Address by Mr. Tom Kitt T.D., Minister for Labour, Trade and Consumer Affairs at the Enterprise Ireland/Deloitte and Touche Forum for Chief Executives, O'Reilly Hall, UCD, Dublin on Monday 22nd November, 1999

Ladies and gentlemen, It is my great pleasure to have the opportunity to say a few words at the close of this important event.

While I was unable to be here for the business end of the day, I am most impressed at the calibre not only of our eminent speakers but at the quality of the group assembled here. I recognise many captains of industry in the gathering and see from the list that you cover the full community of Irish business - from SMEs to our largest corporations; from long established traditional firms to Nasdaq listed players; and from all corners of the country. Your presence in such numbers shows the importance and timeliness of the topic which Enterprise Ireland and Deloitte & Touche have chosen for this forum.

I am not going to try your patience with a discourse on what eCommerce or eBusiness means for you. You have already had the pleasure of listening to eminent experts in the form of Patricia Seybold and Mary Mangan. Happily you might say, it's also the job of us politicians and Ministers to listen. Listen to what's coming down the tracks. Listen to what you, our business community, and our business analysts are saying. What you are proposing, what you are concerned about.

In this regard, I am particularly interested in the results of the survey presented earlier, and of which I have had the privilege of a sneak preview. Surveys and opinion polls can never be entirely relied on, but they do act as a very useful barometer of how people are thinking, how the wind is blowing. But interestingly from this survey it appears that you recognise that the responsibility for e-Business rests foremost with yourselves as Chief Executives. That it is you, and not just your marketing or IT people, who must drive the necessary change. This is encouraging.

On the other hand, over 60% of respondents feel they will have to recruit new people, to help create and deliver the necessary e-Business strategy. I notice that the same number, 60%, said they don't have such a strategy in place. Maybe I should add "not yet". It is safe to say that outside of the survey group, in Irish business as a whole, that percentage of "not yets" is considerably higher. Understandably perhaps, given the awesome potential and the complex task involved. Our reason for being here, I think, is to see:

1. how to begin to move forward urgently on this issue; and
2. how to succeed in this difficult, but potentially very rewarding process.

While I said I would not deliver a discourse, I would like to say a few words about the e-Business environment and the steps we have been taking at national policy level to position Ireland as a country which can play strongly, if not actually lead, in chosen segments of the new global marketplace.

Just before doing that, I think it's worth reminding ourselves of some of the key factors underlying Ireland's proud economic record of recent years. There's a general consensus that this was the result firstly of a consistent series of pro-enterprise policies. These include:

• Foundations laid as far back as the 1960s in terms of education policy and attracting quality overseas investment;
• The recognition by all social partners of the mess we had got ourselves into by the mid 1980s and a determination to work our way out of that, sometimes painfully;
• Prudent management of the public finances, and progressive improvement of the fiscal climate;
• Investment at the same time in key infrastructures;
• Our membership of the European Union, not alone for the funding transfers it provided, but especially for the new markets and perspectives it opened up;
• a low business corporation tax regime and the development of an open economy exporting over 80 per cent of GDP.

But most of all:

• The dynamic response of enterprise in Ireland in delivering results unprecedented in this economy. Not just the excellent performance of the many high quality overseas companies with Irish operations - some of them already leaders in the global eCommerce arena. But also – and for the first time - the powerful performance of a wide range of Irish owned businesses, able and confident, and also playing to win on the world stage.

This is the most encouraging aspect of all, I think, because it is the most secure foundation for future success. You as a group, it is fair to say, understand change. The necessity of change. The inevitability of change. The difficulty of change. And the importance of shaping change to your advantage.

The challenges facing us now are of course new. You don't need reminding that we always have problems - now they're just different problems: this time, the problems with trying to stay on a successful path.

For most of you, your business success has been very much about building relationships overseas. Even for a people as well-travelled as the Irish, the new ICT technologies give a new meaning and perspective to our sense of time and space. Operating as we do from our small open island economy, they act as a logical extension to Irish companies reaching into overseas markets. But also as an extension of extraordinary power to access your markets through e-Business media.

Another reason we are well positioned and aligned to compete in this new global environment is because our success has been built very much on the calibre of our people. Our skilled and educated workforces, a positive attitude and adaptable approach to work, a confidence, a new breed of professional manager. And a successful system of social partnership. As Minister responsible for labour policy as well as international trade and consumer affairs, I cannot overstate the importance of continuing with the process of social partnership. It is vital if our economic success is to be sustained.

But we still have much other work to do. We cannot be complacent about something so fast moving and powerful that, just as it offers great opportunities, these opportunities are expected to fall in large measure to the first or early movers. And on the other side it can seriously erode or wipe out long standing businesses in a short period of time.

We recognise this challenge. And we are acting on it. As most of you know my Department and our policy advisors Forfas have commissioned a number of reports and studies in recent years, including the Information Society Commission, the Expert Group on Future Skills and Technology Foresight among others. We have listened to them and to the voice of business. Most recently the report "e-Commerce: the Policy Requirements" has articulated the key issues.

The Government recognises the need for a broad based, multi disciplinary approach to the new challenges presented by the Information Society. Five key priorities are being decisively tackled to ensure our global competitiveness in the new digital economy:

1. The quality and cost performance of our telecommunications infrastructure;
2. Effective regulation,
3. Education in the use of ICTs
4. Upskilling the existing business sector, and
5. Research and Development

The telecommunications market has been liberalised a full year earlier than had been planned. Innovative Public Private Partnership arrangements have been put in place which will significantly enhance Ireland's broadband connectivity to the global telecommunications network in the year 2000. Our strategy is to promote strong competition so as to achieve first class services at best OECD prices.

The provision of an appropriate regulatory environment will be crucial in establishing Ireland as an e-business hub. I hope to have concluded the passage of the Copyright and Related Rights Bill 1999 before the year end, and my Department and the Department of Public Enterprise are publishing a consultation paper containing outline proposals for electronic signatures and electronic contracts as a precursor to legislation in these areas. Difficult issues relating to intellectual property protection and privacy are also receiving consideration. And you may be pleased to hear that the Revenue Commissioners have just published a report on "Electronic Commerce and the Irish Tax System" and is pursuing such discussions at EU level.

Investment in physical infrastructure must be accompanied by investment in our people. The Government has allocated a total of IR£365 million to various educational initiatives designed to develop appropriate skills and create the conditions for a pipeline of high skills for innovation. These initiatives include:

1. 5,400 additional third level college places in high technology courses over the next four years as well as renewing and modernising facilities and infrastructure.
2. Investment under the primary and secondary Schools IT Initiative, to hasten the integration of ICTs, including new hardware and support services in schools and skills development for teachers.

In the business sector in recent months, Enterprise Ireland and FÁS have both launched initiatives to spread the e-commerce gospel. Today's event is a small, but I think significant, example of that. This year, FÁS will have provided 730 places in electronics and software courses at a cost of IR£3.2 million. Enterprise Ireland will be spending around IR£2 million per annum in helping indigenous firms adapt their management and business processes to on-line trading conditions. Having just heard from Dan Flinter, we can be assured of its commitment to supporting Irish enterprise in gearing up quickly for this.

The fifth of the key needs is a deeper commitment to research and development by our industry, including much stronger collaboration with higher education institutions. Earlier this year, Ireland completed the first phase of a Technology Foresight initiative to identify the technologies that will be important to us in the future. The establishment of centres of excellence in ICTs was a key recommendation.

Much work remains to be done in the immediate future if Ireland is to realise its goal as a world class centre for e-business. We have made a good start and no one should doubt our determination to complete the job. Business in Ireland needs a robust but flexible policy framework to rise to the new challenges in the Information Society.

Already the country is building up its fund of ecommerce success stories - from the Dells to the Kennys. Thinking globally, and reaching globally.

Today you now know or have a good sense for what eBusiness does. I realise that at this stage, the revolution it represents to the way business is done is in danger of becoming a cliche. And yet, I suspect that we are only beginning to glimpse the scale of what is about to happen. But you do know: it will transform your business.

You have heard: it is not just for the international services and software businesses. It matters to all businesses: for how you sell, how you buy, how you discover, how you reach, how you pay, how you get paid. And it matters to every consumer, every citizen.

I congratulate Enterprise Ireland and Deloitte & Touche for their initiative in organising this important event. As a gathering, it is like taking the pulse of Ireland Inc., in fairly good health right now and ready to face the new challenges. I wish you success in what will be a difficult, fascinating and I hope profitable process. And I have every confidence that you will succeed in this latest challenge. The challenge of the cybermarket.