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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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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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Dublin Chamber of Commerce4
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.
(Department of Enterprise, Trade and
Employment).
Embedding a next generation IT infrastructure
4 Introduce VAT-free scheme for purchase of
PCs to stimulate a technology-literate society.
(Department of Enterprise, Trade and
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.
(Department of Education and Science).
9 Optimise early learning in the child care
system and up-skill those working in the early
learning industry.
(Department of Education and Science).
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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Dublin Chamber of Commerce6
City Regions:The Seedsof Growth
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1
7
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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Dublin Chamber of Commerce8
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.
9
A list of Dublin Chamber of Commerce Reports andSubmission is included at the end of this document.
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Dublin Chamber of Commerce10
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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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Dublin Chamber of Commerce12
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
2
13
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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Dublin Chamber of Commerce14
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.
Building aLearningSociety
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
15
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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Dublin Chamber of Commerce16
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.
Building aLearningSociety
"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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Dublin Chamber of Commerce18
Upgrading theKnowledgeInfrastructure
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3
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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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Dublin Chamber of Commerce20
Broadband penetration rates in 2006
Percentage of household ( = 2003)
Broadband penetration rates in 2006
Percentage of Enterprises ( = 2003)
Source: National Competitiveness Councils
Annual Competitiveness Report 2007.
Upgrading theKnowledgeInfrastructure
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..
6
7
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.
Dublin Chamber of Commerce22
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.
Upgrading theKnowledgeInfrastructure
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%
Source: National Competitiveness Councils
Annual Competitiveness Report 2007.
Upgrading theKnowledgeInfrastructure
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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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Dublin Chamber of Commerce24
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 of Commerce26
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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Dublin Chamber of Commerce28
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
Arrival of aKnowledgeCapital
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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Dublin Chamber of Commerce32
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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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Dublin Chamber of Commerce34
Arrival of aKnowledgeCapital
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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 of Commerce36
Arrival of aKnowledgeCapital
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
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