Recovery's not a sprint – more a triathlon
The Business Expo puts co-operation between public sector bodies and SMEs into practice, writes Mark Kellett of Magnet Networks
'IF YOU don't know where you're going, all roads will lead you nowhere," said Henry Kissenger memorably. If you haven't got a plan, how can you expect to achieve your goal?
Possibly the most critical enabler for Ireland's recovery is the creation and the communication of a well-defined vision for how we see ourselves on the world stage.
The vision for recovery must set out not just where we as a nation should strive economically to be in the next two, five and 10 years' time but of more importance to the people, to establish a very clear moral compass by which all in society must be held to account. A clearly defined Vision for Recovery should address our nation's aspirations across a number of themes – social, economic, political, technology, environmental, and regulatory.
It is crucial that the vision must be articulated consistently by the triple helix of our political, academic and business leaders in order for the country as a whole to believe that there is a light at the end of the austerity tunnel.
Let me turn firstly to the most important element in our vision for the road to recovery and it is the social aspect, specifically, the need to set a strong and immovable course in our moral compass which has suffered heavily in the past decade, both as a result of the excesses of the Celtic Tiger and the many cases of abuse of our citizens by church and State.
It is often said that the true standard as to how a nation is judged is how it treats the weakest in society. Looking around us today, we see evidence of a continued weakness in our moral compass; parents of terminally sick children having medical cards removed, lack of financial support to provide for the special educational needs of disabled children, elderly patients left waiting on hospital trolleys through the night, the Priory Hall situation that required the tragic death of a devoted family man before the State would act.
Throughout all of this, many of our political leaders have chosen to remain silent, citing the constraints of the Troika as reason to cause harm and suffering on the weak. This approach of "I was only following orders of the Troika" has a strong negative historical resonance and is not a morally acceptable position to take.
In the midst of all of the furore about the large overspend in the health services, has anybody actually asked the real question, specifically: What type and level of health service do we in Ireland actually need so that those in the shadows of life are not permanently left in darkness?
Is it right that while Nama sits on €4bn of cash on its balance sheet, our sick have to wait months to see a consultant in hospital and even longer to receive treatment?
Let's pose another question that challenges the status quo on the health system. We currently rank 19th in the world for the effectiveness of our healthcare system, behind the likes of Greece, Spain and the UK. What would be the impact on Irish society aiming to be in the world's top 10?
Would this not make us a destination for international medical research, re-invigorate our pharmaceuticals industry, create highly skilled and highly paid employment and improve the overall quality of life index for all citizens? Would this change in direction not draw in wealthy foreign nationals seeking a higher quality of medical training or care and whose payment of fees to our medical system would contribute to an overall uplifting of the standard of care for all Irish citizens ... the virtuous circle! Why do we persist only with the language of overspend, cutting and austerity in the health sector – there is another path.
If we are to truly to emerge stronger as a nation, then we must ensure that we emerge with a far greater sense of humanity; that no member of society is left behind in the race for economic recovery.
At Magnet Networks, we have, over the last nine years, built up a customer base of over 4,000 business customers connected across our own fibre optic broadband network in Ireland and the UK. These relationships have given us an insight into the challenges and opportunities facing the Irish business community, particularly in the SME sector.
We are as a business actively engaged in the local community through, for example, our support for the education sector (DCU Magnet Nobel Lecture Series), mentoring of local start-up businesses and also my own engagement as president of the North Dublin Chamber of Commerce.
In the recent World Economic Forum report on global competitiveness, Ireland ranked 134th out of 148 countries – not exactly a glowing report. If we look more deeply at some of the findings, we see that our ranking for the availability of credit to businesses is 127th in the world. It is clear that the economic aspect of our vision for recovery must address a number of key areas, particularly those affecting the ability of SMEs to capitalise on the emerging growth opportunities such as access to credit and growth capital, access to government procurement processes and availability of skilled staff.
The real evidence of the expansion of credit is the absolute growth in credit granted to Irish businesses and not the refinancing of existing debt. Closer scrutiny and reporting by the Department of Finance and Central Bank of 'true' SME lending is required to ensure that pillar banks are fulfilling their mandate to the nation and not just vested interests. The Government, in its efforts to kickstart lending to SMEs, established the Credit Guarantee Scheme in October 2012 but to date the take-up has been very low, with around 47 loan facilities totalling €5m covered. If this scheme is truly designed to support SMEs in their recovery and growth, then an urgent review is required as to why it has failed so far.
Banking competition is always welcome and with the effective withdrawal by pillar banks from SME lending in the last five years, the void is being rapidly filled by other financial institutions.
A great example of this is the emergence of banks such as Close Brothers, which are successfully reaching out to Irish businesses. Close Brothers has also chosen to sponsor the Business Expo in DCU this Thursday, November 7, a true statement of intent to support the Irish SME sector.
A challenge for many SMEs is gaining access to the public sector procurement process and this is often as a result of the apparent unwillingness of the Irish public sector to support indigenous innovation through ensuring some degree of flexibility, bias and ease of access for SMEs.
Not only have I seen this first hand at Magnet but the issue is evidenced by Ireland's ranking of 70th position in the world for procurement of advanced technologies. I know the public sector has proven to be very slow in adopting new, more efficient and effective technologies, which in turn limits the possible success of Irish tech start-up firms who have little or no chance of selling to the public sector.
One of a number of solutions is to ensure greater access to and transparency of public sector bodies and their procurement processes. Such access would enable indigenous businesses to compete more effectively for the provision of goods and services. This aspiration is now a reality through the great work of the North Dublin Chamber of Commerce and will be showcased at this week's Business Expo in DCU. A number of public sector bodies such as the DAA, DCU, DIT, Dublin City and Fingal County Council will be making their procurement teams available to meet with SMEs.
This event is open to businesses from across Ireland to both exhibit and attend (email email@example.com but be quick).
The single greatest strength a nation has at its disposal is innovation. This must pervade all that we do, whether in the provision of education or healthcare services, the design and manufacture of product and services such as Intel's new chip design or the exploitation of our unique geographic location as a global digital hub.
I truly see a long-term sustainable innovative advantage that can leverage our green energy, our climate and our central geographic position between Europe, the Middle East and North America.
Today, through our Magnet's sister company, Hibernia Networks, Ireland has two transatlantic fibre optic cables that not only provide the only direct links to and from the US, but also onwards to China and down into South America.
Without this connectivity, we simply could not attract the high degree of foreign direct investment to Ireland and nor would we be able to export our digital services as easily as we do today. The opportunity for Ireland is to build on the capability presented by the dedicated fibre optic links to and from the US by making Ireland the global digital hub through which a majority of global virtual goods and services are traded, transacted and stored.
It is quicker to execute high frequency trades from Ireland to New York than it is from London. When you combine this fact with our relatively cool climate, thus making data centres cheaper to run, and with a highly educated graduate workforce, you can see how we could take a strong competitive global stance as the hub for all traded digital services and digital (aka 'big data') analytics.
A further and related opportunity is in the area of green/clean energy. We can see the challenges ahead for power generation and consumption. With the natural climate around us, Ireland should be at the forefront of green energy innovation that ultimately sees us as net exporters of energy to the UK and European grids.
This clean, green power is also a tremendous attraction for large data centre operators, such as Google and Amazon, who need to address their ever growing carbon footprint.
While the Government lacks a co-ordinated vision in this area, there is a great example in Dublin of how the triple helix of business, academia and public sector can themselves take a leadership position and it is the Green Way (www.thegreenway.ie) which was founded by Dublin City University, Dublin Institute of Technology, the DAA, Dublin City Council, Fingal County Council and the North Dublin Chamber of Commerce. The collaboration is focused on innovation and job creation in the area of green and clean technologies. The Green Way will be exhibiting at the Business Expo in DCU.
A national vision around the concept of the global digital hub is something that I see having an impact on all areas of society; in education we need more graduates with skills in maths and sciences, in construction we need specialist skills in the design and construction of clean green data centres, and power generation facilities, in the healthcare sector we can become the global hub for processing and storage of medical records.
All of these activities not only create employment but also drive enhanced revenues to support the provision of world class education and health services and ultimately enable us all to live in the society that never again leaves any citizen to live darkly in the shadows of life.
Mark Kellett is CEO at Magnet Networks. For details of the Business Expo at DCU email firstname.lastname@example.org