It's onwards and upwards -- not a downward spiral
Colm O'Neill of BT sees a progressive future in which we tackle debt, cut costs, and invest in broadband -- and in our workforce, by prioritising education and by reskilling
'Do we really to go back to when we had money but no free time? To a place where houses were investments -- and not homes?'
SITTING down to write this article made me think, what "road to recovery" do we actually want to follow? A road back to where we were?
As a country, do we actually want a return to the frantic times of five years ago where we had money but no time? To a period where our houses were investments and not homes? To where, it seems to me, we had lost the very thing that made us Irish?
Now this is not to say that our current situation is in any way a good one. Clearly these circumstances are extremely distressing. Every section of society has been impacted and some have been devastated.
However, do we want to follow a road that will lead us back to where we were, or do we want to take a road to somewhere different?
I say we go somewhere different. For all of my adult life Ireland has been defined and described by its financial performance -- with a bit of sport, culture, U2 (and even Eurovision) thrown in. During the Nineties and early Noughties, the Celtic Tiger and our booming economy were centre stage. In recent times, the spectacular bursting of the bubble. Ireland and being Irish are about much more than that.
So here are some of my suggestions to help Ireland find the right road to recovery.
Whether we like it or not, we owe a lot of money. Through restructuring and repayment, we need to get our debt down to a sustainable level as quickly as possible.
I am neither an economist nor an expert in sovereign debt, but I do know that high debt levels are like a disease in any organisation. We see examples of it all the time in the business community. Good businesses are destroyed by too much debt. This is an urgent priority.
We have to cut our costs. We don't generate enough tax to pay the current running costs of our economy.
I firmly believe that you can cut costs and increase service levels at the same time. We have done it at BT over the last three years, and many other companies have done this too. There is no reason why it cannot be achieved in public expenditure. There are many examples of Irish public services being world class. There is no question that we can reduce costs while improving the services delivered, and this does not have to come from substantial reductions in people or in wage cuts.
It does mean focusing on the following areas:
• Stop buying things you don't need or get value from. Simple to say, more difficult to do. It requires relentless focus on detailed information to achieve this.
• Eliminate errors and duplication. These are the two biggest drivers of cost and poor service levels. At BT our 'Right First Time' initiative dramatically reduced cost across the business while improving our customer satisfaction levels.
• Automate everything. After some publicly unsuccessful technology projects, we have become very conservative (understandably so) in implementing cutting-edge technology. Ironically, where we have done we are considered to be world class.
The Revenue Commissioners' use of technology is respected globally. Indeed, a project we are involved with on the 999/112 service -- which BT runs on behalf of the Department of Communications -- secured a recent e-Government award. Technology can drive efficiency and reduce costs; however, we need to accept that some of the projects will have teething problems.
As we free up money from reduced costs, we need to start to invest for our future. There are two urgent priorities:
• Reskilling: we have a structural employment problem. The jobs that we have lost are in construction and retail, and the jobs being created are largely in the technology sector. Some would say that you can't turn a retailer or construction worker into a computer programmer.
I disagree, for two reasons. Due to the boom in construction and retail from 2000 to 2007, many people who would have an aptitude for technology went into construction and retail. We need to find them -- and we must retrain them, quickly.
Second, not every job in the tech sector requires a PhD in Computer Science. There are many moderate skilled jobs. We need to quickly understand the gaps and get people back to work.
• Broadband -- well, I had to put it in somewhere! Basic fact: we live on an island in a world that is becoming connected. This presents an incredible opportunity for Ireland. Our nearest neighbour, Northern Ireland, has 80Mb download and 20Mb upload to 90 per cent of homes and businesses (delivered by BT, and with over £20m funding from the Northern Ireland Government as well as our own investment). We must catch up.
While there are some well- documented financial challenges in our communications sector, there are a number of well-funded and well-managed international companies, including BT, which invest hundreds of millions of euro a year in Irish telecoms.
There is a solution for Ireland to capitalise on this fantastic opportunity. Minister Rabbitte's Next Generation Broadband Taskforce is a very positive start. We need to follow through.
Our young people
I've had the opportunity to travel the world in my career, and everywhere I go I see Irish people in top positions in global companies held in very high regard. Whatever it is about Irish homes, they tend to produce great people -- and those people represent Ireland every day in all walks of life.
However, as impressive as that generation is, our current batch of young people is particularly special. BT has the great privilege to organise and sponsor the BT Young Scientist & Technology Exhibition, and I have been struck by the talent and passion coming through. The standard of projects continues to improve, which is good, but what is most impressive is how articulate, confident and optimistic these young people are.
I hear them discuss their projects with judges, ministers and business people with a confidence and enthusiasm that I would not have had at their age.
The winners of the Irish competition regularly win awards at the EU competition, and indeed a number of winners and participants have now gone on to form companies and to enjoy academic and business success.
Ireland's people are her greatest asset and her young people are her future. We may be part of the first generation to leave the next generation worse off financially, but let us make sure we do not short change them on their education. As we make difficult trade-offs to balance the books, a slight increase in pupil-teacher ratios and a slight reduction in support for universities can be seen as a difficult but unfortunate side effect of the downturn. However, these decisions can do untold damage in the long run to our potential recovery.
As a nation we must make education a priority. We must adequately fund it. We must make sure that we give our young people a 21st Century education. These are the people we will need to pay for our pensions and healthcare when we are no longer able to ourselves, and we must equip them well.
Where to next?
I started this piece asking what road we should take for recovery because we do have a choice. I would like to see the debate move on from who is to blame for the road that led to the crisis, to creating a road that will lead to the Ireland of tomorrow.
We have a lot to be proud of. We have produced many great businesses and business people. For a small nation we have enjoyed incredible sporting and cultural success.
When you have lived away, you realise that Irish people are great people to meet. They are welcoming and engaging. This island on the north-west coast of Europe still has a lot to offer a dramatically changing world.
Colm O'Neill is the chief executive of BT Ireland
Sunday Indo Business