Knowledge City Region

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Contents

Foreword Page1

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


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1

Foreword

In 2008, Dublin is a vibrant, growing city. As our

capital continues to attract a record number of

workers and tourists, it is essential that we

leverage the citys potential by realising our vision

to transform it into a leading knowledge city

region. Dublin has enormous potential to

develop as a city region in which technology and

science take root, where talent gathers and where

innovation and creativity occur.

In 2006, the Knowledge Economy Committee was

established within the Dublin Chamber of

Commerce to examine the existing policy

landscape and to draw up a set of

recommendations that would ensure that the

Dublin City Region can compete with other city

regions across the globe. These recommendations

are practical and achievable and will ensure thatDublin plays a vital role at a national level to

stimulate and support Irelands economy.

We are fortunate that we have attracted

contributors from the highest levels of education

and industry who have inputted into the

development of this report and its

recommendations. I would like to acknowledge

the vital role that each member of the Committee

has played.

The recommendations outlined in this report will

give vital momentum to establishing Dublin as a

world leading knowledge city region. We must

now call on government, members of industry

and education, entrepreneurs, small business

owners and all of the citys inhabitants to

embrace this change so that the Dublin City

Region is firmly established on the global map.

The global knowledge economy is evolvingapace. If Dublin is to stake its claim on this

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

Digital Prosperity: Understanding the EconomicBenefits of the Information TechnologyRevolution, Atkinson, R. & McKay, A.

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Dublin Chamber of Commerce2

CommitteeList

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, IntelTerry 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 OConnor, The Digital Hub

Liam Quirke, Matheson Ormsby Prentice

Ferdinand von Prondzynsk, Dublin City University


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31

ExecutiveSummary

This paper, by the Dublin Chamber of

Commerce, draws together views from business

and higher education institutions from across the

Dublin City Region. It presents a case for taking

prompt action in a number of targeted areas in

order to allow Dublin, and Ireland, to reap

rewards from the knowledge economy. Our

inspiration comes from international best practice

and is firmly grounded in national policy.

International experience shows that the

competition for investment and employment in

high value added activities is not between

countries it is between city regions. It also

demonstrates that future growth growth will be

based on competition for key knowledge

workers. The Irish Government has worked hard

to cultivate a supportive environment wherebusiness and education can combine to maximise

growth and productivity through development

and innovation in ICT. To leverage this

investment, a co-ordinated and concerted plan

taking on the mantle of the Whitaker Policy

devised in 1958 is required to attract skilled

human capital. As our capital city, Dublin must

take its place at the heart of this strategy.

Dublin Chamber believes that among Irish cities,

the Dublin City Region has unique potential, interms 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 Irelands commitment and capacity

to deliver on innovation investment.

The foundations for a successful Dublin City

Region have been laid. We need to build on

these by implementing policies that support the

attraction of specialised labour and capital to our

city, and creating an education system that is

geared towards producing the graduates that are

central to the successful knowledge economy. Weshould aim to foster a technology literate society

through both infrastructure and education. We

also need to look beyond the nuts and bolts, to

create a full knowledge eco-system that is

recognised across the world. This means

developing a strong knowledge brand for the

Dublin City Region and investing in landmark

projects that emphasise our commitment to the

ethos underlying the knowledge economy.

This paper identifies a number of practicalrecommendations that can be implemented in

the next four years to maximise return on the

investment planned by Government. These steps

will underpin the development of the Dublin City

Region as a world class centre for knowledge

activities and will serve to further Irelands

aspiration to become a leading location for

innovation investment.1

Dublin Chamber of Commerce is acutely aware of the importance thattreatment of Intellectual Property has in the location decision for manycompanies. For this reason Dublin Chamber will be publishing a separatereport on this issue in the future.

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Developing, attracting and retaining

entrepreneurial, skilled and creative workforce

1 Develop short-term programme of

financial/tax incentives to assist in the

recruitment and retention of key workers with

the skill sets essential to developing the

knowledge economy.

(Department of Enterprise, Trade andEmployment).

2 Introduce SME Knowledge Acquisition

Grants to encourage R&D and expand

Innovation Voucher Scheme to improve SME

management capacity through expert

secondment programme.

(Department of Enterprise, Trade and

Employment / Enterprise Ireland).

3 Encourage tailored and practical training for

SME managers through the ManagementDevelopment Council.


Employment).

Embedding a next generation IT infrastructure

4 Introduce VAT-free scheme for purchase of

PCs to stimulate a technology-literate society.


Employment).

5 Amend the Strategic Infrastructure Act to

include advanced telecommunications tofacilitate development of next generation

networks and amend National Building

Regulations so that new homes are built to be

"next-generation ready".

(Department of the Environment, Heritage

and Local Government).

6 Complete ICT in Education Strategy and

begin implementation by 2008, drawing on

the support of business where it is needed to

achieve this aim.

(Department of Education and Science).

Branding the Greater Dublin Area as a

knowledge city region7 Introduce WiFi across Dublins public

transport system to reinforce the knowledge

brand of the Dublin City Region.

(Department of Transport / Dublin City

Council).

8 Establish world-class science museum to

stimulate interest in science and encourage

international recognition of Dublin as a

knowledge capital.


9 Optimise early learning in the child care

system and up-skill those working in the early

learning industry.


10 Move key Government services for business

to be available online only and implement an

e-government plan for all Government

Departments and Local Authorities.

(Department of the Taoiseach).

The Dublin Chamber of Commerce will continue

to bring together business, higher education

institutions and local government to effectively

voice the City Regions concerns with regard to

developing a knowledge economy.

10 Point Plan for 2012:Recommendations


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5

The New Paradigm

Ireland has recognised that its future lies in the Knowledge

Economy successfully promoting, embracing and

exploiting innovation through science and technology. We

have also realised that the creation of the right conditions

for the development of this economy cannot be left tochance. If this transformation is to be realised in Ireland, a

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 Irelands 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 DirectInvestment 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.

City Regions:

The Seedsof Growth

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City Regions:The Seedsof Growth


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Creating a Knowledge CapitalImagine Dublin 2020presented Dublin Chamber

of Commerces vision of our city as a knowledge

capital within Europe; an internationally

recognised centre of excellence in high-level

education, an engine of creativity and innovation

in science and technology and a city-society in

which technology has taken root and is secondnature. In this vision, knowledge is the source of

competitiveness and productivity.

A National Economic GeneratorRapid urbanisation has dramatically increased the

economic strength and importance of

metropolitan regions worldwide. While nation

states determine the broad economic

environment in which a city operates, decisions

relating to international investment and jobs are

increasingly made at the level of competing city

regions. In 2006, the OECD confirmed this trendand acknowledged that city regions have now

become the real engines of their national

economies.2 There is also compelling

international evidence that clustering is a key

component of successful knowledge based

economies. Clustering creates added value

through the interaction of creative, technologist

and commercial people who interdependently

develop next generation products and services.

This type of dynamic naturally occurs in city

regions.

The Greater Dublin Area is the dominant city

region of the Irish economy. Among Irish cities,

the Dublin City Region has the best balance in

terms of concentration of resources and

infrastructure to allow it to develop as a

knowledge city - a place that develops, attracts

and retains a talented and professional class of

workers, enjoying an excellent quality of life.

The logic for developing the Dublin City Region,

so that it is capable of competing internationally

within the new knowledge economy, is

undeniable. At a national level, it will stimulate

and support Irelands entire economy. As a result,

it will also serve to accelerate regional growth,

allowing Irelands other cities to reach their full

potential. Ultimately, it will provide a road map

for other regional cities as they reach the critical

mass needed to compete internationally. There is

a clear case for Government policy, at both

regional and local level, to embrace a vision of

Dublin as a Knowledge City capable of

competing with other city regions across the

world.

People FocusIn the new economic paradigm that defines the

knowledge economy, the City Region mustcompete with other international locations

through its ability to train, retain and attract

workers. In order to gain competitive advantage

and ensure innovation, the Dublin City Region

must supply the knowledge workers required for

ongoing collaboration between science and

industry.

The workers who are the linchpin of this

knowledge economy have been conceived as the

"creative class", by Richard Florida in Rise of the

Creative Class. This "creative class" is made up of

people working in the fields of science, maths,engineering, communications, the arts, design

and entertainment, and is complemented by a

broader group of "creative professionals"

working in knowledge intensive industries

including business, finance, law, healthcare and

related fields. They are "creative people who

"Competitive Cities in the Global Economy",OECD (2006).

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prefer places that are diverse, tolerant and open

to new ideas." The Three Ts are central to

successfully attracting and retaining these

workers in any economic region. They are:

Technology an ability to embrace change

and new ways of doing things;

Talent an ability to attract and welcome new

people and ideas into a location; and

Tolerance an ability to be non-judgemental

and open to diverse life style choices that

these new people may prefer to embrace.

Culture MattersThe Dublin City Region is in direct competition

with other major cities as the place where talent

gathers and innovation occurs. To date, our city

has been a success as a gateway to Europe; amelting pot, attracting and integrating talent

from across the globe. However, we cannot

assume that this will continue to be the case.

Direct action needs to be taken to ensure that, as

the city continues to develop economically, it also

grows as a vibrant cultural, social and educational

centre in order to attract and build its own

"creative class". Offering the right working and

economic environment is only one part of the

equation necessary to the knowledge economy.

We must take a strategic approach to ensure that

our City also offers the cultural, social and

recreational lifestyle options that position Dublinas an attractive and fulfilling place to live for

talented knowledge workers.

Balanced growth of this kind is an integral part of

the successful city region in the knowledge

economy. Unless a determined effort is made to

develop our city in this way, there is a real risk

that the Dublin City Region may simply attract

talent in the early stages of its career and that

this talent will then move on to other, more

attractive and stimulating cities.

Good FoundationsThe Irish Government has laid the policyfoundations for a new Irish economy with strategy

documents such as Ahead of the Curve; Ireland's

Place in the Global Economy; the Strategy for

Science, Technology and Innovation; and the

report of the latest Task Force on Small Business.

Although these policies are at differing stages of

implementation, an environment is being created

where business and education can collaborate

creatively to move Irish products, processed and

services up the value added chain. Dublin

Chamber believes that, in time, Ireland can reap

the rewards of these policies through higherproductivity, employment and incomes.

In particular, the Dublin Chamber wishes to

acknowledge a number of pro-business tax

fundamentals that the Government has had the

foresight to introduce. These include Irelands

corporate tax regime, a low corporate and

employment tax environment and improvements

to the Research and Development Tax Credit, the

Business Expansion Scheme and the Seed

Capital Schemes.

The business sector has contributed positively tothis strategic debate. Papers such as Retuning

the Growth Engine by the American Chamber of

Commerce of Ireland and A vision for ICT Ireland

by ICT Ireland also plot a course for Ireland in the

knowledge economy.

City Regions:The Seedsof Growth


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1Developing the DublinCity RegionThe 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 theDublin Chambers 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.

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A list of Dublin Chamber of Commerce Reports andSubmission is included at the end of this document.

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Context: Competing to train, retainand attract knowledge workers

Attracting an international creative class will allow the

Dublin City Region to develop the foundations of a

knowledge economy. Yet to be a booming success, Ireland

will need to inspire and train its own creative class from

Irelands children. Once inspired, these children will need

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.

Building a

LearningSociety

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Building aLearningSociety


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Graduations data for selected Dublin institutions,classified by type of qualification (Full/Part Time 2004)

Certificate/ Honours PhD TotalDiploma Degree Masters

Dublin 2,199 18,564 508 21,271

Ireland 18,783 36,386 683 55,852

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2.1 Attracting Internationally-Experienced Talent

The combination of a strong Irish workforce

coming on line with world class knowledge

workers will provide the highly educated and

creative body of labour necessary to maintain the

knowledge economy. This economy requires a

robust higher education infrastructure that can

produce highly skilled, educated and creative

workers. Recognising this, Irish Higher EducationInstitutions have been set an ambitious goal of

doubling their annual output of Ph.D.s to meet a

growing demand. The Dublin City Regions

position as the centre for learning in Ireland is

already well established, with three out of four

Irish Ph.D.s coming from County Dublin alone.

Note: The following institutions are included in

the totals for Dublin: DIT, UCD, TCD, DCU, Royal

College of Surgeons and St Patricks.

The objective of the Government Strategy for

Science, Technology and Innovation is to develop

a sustainable model of research through a

competitive funding process and a focus on

increasing production of Ph.D. graduates. These

are undeniably important elements in achieving a

sustainable economic model, however Dublin

Chamber fears that this Strategy will fail unlesssteps are taken to attract new blood to the

education sector in Ireland.

Experienced senior researchers - or Principal

Investigators - who oversee a research team, are

the essential building block of the Strategy for

Science, Technology and Innovation. The graph

below illustrates that Ireland cannot meet the

demand for people with the necessary skills to

act as Principal Investigators (PIs). There are

relatively few people in this country in the age

groups associated with these senior positions,

and it is certain that we do not currently have the

numbers of senior researchers required to deliver

on the targets for Ph. D.s envisaged in the

Government Strategy.

KEY ACTION

Develop short-term programme offinancial/tax incentives to assist in therecruitment and retention of keyworkers with the skill sets essential todeveloping the knowledge economy.

Percentage of Population with Third Level

Education or higher by Age, 2005

US

OECD

UK

IRELAND

EU15

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Source: National Competitiveness Councils

Annual Competitiveness Report 2007.

25 - 34

34 - 44

45 - 54

55 - 64


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A number of factors also limit the speed at which

Ireland can build its Ph.D. reserve, while still

maintaining quality. At present the level of Ph.D.s

in Ireland is lower than the EU15 average.

Internationally it is recommended that

supervisors/PIs have no more than 5 Ph.D.

students. World class Principal Investigators, who

have the requisite education and experience, are

required to train Irish Ph.D.s but, as illustrated,

these are in short supply locally.

If we are to increase production of Ph.D.s we

need a jump start through the repatriation of

suitably qualified and experienced Irish Ph.D.s

living abroad. Unfortunately, this has proved

difficult to date due to differing standards of

living in Dublin compared to other international

university towns. Dublin Chamber believes that

some form of intervention is required to tip the

balance in favour of Dublin. Without this, the

International Case Study:The Netherlands

The Dutch Government has focused on improving

the attractiveness of the country by allowing an

employer to pay international employees 30% of

their salary as a tax free allowance. This 30% ruling

applies to international employees with a specific

expertise that is scarce or absent in the job market

in the Netherlands. To qualify for the scheme

employees must demonstrate compliance with a

variety of requirements, including level of

education, relevant work experience and

consistency of remuneration with prior employment

(pre-30% allowance). The categories of business

that this applies to are based on the importance

which specialised knowledge has to the role.

difficulty in recruiting internationally experienced

PIs cannot be tackled and our ability to increase

the number of Irish Ph.D.s will be restricted.

Experience abroad gives us some insight into

mechanisms that can be used to attract essential,

skilled workers where a shortfall exists. The

example of the Netherlands is typical.

The Dublin Chamber advises that a short-term

programme, similar to that of the Netherlands,

should be developed to assist in the attraction

and retention of key knowledge workers in

Ireland. Some form of financial or tax incentive

can be effectively used to bridge the gap

between Dublin and other university towns of

international standing, thus addressing the

shortfall in essential knowledge workers, such as

Principal Investigators.


ICT competence from an early age is a critical

building block in a knowledge society, however in

Ireland there is a deficit of basic IT skills across

the general labour force. Dublin Chamber

believes that every school leaver today should

have a defined ICT skill set, in the way previous

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

2.2 ICT Skills as the new three Rs

KEY ACTION

Prompt completion and initialimplementation of the ICT inEducation Strategy by 2008, drawingon the support of business where it isneeded to achieve this aim


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2direction. If this strategy is to make a meaningful

impact, it also requires a detailed plan for action

with specific tasks, targets and timeframes, clear

responsibilities and a definite commitment of

resources from current spending plans.

Primary and secondary education facilities

provide students with the necessary learning skills

to reach their full capacity at third-level. Ireland

has seen an encouraging increase in secondary

school participation rates. Provisional data for

2005 indicates a participation rate of 86%, which

surpasses the Lisbon Agendas target of 85%.

However, in the crucial area of scientific and

mathematical ability, Irish 15 year olds were found

to be below the OECD average in 2003. While

more recent figures show some improvement (to

marginally above average/average) in science

there has been no movement in Irelands maths

ranking. Equally worrying is the fact that there

were over 9 students to every computer in Irishschools, according to the EUs Benchmarking

Access and Use of ICT in European Schools 2006.

These are not the statistics on which a successful

knowledge eco-system can be built.

If we are to collectively sustain the type of

competitive economy desired, Dublin Chamber

believes that ICT skills need to be more ingrained

in the secondary and primary education

curriculum. Dublin Chamber strongly advocate

that some form of IT skills requirement be

introduced to the curriculum across the schools

system and that these skills should be subject toformal examination and accreditation.

Business is more than willing to play its role in

this area. Member companies of the Dublin

Chamber are already committed to pro-bono

support of IT in the learning environment.

However, such involvement can never be a

substitute for the leadership, direction and

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continuous investment in ICT that can only come

from Government. If Government demonstrates

this leadership, businesses will enthusiastically

follow.

Dublin Chamber believes that there is an urgent

need for the Government to complete the ICT in

education strategy and that this should be tightly

coupled with an action plan for speedy execution

beginning in 2008. Business can make a positive

contribution towards achievement of these goals

and this support can be easily harnessed and

mobilised, probably through the establishment of

an Advisory Structure to assist in the planning

and execution process of the strategy. With the

strategy and process in place, Dublin Chamber

recommends that pilot projects be launched for

the start of 2008/2009 school year.

Child development studies have shown that from

the first days of life children begin to take in and

react to their surroundings, developing the

learning skills of a life time. Recognising this,

many countries make a concerted effort to mergethe two tracks of child care and early education,

in an effort foster early childhood development.

In Ireland the two tracks of education and child

care have continued to develop separately. The

National Economic Social Forums report on Early

Childhood Care and Education estimated that for

every Euro invested in early childhood care and

2.3 Early Embedding of

Learning Skills

KEY ACTION

Optimise early learning in the childcare system and up-skilling thoseworking in the early learning industry


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education in Ireland, a return of7.10 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.


"Early Childhood Care and Education",NESF, Report 31 (July 2005).

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Context: ICT as aPlatform for Growth

In the new global economy, ICT is the major enabler, not

just of improved quality of life, but also of economic

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,

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

Governments 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.

Upgrading the

KnowledgeInfrastructure

Digital Prosperity: Understanding the EconomicBenefits of the Information TechnologyRevolution, Atkinson, R. & McKay, A.

5

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Upgrading theKnowledgeInfrastructure


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3.1 PC Penetration

As a technological society, Ireland lags behind

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

improvement of only 3.5% from 2005. These

figures expose a real weakness when compared

with those for Sweden where penetration is at

82%, or Denmark where it is 84%.

The knowledge economy requires a culture

where ICT is second nature to society. To

encourage this, Dublin Chamber believes that the

Irish Government should put in place a PC

penetration scheme. Here we can draw from the

experience of other European countries including

Sweden, Belgium, Italy and Portugal, where

schemes have succeeded in increasing PC usage

and penetration.

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.

Dublin Chamber recommends the introduction of

a scheme for a minimum twelve month duration

that is simple and inexpensive to administer.

Whilst this scheme shall require some co-

ordination between Revenue, the Department of

Finance and employers, the long term benefits todigital adoption and penetration in the country

shall be significant.

KEY ACTION

Introduce VAT-free scheme forthe purchase of PCs to stimulate a

technology-literate society

International Case Study:PC Penetration

Sweden:

Home PC penetration in Sweden was

increased from 40% to 80% as a resultof a pioneering Government scheme

which allowed employees to purchase

a PC VAT-free.

Italy:

The Italian government has implemented

a scheme for students where a 100 voucher

for a computer skills course accompanied a

175 grant towards buying a computer

improving both penetration and usage.


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Broadband penetration rates in 2006

Percentage of household ( = 2003)

Broadband penetration rates in 2006

Percentage of Enterprises ( = 2003)




Netherlands

Denmark

Finland

Sweden

UK

Germany

EU15

France

Spain

Hungary

Poland

Italy

Ireland

70%

60%

50%

40%30%

20%

10%

0%

Finland

Sweden

Spain

Denmark

Netherlands

EU15

UK

Luxembourg

Germany

Italy

Hungary

Ireland

Poland

90%

100%

80%

70%

60%

50%40%

30%

20%

10%

0%

Findings based upon CSO Census 2006 and ComReg(Quarterly Key Data - Document No: 07/67).

ComReg, Quarterly Key Data - Document No: 07/67..

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Improving PC penetration alone will not create the

technology literate society we need. Additional

measures are also required to improve the take-up

of broadband and the use of online services.

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

EU25 for broadband penetration, surpassing only

Greece out of the EU15.7

Significantly, this rankinghas not improved since 2003. The findings of the

2006 Census highlighted that Ir ish households are

still less likely to have internet access than their EU

counterparts, and remain among the lowest

household users of broadband in the EU.

3.2 Strategic Importance ofICT Infrastructure

KEY ACTION

Amend the Strategic Infrastructure Actto include advanced

telecommunications to facilitatedevelopment of next generation

Irelands telecommunications network is currently

reliant on an outdated copper wire system. Bandwidth-

intensive next generation applications such as

Interactive TV, HDTV, and location-based services will

require a network that can accommodate speeds of

between 50Mb/s and 1Gb/s. This cannot be delivered

through our copper wire system. Without higher

speeds Ireland will not be able to meet the needs of

business and will never be seen as a serious contender

for knowledge intensive industries.

Ireland is already losing valuable time and lagging

behind competitors like Singapore, Korea, theNetherlands, the UK, Germany and Sweden who are

investing significantly in next generation networks. It is

acknowledged that the laying of fibre optic cable -

which is the backbone of next generation networks - is

extremely expensive.8 In particular, the current

piecemeal approach being taken to upgrade Dublins


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3telecommunication network is costly and will

leave Dublin in a position where it is, quite

simply, unable to compete against other

international locations.

In the NDP the Government recognises that

advanced broadband telecommunications is a

necessary key infrastructure for gateways and

hubs. The National Spatial Strategy has set a

medium term target of "broadband speeds of 5

megabits per second to the home and more than

that for business". If the Government is

committed to these goals, it is imperative that

Strategic Infrastructure Act is amended to include

advanced telecommunications. This will reduce

the huge cost for companies wishing to invest

and the time it takes for the major trenching work

that is associated with its installation. Crucially, as

other economies forge ahead in developing next

generation networks, Ireland cannot afford to risk

the kind of delays that have fraught thedevelopment of infrastructure here in the past.

This action will make a bold statement about the

value that this country puts on developing next

generation networks showing serious intent

behind what are otherwise dismissed as empty

aspirations. Dublin Chamber believes that by

amending the Strategic Infrastructure Act to

include advanced telecommunications it would

engender the certainty that investors require and

position the Dublin City Region to compete with

other city regions worldwide.

21

A report by Enders Analysis estimated that the priceof fibre-to-the-home for the UK was 1000 perhousehold, 70% of this cost was on the associatedcivil engineering work associated with the digging of

the trench.

8

When fibre motorways are made available,

provision must also be made so that homes can

access this service. Ideally, room for next

generation networks should be put in place while

houses are under construction. Given the rate at

which housing stock has grown in Dublin, we

have missed an incredible opportunity to plan for

the future by catering for high speed and quality

connectivity. In the future, Dublin Chamber

believes that no new dwelling should be built in

the Dublin City Region without the necessary

capability in place for upgrading the

telecommunication network.

In the long-term this should be a requirement of

National Building Regulations, however given the

pace of development, an immediate, interim

measure is also advisable. As a result, Dublin

Chamber proposes that this requirement is

embedded into Dublin City Councils and other

Greater Dublin Area local authorities

development plans. This would make it aprerequisite 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

3.3 Fibre Ready Homes

KEY ACTION

Amend National Building Regulations,and the Dublin City Council

Development Plan so that new homesare built to be "next-generationready"


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International Case Study:Denmark

Legislation was implemented in Denmark in 2004

which required the entire public sector to move to

electronic invoicing. It was estimated that the

Danish public sector made 18 million invoice

transactions to other public authorities annually.

With 10 minutes being saved in the handling of

each invoice when received electronically, it

was estimated that total savings of94 million

were achieved. Furthermore, when the Danish

Government fully implements the system to

facilitate automatic matching between orders

and invoices, it is conservatively estimated

that the total savings will increase to160 million annually.


will greatly improve the commercial case for fibre

being rolled out across Dublin. Dublin Chamber

understands that such a proposal has been

included in a recent consultation paper on

apartment living in the city by Dublin City

Council. Dublin Chamber warmly welcomes this

proposal and believes that it should be extended

to all new housing without delay.

The performance of Irish firms in ICT integration

has been poor to date. This means that Irish

business is failing to translate improved technology

into increased productivity. The 2006 InformationSociety and Telecommunications report prepared

by the CSO, remarked that only 19% of Irish

enterprises reported having a written ICT strategy.

Failure by the vast majority of Irish companies to

integrate existing technologies into their day-to-

day activities is a major concern for future

competitiveness and acts against creating the

necessary sea-change in business culture that is the

basis of a knowledge society. In view of this,

Government should seek to pro-actively lead

business towards integrating ICT more fully into

their day to day functions for example by movingbusiness services online.

Dublin Chamber believes that the Revenue

Commissions early success with Revenue Online

indicates that it is possible to move a number of

key Government services for business to be

available online ONLY. To do so successfully,

customer-focus and user-friendly process and

interfaces must underpin all elements of design. This is

what sets Revenue Online apart from other less popular e-

Government initiatives. This has also clearly worked in the

private sector where, for example, such a move has not

hindered the sale of airline tickets. The Danish Government

has also shown how an excellent regulatory environment

and clear government leadership on ICT, coupled with high

PC and broadband penetration and usage, can result in a

winning strategy for competitiveness, through increased

cost saving and efficiencies.


3.4 Migrate Government Services toBusiness Online ONLY

KEY ACTION

Move key government services forbusiness to online only

Public Services Available Online 2006

( = 2003)

Sweden

UK

France

Denmark

Finland

Italy

EU15

Spain

Netherlands

Hungary

Ireland

Germany

Poland

Switzerland

80%

70%

60%

50%

40%

30%

20%

10%

0%





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23

Context: Innovation andR&D by SMEs

SMEs are an important sector in Ireland and have a vital

role to play in copper-fastening the knowledge economy

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

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.

SMEs and the

KnowledgeEconomy

4


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SMEs and theKnowledge Economy


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4

Dublin Chamber fully supports the

recommendations of the Small Business Forum

that Innovation Vouchers and Knowledge

Acquisition Grants be made available to small

business. Dublin Chamber believes that these are

practical, targeted initiatives that will create

momentum in the adoption of R&D by the SME

sector.

The Innovation Voucher, which allows small

businesses to access research expertise valued at5,000 from third-level institutions, was

introduced on a pilot basis by Enterprise Ireland

in 2007.9 The voucher system encourages SMEs

to explore the opportunities available through

R&D and facilitates knowledge transfer from

third-level institutions. A meaningful assessment

of the success of this initiative will only be

possible after the pilot has been evaluated, but it

is clearly a step in the right direction. Dublin

Chamber suggests that extending the voucher

scheme beyond third level institutions, to City

and County Enterprise Boards and Business

Innovation Centres, would improve theeffectiveness of the scheme. This would also

allow small business to fully realise the benefits of

business development advice in the subject of

commercialisation of R&D, an area in which

Ireland is seeking to develop its capacity.

The Small Business Forum also recommended

the introduction of Knowledge Acquisition

25

Grants in order to develop the innovation capability

and absorptive capacity of small companies through

supporting such activities as R&D planning/training,

consultancy, or market research. While care must be

taken to ensure that these grants complement existing

Enterprise Ireland schemes, there are undoubtedly a

number of areas that can be addressed. One of the

new supports being examined is an R&D Stimulation

Grant, to encourage companies that have not carried

out R&D in the past (or which have done so on a

sporadic basis) to develop sustainable R&D activity.

Once again, Dublin Chamber would strongly support

an initiative of this nature as Dublin Chamber believes

it will make a discernable contribution to developing

innovation among SMEs in the Dublin City Region.

It is essential that Ireland creates a better match

between the demand and supply of training for

small business owner/managers, in terms of content

and delivery mechanisms, if our SMEs are going to

be able to compete at an international level. In this

context, the establishment of the Management

Development Council by the Department ofEnterprise, Trade and Employment is extremely

welcome.

It is our hope that the Council can successfully

address the existing gap between the services of

education providers and the needs of small

business. On one hand, SMEs generally find that the

more tailored the training, the greater the return.

On the other hand, education providers tend to

find the costs of tailoring courses prohibitive and

favour providing more generic training.

4.1 Building R&D Experienceof Small Business

Second Progress Report on Implementation of theRecommendations of the Report of the SmallBusiness

9

4.2 Educating Owner/Managersof SMEs

KEY ACTION

Expand Innovation Voucher Schemeand introduce KnowledgeAcquisition Grants

KEY ACTION

Encourage tailored training for SMEmanagers and improve managementcapacity through expert secondmentprogramme


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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 beto 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 ofmanagerial 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.

Small Businessand the KnowledgeEconomy

SMEs and theKnowledge Economy


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27

Context: Promoting DublinsKnowledge Eco-System

Dublin Chamber is optimistic that the current NDP can

begin to address the Dublin City Regions infrastructure

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

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 Dublins knowledge eco-system.

Arrival of a

KnowledgeCapital

5

Dublin Chamber addressed the issue ofKnowledge Economy Infrastructure in its July 2006Submission to the Department of Finance on the

National Development Plan 2007-2013.

10


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Arrival of aKnowledgeCapital



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City Region wide WiFi connectivity, although

relatively easy to put in place, faces several major

challenges, including a workable business model,

high maintenance costs and ensuring a critical

mass of users. While many cities and towns have

considered rolling out city-wide wireless

connectivity, there are limited examples of a city

implementing this across its public transport

network. Nonetheless, templates do exist on a

one-off basis within private environments for

example company commuter buses.

Dublin Chamber believes that the Dublin CityRegion can steal the limelight in this area by

providing wireless access across the Citys public

transport network - on the DART, commuter

trains and/or Dublin Bus. A number of practical

issues must be considered - for example, to

encourage use, access should be free (possibly

subsidised by on-line advertising streaming into

the bus/train) or charges kept to a minimum (e.g.

included in purchase price of transport ticket).

However the initiative would have positive side

effects in encouraging commuters to switch to

public transport and increasing Dublin

commuters productivity.

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.

One of the challenges that we face in building a

knowledge economy in Dublin is the decline in

graduates taking science and technical subjects.

There is an urgent need to capture students

imagination and stimulate an interest in science-

based subjects early in their lives.

Positive moves have been made to develop

interactive museums in Dublin, as in other cities

across the world for example, the proposed

Science Gallery and the Exploration Station at

Heuston Gate (as outlined below). Nonetheless the

absence of a world-class Science Museum in Dublinis a glaring gap in this landscape.

5.1 WiFi in Public Transport 5.2 Science Museum

Science Gallery

The Science Gallery, located in a new building on Pearse

Street in the heart of the capital, will be a place "where

ideas meet", bringing together the business, research,

student and policy communities, with a core audience of

young adults (15-25) making decisions about future careers

Activities will include exhibitions, festivals, workshops and

events on major interdisciplinary themes from The Futureof Food to The Science of Attraction.

Projects Underway

29

KEY ACTION

Introduce WiFi across Dublins publictransport system

KEY ACTION

Establish world-class science museumand reform funding for science facilities

5


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Exploration Station

The Exploration Station will be Irelands

first interactive science centre for young

people (5-17), families, teachers and

tourists. From its Heuston Gate location,it hopes to inspire a lifelong passion for

discovery through a fusion of arts and

sciences. The interactive exhibits will be

tied to the National school curriculum,

and will cater to school tour

programmes, public programmes and

outreach programmes. The anticipated

opening date is 2010.

Projects Underway


A Museum of Science is a valuable facility that

communicates and teaches science throughout

our lives. More significantly, it can also act as a

focus for building and stimulating an integrated

science culture by capturing the imagination and

acting as a vital engine in promoting careers in

science, engineering and technology. An

outstanding museum of science will enhance

Irelands image as a knowledge-based society and

will serve to inspire future generations of Irish

scientists.

Other major knowledge economies have a history

of integrating science and technology into the

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

and a further 250 million from other public

sources. In the US there are over 350 sciencemuseums and centres, with a combined annual

budget of over $1 billion. They attract 177 million

visitors annually, including 60 million

schoolchildren.

Dublin Chamber believes that, while private

funding is important in this area, achieving

sustained public funding is the real obstacle to the

creation of world-class Science Centres in Ireland.

The experience to date with the two pipeline

projects illustrates the difficulty with funding a

more ambitious, world-class science museum.

Currently, the national science awarenessprogramme Discover Science and Engineering has

an annual budget of approximately 4 million. It is

managed by Forfs and focuses on sponsorship of

individual science-engagement events. However it

does not offer a revenue funding model to cover

the significant ongoing staffing and operational

costs that are associated with running and

maintaining science/technology centres.

Between them, the Science Gallery and the

Exploration Station aim to draw 250,000 visitorsper year this equates to roughly one-sixth of

the Dublin City Regions population. When

benchmarked against other international

knowledge cities our ambition for the

promotion of science seems singularly

unambitious. Bostons Museum of Science

receives over 2 million visitors annually and

Munichs Deutsches Museum, 1.4 million. This is

almost half of these cities populations. If the

Dublin City Region were to emulate these

proportions it would equate to three quarters

of a million people a year (and over a million by

2020). These visitor numbers are currentlyachieved by the National Gallery of Ireland and

there is no reason to suggest that similar

demand for a National Science Museum cannot

be generated particularly in a country that is

on the brink of undertaking a sustained

campaign to promote science.

30 Dublin Chamber of Commerce


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31

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 Irelands 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 thisstructure.

5


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33

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

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, Dublins success will be determined by its

ability to develop, retain, and attract workers. We have done

this well thus far, as the Dublin City Regions 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 educationinstitutions in consultation with government bodies to voice

the regions concern with regard to developing a

Knowledge Economy. They highlight a knowledge regions

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.

Conclusion


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Country Programme

Sweden From 1997, employees could avail of a tax-free

PC scheme (VAT 25%). Home PC penetrationincreased 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.

Appendix:

International Examples of PC Incentive Schemes

35

A


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Dublin Chamber ofCommerces Past Reportsand Submissions

Investing in Knowledge Workers

Budget 2008 Submission

Democracy Now!

Submission to the Department of Environment,

Heritage and Local Governments 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: Irelands International Gateway

Submission to Department of Finance on

National Development Plan 2007 2013


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Dublin Chamber of Commerce7 Clare Street, Dublin 2, Ireland

T +353 (0)1 644 7200F +353 (0)1 676 6043

connecting influencing

Knowledge City Region

Documents

Transcript of Knowledge City Region