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Building National and Regional ICT Brands How to Build a Successful eCommerce Strategy – Lessons from Ireland Presentation by: Adrian Devitt Forfás 02 December 2002 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 Images of Ireland OLD “Poorest of the Rich” – The Economist (1986) Characterised by high levels of unemployment and outward migration NEW The Celtic Tiger Silicon Isle Fiber Hub of Europe Where Ireland has come from. Irish GDP per Capita as a % of EU Average for 1960-99 (EU = 100) 140 120 100 80 60 1960 1973 Ireland 1986 UK 1999 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: eBusiness eGovernment Information Society Going Forward Develop Sectoral Strategies Promote a Positive eBusiness Environment Acceptance of the Importance of the ICT Sector to Future Economic Development Knowledge Economy Driving Growth in Ireland - Now GDP growth 9.3% p.a. over 1995-2001 Advanced/knowledge-intensive sectors: Contributed 45% of annual growth Account for 25% of GDP 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 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. B2B Growth ($ in Billions) B2C Growth ($ in Billions) $3,000.0 $500.0 $2,500.0 $400.0 $2,000.0 $300.0 $1,500.0 $200.0 $1,000.0 $500.0 $100.0 $0.0 $0.0 2000 2001 2002 2003P 2004P Source: eMarketer aggregation from IDC, Forrester and Jupiter 2000 2001 2002 2003P 2004P The Future of ICT… U.S. Bandwidth Demand Growth % 100 90 80 70 60 50 40 30 20 10 0 90 79 70 62 50 30 33 35 40 55 42 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 Source: BCG McKinsey/JP Morgan 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 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 ecommerce 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 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 Establish where you are now: Three mutually reinforcing pillars, 1. eBusiness 2. eGovernment 3. Information Society 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 ICT Companies Based in Ireland EMC Andersen Novell AOL HP eTrade Siebel Intel Sun Dell Microsoft Trintech Baltimore Bid.Com Enba Informix EDS IBM Doubleclick Iona Technologies Smartforce ICL Viking Ericsson Nortel Accenture HP 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 eBusiness Foreign Direct Investment (FDI) eBusiness Adoption by Ireland-based “Existing” Enterprise” 2000 All Respondents/ All Respondents with > 1 PC % of Enterprise 2001 2002 % of Enterprise % of Enterprise Networked PCs 69% 72% 74% Internet Access 69% 81% 84% Own Website 34% 45% 55% Narrowband Connection 69% 53% 40% ISDN Connection 21% 38% 47% Dedicated Leased Line 8% 6% 9% Cable 0% 1% 1% All Respondents with Internet Access Source: Enterprise Ireland 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. 3. Information Society e-Business development Going Forward Environment Support Levels Enterprise Development Levels Security & Trust Legal & Regulatory Taxation & Finance ICT adoption & use Investment in e-Business Research & Development Growth in numbers of e-Businesses Numbers employed E-business Development National Infrastructure E-Business Market Size E-Government Support Services Skills Education National Strategy Number of e-Commerce transcations Electronic Business Processes E-Business Export growth Enterprise Development Levels Develop Sectoral Strategies Existing Sectors New Emerging Sectors Existing Sectors Current Status Sector 1. 2. 3. 4. 5. 6. 7. 8. 9. Website Pharmaceuticals Engineering Electronics Consumer Food Consumer Products InfoComms Finance/ Healthcare/ Software Digital Media/ eCommerce/ Training Total 68% 55% 76% 44% 61% 94% 95% 89% 67% % of Sales Achieved Over Internet 2.3% 0.2% 0.3% 0.3% 0.2% 1.5% 5.6% 0.4% 0.7% eBusiness evolution and business benefit Key Technology Trends and Strategies Going Forward Supplier Integration Web page INFORM Intranet / Webmail INTERACT Full supply chain integration Order taking, making and tracking eBusiness functionality implemented TRANSACT INTEGRATE 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 Promote a Positive eBusiness Environment 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 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) 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 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) 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 High Specification R&D Programmes NDP allocation – Government has made provision for the sum of around €2.5 billion in the National Development Plan (20002006) Science Foundation Ireland (SFI) – government established €635m fund over the seven-year period for investment in worldclass research in niche technology deemed capable of driving economic competitiveness in the longer term ICT Biotechnology Media Lab Europe - Digital Hub 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 Global Crossing Ireland and Pan-European Network Average Costs (US$/PPP) 2000000 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 M1020 64 k 2M Greece (16) Portugal (15) Spain (14) OECD Average Austria (12) Italy (11) UK (13) Belgium (10) Iceland (9) France (7) Switzerland (8) Sweden (6) Netherlands (5) Norway (4) Luxembourg (3) Denmark (2) Ireland (1) International Leased Line Price Basket August 2002 OECD International Leased Line Basket - August '02 15 10 5 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) National Fibre Optic Network Buncrana Lifford Letterkenny Ballyshannon Sligo Dundalk Drogheda Lanesboro Galway Dublin Shannon Portlaoise Roscrea Arklow Limerick Wexford Ballinesker Waterford Kilmore Quay Cork Towns Served Options 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: Building of Fibre Metro Loop around each center Provision of Co-Location space 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 Gweedore Letterkenny Buncrana, Ballyshannon, Donegal Manorhamilton Sligo Ballina Westport, Monaghan Carrickmacross Carrick-on-Shannon Claremorris Roscommon Castlebar Longford Navan Cavan Mullingar Ballinasloe, Tuam, Athlone Loughrea, Gort Galway Birr, Edenderry Ardee Tullamore Portarlington Dun Laoghaire/Rathdown Limerick Thurles, Nenagh, Roscrea Clonmel Carrick-on-Suir, Tipperary, Cashel Tralee, Killarney, Listowel Cork Dublin City, Dublin South, Fingal, Portlaoise Carlow Ennis, Shannon Dundalk, Drogheda, Kilkenny Waterford Dungarvan Youghal, Fermoy, Charleville, Mallow Phase One Town in bold Naas, Newbridge, Kildare, Athy Arklow, Wicklow Enniscorthy, New Ross, Gorey Wexford Conclusion: How to Build an eCommerce Strategy The Future will be Different; International competition intensifying Recognize the Importance of ICT Build partnerships – many factors necessary for Success; Key Learning Points in Ireland Develop policies to the Three key pillars – eBusiness, eGovernment, and the Information Society There is no single policy solution, however most successful policy actions are simple ones In leading countries, Government show a willingness to intervene, e.g., Telecommunications eBusiness complacency does not exist in the leading countries.
