4 Development Agency Strategies

Sections 2 and 3 of this report set out key actions for the industrial development agencies. The agencies have also been developing their own operational plans in respect of e-commerce and these are summarised below. These Strategies take on board the broad thrust of this report and set out the frameworks that will guide agency actions in respect of e-commerce over the coming years.

4.1 IDA Ireland

IDA Ireland has been highly successful in sustaining the momentum of growth in the information and communications technology sector. It has established Ireland as the leading location in Europe for mobile investment in a number of key sectors including electronics, software, call centres and shared services/back office operations, leading to high skill, high income and high value added employment.

IDA’s stated objectives for the future include contributing to regional development and achieving a sustained increase in the quality of jobs in client companies. E-commerce has the potential to contribute strongly to the achievement of these objectives.

IDA Ireland will target opportunities in both new and emerging sectors and new e-commerce expansion opportunities within existing clients.

Emerging Sectors

A value chain of activities has been identified that will form the basis of IDA Ireland’s marketing programme launched earlier this year. Examples of the areas being targeted include:

1. Applications devices and telecommunications hardware
2. Internet Service Providers (ISPs)/Web hosting companies that provide Internet access or web hosting services to third parties
3. Web/Media Shop companies involved in web design and consultancy where gaps exist in the availability of services in Ireland
4. E-Commerce services that provide support services for e-commerce
5. E-commerce Utility Services that provide the full range of e-commerce services
6. Portals/Communities that provide access to the World Wide Web or provide services to distinctive groups of users
7. Retail companies that are involved in direct marketing using e-commerce

• Financial services companies
• Elements of the Infotainment sector that provide entertainment and information services
• Business-to-business activities, which mainly involves selling or buying products on-line but also includes promoting awareness, product research, comparison selection, transactions processing, fulfilment and post-sales support

The majority of the additional jobs created by the Internet will arise in Shared Services and in the provision of content/information. Business-to-business use of e-commerce is likely to result in increased efficiencies, etc., for all businesses.

IDA Ireland Existing Clients

The base of existing overseas companies will continue to be strongly encouraged and supported where necessary in moving quickly to e-commerce-driven operations and in up-skilling employees in e-commerce management and work practices.

The existing base of companies is likely to be an important source of new projects. IDA has been very successful in the past in attracting add-on functions to companies once they are established here. About half of all IDA project and job approvals now come from expansions. With the development of e-commerce, there is potential to attract in command and control centres, shared services, fulfilment functions, and marketing departments of existing companies. There is also the potential to attract key sub-supply companies from the US, for example, in the area of software and digital content distribution.

The development of a cluster of support services in content development, fulfilment and information management and control would be a key marketing advantage for the IDA. In order to ensure that Ireland develops a competitive and conducive e-commerce support environment, Enterprise Ireland will need to work with IDA and its clients to identify the e-commerce support services required. This work should determine whether gaps or structural weaknesses could best be met through encouraging indigenous enterprise or through attracting in overseas companies.

IDA will continue to focus on establishing Ireland as a centre for e-commerce including digital content distribution. This will focus, in the first instance, on ensuring that Ireland becomes the leading European location for digital software distribution. Opportunities in areas where Ireland has not been successful in the past in attracting inward investment such as music, film and audio-visual, entertainment and education and training, focusing, initially on the leading players will also be targeted as they develop.

IDA Ireland will continue its work with Forfás, government departments, and others on key e-commerce business environment issues including:

• Implementation of the international connectivity project and the development of telehouse facilities
• Completion of the two initial Digital Parks at Citywest and East Point
• Consultations on the legal, regulatory and fiscal environment to support e-commerce

4.2 Enterprise Ireland - “Building Profitable Relationships Electronically”

The Emergence of E-commerce

For the purpose of EI’s e-commerce strategy, e-commerce is defined as “…the use of computers and telecommunications networks to develop and conduct business transactions between buyers, sellers and other trading partners”.

Of Enterprise Ireland’s client base, it is estimated that two thirds have not yet established websites and one third are not yet users of email.

EI is to take a strongly proactive role in promoting the use of e-communications/ e-commerce with all clients to reap the benefits of the enormous opportunities emerging for all sectors. New opportunity areas are also emerging in web hosting,

e-commerce services and utilities, retail, financial services and infotainment. There are also opportunities for some EI clients to develop the technologies and products required for e-commerce.

Enterprise Ireland’s Strategy

Enterprise Ireland’s Strategy EI’s overall goal is to ensure that the full capability of the newer information and communications technologies driving e-commerce is harnessed to help Irish business – and EI clients in particular – build their competitive advantage and grow their profitable sales, exports and employment.

In this context, EI’s objectives are to:

• Help a wide range of EI client companies to develop and upgrade their e-commerce capability, and in particular to have all EI clients using email for business and two thirds at least of EI clients having a business website by 2001
• Accelerate the development of key players in the provision of software, services and hardware for e-commerce over the next three years

To achieve these objectives, EI needs to:

• Increase the awareness of EI clients of the opportunities and competitiveness requirements of e-commerce, and demonstrate the value to them of e-commerce
• Develop tools that SMEs can avail of to build their e-commerce capability
• Encourage and support through Development Advisors and the mainstream financial facilities, the widespread development by EI clients of e-commerce capabilities
• Facilitate the development of companies and sectors that can supply the software, services and hardware needed for e-commerce
• Maximise the opportunities inherent in informational communications technologies and e-commerce for balanced spatial development and press for the infrastructural improvements that particularly address the needs of EI clients
• Establish an internal e-commerce specialist unit and an e-commerce co-ordination group to promote and support e-commerce both within EI and EI’s clients

Particular initiatives to progress these tasks are summarised below.

Increase Awareness/Develop Tools

Increase Awareness/Develop Tools Enterprise Ireland has been heavily involved over the past two years in building awareness among its clients about the threats and opportunities of e-commerce.

At a group level, seminar/workshop activities have been undertaken in most major commercial centres in Ireland. These have often been in partnership with industry representative groups (for example, the Small Firms Association, Chambers of Commerce, Institute of Chartered Accountants), service providers (for example, Indigo, Esat, Bank of Ireland, AIB, Irish Management Institute, The Irish Times) and technology/content suppliers (for example Microsoft, Intel, Compaq, Dialog Corp).

Also, Enterprise Ireland is currently proposing that a pilot project be funded under the Small Business Operational Programme (SBOP) to develop e-commerce tools for SMEs. Specifically, the project’s objectives are:

• To assist up to 1,000 Irish SMEs to take specific action in relation to their own companies and to provide them with practical knowledge of e-commerce use and applications
• To provide companies with the definitive Irish-based e-commerce resource set
• To build a community of interest around the e-commerce theme and to successfully leverage this community to rapidly move Irish companies towards adopting successful e-commerce strategies

The project is intended to run for 18 months and is comprised of a combination of practical components aimed at building awareness, increasing adoption and fuelling more effective SME use of ICTs. These include:

• The development of an EI e-commerce web-based Knowledge Bank. This involves the development of a web-based resource set that would become the key web resource for SMEs entering the e-commerce world
• Production of a Practical Guide to e-commerce (hardcopy and online versions)

EI will also examine the proposal for an e-commerce trade logo proposed by the Advisory Committee on Telecommunications (1998).

In addition, EI has already developed a number of e-commerce Training Modules using the EU Adapt and Netlink programmes, which can also be used for SMEs.

Upgrade Companies’ Capabilities (Mainstream IT/E-commerce Initiative)

Once companies are aware of and motivated to use e-commerce, SMEs typically will need specialist advice and help, staff training and some financial support to achieve the changes required.

This mainstream IT/e-commerce initiative operating through EI Development Advisors working with client companies and using mainstream financial incentives will provide financial support for areas such as:

• Management/marketing consultancy for e-commerce strategy and practice
• IT Specialist recruitment
• Training of:
• Managers in e-commerce strategy
• In-house specialists
• Operatives in general IT skills
• Operatives in basic IT and related skills of teamworking, literacy, etc.

A variety of options that companies can pick and choose from will be available. In the training area, some generic modules could be pre-designed.

The Development of E-Commerce Technology Companies

Financial assistance in the form of equity investment and grants, allied to advice, consultancy and expertise will be available to help Irish technology companies become established and grow, by the strengthening of business development capabilities, competitiveness and profitability. Already a number of companies have been established with EI support. A range of companies has been supported during 1999 either with feasibility, expansion/ capacity or management development and mentor grant-aid.

Marketing initiatives undertaken in support of e-commerce technology companies include taking groups of companies to the Boston March 1999 Internet Commerce Expo, and to the Internet World show in LA in April 1999. E-commerce events are planned for New York (October 1999) and Japan (November 1999). The Online Networking Forum of software companies in the USA has also been launched.

The Online Networking Forum comprises a bulletin board site, and a biweekly email newsletter. The goal of the online forum is to prompt discussion and the building of community among Irish high technology companies doing business in the USA.

EI will be extensively involved in the EU 5th Framework for Research, Technological Development and Demonstration. EI will seek to ensure that EI client companies can avail of this developmental funding in the area of “New Methods of Work and Electronic Commerce”.

Conclusion

E-commerce is critical to the development of indigenous companies, both in improving the capability of the broad mass of EI client companies, and in providing market opportunities for a number of EI technology companies. The strategy outlined above aims to maximise these opportunities for EI clients. Other aspects, such as the regional and spatial dimensions and the specific infrastructural need of indigenous SMEs, need to be examined further.

To deliver the strategy, the following has been established:

• An e-commerce specialist unit, within the Development Directorate to promote and support e-commerce as a capability both within EI and with EI’s clients
• An EI cross-divisional e-commerce co-ordination group, which prepared this strategy and will progress it further

4.3 Shannon Development

In the Shannon Region, Shannon Development will follow the same strategic approach as Enterprise Ireland, in promoting and supporting the adoption of e-commerce by its client companies. Client companies of Shannon Development in the Shannon Region will have access to the same e-commerce advisory and support services as their EI counterparts elsewhere in the country.

In addition, a number of specific regional initiatives aimed at stimulating the development of e-commerce were set out in the ShIPP (Shannon Region Information Society Partnership Programme) Strategy and Action Plan which was published in December 1998. The ShIPP Action Plan proposes that a Shannon Region E-Commerce Initiative should be implemented in order to position the Region as a leader in e-commerce and to implement the recommendations proposed in the report of the Advisory Committee on Telecommunications.

The key elements of the Shannon Region E-Commerce Initiative include:

• A Shannon Region E-Commerce Hub, which would be established as a strongly branded and promoted platform to allow Shannon Region companies and their global customers to make commercial transactions on-line in both business-to-business and business-to-consumer markets. As well as global market recognition, this Shannon E-Commerce brand will indicate dependability, security and trustworthy e-commerce processing worldwide. In business-to-business applications, the aim will be to facilitate Shannon Region SMEs to join together through a transaction-capable extranet to create virtual enterprises, for more efficient buying and selling between manufacturers, suppliers and distributors
• A branded Shannon E-Commerce platform and network will provide regional businesses with sophisticated, pre-packaged e-commerce facilities to assist them in creating, designing, and implementing complete online facilities and in running their online businesses. This will be built on the secure, reliable and high-performance Internet connectivity that the Region will have. It will provide reduced costs, a strong branded image and site on the Web, up-to-date and well-maintained systems, faster time to market, assured high security and high performance. It is proposed that the Shannon E-Commerce Hub be established as a public-private partnership with commercial funding and public sector support.
• An E-Commerce Support Centre and Team will:
• Provide awareness, training and independent support to the Region’s companies to adopt e-commerce into their businesses, particularly for their business-to-business transactions
• Support entrepreneurs to set-up new IT-based companies in the Region
• Attract established information technology based companies to the region
• Encourage new types of companies and ways of working, such as dynamic networked and virtual organisations, digital communities, distributed call centres and teleworking
• Undertake further research and development on new ways of working in the Information Society
• Sustain and expand the Region’s E-Commerce Initiative
• Advanced Teleservices Infrastructure based on the Shannon EuroCall Centre in the Shannon Free Zone. This provides modern call-centre infrastructural facilities including 38,000 square feet of open plan and office space, 140 agent workstations, state-of-the-art telephony equipment. It features trunk fibre optic bandwidth capacity and office support services, such as conference rooms and security. Companies use the facilities to deal directly with customers, thus avoiding the need to fully outsource, while cutting down on the capital expenditure required to operate an in-house service. Access to the workstations in terms of the number required and the duration for which they will be used is fully flexible and can be tailored to meet the needs of individual clients.

Using the Shannon EuroCall model, similar centres will be developed over time throughout the Shannon Region. These centres will include custom-designed buildings, with the facilities and services that a call centre requires and with a telecommunications infrastructure, including access to fibre optic bandwidth capacity, multimedia capability for handling voice, web, fax and email, and full PABX and ACD functionality. This will also involve access to a pool of skilled labour with the required information and communications technologies and language skills. Shannon Development will proactively promote the development of these centres and continue to work on the implementation of this initiative.

A key objective of Shannon Development is to disperse the benefits of commerce and of new IT and communication technologies throughout the Shannon Region. The spatial distribution of e-commerce activities is a core issue for regional economic development, as the new IT-based activities have considerable potential for stimulating growth outside of the main urban centres. Shannon Development will implement a structured programme of developing the infrastructure required to support new IT enterprises throughout the Region, working closely with the private sector and with educational institutions such as the Institute of Technology Tralee and the TRBDI.

As well as promoting the E-Commerce Initiative, Shannon Development will implement a number of other innovative enterprise support programmes aimed at promoting the use of information and communications technologies among SMEs throughout the Region and creating a positive environment for e-commerce to develop. These support programmes include the Technology Web project which will involve the establishment of a network of Technology Management Centres (TMCs), to provide a focal point for the delivery of pro-active technology and innovation management services to SMEs in the Shannon Region.

Current plans call for the development of regional nodes or TMCs in Birr, Tralee, Ennis, and Thurles initially, with the Innovation Centre in Limerick acting as the primary node. Additional nodes can be added as the Technology Web develops. This project will attempt to address many of the geographical and infrastructure issues identified by the ShIPP industry workgroup.

A further programme that addresses the information and communication technologies needs of start-up enterprises outside of the main urban centres is the DigiTech Business Development Programme. This commenced at the Innovation Centre in late 1998. It was delivered to prospective entrepreneurs in the Region in the software, multimedia, electronics and telecommunications sectors using videoconferencing technology. The success of this programme illustrates how Shannon Development can support new enterprise development and stimulate the growth of e-commerce throughout the Shannon Region, regardless of location.

4.4 Údarás na Gaeltachta

Údarás na Gaeltachta faces a constant challenge in seeking to achieve its job-creation objectives in the face of a inadequate physical infrastructure throughout the Gaeltacht regions and under the disadvantage of the perceived remoteness of its region. The emergence of an increasing level of ICT-based business opportunities offers the Gaeltacht at least one business sector where these disadvantages are less relevant.

However, it is worth noting the increasing trend among young graduates who want to spend at least their early working years in larger urban centres. This factor accentuates the tendency for service industries, particularly those requiring a significant graduate-level workforce, to locate in these larger urban centres. The Gaeltacht areas are significantly lacking any large or even medium-sized urban centres and this factor militates against the development of a vibrant services sector.

Údarás na Gaeltachta is anxious to ensure that its existing industrial base in the Gaeltacht is adequately equipped to deal with the threats and opportunities created by the emergence of e-commerce. It is also concerned to ensure that the Gaeltacht areas gain their fair share of the new enterprises that will emerge in Ireland to exploit this new business milieu.

The specific measures that will be undertaken by Údarás towards achieving these objectives will include:

• A campaign aimed at increasing the awareness of client companies of the development of e-commerce and encouraging them to evaluate the threats and opportunities which e-commerce brings to their particular businesses
• Encouraging selected companies in the Gaeltacht to develop relevant e-commerce strategies and providing training and management development support where appropriate in order to assist them towards this end
• Where necessary, assisting companies seeking to exploit e-commerce opportunities in identifying relevant funding sources, for example, grant-aid, venture capital funds, RTI, 5th Framework, etc
• Training for Údarás’ own staff to improve the agency’s capacity to exploit and promote the possibilities of e-commerce
• Increasing use of ICT to communicate and transact business with client companies
• Harnessing the sectoral intelligence of IDA and EI in order to be able to more effectively progress the adoption and development of e-commerce strategies in the Gaeltacht
• Evaluate the need to assign special responsibility within the organisation in relation to the promotion of e-commerce Seek to establish demonstration projects within each of the major Gaeltacht regions
• Ensure that the Gaeltacht areas have adequate access to broadband services to ensure that the region is not disadvantaged in the development of e-commerce
• Evaluate on an ongoing basis the possibilities of using ICT in the promotion of the Irish language and encourage client companies to make appropriate use of the Irish language in implementing their e-commerce strategies

Implementation

The policy and other actions set out in this report for government departments, development agencies and enterprises need to be adopted quickly. Steps should be taken to ensure their implementation if the potential of the digital economy is to be realised. Ireland is heavily dependent for income and employment on sectors that will be changed dramatically by e-commerce. The potential of e-commerce for these sectors are significant; so too are the consequences of inaction.

The Government’s role is to take the steps required to create the best regulatory and business environment in the EU in order to maximise the development of e-commerce. The development agencies, business associations and firms themselves need to build on recent initiatives to foster the rapid take-up of e-commerce and harness its full potential for social and economic development in Ireland. Ireland should aim to develop a leadership position in business- to-business e-commerce, business-to-consumer e-commerce and e-commerce enabling technologies and services.

This report on e-commerce is the first step in a process of partnership in developing Ireland’s digital economy involving the Department of Enterprise, Trade and Employment, other government departments, the development agencies and the enterprise sector.

The following action is recommended:

Government Action

• Establish a group to oversee implementation of the actions set out in this report and to prepare a progress report at the end of the year for the Tánaiste and Minister for Enterprise, Trade and Employment. (Department of Enterprise, Trade and Employment)