1. Building National and Regional ICT Brands Building National and Regional ICT Brands How to Build a Successful eCommerce Strategy – Lessons from Ireland Presentation by: Adrian Devitt Forfás 02 December 2002

2. Role of Forfás  Advisory Board for Industrial and Enterprise Development and Science, Technology and Innovation  Advises Minister for Enterprise, Trade and Employment on the development of state policies to stimulate enterprise and employment  Comprehensive view of Industrial Policy

3. Images of Ireland OLD u “Poorest of the Rich” – The Economist (1986) u Characterised by high levels of unemployment and outward migration NEW u The Celtic Tiger u Silicon Isle u Fiber Hub of Europe

4. Where Ireland has come from. Irish GDP per Capita as a % of EU Average for 1960-99 (EU = 100)

5. How to Build a Successful eCommerce Strategy – Lessons from Ireland  Acceptance of the Importance of the ICT Sector to Future Economic Development  Establish where you are now: u eBusiness u eGovernment u Information Society  Going Forward u Develop Sectoral Strategies u Promote a Positive eBusiness Environment

6. Acceptance of the Importance of the ICT Sector to Future Economic Development

7.  GDP growth 9.3% p.a. over 1995-2001  Advanced/knowledge-intensive sectors: u Contributed 45% of annual growth u Account for 25% of GDP u Contribute c. 65% of exports  Almost a third of the PC’s sold in Europe come from Ireland  ICT Trade Surplus 9% of GDP  Growing proportion of software distributed digitally  Development as world e-Business centre further evolution of development process Knowledge Economy Driving Growth in Ireland - Now

8. The Future of ICT… eCommerce Continues to Grow  IT and communications sectors of the world economy are forecasted to grow at annual rates of 30-40% p.a. over the next decade, or ten times the rate of the rest of the economy.  In spite of the downturn, B2C ecommerce continues to grow at a 39% CAGR and B2B ecommerce continues to grow at a 47% CAGR. Source: eMarketer aggregation from IDC, Forrester and Jupiter B2B Growth ($ in Billions) B2C Growth ($ in Billions)

9. The Future of ICT… U.S. Bandwidth Demand Growth % Source: BCG McKinsey/JP Morgan

10. Importance of ICT Leadership Going Forward  Potential to accelerate economic development by: 1.Developing business service activities for next generation Internet infrastructure, applications and services 2.Spawning ground for software and services companies producing media and broadband products and services 3.Enhancing attractiveness as R&D center 4.Enhancing opportunity for regional development 5.Creating an Internet literate population 6.Creating an image of Ireland as world economic and technology leader

11. Importance of ICT Leadership cont’d  Potential to accelerate business development:  Innovation: Active e-commerce users on average report twice the proportion of new products and of improved products in sales  Market Introductions: Use of e-commerce related to doubling of sales of products new to market  Market Share & Access to New Customers: Innovators with successful new product launches twice as likely to be e- commerce users  Skills: e-Commerce users associated with 20% or more employees at degree level, compared with less than 10% for non-ecommerce users Source: Electronic Commerce and Business Change, ONS UK, June 2002

12. Importance of ICT Leadership cont’d  Vast Improvement in Citizen Services  Health Care  Education and Training  Enhanced Family Life through Workplace Flexibility  Enhanced Delivery of Government Services  Lifeline for those with Disabilities  Better dissemination of Culture and Entertainment

13. Establish where you are now: Three mutually reinforcing pillars, 1. eBusiness 2. eGovernment 3. Information Society

14. 1.eBusiness Ireland - Existing Centre for ICT Industry  300+ major electronics companies  80,000+ employed: equipment/software/services  1/3 of all exports  Ireland: world’s largest exporter of software products  40% of Europe's PC packaged software market  60% of Europe's business application software

15. ICT Companies Based in Ireland EMC Dell Doubleclick Andersen Microsoft Iona Technologies Novell Trintech Smartforce AOL Baltimore ICL HP Bid.Com Viking eTrade Enba Ericsson Siebel Informix Nortel IntelEDSAccenture Sun IBM HP

16. eBusiness Enterprise Creation  Ireland was the best represented of the European case study countries in the Deloitte & Touche Technology Fast 500 in 2001, with 10 listings per 1m population (i.e. 38) compared with 2.5 for the second-ranked UK;  Ireland was the best represented of the European case study countries in the Tornado 100 listing of European and Israeli top high-tech companies, with 1.3 listings per 1 million population compared with 1.0 listings for the second-ranked Sweden;  Ireland has more NASDAQ listings per head of population than the other case study countries (excluding the US). Source: Forfas Research

17. eBusiness Foreign Direct Investment (FDI)

18. eBusiness Adoption by Ireland-based “Existing” Enterprise” 20002001 2002 All Respondents/ All Respondents with > 1 PC % of Enterprise Networked PCs69%72% 74% Internet Access69%81% 84% Own Website34%45% 55% All Respondents with Internet Access Narrowband Connection69%53% 40% ISDN Connection21%38% 47% Dedicated Leased Line8%6% 9% Cable0%1% Source: Enterprise Ireland

19. 2. eGovernment Key Government Initiatives  The Revenue Online Service (ROS) which allows for the online filing and payment (via direct debit mandate) of taxes, and online access to personal account details and historical returns;  The launch of the integrated portal for business access to Government services (i.e., BASIS) in May 2001;  Introduction of an eTender website;  Agreement on an eProcurement Strategy, and planned rollout.

20. 3. Information Society

21. e-Business development Going Forward Environment Support LevelsEnterprise Development Levels Taxation & Finance Legal & Regulatory Security & Trust Research & Development National Infrastructure Support Services Skills Education ICT adoption & use Investment in e-Business Growth in numbers of e-Businesses Numbers employed National Strategy E-Business Market Size E-Business Export growth E-business Development Number of e-Commerce transcations Electronic Business Processes E-Government

22. Develop Sectoral Strategies  Existing Sectors  New Emerging Sectors Enterprise Development Levels

23. Existing Sectors  Current Status Sector Website % of Sales Achieved Over Internet 1. Pharmaceuticals68%2.3% 2. Engineering55%0.2% 3. Electronics76%0.3% 4. Consumer Food44%0.3% 5. Consumer Products61%0.2% 6. InfoComms94%1.5% 7. Finance/ Healthcare/ Software95%5.6% 8. Digital Media/ eCommerce/ Training89%0.4% 9. Total67%0.7%

24. Key Technology Trends and Strategies Going Forward eBusiness evolution and business benefit Intranet / Web- mail Web page Order taking, making and tracking eBusiness functionality implemented Supplier Integration Full supply chain integration INFORM INTERACT TRANSACT INTEGRATE

25. New Emerging Sectors  For Example – Digital Content  A Strategy for the Digital Content Strategy in Ireland – Forfas – November 2002. (www.forfas.ie)  Five Key Niches for Ireland  e-Learning  Games  Wireless Services  Digital Libraries  Non-Media Applications

26. Promote a Positive eBusiness Environment

27. Key Pillars of Success Key Pillars of Success  Strong Enterprise Sector (Indigenous and Overseas)  National eCommerce Strategy  National Partnership  Skilled Labour Force  Competitive Regulatory Framework  High Specification R&D Programmes  Telecommunications

28. National eCommerce Strategy  Single Published Overarching Vision and Strategy (New Connections)  Lead from the Top (eMinister) (Ms. Mary Hanafin, TD)  Dedicated Executive Agency - Information Society Department (Information Society Commission)  Commitment to Investment (Information Society Fund)  Clear and transparent Schedule for implementation (Web Based)  National and International benchmarking of progress (Forfas, eEurope)

29. National Partnership  Five national partnership agreements between social partners since 1987  Wage restraint but also consensus on a wide range of economic and social policy areas -  National Competitiveness Council (NCC)  Information Society  Irish Council for Science, Technology & Innovation (ICSTI)  Expert group on Future Skills Needs (EGFSN)  Advisory Committee on Telecommunications  Partnership with representative bodies and within public administration to address business needs

30. Labour Force: High Skills and Flexibility  Schools IT2000  There are at least 56,000 computers in Irish schools  Third Level  Creation of 5,500 additional software places in the Universities  Expert Group on Future Skills Needs (€165 in further ICT Education)  Rank highly for the “fit” between its educational system with its high output of third-level graduates in computer science and engineering – and the needs of a competitive economy. (Source: The IMD World Competitiveness Report)

31. Competitive Regulatory Framework  eCommerce Act 2000 enabling digital signatures  Copyright and Related Rights Act, 2000  Broadcasting Act, 2001  Communications Regulation Act 2002  Pro-competitive approach adopted by regulators

32. High Specification R&D Programmes  NDP allocation – Government has made provision for the sum of around €2.5 billion in the National Development Plan (2000- 2006)  Science Foundation Ireland (SFI) – government established €635m fund over the seven-year period for investment in world- class research in niche technology deemed capable of driving economic competitiveness in the longer term  ICT  Biotechnology  Media Lab Europe - Digital Hub

33. Telecommunications 1. Enhanced International Connectivity  Forfas and others recommended a significant upgrade of international connectivity  Agreed partnership with Global Crossing in 1999  Direct landing provides 160 Stms plus additional capacity and dark fibre available  Pan-European, pan-America and Asia-pacific connectivity  Two dedicated telehouses & 16 internet data centres  360 networks completed link to Canada in 2001

34. Global Crossing Ireland and Pan-European Network

35. International Leased Line Price Basket August 2002

36. 2. National Connectivity  €190m of co-financing funding allocated under National Development Plan 2000- 2006  Objective: “…to facilitate the benefits of the emerging new digital economy being evenly spread across the Region and to contribute to economic and social cohesion in the Information Society”  Local access infrastructure a priority  Deliver through Regional Assemblies and multiple partnerships  Two-thirds of co-funded targeted at Objective 1 Border, Midlands and West Region (€140 million)

37. National Fibre Optic Network Shannon Wexford Waterford Cork Arklow Limerick Roscrea Portlaoise DublinGalway Lanesboro Sligo Ballyshannon Dundalk Drogheda Letterkenny Buncrana Kilmore Quay Ballinesker Lifford Options Towns Served

38. Regional Broadband Plan  Objective – to deliver broadband of 5mBits to homes and substantially greater to Business.  19 Town in Phase I  Key Parts of the Initiative: u Building of Fibre Metro Loop around each center u Provision of Co-Location space u Infrastructure on an open access basis  Over the next 12-18 month 50,000km of networks will be added to the National Stock as part of Phase I

39. Waterford Letterkenny Ballina Carrick-on-Shannon Monaghan Castlebar Roscommon Cavan Mullingar Athlone Galway Tullamore Portlaoise Kilkenny Limerick Clonmel Carlow Dungarvan Cork Wexford Youghal, Fermoy, Charleville, Mallow Tralee, Killarney, Listowel Ballinasloe, Tuam, Loughrea, Gort Westport, Claremorris Buncrana, Ballyshannon, Donegal Dundalk, Drogheda, Ardee Carrickmacross Sligo Dublin City, Dublin South, Fingal, Dun Laoghaire/Rathdown Naas, Newbridge, Kildare, Athy Arklow, Wicklow Navan Portarlington Longford Birr, Edenderry Ennis, Shannon Thurles, Nenagh, Roscrea Carrick-on-Suir, Tipperary, Cashel Enniscorthy, New Ross, Gorey Gweedore Manorhamilton Phase One Town in bold

40. Conclusion: How to Build an eCommerce Strategy Conclusion: How to Build an eCommerce Strategy  The Future will be Different; u International competition intensifying u Recognize the Importance of ICT  Build partnerships – many factors necessary for Success;  Key Learning Points in Ireland u Develop policies to the Three key pillars – eBusiness, eGovernment, and the Information Society u There is no single policy solution, however most successful policy actions are simple ones u In leading countries, Government show a willingness to intervene, e.g., Telecommunications u eBusiness complacency does not exist in the leading countries.