Thursday 22 February 2018

Irish businesses need to realise the digital economy is the 'real' economy

John Kennedy

The new head of the Irish Internet Association says the imperative is to bring more firms online



WITH a strong background in the area of small to medium-sized enterprises (SMEs), Joan Mulvihill self-deprecatingly describes herself as a mole planted by the Irish business community into the internet industry to figure out the digital economy.

"I've been parachuted in from the SME sector and I'm not a technologist," she jokes, before turning serious, "but even I can see that the overall economy, in reality, is the digital economy.

"If you look at the world today from the point of view of airlines, hotels and retailers, if you want to exist in business, you have to be online in some way. Even if you're not selling online, the internet can help you be more productive."

Her mission as the new CEO of the Irish Internet Association (IIA), a body representing 550 internet businesses, is to expand the body's focus to help firms - not only start-ups, but also long-standing second- and third- generation businesses - fight the recession and repurpose themselves for the challenges of the 21st century.

Momentum is on her side. New research compiled by AMAS on behalf of the IIA shows that Irish companies have a higher proportion of online sales than that of any other country. If you look at e-commerce as a percentage of total turnover, it accounts for 26pc of turnover of Irish firms compared with 15pc in the UK and an average of 12pc across the EU-27 nations.

Mulvihill believes that traditional SMEs, including the butcher, tailor and candlestick maker for argument's sake, and not only technology firms, have the most to gain if they look at the world through an internet lens.

But there are issues. Ireland's broadband situation is slowly improving, with 1.3 million subscriptions, but as Forfás points out the country is at least three to five years behind competitor countries in terms of infrastructure.

"For me, the entire economy is the digital economy and vice versa. I don't think you can extract one from the other. So in terms of the National Development Plan (NDP) or a National Digital Development Plan I'm almost torn that they should actually be separate things. One is intrinsically part of the other and a digital strategy should be part of the NDP."

Chronic under-investment and lack of coherent policy in broadband is a concern, but so too is the failure by the State to enact the Cybercrime Bill and only a latent interest in creating a digital curriculum in Irish schools.

"I know we have also done a good job in putting broadband into schools, but if we don't have the hardware that goes with it, or training in education that supports that, then we really are only getting parts of the puzzle but not all of it. If you don't have all of it you're never going to be in a situation to get the full picture."

Mulvihill has a strong background within the Irish SME sector, having previously held the position of senior manager for Family Business Advisory Services at BDO Simpson Xavier.

She also has extensive retail experience, after spending eight years in London and Amsterdam with the King-fisher Group. Mulvihill was at the forefront of managing one of the first transitions of a major UK retailer from the high street to online, and has also worked as a consultant for a number of new business start-ups.

Bringing ordinary firms into the internet sphere is a priority that the IIA needs to embrace.

"This is where we have been quite narrow in our thinking up to now. There has been a sense that technology-based businesses have been the ones with the most to gain and that the digital economy is somehow happening elsewhere - with guys in jeans and T-shirts or chinos and polo shirts - and actually very little is happening with the traditional SME sector, bricks and mortar-type businesses.

"The digital economy applies to everybody and the digital economy is the economy and all aspects of Irish industry and business have an opportunity to gain significantly.

"A lot of my background has been working with Irish SMEs over the years and advising them. Many of those businesses have an absolutely proven value proposition to their customers and they have a huge opportunity now to embrace the digital economy. They have a chance to say: 'you know what, I'm part of that too. I may not necessarily be transacting all of my business online, but there are huge opportunities the internet can provide me with in terms of how efficiently I can process my business transactions, how flexible I can be in terms of my customers and delivering real bottom-line benefit to traditional businesses'."

She says that firms that use the old excuse of not understanding technology need to wake up.

"There are hoteliers around this country who have air conditioning and security alarms, they may not know how they work apart from switching them on and even when broken they don't know how to fix them, but it doesn't stop them from switching them on.

"If they embrace technology like the internet in the same way they stand to gain a huge amount."

Gaining from the internet, says Mulvihill, is not just about selling. It can also be about productivity, efficiency and flexibility. The only way Irish firms can use the digital economy to their strength is if the infrastructure is available.

"I suffered myself with the deep freeze earlier this year in January when so many of us were working from home. It's great for those who can, not so great for those who can't and it is limiting our ability and we are losing productivity days.

"The Government would be the first to say how many days of productivity are lost when so many cannot actually get to work. That impact can be minimised by broadband accessibility."

One issue that has Mulvihill seething is the Government's failure to enact the Cybercrime Bill, which went from the top of its agenda last year to the C-list this year. If Ireland intends to be one of the internet's great trading nations, structures to cope with issues like criminal behaviour need to be in place to encourage trade but also continued global investment.

"We need to be putting in preventative measures rather than cure measures in 10 years time when we have a digital economy boom, and saying we should have regulated that more at the start.

"Let's start putting those pieces in place now," she urges.

To watch a video interview with Joan Mulvihill, go to www.digital21.ie.

© Silicon Republic Ltd

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