Developing a

Knowledge City
Region
A TEN POINT PLAN
Contents

Foreword Page 1
Committee List Page 2
Executive Summary Page 3
10 Point Plan for 2012: Recommendations Page 4
Section 1: City Regions: The Seeds of Growth Page 5
Section 2: Building a Learning Society Page 11
Section 3: Upgrading the Knowledge Infrastructure Page 17
Section 4: SMEs and the Knowledge Economy Page 23
Section 5: Arrival of a Knowledge Capital Page 27
Conclusion Page 33

Appendix
International Examples of PC Incentive Schemes Page 35
Past Reports and Submissions Page 36
Foreword

In 2008, Dublin is a vibrant, growing city. As our
capital continues to attract a record number of
workers and tourists, it is essential that we
leverage the city’s potential by realising our vision
to transform it into a leading knowledge city
region. Dublin has enormous potential to
develop as a city region in which technology and
science take root, where talent gathers and where
innovation and creativity occur.
In 2006, the Knowledge Economy Committee was
established within the Dublin Chamber of
Commerce to examine the existing policy
landscape and to draw up a set of
recommendations that would ensure that the
Dublin City Region can compete with other city
regions across the globe. These recommendations
are practical and achievable and will ensure that
Dublin plays a vital role at a national level to
stimulate and support Ireland’s economy.
We are fortunate that we have attracted
contributors from the highest levels of education
and industry who have inputted into the
development of this report and its
recommendations. I would like to acknowledge
the vital role that each member of the Committee
has played.
The recommendations outlined in this report will
give vital momentum to establishing Dublin as a
world leading knowledge city region. We must
now call on government, members of industry
and education, entrepreneurs, small business
owners and all of the city’s inhabitants to
embrace this change so that the Dublin City
Region is firmly established on the global map.
The global knowledge economy is evolving
apace. If Dublin is to stake its claim on this
economy, strong leadership and conviction are
needed. It is now a national imperative that we
take action. Government has a vital role to play in
shaping our legacy for future generations.

Martin Murphy
Chairperson

1 ‘Digital Prosperity: Understanding the Economic

Benefits of the Information Technology 1
Revolution’, Atkinson, R. & McKay, A.
 Committee
List

Martin Murphy, Hewlett-Packard Ireland – Chair

Des Fahey, Dublin Business Innovation Centre

Niall Feely, Eircom
Karen Forte, Allianz
Catherine Godson, University College Dublin
Jacqueline Hall, Political Communications
Trevor Holmes, Intel
Terry Landers, Microsoft
David Lloyd, Trinity College Dublin
Eva Maguire, Irish Management Institute
David Martin, Google
Tom McCarthy, Irish Management Institute
Brian Norton, Dublin Institute of Technology
Joyce O’Connor, The Digital Hub
Liam Quirke, Matheson Ormsby Prentice
Ferdinand von Prondzynsk, Dublin City University

2 Dublin Chamber of Commerce

 Executive
Summary
This paper, by the Dublin Chamber of
Commerce, draws together views from business
and higher education institutions from across the
Dublin City Region. It presents a case for taking
prompt action in a number of targeted areas in
order to allow Dublin, and Ireland, to reap
rewards from the knowledge economy. Our
inspiration comes from international best practice
and is firmly grounded in national policy.
International experience shows that the
competition for investment and employment in
high value added activities is not between
countries – it is between city regions. It also
demonstrates that future growth growth will be
based on competition for key knowledge
workers. The Irish Government has worked hard
to cultivate a supportive environment where
business and education can combine to maximise
growth and productivity through development
and innovation in ICT. To leverage this
investment, a co-ordinated and concerted plan –
taking on the mantle of the Whitaker Policy
devised in 1958 – is required to attract skilled
human capital. As our capital city, Dublin must
take its place at the heart of this strategy.
Dublin Chamber believes that among Irish cities,
the Dublin City Region has unique potential, in
terms of resources, skills, people and
infrastructure, to develop as a "Knowledge City",
capable of competing on the global stage. As
such, it will stimulate national growth and
demonstrate Ireland’s commitment and capacity
to deliver on innovation investment.
1 Dublin Chamber of Commerce is acutely aware of the importance that
treatment of Intellectual Property has in the location decision for
companies. For this reason Dublin Chamber will be publishing a separate
report on this issue in the future.
The foundations for a successful Dublin City
Region have been laid. We need to build on
these by implementing policies that support the
attraction of specialised labour and capital to our
city, and creating an education system that is
geared towards producing the graduates that are
central to the successful knowledge economy. We
should aim to foster a technology literate society
through both infrastructure and education. We
also need to look beyond the nuts and bolts, to
create a full knowledge eco-system that is
recognised across the world. This means
developing a strong knowledge brand for the
Dublin City Region and investing in landmark
projects that emphasise our commitment to the
ethos underlying the knowledge economy.
This paper identifies a number of practical
recommendations that can be implemented in
the next four years to maximise return on the
investment planned by Government. These steps
will underpin the development of the Dublin City
Region as a world class centre for knowledge
activities and will serve to further Ireland’s
aspiration to become a leading location for
innovation investment.1
1 many
3
 10 Point Plan for 2012:
Recommendations

Developing, attracting and retaining 6 Complete ICT in Education Strategy and

entrepreneurial, skilled and creative workforce
1 Develop short-term programme of
financial/tax incentives to assist in the
recruitment and retention of key workers with
the skill sets essential to developing the
knowledge economy.
(Department of Enterprise, Trade and
Employment).
2 Introduce SME ‘Knowledge Acquisition
Grants’ to encourage R&D and expand
‘Innovation Voucher’ Scheme to improve SME
management capacity through expert
secondment programme.
(Department of Enterprise, Trade and
Employment / Enterprise Ireland).
3 Encourage tailored and practical training for
SME managers through the ‘Management
Development Council’.
(Department of Enterprise, Trade and
Employment).
begin implementation by 2008, drawing on
the support of business where it is needed to
achieve this aim.
(Department of Education and Science).
Branding the Greater Dublin Area as a
knowledge city region
7 Introduce WiFi across Dublin’s public
transport system to reinforce the knowledge
brand of the Dublin City Region.
(Department of Transport / Dublin City
Council).
8 Establish world-class science museum to
stimulate interest in science and encourage
international recognition of Dublin as a
knowledge capital.
(Department of Education and Science).
9 Optimise early learning in the child care
system and up-skill those working in the early
learning industry.

(Department of Education and Science).

Embedding a next generation IT infrastructure
4 Introduce VAT-free scheme for purchase of
10 Move key Government services for business
PCs to stimulate a technology-literate society.
to be available online only and implement an
(Department of Enterprise, Trade and e-government plan for all Government
Employment). Departments and Local Authorities.

(Department of the Taoiseach).

5 Amend the Strategic Infrastructure Act to
include advanced telecommunications to
facilitate development of next generation
networks and amend National Building
The Dublin Chamber of Commerce will continue
Regulations so that new homes are built to be
to bring together business, higher education
"next-generation ready".
institutions and local government to effectively
(Department of the Environment, Heritage voice the City Region’s concerns with regard to
and Local Government). developing a knowledge economy.

4 Dublin Chamber of Commerce

 1
The New Paradigm

City Regions:
Ireland has recognised that its future lies in the ‘Knowledge
Economy’ – successfully promoting, embracing and
exploiting innovation through science and technology. We

The Seeds
have also realised that the creation of the right conditions
for the development of this economy cannot be left to
chance. If this transformation is to be realised in Ireland, a

of Growth concerted and co-ordinated plan is required to attract

skilled human capital, foster indigenous talent and create
effective networks between science, education and
industry. As our capital city, Dublin will play a pivotal part in
this transformation.

The Whitaker policy of 1958 demonstrated Ireland’s ability

to perceive a new economic paradigm and develop a
successful strategy to compete. Fifty years on, the Dublin
City Region needs to build on the Foreign Direct
Investment that was the result of this strategy and Ireland
must, once again, demonstrate foresight by creating an
equivalent enterprise strategy that accounts, not only for
the global competition in capital, but that also tackles the
new competitive arena of talented and creative labour.

5
 City Regions:
The Seeds
of Growth

6 Dublin Chamber of Commerce


Creating a Knowledge Capital
Imagine Dublin 2020 presented Dublin Chamber
of Commerce’s vision of our city as a knowledge
capital within Europe; an internationally
recognised centre of excellence in high-level
education, an engine of creativity and innovation
in science and technology and a city-society in
which technology has taken root and is second
nature. In this vision, knowledge is the source of
competitiveness and productivity.
A National Economic Generator
Rapid urbanisation has dramatically increased the
economic strength and importance of
metropolitan regions worldwide. While nation
states determine the broad economic
environment in which a city operates, decisions
relating to international investment and jobs are
increasingly made at the level of competing city
regions. In 2006, the OECD confirmed this trend
and acknowledged that city regions have now
become the real engines of their national
economies.2 There is also compelling
international evidence that clustering is a key
component of successful knowledge based
economies. Clustering creates added value
through the interaction of creative, technologist
and commercial people who interdependently
develop next generation products and services.
This type of dynamic naturally occurs in city
regions.
The Greater Dublin Area is the dominant city
region of the Irish economy. Among Irish cities,
the Dublin City Region has the best balance in
terms of concentration of resources and
infrastructure to allow it to develop as a
‘knowledge city’ - a place that develops, attracts
and retains a talented and professional class of
2 "Competitive Cities in the Global Economy",
OECD (2006).
1
workers, enjoying an excellent quality of life.
The logic for developing the Dublin City Region,
so that it is capable of competing internationally
within the new knowledge economy, is
undeniable. At a national level, it will stimulate
and support Ireland’s entire economy. As a result,
it will also serve to accelerate regional growth,
allowing Ireland’s other cities to reach their full
potential. Ultimately, it will provide a road map
for other regional cities as they reach the critical
mass needed to compete internationally. There is
a clear case for Government policy, at both
regional and local level, to embrace a vision of
Dublin as a ‘Knowledge City’ capable of
competing with other city regions across the
world.
People Focus
In the new economic paradigm that defines the
knowledge economy, the City Region must
compete with other international locations
through its ability to train, retain and attract
workers. In order to gain competitive advantage
and ensure innovation, the Dublin City Region
must supply the knowledge workers required for
ongoing collaboration between science and
industry.
The workers who are the linchpin of this
knowledge economy have been conceived as the
"creative class", by Richard Florida in Rise of the
Creative Class. This "creative class" is made up of
people working in the fields of science, maths,
engineering, communications, the arts, design
and entertainment, and is complemented by a
broader group of "creative professionals"
working in knowledge intensive industries
including business, finance, law, healthcare and
related fields. They are "creative people who
7
 City Regions:
The Seeds
of Growth
prefer places that are diverse, tolerant and open
to new ideas." The Three T’s are central to
successfully attracting and retaining these
workers in any economic region. They are:
Technology – an ability to embrace change
and new ways of doing things;
Talent – an ability to attract and welcome new
people and ideas into a location; and
Tolerance – an ability to be non-judgemental
and open to diverse life style choices that
these ‘new’ people may prefer to embrace.
Culture Matters
The Dublin City Region is in direct competition
with other major cities as the place where talent
gathers and innovation occurs. To date, our city
has been a success as a gateway to Europe; a
melting pot, attracting and integrating talent
from across the globe. However, we cannot
assume that this will continue to be the case.
Direct action needs to be taken to ensure that, as
the city continues to develop economically, it also
grows as a vibrant cultural, social and educational
centre in order to attract and build its own
"creative class". Offering the right working and
economic environment is only one part of the
equation necessary to the knowledge economy.
We must take a strategic approach to ensure that
our City also offers the cultural, social and
recreational lifestyle options that position Dublin
as an attractive and fulfilling place to live for
talented knowledge workers.
Balanced growth of this kind is an integral part of
the successful city region in the knowledge
economy. Unless a determined effort is made to
8 Dublin Chamber of Commerce
develop our city in this way, there is a real risk
that the Dublin City Region may simply attract
talent in the early stages of its career and that
this talent will then move on to other, more
attractive and stimulating cities.
Good Foundations
The Irish Government has laid the policy
foundations for a new Irish economy with strategy
documents such as Ahead of the Curve; Ireland's
Place in the Global Economy; the Strategy for
Science, Technology and Innovation; and the
report of the latest Task Force on Small Business.
Although these policies are at differing stages of
implementation, an environment is being created
where business and education can collaborate
creatively to move Irish products, processed and
services up the value added chain. Dublin
Chamber believes that, in time, Ireland can reap
the rewards of these policies through higher
productivity, employment and incomes.
In particular, the Dublin Chamber wishes to
acknowledge a number of pro-business tax
fundamentals that the Government has had the
foresight to introduce. These include Ireland’s
corporate tax regime, a low corporate and
employment tax environment and improvements
to the Research and Development Tax Credit, the
Business Expansion Scheme and the Seed
Capital Schemes.
The business sector has contributed positively to
this strategic debate. Papers such as Retuning
the Growth Engine by the American Chamber of
Commerce of Ireland and A vision for ICT Ireland
by ICT Ireland also plot a course for Ireland in the
knowledge economy.
 1
Developing the Dublin
City Region
The national strategic overview is set. As a result,
this paper by the Dublin Chamber focuses on a
number of practical recommendations that will
advance the development of the Dublin City
Region within the national framework. These
recommendations work hand in hand with the
Dublin Chamber’s other policy papers,
particularly on the governance, infrastructural and
transport needs of the City Region.3 The Dublin
Chamber represents views from across the
commercial and education spectrum in the city.
All believe that these recommendations will lend
vital momentum to establishing the Dublin City
Region as a world-leading knowledge city – and
this also offers a real opportunity to fuel growth
across our national economy. The global
knowledge economy is evolving apace. If Dublin
is to stake its claim in this economy, now is the
time to take action.

3 A list of Dublin Chamber of Commerce Reports and

Submission is included at the end of this document.
9
10 Dublin Chamber of Commerce
 2
Context: Competing to train, retain
and attract knowledge workers

Building a Attracting an international ‘creative class’ will allow the

Dublin City Region to develop the foundations of a

Learning
knowledge economy. Yet to be a booming success, Ireland
will need to inspire and train its own creative class from
Ireland’s children. Once inspired, these children will need

Society an advanced ICT infrastructure, and the tools to access it, at

home and at school. Our knowledge economy will require a
higher education infrastructure geared to foster highly
skilled, educated and creative knowledge workers, so we
need to put the basics in place to allow us to create this.

11
 Building a
Learning
Society

12 Dublin Chamber of Commerce


2.1 Attracting Internationally-
Experienced Talent
KEY ACTION
Develop short-term programme of
financial/tax incentives to assist in the
recruitment and retention of key
workers with the skill sets essential to
developing the knowledge economy.
The combination of a strong Irish workforce
coming on line with world class knowledge
workers will provide the highly educated and
creative body of labour necessary to maintain the
knowledge economy. This economy requires a
robust higher education infrastructure that can
produce highly skilled, educated and creative
workers. Recognising this, Irish Higher Education
Institutions have been set an ambitious goal of
doubling their annual output of Ph.D.s to meet a
growing demand. The Dublin City Region’s
position as the centre for learning in Ireland is
already well established, with three out of four
Irish Ph.D.s coming from County Dublin alone.
Graduations data for selected Dublin institutions,
classified by type of qualification (Full/Part Time 2004)
Certificate/ Honours PhD Total
Diploma Degree Masters
Dublin 2,199 18,564 508 21,271
Ireland 18,783 36,386 683 55,852
Note: The following institutions are included in
the totals for Dublin: DIT, UCD, TCD, DCU, Royal
College of Surgeons and St Patrick’s.
The objective of the Government Strategy for
Science, Technology and Innovation is to develop
a sustainable model of research through a
2
competitive funding process and a focus on
increasing production of Ph.D. graduates. These
are undeniably important elements in achieving a
sustainable economic model, however Dublin
Chamber fears that this Strategy will fail unless
steps are taken to attract new blood to the
education sector in Ireland.
Experienced senior researchers - or Principal
Investigators - who oversee a research team, are
the essential building block of the Strategy for
Science, Technology and Innovation. The graph
below illustrates that Ireland cannot meet the
demand for people with the necessary skills to
act as Principal Investigators (PIs). There are
relatively few people in this country in the age
groups associated with these senior positions,
and it is certain that we do not currently have the
numbers of senior researchers required to deliver
on the targets for Ph. D.s envisaged in the
Government Strategy.
Percentage of Population with Third Level
Education or higher by Age, 2005
45%
25 - 34
40% 34 - 44
35% 45 - 54
55 - 64
30%
25%
20%
15%
10%
5%
0%
US
OECD
UK
IRELAND
EU15
Source: National Competitiveness Council’s
Annual Competitiveness Report 2007. 13
 Building a
Learning
Society
A number of factors also limit the speed at which
Ireland can build its Ph.D. reserve, while still
maintaining quality. At present the level of Ph.D.s
in Ireland is lower than the EU15 average.
Internationally it is recommended that
supervisors/PIs have no more than 5 Ph.D.
students. World class Principal Investigators, who
have the requisite education and experience, are
required to train Irish Ph.D.s but, as illustrated,
these are in short supply locally.
If we are to increase production of Ph.D.s we
need a ‘jump start’ through the repatriation of
suitably qualified and experienced Irish Ph.D.s
living abroad. Unfortunately, this has proved
difficult to date due to differing standards of
living in Dublin compared to other international
university towns. Dublin Chamber believes that
some form of intervention is required to tip the
balance in favour of Dublin. Without this, the
2.2 ICT Skills as the new ‘three Rs’
International Case Study:
The Netherlands
The Dutch Government has focused on improving
the attractiveness of the country by allowing an
employer to pay international employees 30% of
their salary as a tax free allowance. This ‘30% ruling’
applies to international employees with a specific
expertise that is scarce or absent in the job market
in the Netherlands. To qualify for the scheme
employees must demonstrate compliance with a
variety of requirements, including level of
education, relevant work experience and
consistency of remuneration with prior employment
(pre-30% allowance). The categories of business
that this applies to are based on the importance
which specialised knowledge has to the role.
14 Dublin Chamber of Commerce
difficulty in recruiting internationally experienced
PIs cannot be tackled and our ability to increase
the number of Irish Ph.D.s will be restricted.
Experience abroad gives us some insight into
mechanisms that can be used to attract essential,
skilled workers where a shortfall exists. The
example of the Netherlands is typical.
The Dublin Chamber advises that a short-term
programme, similar to that of the Netherlands,
should be developed to assist in the attraction
and retention of key knowledge workers in
Ireland. Some form of financial or tax incentive
can be effectively used to bridge the gap
between Dublin and other university towns of
international standing, thus addressing the
shortfall in essential knowledge workers, such as
Principal Investigators.
KEY ACTION
Prompt completion and initial
implementation of the ICT in
Education Strategy by 2008, drawing
on the support of business where it is
needed to achieve this aim
ICT competence from an early age is a critical
building block in a knowledge society, however in
Ireland there is a deficit of basic IT skills across
the general labour force. Dublin Chamber
believes that every school leaver today should
have a defined ICT skill set, in the way previous
generations had the ‘three Rs’ as a rite of
passage. The ICT strategy in education provides
a welcome road-map to take Ireland in this

direction. If this strategy is to make a meaningful
impact, it also requires a detailed plan for action
with specific tasks, targets and timeframes, clear
responsibilities and a definite commitment of
resources from current spending plans.
Primary and secondary education facilities
provide students with the necessary learning skills
to reach their full capacity at third-level. Ireland
has seen an encouraging increase in secondary
school participation rates. Provisional data for
2005 indicates a participation rate of 86%, which
surpasses the Lisbon Agenda’s target of 85%.
However, in the crucial area of scientific and
mathematical ability, Irish 15 year olds were found
to be below the OECD average in 2003. While
more recent figures show some improvement (to
marginally above average/average) in science
there has been no movement in Ireland’s maths
ranking. Equally worrying is the fact that there
were over 9 students to every computer in Irish
schools, according to the EU’s Benchmarking
Access and Use of ICT in European Schools 2006.
These are not the statistics on which a successful
knowledge eco-system can be built.
If we are to collectively sustain the type of
competitive economy desired, Dublin Chamber
believes that ICT skills need to be more ingrained
in the secondary and primary education
curriculum. Dublin Chamber strongly advocate
that some form of IT skills requirement be
introduced to the curriculum across the schools
system and that these skills should be subject to
formal examination and accreditation.
Business is more than willing to play its role in
this area. Member companies of the Dublin
Chamber are already committed to pro-bono
support of IT in the learning environment.
However, such involvement can never be a
substitute for the leadership, direction and
2
continuous investment in ICT that can only come
from Government. If Government demonstrates
this leadership, businesses will enthusiastically
follow.
Dublin Chamber believes that there is an urgent
need for the Government to complete the ICT in
education strategy and that this should be tightly
coupled with an action plan for speedy execution
beginning in 2008. Business can make a positive
contribution towards achievement of these goals
and this support can be easily harnessed and
mobilised, probably through the establishment of
an Advisory Structure to assist in the planning
and execution process of the strategy. With the
strategy and process in place, Dublin Chamber
recommends that pilot projects be launched for
the start of 2008/2009 school year.
2.3 Early Embedding of
Learning Skills
KEY ACTION
Optimise early learning in the child
care system and up-skilling those
working in the early learning industry
Child development studies have shown that from
the first days of life children begin to ‘take in’ and
‘react’ to their surroundings, developing the
learning skills of a life time. Recognising this,
many countries make a concerted effort to merge
the two tracks of child care and early education,
in an effort foster early childhood development.
In Ireland the two tracks of education and child
care have continued to develop separately. The
National Economic Social Forum’s report on Early
Childhood Care and Education estimated that for
every Euro invested in early childhood care and
15
 Building a
Learning
Society

education in Ireland, a return of ¤7.10 can be

expected.4 The report also highlighted
weaknesses in national early childhood policies:
several Government departments share
responsibility for policies affecting young
children; the sector is weakly regulated; and child
care is conceived not as a learning opportunity
but mainly as a child minding service for working
parents.

As the number of working parents increase and

the issue of childcare moves up the social and
political agenda in Ireland, this is a time of
unique opportunity to foster a learning ethos in
our child care system. Priority should be given to
integrating the two tracks of child care and early
education and, in the process, up-skilling the
education levels of those working in early
learning industry.

4 "Early Childhood Care and Education",

NESF, Report 31 (July 2005).

16 Dublin Chamber of Commerce

 3
Context: ICT as a
Platform for Growth

Upgrading the In the new global economy, ICT is the major enabler, not
just of improved quality of life, but also of economic

Knowledge
growth. The gains from ICT will be felt beyond the confines
of the ICT industry. They also benefit other knowledge
intensive industries - financial services, pharmaceutical,

Infrastructure digital media, bioscience – areas that have been

traditionally strong for Ireland and are earmarked as vital to
future national growth.

The Information Technology and Innovation Foundation,

notes that ICT hugely impacts in five key areas:
productivity, employment, more efficient markets, higher
quality goods and services, and innovation of products and
services.5 Timely recognition of this fact has inspired the
Government’s investment programme through the National
Development Plan (NDP) and other mechanisms.

The Small Business Forum has called for continued

investment in next-generation networks and services, and
online public services. If the Government is to maximise
return on its proposed investment in ICT it must create a
technology literate society. The first step in creating a
strong ICT foundation for the Dublin City Region is PC
penetration. This is followed by high speed access to the
internet and the promotion of the use of online services.

5 ‘Digital Prosperity: Understanding the Economic

Benefits of the Information Technology 17
Revolution’, Atkinson, R. & McKay, A.
 Upgrading the
Knowledge
Infrastructure

18 Dublin Chamber of Commerce

 3
3.1 PC Penetration
Dublin Chamber recommends the introduction of
KEY ACTION
a scheme for a minimum twelve month duration
that is simple and inexpensive to administer.
Introduce VAT-free scheme for
Whilst this scheme shall require some co-
the purchase of PCs to stimulate a ordination between Revenue, the Department of
technology-literate society Finance and employers, the long term benefits to
digital adoption and penetration in the country
As a technological society, Ireland lags behind shall be significant.
other OECD countries. Ireland ranked only 21st in
the World Economic Forum's Global Information
Technology Ranking 2006/2007, while Denmark,
Sweden and Singapore filled the top ranks. The
CSO estimated that 58.5% of all households in
Ireland had a home computer in 2006, an International Case Study:
improvement of only 3.5% from 2005. These PC Penetration
figures expose a real weakness when compared
with those for Sweden where penetration is at Sweden:
82%, or Denmark where it is 84%. Home PC penetration in Sweden was
increased from 40% to 80% as a result
The knowledge economy requires a culture of a pioneering Government scheme
where ICT is second nature to society. To which allowed employees to purchase
encourage this, Dublin Chamber believes that the a PC VAT-free.
Irish Government should put in place a PC
penetration scheme. Here we can draw from the Italy:
experience of other European countries including The Italian government has implemented
Sweden, Belgium, Italy and Portugal, where a scheme for students where a ¤100 voucher
schemes have succeeded in increasing PC usage for a computer skills course accompanied a
and penetration. ¤175 grant towards buying a computer –
improving both penetration and usage.
Given the technology gap at grass-roots level
between Ireland and many of our European
neighbours, the case for a VAT-free PC scheme
for employees is very strong. If we are to meet
the goals of improved competitiveness through
increased productivity and innovation, we must
ensure that the nation has IT-active generations
that diffuse IT skills throughout the economy to
family, friends and the workplace.

19
 Upgrading the
Knowledge
Infrastructure

3.2 Strategic Importance of Broadband penetration rates in 2006

Percentage of Enterprises ( = 2003)
ICT Infrastructure 100%

90%
KEY ACTION 80%

70%
Amend the Strategic Infrastructure Act
60%
to include advanced
50%
telecommunications to facilitate
40%
development of next generation
30%

20%
Improving PC penetration alone will not create the
technology literate society we need. Additional 10%
measures are also required to improve the take-up 0%
of broadband and the use of online services.

Italy

Hungary

Ireland
Netherlands

EU15

UK

Luxembourg

Germany
Finland

Sweden

Spain

Denmark

Poland
In Ireland, four out of every five homes with
computers are connected to the internet.6 Despite
this Ireland ranked an embarrassing 16th out of the Source: National Competitiveness Council’s
EU25 for broadband penetration, surpassing only Annual Competitiveness Report 2007.
Greece out of the EU15.7 Significantly, this ranking
has not improved since 2003. The findings of the Ireland’s telecommunications network is currently
2006 Census highlighted that Irish households are reliant on an outdated copper wire system. Bandwidth-
still less likely to have internet access than their EU intensive next generation applications – such as
counterparts, and remain among the lowest Interactive TV, HDTV, and location-based services – will
household users of broadband in the EU. require a network that can accommodate speeds of
between 50Mb/s and 1Gb/s. This cannot be delivered
Broadband penetration rates in 2006 through our copper wire system. Without higher
Percentage of household ( = 2003) speeds Ireland will not be able to meet the needs of
70% business and will never be seen as a serious contender
60% for knowledge intensive industries.
50%
Ireland is already losing valuable time and lagging
40%
behind competitors like Singapore, Korea, the
30%
Netherlands, the UK, Germany and Sweden who are
20% investing significantly in next generation networks. It is
10% acknowledged that the laying of fibre optic cable -
0% which is the backbone of next generation networks - is
extremely expensive.8 In particular, the current
Ireland
Spain

Hungary

Poland

Italy
EU15

France
Sweden

UK

Germany
Netherlands

Denmark

Finland

piecemeal approach being taken to upgrade Dublin’s

6 Findings based upon CSO Census 2006 and ComReg

(Quarterly Key Data - Document No: 07/67).
20 Dublin Chamber of Commerce 7
ComReg, Quarterly Key Data - Document No: 07/67.
.

telecommunication network is costly and will
leave Dublin in a position where it is, quite
simply, unable to compete against other
international locations.
In the NDP the Government recognises that
advanced broadband telecommunications is a
necessary key infrastructure for gateways and
hubs. The National Spatial Strategy has set a
medium term target of "broadband speeds of 5
megabits per second to the home and more than
that for business". If the Government is
committed to these goals, it is imperative that
Strategic Infrastructure Act is amended to include
advanced telecommunications. This will reduce
the huge cost for companies wishing to invest
and the time it takes for the major trenching work
that is associated with its installation. Crucially, as
other economies forge ahead in developing next
generation networks, Ireland cannot afford to risk
the kind of delays that have fraught the
development of infrastructure here in the past.
This action will make a bold statement about the
value that this country puts on developing next
generation networks – showing serious intent
behind what are otherwise dismissed as empty
aspirations. Dublin Chamber believes that by
amending the Strategic Infrastructure Act to
include advanced telecommunications it would
engender the certainty that investors require and
position the Dublin City Region to compete with
other city regions worldwide.
8 A report by Enders Analysis estimated that the price
of fibre-to-the-home for the UK was ¤1000 per
household, 70% of this cost was on the associated
civil engineering work associated with the digging of
the trench.
3
3.3 Fibre Ready Homes
KEY ACTION
Amend National Building Regulations,
and the Dublin City Council
Development Plan so that new homes
are built to be "next-generation
ready"
When fibre ‘motorways’ are made available,
provision must also be made so that homes can
access this service. Ideally, room for next
generation networks should be put in place while
houses are under construction. Given the rate at
which housing stock has grown in Dublin, we
have missed an incredible opportunity to plan for
the future by catering for high speed and quality
connectivity. In the future, Dublin Chamber
believes that no new dwelling should be built in
the Dublin City Region without the necessary
capability in place for upgrading the
telecommunication network.
In the long-term this should be a requirement of
National Building Regulations, however given the
pace of development, an immediate, interim
measure is also advisable. As a result, Dublin
Chamber proposes that this requirement is
embedded into Dublin City Council’s and other
Greater Dublin Area local authorities’
development plans. This would make it a
prerequisite for all new dwellings in the Region,
as part of the normal course of planning
permission.
The marginal cost of laying down this fibre now
would be of a significantly lower order of
magnitude than the cost of retrofitting it and it
21
 Upgrading the
Knowledge
Infrastructure

will greatly improve the commercial case for fibre
being rolled out across Dublin. Dublin Chamber
understands that such a proposal has been
included in a recent consultation paper on
apartment living in the city by Dublin City
Council. Dublin Chamber warmly welcomes this
proposal and believes that it should be extended
to all new housing without delay.
3.4 Migrate Government Services to
Business Online ONLY
KEY ACTION
Move key government services for
business to online only
interfaces must underpin all elements of design. This is
what sets Revenue Online apart from other less popular e-
Government initiatives. This has also clearly worked in the
private sector where, for example, such a move has not
hindered the sale of airline tickets. The Danish Government
has also shown how an excellent regulatory environment
and clear government leadership on ICT, coupled with high
PC and broadband penetration and usage, can result in a
winning strategy for competitiveness, through increased
cost saving and efficiencies.
Public Services Available Online 2006
( = 2003)
80%
70%
60%

50%
The performance of Irish firms in ICT integration
40%
has been poor to date. This means that Irish
business is failing to translate improved technology 30%

into increased productivity. The 2006 Information 20%

Society and Telecommunications report prepared 10%
by the CSO, remarked that only 19% of Irish 0%
enterprises reported having a written ICT strategy.
Poland
Ireland

Germany
Netherlands

Hungary
EU15

Spain
Denmark

Finland

Italy
Sweden

UK

France

Failure by the vast majority of Irish companies to
integrate existing technologies into their day-to-
Source: National Competitiveness Council’s
day activities is a major concern for future
Annual Competitiveness Report 2007.
competitiveness and acts against creating the
necessary sea-change in business culture that is the
basis of a knowledge society. In view of this,
Government should seek to pro-actively lead
business towards integrating ICT more fully into
their day to day functions – for example by moving
business services online.
Dublin Chamber believes that the Revenue
Commission’s early success with Revenue Online
indicates that it is possible to move a number of
key Government services for business to be
available online ONLY. To do so successfully,
customer-focus and user-friendly process and
22 Dublin Chamber of Commerce
Switzerland
International Case Study:
Denmark
Legislation was implemented in Denmark in 2004
which required the entire public sector to move to
electronic invoicing. It was estimated that the
Danish public sector made 18 million invoice
transactions to other public authorities annually.
With 10 minutes being saved in the handling of
each invoice when received electronically, it
was estimated that total savings of ¤94 million
were achieved. Furthermore, when the Danish
Government fully implements the system to
facilitate automatic matching between orders
and invoices, it is conservatively estimated
that the total savings will increase to
¤160 million annually.
 4
Context: Innovation and
R&D by SMEs

SMEs and the SMEs are an important sector in Ireland and have a vital
role to play in copper-fastening the knowledge economy

Knowledge
here. Over 97% of businesses operating in Ireland employ
less than 50 people. More than half of the private sector
workforce is employed in what are defined as ‘small’

Economy organisations. Many of these organisations form an

essential part of the supply chain for larger firms or play an
important role in delivering domestic services. Yet the
productivity of Irish SMEs is low in comparison with similar-
sized companies in other countries.

National public policy and industry papers universally point

to the role that indigenous companies and SMEs must play
in contributing to innovation and growth. If they are to rise
to this challenge every effort must be made to increase the
R&D intensity, and innovation levels, of Irish-owned firms.
The current level of R&D activity and R&D spending within
indigenous firms in Ireland is also amongst the lowest in
the OECD. Two-thirds of R&D spending in Ireland is
performed by multinational corporations. Dublin Chamber
believes that incentives aimed at introducing SMEs to R&D
and its benefits can sow the seeds for further expansion of
indigenous SMEs into this area.

23
 SMEs and the
Knowledge Economy

24 Dublin Chamber of Commerce


4.1 Building R&D Experience
of Small Business
KEY ACTION
Expand ‘Innovation Voucher’ Scheme
and introduce ‘Knowledge
Acquisition Grants’
Dublin Chamber fully supports the
recommendations of the Small Business Forum
that ‘Innovation Vouchers’ and ‘Knowledge
Acquisition Grants’ be made available to small
business. Dublin Chamber believes that these are
practical, targeted initiatives that will create
momentum in the adoption of R&D by the SME
sector.
4.2 Educating Owner/Managers
The ‘Innovation Voucher’, which allows small
businesses to access research expertise valued at
¤5,000 from third-level institutions, was
introduced on a pilot basis by Enterprise Ireland
in 2007.9 The voucher system encourages SMEs
to explore the opportunities available through
R&D and facilitates knowledge transfer from
third-level institutions. A meaningful assessment
of the success of this initiative will only be
possible after the pilot has been evaluated, but it
is clearly a step in the right direction. Dublin
Chamber suggests that extending the voucher
scheme beyond third level institutions, to City
and County Enterprise Boards and Business
Innovation Centres, would improve the
effectiveness of the scheme. This would also
allow small business to fully realise the benefits of
business development advice in the subject of
commercialisation of R&D, an area in which
Ireland is seeking to develop its capacity.
The Small Business Forum also recommended
the introduction of ‘Knowledge Acquisition
9 On the other hand, education providers tend to
Second Progress Report on Implementation of the
Recommendations of the Report of the Small
Business
4
Grants’ in order to develop the innovation capability
and absorptive capacity of small companies through
supporting such activities as R&D planning/training,
consultancy, or market research. While care must be
taken to ensure that these grants complement existing
Enterprise Ireland schemes, there are undoubtedly a
number of areas that can be addressed. One of the
new supports being examined is an R&D Stimulation
Grant, to encourage companies that have not carried
out R&D in the past (or which have done so on a
sporadic basis) to develop sustainable R&D activity.
Once again, Dublin Chamber would strongly support
an initiative of this nature as Dublin Chamber believes
it will make a discernable contribution to developing
innovation among SMEs in the Dublin City Region.
of SMEs
KEY ACTION
Encourage tailored training for SME
managers and improve management
capacity through expert secondment
programme
It is essential that Ireland creates a better match
between the demand and supply of training for
small business owner/managers, in terms of content
and delivery mechanisms, if our SMEs are going to
be able to compete at an international level. In this
context, the establishment of the Management
Development Council by the Department of
Enterprise, Trade and Employment is extremely
welcome.
It is our hope that the Council can successfully
address the existing gap between the services of
education providers and the needs of small
business. On one hand, SMEs generally find that the
more tailored the training, the greater the return.
find the costs of tailoring courses prohibitive and
favour providing more generic training. 25
 SMEs Business
Small and the
and the Knowledge
Knowledge Economy
Economy

Dublin Chamber believes that the Management

Development Council can play a role in
encouraging the market to provide more
practical, tailored courses for business
owner/managers. Specifically, an accessible,
relevant and affordable mechanism to match
groups of companies with similar interests and
requiring similar training would go some way to
stimulating education providers to meet these
specific needs.

SME owner/managers tend to focus more on

resolving day-to-day problems and less on their
long-term development and strategy due to time
and manpower constraints. In order to open their
eyes to the value of improving management
capacity, Dublin Chamber recommends
development of a scheme whereby individuals
with relevant industry knowledge and managerial
experience may be seconded to SMEs for a
period of up to three years. Their role would be
to impart ‘soft, tacit knowledge’ thus increasing
the management capacity of the host company,
without impacting on the time and resources of
the owner/manager.

For this programme to be successful,

Government must ensure that Enterprise Ireland
and other relevant agencies have the necessary
skills and resources to offer this service to SMEs.
When combined as an integrated package Dublin
Chamber believes that an expanded Innovation
Voucher Scheme, the provision of Knowledge
Acquisition Grants and the secondment of
managerial experts to SMEs would boost both
R&D capacity and management capability. Over-
time these initiatives will work to create a culture
within this sector where these elements are
considered a prerequisite for any successful SME.

26 Dublin Chamber of Commerce

 5
Context: Promoting Dublin’s
Knowledge Eco-System

Arrival of a Dublin Chamber is optimistic that the current NDP can

begin to address the Dublin City Region’s infrastructure

Knowledge
concerns in the areas of transport, education and business
development.10 If implemented swiftly, the NDP will go a
long way to addressing quality of life issues that might

Capital otherwise hinder the attraction of high value-added

knowledge workers to the City. However infrastructure
alone is not enough. To compete internationally as a
knowledge region, Dublin also needs to create momentum
and energy in social and cultural spheres that gel with the
knowledge economy – we need to create a more rounded
"knowledge eco-system".

Many elements of a knowledge eco-system are less

tangible than the nuts and bolts of infrastructure and yet
they are just as necessary to attracting and retaining the
labour force required to grow our economy. This is about
extending innovation and creativity beyond the workplace
and exciting people about their city. The Dublin City
Region must build on its growing reputation as a "melting
pot" and gateway to Europe for knowledge based
companies by showcasing creativity and imagination – and
at the same time reinforcing its commitment to the
knowledge economy. The Dublin Chamber believes that a
number of practical changes can serve as catalysts or
‘tipping points’ to further the development and reputation
of Dublin’s knowledge eco-system.

10 Dublin Chamber addressed the issue of

Knowledge Economy Infrastructure in its July 2006 27
Submission to the Department of Finance on the
National Development Plan 2007-2013.
 Upgrading
Arrival of a the
Knowledge
Capital
Infrastructure

28 Dublin Chamber of Commerce

 5
5.1 WiFi in Public Transport 5.2 Science Museum

KEY ACTION KEY ACTION

Introduce WiFi across Dublin’s public Establish world-class science museum

transport system and reform funding for science facilities

City Region wide WiFi connectivity, although One of the challenges that we face in building a
relatively easy to put in place, faces several major knowledge economy in Dublin is the decline in
challenges, including a workable business model, graduates taking science and technical subjects.
high maintenance costs and ensuring a critical There is an urgent need to capture students’
mass of users. While many cities and towns have imagination and stimulate an interest in science-
considered rolling out city-wide wireless based subjects early in their lives.
connectivity, there are limited examples of a city
implementing this across its public transport Positive moves have been made to develop
network. Nonetheless, templates do exist on a interactive museums in Dublin, as in other cities
one-off basis within private environments – for across the world – for example, the proposed
example company commuter buses. Science Gallery and the Exploration Station at
Heuston Gate (as outlined below). Nonetheless the
Dublin Chamber believes that the Dublin City absence of a world-class Science Museum in Dublin
Region can steal the limelight in this area by is a glaring gap in this landscape.
providing wireless access across the City’s public
transport network - on the DART, commuter
trains and/or Dublin Bus. A number of practical Projects Underway
issues must be considered - for example, to
encourage use, access should be free (possibly
Science Gallery
subsidised by on-line advertising streaming into
The Science Gallery, located in a new building on Pearse
the bus/train) or charges kept to a minimum (e.g.
Street in the heart of the capital, will be a place "where
included in purchase price of transport ticket).
ideas meet", bringing together the business, research,
However the initiative would have positive side
student and policy communities, with a core audience of
effects in encouraging commuters to switch to
young adults (15-25) making decisions about future careers.
public transport and increasing Dublin
Activities will include exhibitions, festivals, workshops and
commuters’ productivity.
events on major interdisciplinary themes from ‘The Future
of Food’ to ‘The Science of Attraction’.
Most importantly, this would be a significant
statement of intent for the Dublin City Region. It
will increase the cohesion to our knowledge eco-
system and act as an innovative, flagship initiative
positioning Dublin as a global leader.

29
 Arrival of a
Knowledge
Capital
Projects Underway
Exploration Station
The Exploration Station will be Ireland’s
first interactive science centre for young
people (5-17), families, teachers and
tourists. From its Heuston Gate location,
it hopes to inspire a lifelong passion for
discovery through a fusion of arts and
sciences. The interactive exhibits will be
tied to the National school curriculum,
and will cater to school tour
programmes, public programmes and
outreach programmes. The anticipated
opening date is 2010.
Between them, the Science Gallery and the
Exploration Station aim to draw 250,000 visitors
per year – this equates to roughly one-sixth of
the Dublin City Region’s population. When
benchmarked against other international
knowledge cities our ambition for the
promotion of science seems singularly
unambitious. Boston’s Museum of Science
receives over 2 million visitors annually and
Munich’s Deutsches Museum, 1.4 million. This is
almost half of these cities’ populations. If the
Dublin City Region were to emulate these
proportions it would equate to three quarters
of a million people a year (and over a million by
2020). These visitor numbers are currently
achieved by the National Gallery of Ireland and
there is no reason to suggest that similar
demand for a National Science Museum cannot
be generated – particularly in a country that is
on the brink of undertaking a sustained
campaign to promote science.
30 Dublin Chamber of Commerce
A Museum of Science is a valuable facility that
communicates and teaches science throughout
our lives. More significantly, it can also act as a
focus for building and stimulating an integrated
science culture by capturing the imagination and
acting as a vital engine in promoting careers in
science, engineering and technology. An
outstanding museum of science will enhance
Ireland’s image as a knowledge-based society and
will serve to inspire future generations of Irish
scientists.
Other major knowledge economies have a history
of integrating science and technology into the
fabric of their culture through science centres and
museums. In the UK there are over 80 Science and
Discovery centres. These are supported by a £250
million sterling injection from the National Lottery
and a further £250 million from other public
sources. In the US there are over 350 science
museums and centres, with a combined annual
budget of over $1 billion. They attract 177 million
visitors annually, including 60 million
schoolchildren.
Dublin Chamber believes that, while private
funding is important in this area, achieving
sustained public funding is the real obstacle to the
creation of world-class Science Centres in Ireland.
The experience to date with the two pipeline
projects illustrates the difficulty with funding a
more ambitious, world-class science museum.
Currently, the national science awareness
programme Discover Science and Engineering has
an annual budget of approximately ¤4 million. It is
managed by Forfás and focuses on sponsorship of
individual science-engagement events. However it
does not offer a revenue funding model to cover
the significant ongoing staffing and operational
costs that are associated with running and
maintaining science/technology centres.
 5
Dublin Chamber has looked to the arts world to
offer a workable alternative. The operational
model of science facilities is very similar to that of
arts organisations and, accordingly, we would
recommend that a National Science Council be
created to consolidate the current programmes.
The Irish Arts Council has an operating budget of
¤80 million and administers grants to fund 317
arts organizations and centres nationwide
annually. The proposed ‘Science Council’ would
operate in a similar way, managing an annual
funding structure and acting as an umbrella
organisation for the sector. Given the strategic
importance that science and technology will play
in the future of our economy and the importance
of innovation and creativity in this area, Dublin
Chamber believes that the Council should receive
a budget on par with that of the current Arts
Council.

The centralisation of this ‘Science Council’ would

play a significant role in facilitating the
development of a first-rate Science Museum,
which reflects Ireland’s ambition in the area of
science and technology. Given the scale of
projects of this nature, the ‘Science Council’
funding process should permit organisations to
present multi-annual budgets for approval.
Naturally, the Dublin Chamber would encourage
consultation with the Arts Council, Discover
Science and Engineering, and representatives of
existing science centres in Ireland and
internationally in the development of this
structure.

31
32 Dublin Chamber of Commerce
 Significant progress has been made in the development of
the knowledge infrastructure of the Dublin City Region. We
are nurturing a creative and research-rich environment which

Conclusion
feeds the thriving ICT, financial services, multimedia,
pharmaceutical, internet, and life-science sectors of the city-
region. However, as other international city regions
targeting knowledge services and industries raise the bar for
competitors, Dublin’s success will be determined by its
ability to develop, retain, and attract workers. We have done
this well thus far, as the Dublin City Region’s core
competency is its people, but our city region will need to
build upon this strong foundation to form a sustainable
economy based on knowledge workers and a more rounded
knowledge eco-system that receives international
recognition.

Through this paper, Dublin Chamber has started the process

of bringing together business and higher education
institutions in consultation with government bodies to voice
the region’s concern with regard to developing a
Knowledge Economy. They highlight a knowledge region’s
needs: infrastructural, educational, innovational,
entrepreneurial, and the necessity to market its arrival.

The Dublin Chamber is now looking to decision makers

across Ireland to support our vision for Dublin as a
‘Knowledge City’ - the heart of a vibrant and successful Irish
knowledge economy. Dublin Chamber believes that Ireland
can support the Dublin City Region in becoming a talent-
attracting centre or ignore it allowing Ireland to become a
talent-exporter.

33
 Arrival of a
Knowledge
Capital

34 Dublin Chamber of Commerce

 A
Appendix:

International Examples of PC Incentive Schemes

Country Programme
Sweden From 1997, employees could avail of a tax-free
PC scheme (VAT 25%). Home PC penetration
increased from 40% to over 80%.

Portugal Students were offered cheap loans from

participating banks to buy state-of-the-art
notebook computers provided at special prices.
Student Internet usage is over 90%, whilst
general penetration is only 41%.

Italy Since 2003, all Italian 16-years old receive a

¤175 grant towards buying a computer and
¤100 towards getting a certificate for basic
computer skills.

Belgium Belgium introduced a VAT-free, low priced PC

package with broadband access and a card
reader for e-government purposes in order to
increase penetration rates.

35
 Dublin of
Arrival Chamber
a of
Knowledge Past Reports
Commerce’s
Capital
and Submissions

Investing in Knowledge Workers

Budget 2008 Submission

Democracy Now!
Submission to the Department of Environment,
Heritage and Local Government’s Green Paper
for Local Government Reform

Deliver, Deliver, Deliver!

Submission to the Department of Transport on its
Statement of Strategy 2008-2010

Dublin Business Priorities

General Election 2007

Tourism ABC: Promoting Dublin as a location for

Arts, Business and Culture
Policy paper from Dublin Chamber

Transport 21: Future for Dublin

Policy paper from Dublin Chamber

Dublin: Ireland’s International Gateway

Submission to Department of Finance on
National Development Plan 2007 – 2013

36 Dublin Chamber of Commerce

Design: Baseline

connecting influencing

Dublin Chamber of Commerce

7 Clare Street, Dublin 2, Ireland

T +353 (0)1 644 7200

F +353 (0)1 676 6043
W www.dublinchamber.ie
E info@dublinchamber.ie