(GCF2007) Role of the ICT Industry From Zero to Hero
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  • 1.  
  • 2. Presentation on the Irish Transformation and the Role of the ICT Industry From Zero to Hero November 2006 Ronan Deignan Managing Director
  • 3. Agenda 1 ) What Transformation ? 2 ) How was it achieved ? 3 ) Ireland and ICT Foreign Investment The Irish Industry 4 ) The Future
  • 4. A small island in the Atlantic beside Britain Population 4.2 million people . 1) Ireland theTransformation
  • 5. History of exporting people and cattle
  • 6. Ireland’s Economic History
    • 1922 to 1958
      • A basic agricultural economy
      • Self-sufficiency and protectionism
    • 1958 to 1973
      • Opening up and joining Europe (EEC)
    • 1973 to 1987
      • some success, adjustments but crises also
  • 7.
    • “ By the 1980s Ireland was referred to as the 'sick man of Europe'
    • At one point the International Monetary Fund considered imposing strict economic measures ”
    • Economic history of the Republic of Ireland
    • From Wikipedia
    • 1987 to date
      • Stunning development and growth
  • 8. The Irish Economic Transformation
    • 1990 2005
    • GDP €m 36,312 146,279
    • GDP per capita € 10,357 36,118
    • Merchandise exports 18b 85.1b
    • Total Debt GDP 96.4% 24%
    • Total Labour Force 1.310m 1.95m
    • Unemployment 176,000 86,000
    • Unemployment 13% 4.2%
    • Inflation 3.4% 2.3%
  • 9. Ireland in 2006 Sources: Economist Intelligent Unit Limited 2006, Irish Times 31/03/06 & 23/03/06, Central Statistics Office (CSO)
    • One of the Global Top 10 Business Locations (6 th in 2006)
    • High economic growth for an EU country
    • - GNP grew by 5.4% (2005)
    • - GDP grew by 4.7% (2005)
    • Estimated for 15 more years of Strong Growth
    • Population to reach 5.3 million by 2020
    • Labour Force to increase by 2.2% each year for the
    • next 10 years
    • Irish economy to sustain Productivity growth of 3%
    • Potential growth in economy will remain at 5.75%
    • until 2010
  • 10. Ireland’s Economic Transformation The Irish economy has grown at over three times the European and twice the U.S. average over the 90’s. Real GDP Growth 0 1 2 3 4 5 6 7 8 '70's '80's '90's % Growth US average EU Average Ireland (Source: OECD Economic Outlook - December 2000)
  • 11. Components of Exports 1970 Components of Exports Today Ireland’s Economic Transformation
  • 12. Destination of Exports 1970 Source: Central Statistics Office Destination of Exports Today Ireland’s Economic Transformation
  • 13. The Unemployment Rate – Historically the key driver of economic policy Per cent Source: OECD; CSO; Census of Population; Labour Force Surveys; Live Register Statements; Dept of Finance
  • 14. GDP Per Head: Ireland (and UK) Compared to EU Average --- Surpassed the UK in 1999 UK Ireland EU Average
  • 15. . 2) How was it achieved ?
  • 16. Strategic Development Agencies Clear Strategy and Objectives Sector Focus Many Other things combined to support strategy The Key Issues
  • 17. 1) FDI for capital, know how and best practice but also 2) Grow a modern competitive Irish industry at the same time Dual Strategy
  • 18. Strategic Development Agencies Foreign Investment IDA Ireland IDA Ireland Policy Research & Advice Science & Technology Policy Research & Advice Science & Technology Coordination Forfas Support for Irish-owned businesses (including trade & technology) Medium to Large Enterprise Ireland Minister for Enterprise, Trade & Employment Government Government Science Foundation Ireland Support for Science and Research
  • 19. Lots of Other Important Agencies including
    • FAS Training
    • Tourism Ireland
    • Bord Bia – Food Industry
    • Shannon Development
    • Customs House Docks Authority – International Financial Services Centre
  • 20. Clear Objectives and Strategy
    • Last 20 years
    • Objective ; Employment Creation
    • Strategy ; Ireland as the European location for investment in key sectors
    • Now
    • Objective ; create a knowledge innovation led economy – better jobs/global businesses
    • Strategy : Ireland as an effective location for innovative creative businesses in high value sectors
  • 21. Why Ireland? “ Every success we’ve achieved around the world has been due to the old Irish recipe of big dreams, hard work and strong relationships.” Michael Dell, Chairman, Dell Inc. Many of the worlds top companies are here Young, well Educated flexible people Highly attractive Corporation Tax environment Flexible and Pro-Business environment Quality of Life English speaking global trading hub
  • 22. Education & Skills Population projections: Growth rates in % (from 2000 to 2010) Source: Third European Report on S&T Indicators
  • 23. Education & Skills Science & Engineering Graduates per 1000 population aged 20-34 Source: Third European Report on S&T Indicators
  • 24.
            • Flexibility and adaptability of Workforce 2005
            • Rate
    • USA: 7.76
    • Ireland 7.64
    • Hungary 6.86
    • Netherlands 6.43
    • UK 6.05
    • Germany 4.49
    • France 4.36
    • Source:: IMD World Competitiveness Report 2005
  • 25. Labour Productivity in the Services Sector Source IMD World Competitiveness Report 2006 $ US
  • 26. Favourable Tax Environment One of The Lowest Corporate Tax Rates in Europe Source: KPMG Corporate Tax Rate Survey 2006 % Business models built around Ireland’s standard 12.5% corporation tax rate help build shareholder value
  • 27. Quality of Life Source: The Economist Intelligence Unit, 2004
    • Ireland is ranked No. 1 for quality of life by The Economist
    • Criteria
    • Material
    • wellbeing
    • Health
    • Family
    • Relations
    • Job Security
    • Social and
    • community
    • activities
    • Political
    • freedom and
    • security
    • Gender
    • equality
    Country Score Top 6 Countries
  • 28. English Speaking Global Trading Hub
    • Ireland has embodied the free trade aspects of the EU since joining the common market over 30 years ago
    • Ireland has allowed immediate free inward movement of people from the ten new EU accession states from May 2004
    • Recognised and proven management capability
  • 29. A Truly Pro-Business Environment
    • Strong Government Commitment - Prudent spending and borrowing policies, investment in education, pro-business regulatory framework for e-business
    • Successive Social Partnerships - Social pacts to control wage costs between employees, employers and the Government
    • Consistent focus on developing skill base through Education
    • Support for Inward Investment – IDA Ireland / Government
    • Strong R&D Support for Companies and Universities for developing newer technologies
    • Record Job Creation - One in every 10 jobs created in the EU is a job in Ireland
    • Consistent Pro Business Policies – Government strategies implemented
  • 30. Other Issues ICT
    • Tax Incentives
      • 20% R&D tax credit
      • No stamp duty on IP transfer
    • Infrastructure
      • Excellent site availability
      • Developed sub-supply system
      • World class design
  • 31. Average % Rate of Return on US Direct Investment Abroad 2000-2004 Source: US Bureau of Economic Analysis, 2006 %
  • 32. Sector Focus Key Sectors for Ireland
    • ICT
    • Pharmaceuticals & Biotechnology
    • Medical Technologies
    • International and Financial Services
  • 33. FDI in Ireland: Key Sectors, Key Players Intel Dell IBM Motorola Freescale Apple Hewlett Packard Ericsson Lucent EMC 2 Analog Devices Siemens Microsoft Oracle Google Accenture eBay Hertz SAP Yahoo Whirlpool UPS GE Capital GMAC Merrill Lynch ABN Amro Bankers Trust Citibank Deutsche Bank Bear Stearns AIG Morgan Grenfell Daiwa Eli Lilly Merck Novartis Pfizer Abbott Schering-Plough Bausch & Lomb Medtronic Wyeth Medica Gillette J & J Information & Communications International Services Financial Services Life Sciences
  • 34. The Pharmaceutical Industry in Ireland
    • No. 1 location in Europe for international pharmaceutical investment
    • 9 of the world’s top 10 companies
    • 34,000 employed in Life Sciences including 18,000 in pharmaceuticals
    • World’s largest biopharma plant (Wyeth)
    • Exports of €30 billion in 2004
    • Blockbuster products
      • Lipitor, Viagra, Botox , Zyprexa, Zocor
  • 35. Medical Devices
    • Europe’s leading location for the medical device industry
    • Over 90 companies exporting over €6.4bn
    • Employing 19,000 people
    • 13 of the World’s top 25 companies present in Ireland
    • Integrated manufacturing, R&D, customer support and value added services
  • 36. International Services
    • Strong clusters built
      • Software Development
      • Shared Services
      • Financial Services
      • Customer Support Centres
  • 37. Financial Services in Ireland
    • Ireland is recognised as
    • a centre of excellence for a
    • range of internationally traded
    • financial services
    • More than 450 leading financial institutions
    • More than 700 managed financial entities
    • Key Financial Sectors
            • Banking and Asset Management
            • Fund Management, Custody and Administration
            • Insurance, Reinsurance, Life Assurance and Captive Assurance
            • Corporate Financial Services
    Source: FIBI, 2005
  • 38. Who’s here?
  • 39. . 3) Ireland and ICT
  • 40. ICT in Ireland
    • 2 0 0 companies , employing 37 ,600 approx.
    • ICT Industry accounts for €50 billion annual exports
    • 6 of the worlds top 10 leading ICT companies have operations in Ireland
    • Over 900 Software Companies – both Irish and foreign owned
    • Software Sector exports over €14 billon worth of products and services with a total revenue of almost €15 billion
  • 41. Value added in the ICT sector in Ireland is 11.6% of GDP compared to 5% EU average Source:: Economic Intelligence Unit
  • 42. Ireland : A Home to Global Players Novell
  • 43. Top 10 ICT Companies in Ireland TOTAL EMPLOYMENT Intel 5,200 Dell 4,400 IBM 3,300 Hewlett Packard 2,300 Xerox 1,600 Ericsson 1,400 Analog Devices 1,200 Microsoft 1,100 EMC 1,100 Apple 1,000
  • 44. ICT Ireland – Recent Greenfield Wins Internet Space, Security, Storage, Telecoms
  • 45. Research & Development Recent Expansions ICT in Ireland
  • 46. ICT in Ireland
    • Current Focus / Sub-sectors
    • Software
    • Semiconductors
    • Telecommunications
    • Computer Systems
    • Storage
    • Activities
    • R&D
    • New Product Development and Design
    • Supply Chain Management
    • Software Development including localisation
    • Services: Customer Facing Functions – Sales & Marketing
    • Tech Support: Contact Centres
    • EMEA OPS / HQ: Shared Services, Financial Accounts & Management Services, Brand Management, IP, etc.
  • 47. Irish Owned ICT Sector
  • 48. The Importance of the ICT Sector in Ireland 2005 Source Enterprise Ireland
    • Small companies but growing
    • Sales Euro 2.2 B
    • Exports Euro 1.4 B
    • Annual Growth Rate in sales 9%
    • R & D Spend Euro 230m 10.5% of sales
    • Annual Growth Rate in spend 23%
  • 49. Irish Software Industry Export Markets
  • 50. Irish Software Industry Key Clusters Developing SectorsTechnologies
    • eLearning
    • Financial Services
    • Mobile & Wireless
    • Public Sector
    • Digital Media
    • Middleware
    • Lifesciences
    • Travel & Leisure
    • Webservices
    • Games
    • Wifi/WiMax
  • 51. Software “High Potential Start-Ups”
    • Total 245 Software Start-Up companies – 74% success rate
    • Software companies now account for 66% of all start-up companies
    • 70% of start-ups come from industry, 20% from third level
  • 52. Key Factors in Success of Irish Software Industry
    • Strong Product / Market Niche based
    • Export focussed
    • Significant Investment in R&D
    • Infrastructure to support the commercialisation of Intellectual Property
    • Local Venture Capital Industry
    • World Class Telecommunications Infrastructure
  • 53. Irish Software Industry Success Stories
    • eLearning – Skillsoft, Riverdeep
    • Financial Services – Eontec
    • Middleware – Iona Technologies
    • Electronic Payments – Trintech
    • DSP/Communities - CEVA
  • 54. Evolution of the Irish Software Industry First Phase: 1970-1985 Characteristics - Software Services - Some products - Low profits
    • Second Phase:
    • 1986-1995
    • Characteristics
    • - Products
    • - International sales,
    • including the USA
    • Niche technologies/high
    • growth markets
    Third Phase: 1996-present Characteristics - Venture capital - Serial investors - Stock market listings - Take-overs
  • 55. . 4) The Future
  • 56. Government Strategy Now :
    • Move Ireland up value chain: research- and innovation-driven economy
    • Attract, Grow R&D activities within Ireland
    • Broaden the activities of MNCs within Ireland
    • Be supportive of indigenous SMEs, start-ups
  • 57. ‘ Ireland will be internationally renowned for the excellence of its research and be at the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture’ SFI – Built for Research
  • 58.
    • Focus
      • Biotechnology
      • Information & Communications Technologies
      • Frontier/emerging opportunities
  • 59. Continued Investment in R&D
    • Strategy for Science, Technology & Innovation
      • New Government strategic plan, launched June 2006
      • Will invest €3.8bn over next 7 years
      • Will double output of PhDs
      • Develop sustainable career paths for researchers
      • Significant investment in technology transfer and commercialisation of IP
      • Development of competency centres and industry-led networks
  • 60.
    • IDA approaching task in three ways:
    • Marketing and branding Ireland internationally as a knowledge, innovation and technology business location
    • Major operational focus on developing R&D capability in-company
        • R&D Capability and RTI grants for incremental R&D
        • Last year over 50 R&D projects and €260 m investment
        • Focus on “development” of products and processes.
    • Developing “connectedness” between Industry and Academia
  • 61. Strategic ICT Clustering in Ireland Interdisciplinary Research: components, systems, software & networks Tyndal Institute Industry Academic Collaboration Analog, Siemens, Philips, Intel etc. NCSR Dublin City Univ Sensors & Diagnostics Bell Labs / CTVR Telecoms, software Value chain etc. Xilinx CRANN Trinity College Dublin Nanostructures & Nanodevices INTEL DERI Univ. College Galway Semantic Web Hewlett Packard A I C Univ. College Dublin Dublin City Univ. PervasiveComputing Ericsson, IBM, Mitsubishi ISERC Univ. of Limerick Dublin City Univ. Software Eng. IBM, Oracle, Sun, Motorola & Iona TSSG Waterford Institute of Technology Telecoms Software Lucent, Motorola, Siemens& Nortel Centre for Intelligent Systems Univ. of Ulster Cognitive assistance Artificial Neurons
  • 62. Success in the Future
    • “ Ireland a Knowledge Economy”
    • Re-enforcing Ireland’s claim to be a knowledge economy :
    • A Quality and Relevant Education System
    • Innovation Systems that bring together researchers and businesses in commercial applications of science and technology.
    • Socio- economic Framework that ensures a stable economy, competition, flexible labour markets and social protection.
  • 63. Conclusions
    • Action Points
    • Seek to be a player – select an exciting but relevant focus but - be bold
    • Set in place a strategy to achieve it
    • Back it politically and with money and resources and ensure that it works
    • Be flexible and fast
    • Keep working on the strategy – it will need to be updated regularly
  • 64. Conclusions Action Points 6. Empower key public sector agencies with private sector ethos to help the private sector make it happen 7 Eliminate bureaucracy and make it easy and profitable to do business 8 Be consistent
  • 65.