The International Content Services Centre (ICSC)

Contribution by Kieran O’Hea to the ICSC Draft Proposal Version 03.09.09

The 2002 Forfás report “A Strategy for the Digital Content Sector in Ireland” drew attention to the
potential global demand for digital content and framed this in the context of the development of the
sector in Ireland.

Its vision was to develop a world class digital content industry based on the targeted development of
a number of clusters at the intellectual property end of market, namely enabling technology and
high-value content and applications.

The report also predicted that the future value of the Irish digital content sector depended on
providing incentives that would attract multinationals to locate content related activities in this
country. These activities included the creation and distribution of content and also fiscal measures
including digital asset management, rights trading and collecting income from royalties. Forfás
believed that Ireland had a window of opportunity of five years to do this. It is now seven years since
the report was published.

Silicon Republic may have indirectly shed some light on why the report didn’t bear fruit : "In 2002
Ireland was at a crossroads. It could have focused its energies on creating a vibrant, innovation-
driven economy led by well-funded entrepreneurs driving scalable export-oriented businesses that
would generate employment in parishes across the land. Or it could have focused on the then
burgeoning construction industry, which saw opportunities in the housing boom. We opted for the
latter route, more Irish money went into the commercial UK property market than local businesses
and the rest – including €90bn of financial debt which NAMA will have to absorb – is history. But it
could have been different. It still can be different.”

www.siliconrepublic.com/news/article/13712/business/digital-21-entrepreneurship

Getting back to ICSC, encouraging the development of new intellectual property by Irish companies
should be one of its objectives. Digital content is an IP intensive business and must therefore be
positioned as a sector with high growth potential in this context. To have economic consequences
however, IP needs to be protected and leveraged on a wide scale. Ireland has traditionally been poor
at doing this. We must learn to monetise our creativity.

Digital content may not lead to many patents being registered but a large amount of trade may be
based on licensing and royalty payments. Negotiating the best deal possible can be an intimidating
challenge for digital enterprises particularly when trying to negotiate with large clients who have
access to significant legal resources.

The ICSC proposal should not be aimed solely at convincing government. Representative bodies like
the Irish Internet Association also need to be convinced. So do members of the local digital media
community who do not reside in the Digital Hub or are not members of the Digital Content Forum.

Proficiency in the creation, management and trading of digital content can contribute significantly to
Ireland’s future competitive advantage. However it needs to be decided if the ICSC is aimed at digital
media companies, traditional content companies, companies who are developing IP in Ireland, the
creative industries or all of these.

The use of analogies like NYSE and IFSC need to be thought through bearing in mind current
sensitivities about the banking sector. The IFSC will be remembered as an inducement to
international banks to move to Ireland to take advantage of tax incentives. Most moved staff here
lock, stock and barrel so it is probably not remembered for local job creation.

The ICSC needs a USP – something that differentiates Dublin as a location to locations which are
more synonymous with stock exchanges (New York, London) and bandwidth (US, Malaysia). We
need to marry financial incentives with our creative culture (“from wired to inspired”). The ICSC
needs to be a haven in which to create, protect and exploit content.

Need to learn from and differentiate from other projects such as Digital Hub, SFI, Forum Virium
(Helsinki) and Babelsberg Media City (Berlin). Prepare some case studies. An interesting educational
model supporting innovation and the smart economy is the decision to amalgamate the Helsinki
University of Art & Design, the University of Technology and the University of Economics.

As Science Foundation Ireland is endeavouring to do in attracting the world’s leading scientists to

carry out primary research in this country, ICSC can be an international centre of excellence which
together with the right infrastructure and appropriate trading incentives will provide the world’s
leading content companies with a compelling argument to base their European operations here.

Meanwhile the ICSC should also provide indigenous companies with access to comprehensive
resources such as academic support, R&D facilities, and networking and collaboration opportunities.
They can also avail of mentoring and business support as and when they need it, including legal and
financial advice, as well as introductions to international partners.

Financing the ICSC is not only about providing investment but also about providing incentives.
Schemes whereby Irish content companies would receive subsidies towards content creation,
particularly in export markets, must be considered, as should financial relief relating to the
exploitation of IPR, i.e. tax-free royalties.

The wording around content distribution needs to be chosen carefully. Promoting Ireland as a single
location from which content would be distributed securely may be at odds with the practice of
making content downloadable from many locations worldwide, bundled with charging in the local
currency.

Niall Jordan said at Farmleigh that Ireland was let down by the church, banks and other institutions
but not the Irish cultural industry. This could add weight to the ICSC argument. “Give creativity a
chance”

The momentum generated by the ICSC proposal and by Farmleigh must not be allowed to dissipate.
The ICSC plan has been publicised by Ministers including Conor Lenihan who has been quoted as
saying that the Government will enact the plan. Talk of setting up stakeholder groups, a digital
strategy unit and even a digital strategy department must become reality.