What next for the Digital Economy in Ireland? – Part Two
In his book, “How the Irish Saved Civilization: The Untold Story of Ireland's Heroic Role from the Fall of Rome to the Rise of Medieval Europe”, Thomas Cahill outlines how the great monastic settlements of Ireland helped to preserve the classical culture of Europe from being lost during the so-called Dark ages.
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Now over 1500 years later, as we move swiftly from the analogue to the digital age, Ireland has the opportunity to re-define itself as a “knowledge economy”. Whether we save civilization again is up for grabs. In our last article, The Hub outlined broadly the concept of an International Content Services Centre, the digital content equivalent of the IFSC. The purpose of this article is to look more closely at what could be achieved by such an initiative based on the feedback from readers and other interested stakeholders.
I outline each opportunity, the actions required and the potential return on investment. Due to the convergent nature of the industry, these areas are not exclusive and will necessarily overlap. These are broad brushstroke descriptions of what such a centre might look like and what activities might be realised.
1) THE OPPORTUNITY: LAW / LEGAL SERVICES
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This encompasses many aspects and is, in itself, a massive undertaking. The Institute of International and European Affairs outlined some of the potential as follows in their recently published “The Next Leap – Competitive Ireland in the Digital Era” (IIEA 2008) report. |
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“As a part of the legal hub, a taskforce could be drawn together to consider the feasibility of a global rights clearance hub. ….The Taxation Commission could investigate whether innovative tax deductions could be introduced to make Ireland an attractive location in which to vest intellectual property, and whether new tax treaties are necessary to minimise double taxation on foreign withholding tax. In addition, new measures to enhance Ireland’s conformity with US intellectual property and trade compliance law could be considered. One stakeholder proposed that Ireland lobby to join the US Patent Prosecution Highway (PPH), thereby allowing parties filing patents of first instance to do so in Ireland, with the added assurance that they could pursue infringers in the US for damages.”
Areas that a legal hub could focus on are myriad: global digital rights management, rights clearance, intellectual property management, privacy, taxation, arbitration etc.
Actions:
A legal taskforce encompassing both legal experts and interested parties should be convened to flesh out the potential for such a Hub.
Return on Investment
Like Financial Services, legal services are a high-end activity which will bring economic reward, encourage economic activity as well as additional services. The recent changes to the Finance Act which provide for a three-year exemption from corporation tax for start-ups makes Ireland an ideal location for new innovative global businesses who would benefit from the services of such a legal hub.
2) THE OPPORTUNITY: ONLINE ADVERTISING
As content is being rapidly freed from the constraints of analogue broadcasting and enforced territorialistaion, funding mechanisms are also under assault. The fragmentation brought on by digital television has meant greater competition and less funding for quality programming. The rise of the Personal Video recorder (TiVo, Sky+) has further undermined the effectiveness of television advertising and further impacted the availability of funding. New business models and funding mechanisms are required for content and advertising will be at the heart of that change.
The rise of the Personal Video recorder (TiVo, Sky+) has further undermined the effectiveness of television advertising and further impacted the availability of funding. New business models and funding mechanisms are required for content and advertising will be at the heart of that change. |
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Actions:
Create a tax-incentivised location for global media buyers. Ireland becomes a hub for online advertising. Also, ensure data-warehousing infrastructure (potentially with a green, energy-efficient agenda) is available to further incentivise a move here. With banner advertising being replaced rapidly by video and interactive rich-media advertising displays, hosting and maintenance will be an added-draw.
There is also an opportunity for Ireland to become a "broker" for branded entertainment, managing the relationships between brands and content-creators. Indigenous online success stories such as Sophia’s Diary highlight the potential of these new business models whereby brands deal directly with content creators to inculcate their brands into the content. Ireland is already a leader in the field although this is not recognised sufficiently within the mainstream media circles.
Return On Investment:
Apart from the obvious revenue brought into the country, bringing global media buyers will give content-creators in Ireland a “doorstep” opportunity for taking advantage of the new emerging business models. Also, it will further copper-fasten the relevant multi-nationals such as Google and Microsoft who are stakeholders in the infrastructure of online advertising. The creative services “add-on” potential is also attractive giving local indigenous creative talent new opportunities to work on global media campaigns (all be it online) – campaigns which traditionally would have emanated from New York or London.
Advertising is potentially the kick-start for the “creative industries” sector in Ireland for two reasons. One, it is in itself a “creative service” offering employment and service opportunities in creating and developing campaigns. Secondly, the end product – “the advert” – provides revenue for content creators who adopt the new advertising business models for ad-supported content (Video-On-Demand, ad-placements in casual gaming, branded entertainment etc.)
The opportunity for becoming a “broker” for online branded entertainment would further re-enforce Ireland as a location for global advertising services.
3) THE OPPORTUNITY: ONLINE GAMING AND VIRTUAL WORLDS
With over 217 million people playing online games globally (Comscore 2007), there is an enormous opportunity for creating the right environment for locating a hub for this global activity here.
We already have a number of success stories located in The Digital Hub such as GOA and GALA Networks, so there is real merit in targeting this area strategically. |
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Actions:
The IDA should make a concerted effort to locate online gaming in Ireland and provide a tax-incentivised location to that end.
Return On Investment:
Ireland has done well from middleware applications for the gaming industry. Now as the area moves towards Software as Service model, there is ample opportunity to create employment in this area. This may also have the knock-on benefit of furthering a games developer industry where original IP can be created.
4) THE OPPORTUNITY: CLOUD COMPUTING
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Already Ireland is host to a number of multi-nationals who have avowedly stated that Cloud Computing is an inherent part of their business strategy. These include Amazon, Facebook, Microsoft, Google and IBM. In a sense, this opportunity needs to be seen in tandem with the next opportunity - data warehousing - as they are much the same thing. However, it is the content creation and services side of Cloud-Computing that is of huge potential to Ireland. |
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Actions:
A concerted educational push at primary, secondary and tertiary level to encourage the understanding of Software Developer Kits. This need only be endorsed and supported by the Department of Education and may be funded by the relevant enterprise providers. The educational activities may take place in the form of after-school activities, competitions, club house environments utilising the facilities of the education establishments.
Tax-incentivised support for the location of global cloud-computing infrastructure and services in this country.
Return On Investment:
Innovation and entrepreneurship. Cloud Computing and the services infrastructure offers a low barrier to entry for monetising creative and technical services and products. By instilling this sense of creativity and technical expertise, there is the manifold effect of creating both an audience for the products as well as developers.
5) THE OPPORTUNITY: DATA-WAREHOUSING/GLOBAL CONTENT EXCHANGE
This opportunity should be carefully considered relative to the other opportunities – legal, advertising and cloud-computing. Initially, it would be aimed at the traditional content sectors such as film, animation, television, video and audio. Archiving and the monetization of existing content will be the initial priority. |
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But as the industry develops and the demand for content becomes more sophisticated, Ireland will be well positioned for the transition.
Actions:
By pro-actively creating the correct entrepreneurial, legal, administrative, political and commercial environment to support this idea then we can create a world-class solution for the provision of global content.
Return On Investment:
According to the International Federation of the Phonographic Industry (IFPI), in 2007 20 billion music files were illegally downloaded. In 2008, that went up to 40 billion music files illegally downloaded. At the same time, digital music grew by an estimated 25% and is now worth 3.7 billion dollars in 2008. Digital music now accounts for 20% of recorded music sales, up from 15% in 2007. The ratio between illegal to legal downloads is 10:1.
The film industry is looking down the barrel of the same gun. In 2006, piracy cost the movie industry $6.1 billion, 75% higher than expected, according to the Motion Picture Association of America.
There is a huge opportunity for Ireland to provide a solution to the mess. Digital Content as a commodity provides for a low-cost, high volume business opportunity.
Managing Innovation
The Digital Economy is fundamentally different than the old Industrial Economy. The focus now is on collaborative processes, shared resources, teamwork, knowledge sharing, open innovation, communities of practice and value networks. Value in a digital enterprise is largely determined by intangibles such as technical competence, imagination, creativity, ideas and flexibility. However, alongside these, having an ability to invest in, value, finance and apply the appropriate business model to develop digital projects, is equally crucial.
Because a digital age way of thinking and acting is so different than the old, a radical approach to learning needs to be used in the ICSC. In order to provide ongoing intellectual support for those engaged on projects, a dynamic learning infrastructure will need to be put in place. Developed in partnership with existing educational providers, it will nurture a spirit of innovation, stimulate ventures, help individuals understand risk and manage change in a supportive mutual learning network. Quality, initiative, a risk taking attitude and eagerness for self-development will become a core feature in the participants’ professional lives.
A rich and dynamic environment will emerge through the interaction of those from diverse backgrounds such as media studies, financial services, IT, business, the arts, engineering and science drawing on and learning from each other. Innovation programmes will also draw on the creative cultural resources of this country along with the values and identities of recent immigrants, leading to a world renowned cultural dynamic. This education will leverage expertise already available in the IFSC gained by developing programmes there. Such an approach to creating value from projects founded on interactions between digital and financial networks will lead the ICSC to generate an inimitable international competitive advantage for Ireland.
Thanks to the following contributors to these articles for their ideas and input:
Finbarr Bradley, Michael Walsh (Globaldmx.com), Liam Ward & Graeme Kelly (DV4), Andrew Fitzpatrick (Monster Distributes), Andrew McAvinchey, Cathal Gaffney (Brown Bag Films), Alex Klive (WorldTV.com), Johnny Ryan (IIEA), Frederic Herrera (IADT/Create), Ed Melvin (ICANN), Neil Leyden (Calico Media)
News
3rd – 5th of February: Lunchtime Seminars @ The Digital Hub
The Digital Hub is organising a number of enterprise themed seminars to be held at lunchtime in The Digital Hub: ‘Expanding into the UK Digital Market’, ‘The Research and Development tax credit’ and ‘How will the world value your business’.
More info: http://www.thedigitalhub.com/events_article.php?id=234
9th – 13th February: Engineered! A Week of Wonder - as part of Engineers Week 2009
A series of events to create a positive awareness and spark enthusiasm about the engineering profession to people of all ages will take place at many venues across the country. The Digital Hub is delighted to host a Careers Seminar: Digital Media Engineering on Tuesday 10th of February and an Interactive Talk on Living with Robots by Prof. Noel Sharkey, Professor of Artificial Intelligence and Robotics and a Professor of Public Engagement at The University of Sheffield in the UK on Thursday 12th of February.
More info: http://www.thedigitalhubelevate.com/engineered_a_week_of_wonder
GALA Networks Europe create 50 additional jobs at its Digital Hub base
Online games company Gala Inc. is to expand its European headquarters in The Digital Hub with the creation of 50 jobs. The Japanese online games community company have been operating in The Digital Hub since 2007 and currently employ 47 people. They operate the gPotato brand by hosting, publishing and distributing free online games via the www.gpotato.eu portal. Their Digital Hub office was established to address the fast growing European market, with localized versions of their online games available in German and French.
They have previously cited The Digital Hub's and Ireland’s strong internet infrastructure, young, educated and creative population, and strong supply of software, localisation and technical expertise as their decision to locate their European HQ in Dublin.
For further information on GALA Networks Europe click here
For further information on locating your business in The Digital Hub click here
Africa Teaching Trip 2009 with Camara – Volunteer!
Camara is a registered Irish charity staffed primarily by volunteers. Located in The Digital Hub since 2008, their mission is to enhance the educational system in Africa by using Irish technology resources. In July 2009 Camara will be sending volunteers to teach in their EDU-Labs in schools across Ethiopia, Kenya, Lesotho, Uganda, Tanzania, Rwanda and Zambia. Volunteers will teach introductory computer Hardware and Software skills in schools and educational institutions over a four week period.
Further information and applications are now available online at: http://www.camara.ie/volunteer/africa09/index.php or please email hester@camara.ie
Office Space available now @ The Digital Hub
The Digital Hub currently has a selection of office space available at competitive rates with flexible terms. The office space, along with other benefits and services on offer by The Digital Hub are a perfect match for digital media companies that range from start up to more established.
To find out more about locating your business in The Digital Hub and for an up to date listing of offices available now contact:
t. 00 353 1 4806 200
e. locate@thedigitalhub.com
w. www.thedigitalhub.com/locate/index.php
Digital Media courses @ The Digital Hub
The Digital Hub offers short intensive courses in specific aspects of digital media. From introductory courses for those just starting out, to master classes aimed at industry professionals our experienced lecturers will share their skills in a professional friendly environment.
Please check www.thedigitalhubelevate.com for course updates and fees.
Digital Hub FM
Digital Hub FM recommences broadcasting on Friday 20th February 2009 under a new temporary license from the Broadcasting Commission. This year we plan to broadcast each Friday 8am to 12 Midnight on 94.3 FM until December 18th 2009. The station features a unique mix of local and community news, discussion, arts, history and culture combined with specialist and niche music shows, from jazz to showband to world to urban. Check out the station schedule and listen in on www.digitalhubfm.com
Events
13th February: Digital Media Awards
Location: Crowne Plaza Northwood Dublin Hotel, Dublin.
The short list for the 7th annual Digital Media Awards has been announced and as in previous years a number of companies located in The Digital Hub have received nominations. The Digital Media Awards have been recognising and rewarding excellence in the Digital Media Sector since their launch in 2003. This year’s award ceremony and gala dinner will take place in the Crowne Plaza Hotel on the 13th of February 2009.
Four new categories have been added to the awards this year to reflect the changes and advances in the Digital Media Industry; Best in Gaming, Best Viral marketing campaign, Best Search Marketing campaign & Best Newcomer with International Potential.
More info: www.digitalmedia.ie
1st April: Search Marketing World 2009
Location: Crowne Plaza Northwood Dublin Hotel, Dublin.
Time: 9:00 AM - 5:00 PM
Price: €395
Search Marketing World 2009 is a conference devoted to advancing the knowledge and application of Search Engine Marketing into Online Marketing campaigns. Now in its third year, delegates will enjoy an opportunity to choose from 18 up to the minute sessions, exhibitors, walk in clinics and the best industry networking opportunity in Dublin! Sessions are available across varying levels of advancements for those experts in the industry or anyone looking to learn about Digital Marketing in more detail.
More info: emer@interactivereturn.com
Tel:+353 1 649 6386
Fax:+353 1 649 6357
www.searchmarketingworld2009.com