introduction of
KEY ACTION
a scheme for a minimum twelve month duration
that is simple and inexpensive to administer.
Introduce VAT-free scheme for
Whilst this scheme shall require some co-
the purchase of PCs to stimulate a ordination between Revenue, the Department of
technology-literate society Finance and employers, the long term benefits to
digital adoption and penetration in the country
As a technological society, Ireland lags behind shall be significant.
other OECD countries. Ireland ranked only 21st in
the World Economic Forum's Global Information
Technology Ranking 2006/2007, while Denmark,
Sweden and Singapore filled the top ranks. The
CSO estimated that 58.5% of all households in
Ireland had a home computer in 2006, an International Case Study:
improvement of only 3.5% from 2005. These PC Penetration
figures expose a real weakness when compared
with those for Sweden where penetration is at Sweden:
82%, or Denmark where it is 84%. Home PC penetration in Sweden was
increased from 40% to 80% as a result
The knowledge economy requires a culture of a pioneering Government scheme
where ICT is second nature to society. To which allowed employees to purchase
encourage this, Dublin Chamber believes that the a PC VAT-free.
Irish Government should put in place a PC
penetration scheme. Here we can draw from the Italy:
experience of other European countries including The Italian government has implemented
Sweden, Belgium, Italy and Portugal, where a scheme for students where a ¤100 voucher
schemes have succeeded in increasing PC usage for a computer skills course accompanied a
and penetration. ¤175 grant towards buying a computer –
improving both penetration and usage.
Given the technology gap at grass-roots level
between Ireland and many of our European
neighbours, the case for a VAT-free PC scheme
for employees is very strong. If we are to meet
the goals of improved competitiveness through
increased productivity and innovation, we must
ensure that the nation has IT-active generations
that diffuse IT skills throughout the economy to
family, friends and the workplace.

19
Upgrading the
Knowledge
Infrastructure

3.2 Strategic Importance of Broadband penetration rates in 2006


Percentage of Enterprises ( = 2003)
ICT Infrastructure 100%

90%
KEY ACTION 80%

70%
Amend the Strategic Infrastructure Act
60%
to include advanced
50%
telecommunications to facilitate
40%
development of next generation
30%

20%
Improving PC penetration alone will not create the
technology literate society we need. Additional 10%
measures are also required to improve the take-up 0%
of broadband and the use of online services.

Italy

Hungary

Ireland
Netherlands

EU15

UK

Luxembourg

Germany
Finland

Sweden

Spain

Denmark

Poland
In Ireland, four out of every five homes with
computers are connected to the internet.6 Despite
this Ireland ranked an embarrassing 16th out of the Source: National Competitiveness Council’s
EU25 for broadband penetration, surpassing only Annual Competitiveness Report 2007.
Greece out of the EU15.7 Significantly, this ranking
has not improved since 2003. The findings of the Ireland’s telecommunications network is currently
2006 Census highlighted that Irish households are reliant on an outdated copper wire system. Bandwidth-
still less likely to have internet access than their EU intensive next generation applications – such as
counterparts, and remain among the lowest Interactive TV, HDTV, and location-based services – will
household users of broadband in the EU. require a network that can accommodate speeds of
between 50Mb/s and 1Gb/s. This cannot be delivered
Broadband penetration rates in 2006 through our copper wire system. Without higher
Percentage of household ( = 2003) speeds Ireland will not be able to meet the needs of
70% business and will never be seen as a serious contender
60% for knowledge intensive industries.
50%
Ireland is already losing valuable time and lagging
40%
behind competitors like Singapore, Korea, the
30%
Netherlands, the UK, Germany and Sweden who are
20% investing significantly in next generation networks. It is
10% acknowledged that the laying of fibre optic cable -
0% which is the backbone of next generation networks - is
extremely expensive.8 In particular, the current
Ireland
Spain

Hungary

Poland

Italy
EU15

France
Sweden

UK

Germany
Netherlands

Denmark

Finland

piecemeal approach being taken to upgrade Dublin’s

6 Findings based upon CSO Census 2006 and ComReg


(Quarterly Key Data - Document No: 07/67).
20 Dublin Chamber of Commerce 7
ComReg, Quarterly Key Data - Document No: 07/67.
.
3
telecommunication network is costly and will 3.3 Fibre Ready Homes
leave Dublin in a position where it is, quite
simply, unable to compete against other
international locations. KEY ACTION

In the NDP the Government recognises that Amend National Building Regulations,
advanced broadband telecommunications is a and the Dublin City Council
necessary key infrastructure for gateways and Development Plan so that new homes
hubs. The National Spatial Strategy has set a are built to be "next-generation
medium term target of "broadband speeds of 5 ready"
megabits per second to the home and more than
that for business". If the Government is
committed to these goals, it is imperative that When fibre ‘motorways’ are made available,
Strategic Infrastructure Act is amended to include provision must also be made so that homes can
advanced telecommunications. This will reduce access this service. Ideally, room for next
the huge cost for companies wishing to invest generation networks should be put in place while
and the time it takes for the major trenching work houses are under construction. Given the rate at
that is associated with its installation. Crucially, as which housing stock has grown in Dublin, we
other economies forge ahead in developing next have missed an incredible opportunity to plan for
generation networks, Ireland cannot afford to risk the future by catering for high speed and quality
the kind of delays that have fraught the connectivity. In the future, Dublin Chamber
development of infrastructure here in the past. believes that no new dwelling should be built in
the Dublin City Region without the necessary
This action will make a bold statement about the capability in place for upgrading the
value that this country puts on developing next telecommunication network.
generation networks – showing serious intent
behind what are otherwise dismissed as empty In the long-term this should be a requirement of
aspirations. Dublin Chamber believes that by National Building Regulations, however given the
amending the Strategic Infrastructure Act to pace of development, an immediate, interim
include advanced telecommunications it would measure is also advisable. As a result, Dublin
engender the certainty that investors require and Chamber proposes that this requirement is
position the Dublin City Region to compete with embedded into Dublin City Council’s and other
other city regions worldwide. Greater Dublin Area local authorities’
development plans. This would make it a
prerequisite for all new dwellings in the Region,
as part of the normal course of planning
permission.

The marginal cost of laying down this fibre now


would be of a significantly lower order of
magnitude than the cost of retrofitting it and it

8 A report by Enders Analysis estimated that the price


of fibre-to-the-home for the UK was ¤1000 per
household, 70% of this cost was on the associated 21
civil engineering work associated with the digging of
the trench.
Upgrading the
Knowledge
Infrastructure

will greatly improve the commercial case for fibre interfaces must underpin all elements of design. This is
being rolled out across Dublin. Dublin Chamber what sets Revenue Online apart from other less popular e-
understands that such a proposal has been Government initiatives. This has also clearly worked in the
included in a recent consultation paper on private sector where, for example, such a move has not
apartment living in the city by Dublin City hindered the sale of airline tickets. The Danish Government
Council. Dublin Chamber warmly welcomes this has also shown how an excellent regulatory environment
proposal and believes that it should be extended and clear government leadership on ICT, coupled with high
to all new housing without delay. PC and broadband penetration and usage, can result in a
winning strategy for competitiveness, through increased
3.4 Migrate Government Services to cost saving and efficiencies.
Business Online ONLY Public Services Available Online 2006
( = 2003)
KEY ACTION
80%
Move key government services for 70%
business to online only 60%

50%
The performance of Irish firms in ICT integration
40%
has been poor to date. This means that Irish
business is failing to translate improved technology 30%

into increased productivity. The 2006 Information 20%


Society and Telecommunications report prepared 10%
by the CSO, remarked that only 19% of Irish 0%
enterprises reported having a written ICT strategy.
Poland
Ireland

Germany
Netherlands

Hungary
EU15

Spain
Denmark

Finland

Italy
Sweden

UK

France

Switzerland
Failure by the vast majority of Irish companies to
integrate existing technologies into their day-to-
Source: National Competitiveness Council’s
day activities is a major concern for future
Annual Competitiveness Report 2007.
competitiveness and acts against creating the
necessary sea-change in business culture that is the
basis of a knowledge society. In view of this, International Case Study:
Government should seek to pro-actively lead Denmark
business towards integrating ICT more fully into
their day to day functions – for example by moving Legislation was implemented in Denmark in 2004
business services online. which required the entire public sector to move to
electronic invoicing. It was estimated that the
Dublin Chamber believes that the Revenue Danish public sector made 18 million invoice
Commission’s early success with Revenue Online transactions to other public authorities annually.
indicates that it is possible to move a number of With 10 minutes being saved in the handling of
key Government services for business to be each invoice when received electronically, it
available online ONLY. To do so successfully, was estimated that total savings of ¤94 million
customer-focus and user-friendly process and were achieved. Furthermore, when the Danish
Government fully implements the system to
facilitate automatic matching between orders
22 Dublin Chamber of Commerce
and invoices, it is conservatively estimated
that the total savings will increase to
¤160 million annually.
4
Context: Innovation and
R&D by SMEs

SMEs and the SMEs are an important sector in Ireland and have a vital
role to play in copper-fastening the knowledge economy

Knowledge
here. Over 97% of businesses operating in Ireland employ
less than 50 people. More than half of the private sector
workforce is employed in what are defined as ‘small’

Economy organisations. Many of these organisations form an


essential part of the supply chain for larger firms or play an
important role in delivering domestic services. Yet the
productivity of Irish SMEs is low in comparison with similar-
sized companies in other countries.

National public policy and industry papers universally point


to the role that indigenous companies and SMEs must play
in contributing to innovation and growth. If they are to rise
to this challenge every effort must be made to increase the
R&D intensity, and innovation levels, of Irish-owned firms.
The current level of R&D activity and R&D spending within
indigenous firms in Ireland is also amongst the lowest in
the OECD. Two-thirds of R&D spending in Ireland is
performed by multinational corporations. Dublin Chamber
believes that incentives aimed at introducing SMEs to R&D
and its benefits can sow the seeds for further expansion of
indigenous SMEs into this area.

23
SMEs and the
Knowledge Economy

24 Dublin Chamber of Commerce


4
4.1 Building R&D Experience Grants’ in order to develop the innovation capability
and absorptive capacity of small companies through
of Small Business supporting such activities as R&D planning/training,
consultancy, or market research. While care must be
KEY ACTION taken to ensure that these grants complement existing
Enterprise Ireland schemes, there are undoubtedly a
Expand ‘Innovation Voucher’ Scheme number of areas that can be addressed. One of the
and introduce ‘Knowledge new supports being examined is an R&D Stimulation
Acquisition Grants’ Grant, to encourage companies that have not carried
out R&D in the past (or which have done so on a
Dublin Chamber fully supports the sporadic basis) to develop sustainable R&D activity.
recommendations of the Small Business Forum Once again, Dublin Chamber would strongly support
that ‘Innovation Vouchers’ and ‘Knowledge an initiative of this nature as Dublin Chamber believes
Acquisition Grants’ be made available to small it will make a discernable contribution to developing
business. Dublin Chamber believes that these are innovation among SMEs in the Dublin City Region.
practical, targeted initiatives that will create
momentum in the adoption of R&D by the SME
sector.
4.2 Educating Owner/Managers
of SMEs
The ‘Innovation Voucher’, which allows small
businesses to access research expertise valued at
KEY ACTION
¤5,000 from third-level institutions, was
introduced on a pilot basis by Enterprise Ireland Encourage tailored training for SME
in 2007.9 The voucher system encourages SMEs managers and improve management
to explore the opportunities available through capacity through expert secondment
R&D and facilitates knowledge transfer from programme
third-level institutions. A meaningful assessment
of the success of this initiative will only be It is essential that Ireland creates a better match
possible after the pilot has been evaluated, but it between the demand and supply of training for
is clearly a step in the right direction. Dublin small business owner/managers, in terms of content
Chamber suggests that extending the voucher and delivery mechanisms, if our SMEs are going to
scheme beyond third level institutions, to City be able to compete at an international level. In this
and County Enterprise Boards and Business context, the establishment of the Management
Innovation Centres, would improve the Development Council by the Department of
effectiveness of the scheme. This would also Enterprise, Trade and Employment is extremely
allow small business to fully realise the benefits of welcome.
business development advice in the subject of
commercialisation of R&D, an area in which It is our hope that the Council can successfully
Ireland is seeking to develop its capacity. address the existing gap between the services of
education providers and the needs of small
The Small Business Forum also recommended business. On one hand, SMEs generally find that the
the introduction of ‘Knowledge Acquisition more tailored the training, the greater the return.
9 On the other hand, education providers tend to
Second Progress Report on Implementation of the
Recommendations of the Report of the Small find the costs of tailoring courses prohibitive and
Business favour providing more generic training. 25
SMEs Business
Small and the
and the Knowledge
Knowledge Economy
Economy

Dublin Chamber believes that the Management


Development Council can play a role in
encouraging the market to provide more
practical, tailored courses for business
owner/managers. Specifically, an accessible,
relevant and affordable mechanism to match
groups of companies with similar interests and
requiring similar training would go some way to
stimulating education providers to meet these
specific needs.

SME owner/managers tend to focus more on


resolving day-to-day problems and less on their
long-term development and strategy due to time
and manpower constraints. In order to open their
eyes to the value of improving management
capacity, Dublin Chamber recommends
development of a scheme whereby individuals
with relevant industry knowledge and managerial
experience may be seconded to SMEs for a
period of up to three years. Their role would be
to impart ‘soft, tacit knowledge’ thus increasing
the management capacity of the host company,
without impacting on the time and resources of
the owner/manager.

For this programme to be successful,


Government must ensure that Enterprise Ireland
and other relevant agencies have the necessary
skills and resources to offer this service to SMEs.
When combined as an integrated package Dublin
Chamber believes that an expanded Innovation
Voucher Scheme, the provision of Knowledge
Acquisition Grants and the secondment of
managerial experts to SMEs would boost both
R&D capacity and management capability. Over-
time these initiatives will work to create a culture
within this sector where these elements are
considered a prerequisite for any successful SME.

26 Dublin Chamber of Commerce


5
Context: Promoting Dublin’s
Knowledge Eco-System

Arrival of a Dublin Chamber is optimistic that the current NDP can


begin to address the Dublin City Region’s infrastructure

Knowledge
concerns in the areas of transport, education and business
development.10 If implemented swiftly, the NDP will go a
long way to addressing quality of life issues that might

Capital otherwise hinder the attraction of high value-added


knowledge workers to the City. However infrastructure
alone is not enough. To compete internationally as a
knowledge region, Dublin also needs to create momentum
and energy in social and cultural spheres that gel with the
knowledge economy – we need to create a more rounded
"knowledge eco-system".

Many elements of a knowledge eco-system are less


tangible than the nuts and bolts of infrastructure and yet
they are just as necessary to attracting and retaining the
labour force required to grow our economy. This is about
extending innovation and creativity beyond the workplace
and exciting people about their city. The Dublin City
Region must build on its growing reputation as a "melting
pot" and gateway to Europe for knowledge based
companies by showcasing creativity and imagination – and
at the same time reinforcing its commitment to the
knowledge economy. The Dublin Chamber believes that a
number of practical changes can serve as catalysts or
‘tipping points’ to further the development and reputation
of Dublin’s knowledge eco-system.

10 Dublin Chamber addressed the issue of


Knowledge Economy Infrastructure in its July 2006 27
Submission to the Department of Finance on the
National Development Plan 2007-2013.
Upgrading
Arrival of a the
Knowledge
Capital
Infrastructure

28 Dublin Chamber of Commerce


5
5.1 WiFi in Public Transport 5.2 Science Museum

KEY ACTION KEY ACTION

Introduce WiFi across Dublin’s public Establish world-class science museum


transport system and reform funding for science facilities

City Region wide WiFi connectivity, although One of the challenges that we face in building a
relatively easy to put in place, faces several major knowledge economy in Dublin is the decline in
challenges, including a workable business model, graduates taking science and technical subjects.
high maintenance costs and ensuring a critical There is an urgent need to capture students’
mass of users. While many cities and towns have imagination and stimulate an interest in science-
considered rolling out city-wide wireless based subjects early in their lives.
connectivity, there are limited examples of a city
implementing this across its public transport Positive moves have been made to develop
network. Nonetheless, templates do exist on a interactive museums in Dublin, as in other cities
one-off basis within private environments – for across the world – for example, the proposed
example company commuter buses. Science Gallery and the Exploration Station at
Heuston Gate (as outlined below). Nonetheless the
Dublin Chamber believes that the Dublin City absence of a world-class Science Museum in Dublin
Region can steal the limelight in this area by is a glaring gap in this landscape.
providing wireless access across the City’s public
transport network - on the DART, commuter
trains and/or Dublin Bus. A number of practical Projects Underway
issues must be considered - for example, to
encourage use, access should be free (possibly
Science Gallery
subsidised by on-line advertising streaming into
The Science Gallery, located in a new building on Pearse
the bus/train) or charges kept to a minimum (e.g.
Street in the heart of the capital, will be a place "where
included in purchase price of transport ticket).
ideas meet", bringing together the business, research,
However the initiative would have positive side
student and policy communities, with a core audience of
effects in encouraging commuters to switch to
young adults (15-25) making decisions about future careers.
public transport and increasing Dublin
Activities will include exhibitions, festivals, workshops and
commuters’ productivity.
events on major interdisciplinary themes from ‘The Future
of Food’ to ‘The Science of Attraction’.
Most importantly, this would be a significant
statement of intent for the Dublin City Region. It
will increase the cohesion to our knowledge eco-
system and act as an innovative, flagship initiative
positioning Dublin as a global leader.

29
Arrival of a
Knowledge
Capital

Projects Underway A Museum of Science is a valuable facility that


communicates and teaches science throughout
Exploration Station our lives. More significantly, it can also act as a
The Exploration Station will be Ireland’s focus for building and stimulating an integrated
first interactive science centre for young science culture by capturing the imagination and
people (5-17), families, teachers and acting as a vital engine in promoting careers in
tourists. From its Heuston Gate location, science, engineering and technology. An
it hopes to inspire a lifelong passion for outstanding museum of science will enhance
discovery through a fusion of arts and Ireland’s image as a knowledge-based society and
sciences. The interactive exhibits will be will serve to inspire future generations of Irish
tied to the National school curriculum, scientists.
and will cater to school tour
programmes, public programmes and Other major knowledge economies have a history
outreach programmes. The anticipated of integrating science and technology into the
opening date is 2010. fabric of their culture through science centres and
museums. In the UK there are over 80 Science and
Discovery centres. These are supported by a £250
million sterling injection from the National Lottery
Between them, the Science Gallery and the and a further £250 million from other public
Exploration Station aim to draw 250,000 visitors sources. In the US there are over 350 science
per year – this equates to roughly one-sixth of museums and centres, with a combined annual
the Dublin City Region’s population. When budget of over $1 billion. They attract 177 million
benchmarked against other international visitors annually, including 60 million
knowledge cities our ambition for the schoolchildren.
promotion of science seems singularly
unambitious. Boston’s Museum of Science Dublin Chamber believes that, while private
receives over 2 million visitors annually and funding is important in this area, achieving
Munich’s Deutsches Museum, 1.4 million. This is sustained public funding is the real obstacle to the
almost half of these cities’ populations. If the creation of world-class Science Centres in Ireland.
Dublin City Region were to emulate these The experience to date with the two pipeline
proportions it would equate to three quarters projects illustrates the difficulty with funding a
of a million people a year (and over a million by more ambitious, world-class science museum.
2020). These visitor numbers are currently Currently, the national science awareness
achieved by the National Gallery of Ireland and programme Discover Science and Engineering has
there is no reason to suggest that similar an annual budget of approximately ¤4 million. It is
demand for a National Science Museum cannot managed by Forfás and focuses on sponsorship of
be generated – particularly in a country that is individual science-engagement events. However it
on the brink of undertaking a sustained does not offer a revenue funding model to cover
campaign to promote science. the significant ongoing staffing and operational
costs that are associated with running and
maintaining science/technology centres.

30 Dublin Chamber of Commerce


5
Dublin Chamber has looked to the arts world to
offer a workable alternative. The operational
model of science facilities is very similar to that of
arts organisations and, accordingly, we would
recommend that a National Science Council be
created to consolidate the current programmes.
The Irish Arts Council has an operating budget of
¤80 million and administers grants to fund 317
arts organizations and centres nationwide
annually. The proposed ‘Science Council’ would
operate in a similar way, managing an annual
funding structure and acting as an umbrella
organisation for the sector. Given the strategic
importance that science and technology will play
in the future of our economy and the importance
of innovation and creativity in this area, Dublin
Chamber believes that the Council should receive
a budget on par with that of the current Arts
Council.

The centralisation of this ‘Science Council’ would


play a significant role in facilitating the
development of a first-rate Science Museum,
which reflects Ireland’s ambition in the area of
science and technology. Given the scale of
projects of this nature, the ‘Science Council’
funding process should permit organisations to
present multi-annual budgets for approval.
Naturally, the Dublin Chamber would encourage
consultation with the Arts Council, Discover
Science and Engineering, and representatives of
existing science centres in Ireland and
internationally in the development of this
structure.

31
32 Dublin Chamber of Commerce
Significant progress has been made in the development of
the knowledge infrastructure of the Dublin City Region. We
are nurturing a creative and research-rich environment which

Conclusion
feeds the thriving ICT, financial services, multimedia,
pharmaceutical, internet, and life-science sectors of the city-
region. However, as other international city regions
targeting knowledge services and industries raise the bar for
competitors, Dublin’s success will be determined by its
ability to develop, retain, and attract workers. We have done
this well thus far, as the Dublin City Region’s core
competency is its people, but our city region will need to
build upon this strong foundation to form a sustainable
economy based on knowledge workers and a more rounded
knowledge eco-system that receives international
recognition.

Through this paper, Dublin Chamber has started the process


of bringing together business and higher education
institutions in consultation with government bodies to voice
the region’s concern with regard to developing a
Knowledge Economy. They highlight a knowledge region’s
needs: infrastructural, educational, innovational,
entrepreneurial, and the necessity to market its arrival.

The Dublin Chamber is now looking to decision makers


across Ireland to support our vision for Dublin as a
‘Knowledge City’ - the heart of a vibrant and successful Irish
knowledge economy. Dublin Chamber believes that Ireland
can support the Dublin City Region in becoming a talent-
attracting centre or ignore it allowing Ireland to become a
talent-exporter.

33
Arrival of a
Knowledge
Capital

34 Dublin Chamber of Commerce


A
Appendix:

International Examples of PC Incentive Schemes

Country Programme
Sweden From 1997, employees could avail of a tax-free
PC scheme (VAT 25%). Home PC penetration
increased from 40% to over 80%.

Portugal Students were offered cheap loans from


participating banks to buy state-of-the-art
notebook computers provided at special prices.
Student Internet usage is over 90%, whilst
general penetration is only 41%.

Italy Since 2003, all Italian 16-years old receive a


¤175 grant towards buying a computer and
¤100 towards getting a certificate for basic
computer skills.

Belgium Belgium introduced a VAT-free, low priced PC


package with broadband access and a card
reader for e-government purposes in order to
increase penetration rates.

35
Dublin of
Arrival Chamber
a of
Knowledge Past Reports
Commerce’s
Capital
and Submissions

Investing in Knowledge Workers


Budget 2008 Submission

Democracy Now!
Submission to the Department of Environment,
Heritage and Local Government’s Green Paper
for Local Government Reform

Deliver, Deliver, Deliver!


Submission to the Department of Transport on its
Statement of Strategy 2008-2010

Dublin Business Priorities


General Election 2007

Tourism ABC: Promoting Dublin as a location for


Arts, Business and Culture
Policy paper from Dublin Chamber

Transport 21: Future for Dublin


Policy paper from Dublin Chamber

Dublin: Ireland’s International Gateway


Submission to Department of Finance on
National Development Plan 2007 – 2013

36 Dublin Chamber of Commerce


Design: Baseline

connecting influencing

Dublin Chamber of Commerce


7 Clare Street, Dublin 2, Ireland

T +353 (0)1 644 7200


F +353 (0)1 676 6043
W www.dublinchamber.ie
E info@dublinchamber.ie