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Rick Kelley, Head of European SMB Sales, Facebook is discussing the power of digital media as a profitable business tool.Sept 11 at 12:17 Comment Like

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Ronan Harris, Online Sales and Operation Manager, GoogleWhat insight can we gain from analysing search trends? Sept 11 at 12:42

Aengus McClean, Vice President, AOL Global OperationsWhat about the bottom line - will social media actually deliver the revenue stream?Sept 11 at 12:33

Mike Roche, Chief Architect, IBMCan social networking improve a company's efficiency from within?Sept 11 at 12:56

Richard Delevan, Managing Director, McConnell’s DigitalHow can we cope with constant change on the web?Sept 11 at 13:08

LISBON: YES FOR BUSINESS | HOW TO SECURE CREDIT | 12 BUSINESS ANNIVERSARIES

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ADS With building progressing well on the Convention Centre Dublin, a ‘one year-out

anniversary’ was held by the Centre’s organisers during September. Due to open in

September 2010, the Convention Centre Dublin has been designed by Pritzker Prize

winning architect Kevin Roche. It will be able to accommodate 3,040 delegates in ‘the

forum’ on level one, while an auditorium on the building’s upper levels has the capacity

to fit 2,000 delegates. More than 20 multi-purpose meeting rooms over 4,500 metres of

floor space are also incorporated in the design. The Convention Centre is expected to

create up to 250 full-time equivalent jobs and up to 300 part-time positions when open.

According to Government estimates, the business tourism generated by the Convention

Centre will indirectly support over 2,000 Irish jobs. The Centre’s first booking (a major

medical conference planned for 2011) was secured as early as 2007.

Convention Centre Dublincelebrates ‘minus one’ anniversary

InterTradeIreland announces new funding recipientsCross-border enterprise development

agency InterTradeIreland recently

announced the latest round of

investment under its Innovia

programme, designed to help

companies form cross-border

partnerships sharing knowledge and

technical expertise. €4m was released

to 12 companies in the Republic

and Northern Ireland to help in their

research and development work.

InterTradeIreland plans to release

a further €7.6m this year for other

projects under the fund. For more

information on the Innovia fund, visit

www.intertradeireland.com/innova.

Commission on Taxation proposes mixed bag of reformsThe Commission on Taxation has produced a significant report with several

recommendations for achieving a more sustainable tax system. The proposed reforms

include the introduction of water charges for domestic use, and that state properties,

third level and professional institutions, accommodation providers, and agricultural

buildings be made taxable for commercial rates. Dublin Chamber Chief Executive

Gina Quin, while welcoming these proposals, expressed disappointment with the

Commission’s call for an annual tax on privately-owned housing based on any owner’s

self-assessment of their property’s value. Specifically, Quin said that applying such

a tax on a national rather than a local basis would only support inefficient local

government. “It is usually the case that property taxes are local, as they are linked

to local services. The Commission’s recommendation separates this linkage and will

end up punishing those living in urban areas, where it is more cost-effective for local

authorities managing services,” noted Quin. “We believe that the property tax rate

should be set by each local authority. Therefore, they will be accountable directly to

local taxpayers for what they collect and then how they spend it. The more efficient

they are in running their local authority and providing the services needed by local

taxpayers, the lower that rate could be. This linkage of revenue to services will make

the tax system truly sustainable.”

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the future of the Poolbeg incinerator remains uncertain after Minister

for the Environment, Heritage and Local Government, John Gormley, who has

campaigned against incineration of waste for much of his career, received a

report on strategic waste management from an expert group commissioned

by the department. The group advised that no more than 25 per cent of

biodegradable municipal waste (BMW) should be sent for incineration nationally,

and proposed that local authorities should not be allowed to enter into

contracts to supply BMW to incinerators. Under an agreement signed between

Dublin’s four local authorities and Dublin Waste to Energy (the company behind

the incinerator) 600,000 tonnes of waste will be burned every year at Poolbeg.

Meanwhile, an August report by Forfás (Ireland’s national policy advisory body

for enterprise and science) strongly advised against the introduction of a cap or

levy on incineration until adequate alternative waste treatment facilities become

operational. The body also recommended that a clearer direction be set on

waste management policy, noting that the current political uncertainty had

hindered private investment in waste management.

Expert report casts doubt on Dublin waste infrastructure

The bike rental scheme agreed between Dublin

City Council and advertiser JC Decaux launched

on September 13th. In exchange for allowing JC

Decaux to place advertising billboards at strategic

locations in the city, 40 bike stations have been

distributed throughout the city centre inside the

canal boundary. The 450 bikes involved in the

scheme will be accessible on a self-service basis

seven days a week, between 5am and 12.30am.

Cyclists who want to avail of the scheme must

purchase a long-term hire card allowing year-round

use, which costs €10, or a three-day ticket for

€2. The first half hour of any journey made using

the bicycles is free, with service charges levied

(depending on the length of the journey) thereafter.

To help prevent theft of the bicycles, would-be

users will need to have a €150 pre-approved charge

placed on their credit cards, which will only be

deducted if a bicycle is rented by a user for more

than 24 hours.

Long-awaited bike rental scheme launched

Christmas FM prepares for a returnIreland’s first all-Christmas radio station, Christmas FM, will resume broadcasting

on 29 November after receiving a 30-day licence from the Broadcasting

Commission of Ireland (BCI). The not-for-profit station, which raised over

€35,000 for charity in 2008 (its first year of operation) will be expanding its

broadcasts this year to include Cork city and the surrounding areas, raising

money through sponsorship and texts requesting popular Christmas songs for

the Simon Communities. For further information or sponsorship opportunities,

visit www.christmasfm.ie or call (01) 524 0830.

Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan TD, launched a major overseas marketing campaign on

September 17th aimed at attracting foreign investment. The campaign, which has been developed by IDA Ireland, is designed to position

Ireland as the pre-eminent location for companies who are seeking to invest in future innovation. The campaign consists of television,

internet, newspaper and poster advertisements and the tagline will be: Ireland, where ‘innovation comes naturally’. The campaign is itself

designed to be innovative, fresh and impactful. Each ad in the series, created by advertising agency McConnells, uses a blackboard as a

backdrop to make points about Ireland and innovation, and will stress the part that the people of Ireland can play in making innovation

happen. Launching the campaign, the Tánaiste said, “In today’s turbulent global economy, it is critically important that our international

brand positions Ireland as a location for leading multinational companies to invest in their future. This campaign taps into Ireland’s unique

selling points built around our talented and highly skilled workforce. It is aimed at opening new eyes to what Ireland has to offer.”

Kraft in bid for CadburyAmerican food giant Kraft has launched a landmark

takeover bid for Cadbury. Cadbury, which employs 1,100

people in Dublin, rejected an initial proposal in September

valued at roughly $16bn (€10.9bn). However, Irene

Rosenfeld, the Chief Executive Officer of Illinois-based

Kraft, said of the potential takeover that she was looking

forward to a “constructive dialogue” with Cadbury over

the coming weeks, and emphasised the attractiveness of

a merger between the companies. Acquiring Cadbury,

she noted, would grant Kraft a “solid entry” into India

and give the group a more balanced geographical base.

Rosenfeld forecast that long-term earnings per share at

the unified company could rise to 11c a year.

Indecon International Economic Consultants have completed a new

study on the future role of Dublin Port. The report, launched by

Transport Minister Noel Dempsey, recommends that the Government

should not put any policy in place that could block either the proposed

development at Bremore or the expansion of Dublin Port, warning

that a failure to develop Dublin’s port capacity would render the city

unable to meet the future requirements of importers and exporters.

The findings were welcomed by Dublin Chamber policy director Aebhric

McGibney. “There is about 10 to 15 years’ capacity left in Ireland’s

existing port infrastructure,” she noted. “Ireland's importers and

exporters need port facilities to be significantly developed to cater to

their existing and future needs at a competitive price.”

Independent report urges port development

Campaign launched to attract foreign investment

Mary Coughlan TD, Tánaiste and Minister for Enterprise, Trade and Employment with Colm Long Head of EMEA Operations, Facebook. Picture by Jason Clarke.

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ADS

The appointment of former Dublin

City Manager John Fitzgerald, and

Gerry Murphy as Chairperson and

Chief Executive Officer respectively

of the soon-to-be-established Dublin

Transport Authority (DTA) has

been warmly welcomed by Dublin

Chamber Chief Executive Gina Quin.

In welcoming the appointments,

Quin reiterated that establishing

the DTA would be an essential step

towards improving transport and

traffic. “We need a powerful DTA

operational with immediate effect

to coordinate Dublin's numerous

transport bodies and ensure the swift

delivery of a reliable, integrated and

cost-effective transport network for

commuters, workers, shoppers and

tourists in the Dublin City Region,”

she noted. Quin also warned that

Dublin’s serious congestion problem

and suburban sprawl was currently

having a damaging effect on the city’s

competitiveness and attractiveness on

the international stage for investment

and jobs.

InterTradeIreland’s Quarterly Business Monitor, a study produced in association with Millward

Brown Ulster, showed businesspeople across Ireland operating in a difficult climate but

with significant hope for the future. The survey of 1,000 business owners and CEOs took

place from July 1st 2009 to July 15th, and showed that 14 per cent of businesses on the

island had experienced an increase in turnover, with profitability increasing for 13 per cent

of businesses. However, 58 per cent recorded a decrease in turnover and 51 per cent had

suffered a decrease in profitability. The climate proved harsher in the Republic of Ireland,

where 72 per cent of businesses faced lower turnover during the quarter and 64 per cent

had experienced a decline in profitability. Nonetheless, optimism for the future remained

reasonably robust on both sides of the border. 20 per cent of owners and CEOs anticipated

an increase in turnover during the coming quarter, and 16 per cent of businesses expected

an increase in profitability. 73 per cent of businessespeople on the island were optimistic

about their company performance over the next three years, with 15 per cent describing

themselves as ‘very optimistic’ and 58 per cent saying they were ‘fairly optimistic’.

Special Olympics Ireland, the charity that

brings athletes with intellectual disabilities

together in a spirit of friendly competition,

will be running its biggest-ever national

games event during June 2010. With an

estimated 1,900 athletes and 4,000 family

members taking part at the five-day event

in Limerick, the total bill for the games is

anticipated to reach €2m. The charity, which receives 25 to 30 per cent of its operating

costs from the Department of Arts, Sports and Tourism and currently holds a major

sponsorship deal with Eircom, has found its small-scale fundraising activities generating

roughly 50 per cent of the revenues attained in previous years. Chief Executive Matt English

revealed in an interview with the Sunday Business Post that Special Olympics Ireland would

be hoping for support from companies to help the games proceed on schedule. “I hope

local businesses in Limerick will learn from the experience of others who’ve been involved

with us and try and give us their support,” he remarked. “All companies will want to

protect associations like this, even in the current climate.”

Bond yields drop on government debt€700m worth of government bonds

due for repayment in 2020 have been

auctioned by the National Treasury

Management Agency (NTMA) at an

average yield rate of 4.91 per cent.

The significantly lower rate (at the

NTMA’s March auction, an average

yield of 5.8 per cent was required to sell

bonds) was welcomed by analysts as

a sign of growing investor confidence

in Ireland’s debt. Alan McQuaid, Chief

Economist at Bloxham Stockbrokers,

described the successful sale as

“impressive”, particularly given that

other countries including Germany

were seeking to sell bonds of their own

during the same week.

A new public transport bill puts bus passenger’s needs at the centre of bus route

licensing. The bill, published by Minister for Transport Noel Dempsey in September,

renames the Dublin Transport Authority as the National Transport Authority, and gives

the body powers to issue and administer bus licenses.

“Buses are the workhorses of the transport network in Dublin,” said Gina Quin, Dublin

Chamber Chief Executive. “This bill is a piece of good news for Dublin commuters, as it

prioritises the needs of the bus passenger when issuing licences for bus routes.” Quin

added that continued development of the city’s bus and rail services was essential to

encourage people in the Dublin City Region to switch from private to public forms of

transport.

InterTradeIreland study shows optimism in difficult times

New bill good for bus passengers

Appointments made for Dublin Transport Authority

Special Olympics Ireland to seek corporate support

Share the Feeling!

Why not organise a fundraising

event at work, at home or in your

community and help change the lives

of people with a learning disability?

Go on! help new athletes in

your county go for gold!Thank you.

For your fundraising pack, call (01) 8691711 or email

jonathan.fitzpatrick@specialolympics.ie

Or make a donation to Special Olympics Ireland at www.specialolympics.ie

fc-olypmics.qxd:Layout 1 16/06/2009 15:05 Page 1

10 11 111010

At Business irelAnd, we know a paradigm shift when we see one. When Dublin Chamber President, PJ Timmins instructs the crowd at the Chamber’s recent Digital Media Networking event to put their phones on silent, but to feel free to 'tweet' to their followers in the Twittersphere, it’s clear that the times are a-changin’. Consequently, throughout the day social media experts and newbies alike are seen urgently thumbing messages into their phones, laptops and palm pilots, as heavy hitters from big internet companies give their views on web trends.

The fact that such digital whispering is now considered

normative behaviour for well-heeled professionals indicates the

urgency with which some Irish businesses are trying to get to grips

with the world of social media. Indeed, “if you see the person

next to you typing, it’s not that they’re not engaging, it’s that

they’re really engaging,” explains Timmins, before proceeding to

join in the digital mêlée himself.

Roughly one-tenth of the audience has phones at the ready

and is thus “engaging”. Others, arguably, need more coaxing

into this new and confusing world of social media. Indeed, we’ve

fallen behind many of our European partners, and a lot of Irish

companies are yet to be convinced that the online world is worth

engaging with. While most business people have heard that this

social media thing is “compelling” and “sexy” and a harbinger

of the future, Aengus McClean, Vice President of AOL Global

Operations, asks the question that’s really on their minds. “Is this

going to deliver the traffic, deliver the business, and deliver the

revenue stream at a cost I’m willing to bear?”

In order to answer this question McClean brings the

conversation back to the invention of the printing press and the

dominance for centuries of static one-way media. McClean goes

on to explain the need for companies to engage in more targeted

two-way conversations with their customers.

The evidence provided by McClean for a migration of consumers

online is compelling. He notes that there are 1.6 billion web users,

308 million of those in the EU and 2.4 million in Ireland. But he

also bemoans the low level of Irish penetration in the market

compared to some other European states (58 per cent to be

exact, as opposed to 70 per cent in the UK, France and Germany).

“That’s one of the key issues,” he notes later in interview. “The

overall engagement level is low. We need to drive the whole

country online. We need to build it up to the European average

– up to around 70 per cent. Then it becomes even more useful

for businesses to spend time on their online wares, their content

online and to have an effective online strategy.”

McClean’s presentation is a good comprehensive introduction

to the world of digital media. He outlines the ways companies can

engage online from old-fashioned brochure-ware sites to various

forms of targeted and untargeted advertising, and one-to-one

engagement via social networking sites. In a wide-ranging talk

McClean sums up the general e-commerce and marketing trends

that make the net increasingly difficult to ignore.

Listen to your CustomersGoogle’s Online Sales and Operation Manager, Ronan Harris,

is next with a presentation entitled ‘Survival of the Fastest’,

mainly concerned with issues of measurability. Essentially, it’s all

very well to hyperbolise about the web revolution, but business

people like to see data. In this context, Harris stresses the

importance of analytical tools like Google Analytics and Google

Insight. He rejects the one-size-fits-all approach to web strategy

often employed in the past and demonstrates the importance of

entrepreneurs researching and analysing the search results for

terms relevant to their particular businesses. Using the net to

“listen” to consumers, Harris maintains, is by far the best way to

plan for the future. Most strikingly he demonstrates how divergent

the search data was for the terms “Lisbon yes” and “Lisbon no” in

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11

advance of the last Lisbon treaty, with more searches done in the

latter category. Harris reveals that current searches are indicated

in a similar direction, and wonders will this be reflected in a

second rejection of the treaty.

“The masses of data available online can be overwhelming to

some people,” he tells me later. “It’s massively complex and

unless people spend an awful lot of time online they often don’t

know where to look for information or how to distil that

information even if they do find it. So what we want to do at

Google is teach people how to be better at finding and accessing

that data, and how to turn that data into information and then

turn that information into insight. That allows people to change

and evolve and redirect their businesses to do better. Some serial

entrepreneurs even use it to dictate their next business ideas.

We’re seeing that, despite the downturn in the economy, in

every industry there are businesses emerging who’ve figured

out how to develop these insights and as a result they’re actually

starting to grow and they’re coming out of the recession a lot

faster than others.”

Social Networking within a BusinessNext up is Mike Roche, Chief Architect with IBM in Dublin,

who discusses how social networking tools can be used to

foster efficiency and social cohesion within an organisation. He

discusses their own Lotus Connections software, which employs

the techniques of social networking within organisations for

both social and practical ends, and he explains their positive

experiences with Lotus and general interaction with other

social media platforms.

Roche’s presentation demonstrates that it’s not just the

business/consumer relationship that is changing in this brave

new world of Twitter and Facebook, but that internal company

dynamics are also in flux. “I meet my direct boss once a year at a

conference in Florida,” he reveals to the audience and he outlines

the advantages of platforms such as Lotus for sharing data and

allowing geographically dispersed employees to work together.

He also notes an experiment carried out by an IBM employee

called Luis Suarez, based on the Canary Islands, who has decided

to only communicate via social networking technology.

Later he remarks that comfort with social networking

technology does appear to be generational. “Reinmetall is one

of our largest customers for Lotus Connections,” he tells me, by

way of example. “They’ve found that the technology is helping

them recruit younger graduates who might have otherwise seen

them as a stuffy old engineering company. For kids there’s almost

an expectation that such software will be there. That generation

are always networked and they’re growing up with Twitter and

Myspace and Facebook. Indeed we’ve found that, whereas

older people tend to use search engines and books to solve their

problems, younger people are more comfortable reaching out

Net

too big to ignore, yet often too frightening to explore as a business venture, digital media has long been the elephant in the room. Patrick Freyne spoke to the key speakers at Dublin Chamber’s Digital Media Networking event to discover how digital media can be used as a profitable business tool.

ProFit

"Online, the consumers are definitively in charge and they do not suffer

fools gladly."

Mike roChe, ChieF ArChiteCt

with iBM outliNeD how soCiAl

NetworkiNg CAN AiD eFFiCieNCy

AND CohesioN iN BusiNess.

10:16 AM Sept 11th from web

BI_Autumn09_1-58.indd 10-11 21/09/2009 09:43:31

12

cover story

131212

to their networks. It’s a complete paradigm shift in terms of how

people approach their jobs but companies shouldn’t be afraid of it.”

Constant ChangeAfter a refreshing coffee break, Richard Delevan, former Sunday

Tribune business editor and Managing Director of McConnell’s

Digital, confirms that the only thing we know about the web

revolution is that we know nothing. In a talk entitled “Coping with

Constant Change”, Delevan insists that people try not to get too

hung up on particular web platforms. “If you decide it’s all about

Facebook, it’s like putting all your chips on black,” he asserted.

Essentially he argued that today’s high-on-the-hog social

networking site could be tomorrow’s digital has-been and he

advocated the importance of getting a general understanding of

social media rather than a platform-specific one. In outlining various

successful web marketing campaigns, he rejected the notion that

the web revolution is totally about convoluted Geek-friendly

technology - “what you have to remember is that this is all about

people,” he says.

This isn’t quite rejected by Facebook’s Head of European SMB

Sales, Rick Kelley, although his presentation does, understandably,

focus on the tremendous growth of his own employers – the

implication being that Facebook should in fact be a key strand

in any online business strategy. A central question proposed in

Kelley's presentation is: “Is social media a fad or is it the biggest

social change since the industrial revolution?”

Branding through FacebookThere are now 781,000 Irish people returning to Facebook on a

weekly basis, so it certainly doesn’t look like a fad. This means

that online consumers on social networking sites like Facebook

can no longer be ignored by technophobic business people with

their heads in the sand. Although this revolution may seem scary

to some, Kelley insists that companies still need to embrace the

revolution. “If you have 500 Facebook friends and you have a bad

experience with a company you can let them all know about it,”

he says. “That can be a very challenging thing for companies to

get to grips with. But we still reckon that it’s better to take part

in that conversation rather than have it take place without your

involvement. It is a challenge and it’s something companies need

to figure out how to get better at. They have to embrace the fact

that at least people are letting them know when problems take

place, whereas before they wouldn’t have let them know, at least

now there’s a chance to rectify it.”

Kelley also details how Facebook’s advertising models and

the marketing approaches of some of the companies on their

networks have to continuously negotiate that tricky balance

between adding value to the man on the street, and spreading

their own message. Online, the consumers are definitively in

charge and they do not suffer fools gladly. “For example, I signed

up as a fan of a particular TV network,” he tells me with a sigh.

“I was hoping to get good insights into what they were thinking

cover story

13

but all I got was every two hours ‘this is coming up next’ or ‘this

is coming up at nine o clock’. I can read a TV guide for that!

Essentially what that business was doing was creating noise and I

actually end up thinking of their company in a less favourable way.

It can damage your brand if you only transmit noise. Companies

need to think like their customers, listen to their customers and

then provide something that adds value!”

Such anecdotes might scare the bejaysus out of some

companies, but the general message from the podium is actually

a soothing one. While the Twitter-happy denizens of Web 2.0 are

quick to anger, it would appear they’re also quick to defend

and forgive. “I’d say to people that the best way to see what it

can do is to try it,” says Kelley. “Give it a shot. Build a fan page

on Facebook. It’s free!”

Ronan Harris is similarly encouraging but suggests that

people should first do a bit of research to see what approach

best suits their business. “The trend of people moving

into the online space to make purchasing decisions is

undisputable, so people can’t afford to ignore it,” he tells

me. “Irish consumers have gone online in their droves. And

really there’s no right way or wrong way of doing it. But

there are things that clearly work better than others. One

of the things I repeatedly see amongst large and small

companies is people rushing in headlong thinking ‘I need

to be on the web!’ and going in there without putting any

thought into it. Usually they have a catalogue or brochure

for their company and they put it all up on a very static

and boring website. Nowadays, when people come to a

website they expect so much more than that; as

well as finding out about your product or service

they expect to be able to have some level of interaction.”

In many ways the social media revolution brings us full circle

to an older set of business values. At the end of the conference

as business people and social media experts mingle over lunch,

Aengus McClean of AOL suggests that operating an online

business successfully is more like operating a corner shop than a

twentieth century corporation. “The new template for business

essentially involves not being anonymous,” he tells me. “It does

involve an element of personality and if you think back to the way

business would have been carried out in the past at the local corner

shop level there was always an element of personality to it. It was

more than just the fact that it was the local shop, it was also the local

news centre and it was a friendly place to go. People felt a loyalty

to that and stuck with it longer than more impersonal institutions

because essentially we’re social beings. Well, consumers are getting

that experience back again. Consumption is no longer just about

shopping centres and faceless department stores.

People can go online now and get that

corner shop experience from businesses

via blogs or social networking websites

or Twitter or whatever. Futuristic

as it might seem in some ways, in

other ways all this stuff is actually a

return to older business values.”

Dublin Chamber’s Digital Media

Networking Event was kindly

supported by UPC and IBM. k

"If you decide it’s all about Facebook, it’s like putting all your chips on black.” – Richard Delevan, MD, McConnell’s Digital.

Home Profile Find People Settings Help Sign Out

"Most strikingly he demonstrates how divergent the search data was for the terms “Lisbon yes” and “Lisbon no” in advance of the last Lisbon treaty, with more searches done in the latter category."

riCk kelley, heAD oF

euroPeAN sMB sAles For

FACeBook ADDresseD the

teChNoPhoBes iN the AuDieNCe

AND eNCourAgeD theM to get

iNvolveD.

12:37 PM Sept 11th from web

AeNgus MCCleAN, viCe PresiDeNt oF Aol gloBAl oPerAtioNs

gives ChAMBer PresiDeNt, PJ tiMMiNs AN iNtroDuCtioN to

the worlD oF DigitAl MeDiA For BusiNess.

11:24 AM Sept 11th from web

riChArD DelevAN, MANAgiNg DireCtor oF MCCoNNell’s DigitAl

highlighteD the ChAlleNges FACeD By MArketers iN CoPiNg

with the FluiD set oF ChoiCes iN usiNg DigitAl MeDiA.

12:05 PM Sept 11th from web

“Is this going to deliver the traffic, deliver the business, and deliver the revenue stream at a cost I’m willing to bear?” – Aengus McClean, Vice President of AOL Global Operations.

BI_Autumn09_1-58.indd 12-13 21/09/2009 09:43:32

1514 1514

ADSAs Ireland gets to grips with the substantial national deficit, with An Bord Snip Nua and the Commission on Taxation heralding major change, local government reform could provide some of the most significant benefits for the business community.

Roadmap toReform

BI_Autumn09_1-58.indd 14-15 18/09/2009 15:19:49

16 17

FOR THE better part of a year, our attention has been drawn to a crisis in the public finances and the Government’s ongoing efforts to close the gap between shrinking tax revenues and expenditure. This has served to obscure a less dramatic but highly significant threat: an ever-growing hole in the budgets of Local Authorities. At the height of our building boom in 2006, 13.6 per cent of Local Authority expenditure came from charges on developers. As these revenues have dried up, and developers in some areas have failed to meet their obligations, Local Authorities have responded by passing the taxation burden squarely onto the shoulders of business.

In 2009, a year when the focus of both the public and private

sector has been on cutting costs, over 60 per cent of local

authorities (22 out of 34) have increased their commercial rates.

Of the 12 authorities that opted not to increase rates, none are

in Dublin. Indeed, Dublin City Council’s 2008 rates increase of

3.3 per cent (along with an increase of five cent per gallon in

water charges) was one of the most dramatic in the country.

Coupled with the separation of services such as waste disposal,

infrastructural development, and water supply as added charges,

businesses have been paying more and more for less and less

from local government. Increasing pressure on enterprise at

a time of recession is hardly a sustainable funding model, so

businesses around the country understandably awaited the

report of the Special Group on Public Sector Numbers and

Expenditure Programmes (otherwise known as An Bord Snip

Nua) with bated breath.

The results of the group, headed by leading economist Colm

McCarthy, did not disappoint. Despite being criticised by Eamon

O’Cuiv (whose Department of Community, Rural and Gaeltacht

Affairs is earmarked for abolition by the group) as “some sense

of what would happen the country if an economist from Dublin

4 was running the country,” the report highlighted key areas

where central government spending can be brought more into

line with the economic realities of the day, and was largely

welcomed by the business community. For those longing for

serious reform of local authority funding, moreover, it offered

some much-needed cause for hope.

Even though public expenditure on local government lay

outside the core remit of the group, the report contained

some radical proposals, not least the abolition of both regional

authorities and town councils. This move (which would bring the

total number of authorities down from 34 to 22) together with a

proposal to reduce central exchequer funding of local authorities

by €100m, has attracted more media attention than any other

recommendation from the group on local government. However,

the report’s proposals go far beyond a €100m cut to budgets

totalling an estimated €5bn. In a few short pages, the group

gave an alternative vision of how local government should be

funded that was at once sensible, sustainable, and effective.

Rate FreezeAs an immediate measure, a freeze on commercial rates to

alleviate pressure on business was proposed, along with a

reduction in current expenditure of at least ten per cent. The

abolition of bonus payments to local government staff, a more

strategic management of the land controlled by local authorities,

and serious consideration of outsourcing and sharing services

with other state bodies were all urged. It was in the long term,

however, that the most fundamental shift was proposed.

The group argued that local authorities should gradually

become self-financing, replacing Exchequer support with

increased revenue generation from local sources. This would

include, the report states, measures that might be suggested by

the Commission on Taxation, and increased recovery of the cost

of providing services. The group singled out the introduction of

domestic water charges as an approach that would be consistent

with self-financing local government. Indeed, the report outlined

an entirely more rational alternative to our current system

of water management: a single national authority with the

mandate to plan and manage water supplies on the basis of

river basins. While removing this costly service burden from local

authorities, the report proposed to engage local government

more with services currently delivered through the Department

of Community, Rural and Gaeltacht Affairs, including Volunteer

centres and Drugs Task Forces. Indeed, the report made a

case for a ‘local appraisal step’ for local projects seeking public

funding, where local authorities would assess the work of local

organisations in the area. Instead of each local organisation

submitting its funding application to separate central

Government Departments and agencies, the report proposed

that they should submit applications to their local authorities,

either individually or in partnership with other organisations.

Funding ReformCouncillor Dermot Lacey, a long-standing member of Dublin

City Council and former Cathaoirleach of the Dublin Regional

Authority, is happy that reform of local government is being

discussed even though he is critical of blanket proposals to

abolish a set number of authorities. “There is a case for review

and reform. There may be counties that have town councils and

county councils where one might be sufficient. That, I think,

needs to be looked at on a case-by-case basis,” he says. “You

may get better local government that way. My argument has

been consistently that, if you reform local government, you can

end up saving the country money rather than costing money.

That’s the way to look at it.”

Lacey, who has long argued for reform of the funding model

for local government, says that meaningful discussion involving

all parties is essential to developing a funding system that is

not entirely dependent on commercial charges and central

government. “Aside from a sustainable system of funding

local government, I’d also want an agreed system of local

government. It’s been that lack of agreement that, in many ways,

caused problems over the years. There’s agreement on PAYE.

There might not be agreement on the rates, the allowances or

the credits, but there’s agreement that it’s a reasonable and fair

system,” he notes. “We don’t have anything like that in relation

to funding local government.

“There needs to be a national forum, given six months – no big

never-ending saga – involving the social partners, the political

parties, and the councillor representative bodies to sit down

and agree a system. When you agree a system, you take the

system out of the political arena and get down into argument

over the level of rates. Left-wing parties might want a higher

rate, right-wing parties might want lower, but you need to

get agreement on the system first,” he insists. Lacey is sharply

critical also of the failure to address the funding model for local

government while the Celtic Tiger still roared. “As they were

reducing taxes, and as the country was in a financially good

position, that was the time to reform and introduce

new systems.”

Financial IndependenceCommenting on the proposal that central government

financial support for local government be reduced in favour

of self-funding local authorities, Lacey appears to welcome a

greater degree of independence that this would entail. “One

of the problems that local government has is that we’re seen

as being the subsidiary of the Department of the Environment.

The more that the Dublin Chamber of Commerce can

talk to someone who can do something in Dublin, the more money we save, the more we promote business, the more we promote jobs and a better society.

My argument has been consistently that, if you

reform local government, you can end up saving the country money rather than costing money. That’s the way to look at it.

Councillor Dermot Leary

BI_Autumn09_1-58.indd 16-17 18/09/2009 15:19:50

18

ADS

That process is highlighted by the fact that the city and county

manager are appointed by an independent body that would

usually include officials from the Department of the Environment.

We have to break the subservient link between local government

and the Department of the Environment,” he says.

For that, Lacey argues, greater financial independence

and devolved control is essential. “It was central government

that removed the right of local authorities to raise money

independently,” he says. “We get about €120m less in what’s

called rate support grant through the local government fund

than is our entitlement under what we received when rates were

abolished. That €120m of a shortfall is only based on the rates

when rates were abolished. It would be a lot more now. When

rates were abolished, the absolute promise was that we would

get a sum of money equal to the domestic rates that were

abolished,” he notes.

With more financial independence, he states, greater control

over policy should also follow. “Why does the Department of

the Environment decide housing policy in Dublin? Why does

the Department of Community, Rural and Gaeltacht affairs fund

Sandymount sea cove or scouts? That’s a local government

matter. The more we devolve power down, the more money we

save. The more that the Dublin Chamber of Commerce can talk

to someone who can do something in Dublin, the more money

we save, the more we promote business, the more we promote

jobs and a better society. The present structures that we

have are a disaster.”

With a White Paper due from the Department of the

Environment, Heritage and Local Government before the end

of the year, Lacey is one of a growing number of voices calling

for root-and-branch reform, particularly of a funding model

that places an inordinate amount of strain on local businesses.

Business owners, however can ultimately take heart from the fact

that Ireland’s blueprint for economic recovery has called for a

freeze in local authority rates and, more meaningfully, made the

important case that domestic consumers will need to pay their

way in funding the services produced by local authorities. k

The recommendations in the Report of the Special Group

on Public Sector Numbers and Expenditure Programmes

depended heavily on the Commission on Taxation

devising ways to fund local authorities through a broader

base of domestic charges. In this role, its members did not

disappoint. Specifically citing a broadening of the tax base

and a more sustainable system (rather than an increase

in general tax rates) as a key objective, the Commission

proposed an annual property tax on privately-owned

housing, based on the current market value of a property.

This will replace stamp duty on private residences, and be

an integral part of financing local authorities. However,

according to the Commission’s plan, the tax will be

imposed on a national basis rather than being set by each

local authority.

The Commission also proposed that state properties,

third level and professional institutions, large bed and

breakfasts, community halls, agricultural farm buildings,

and self-catering holiday accommodation be brought

into the commercial rates net for local authorities, in a

move welcomed by the Dublin Chamber of Commerce.

In addition, the Chamber endorsed the proposal that

water charges be extended to private households as well

as businesses. “By making private households subject to

water charges, Ireland would be accepting the polluter

pays principal, which so far has only been applied to

businesses,” said Chief Executive Gina Quin.

The impact from the Report of the Special Group on

Public Sector Numbers and Expenditure Programmes

on business is not merely confined to the area of local

government. Improved efficiency and savings in the public

sector stand in the long-term to benefit all taxpayers

and, by extension, the businesses they frequent. In the

short-term, redundancies in the public service and cuts to

social welfare are likely to eat into consumer spending,

making it all the more essential for businesses to have

a product or service that their customers, quite simply,

cannot do without.

Another meaningful proposal made in the report is

the rationalisation of the aid given to industry. Currently,

the report notes, support to business is delivered by

a range of agencies across a number of Government

Departments. The group, pointing to growing staffing

expenditure and the duplication of effort by several

agencies, proposed instead that enterprise supports for

indigenous industry should be delivered through a single

agency, led by a strong management team and operating

under well-defined oversight mechanisms. This, the report

argues would facilitate a more coherent approach to the

provision of support to industries and allow for proper

measurement of that support’s effectiveness.

Specifically, the report calls for the amalgamation of

the County and City Enterprise Boards, the Business

Innovation Centres, the Western Development

Commission, the enterprise functions of Údarás na

Gaeltachta, Shannon Development, Bord Iascaigh Mhara,

LEADER and Teagasc - as well as sector-specific agencies

such as the Irish Film Board – into a re-constituted

Enterprise Ireland. This streamlined agency, operating

a regional office network, would lead to savings in

accommodation costs, overall administration costs,

and staff wages.

THE COMMISSION ON TAXATION

RATIONALISATION OF STATE AGENCIES

BI_Autumn09_1-58.indd 18-19 18/09/2009 15:19:50

2120

Responding to the needs of members and optimising the services provided to them are the cornerstones of the Dublin Chamber Strategy Implementation Plan 2009-2011. The plan, which was prepared over the course of the past 12 months, sets out Dublin Chamber’s strategic direction around three pillars: attracting and retaining members, advocating on behalf of Dublin business and improving operating efficiency. At the heart of these pillars is an overarching communications plan, which emphasises the digital engagement of members.

“It is important for every organisation to have a clear

strategic direction,” explains Dublin Chamber Chief Executive

Gina Quin. “We must ensure that the Chamber has a tight focus

on its priorities in order to deliver an effective service. We are

very well connected to our members in strategic terms and this

plan increases our ability to hear their views and make sure that

those views are well represented.”

Listening to the needs of the members was the first step in the

development of the plan. Needless to say, members’ priorities

changed dramatically between mid-2008 and today. “We began

the consultation process with an extensive members’ survey to

establish what our members thought of the Chamber’s service and

what they wanted from their membership,” explains Director of

Policy and Communications, Aebhric McGibney. “The process was

delayed somewhat when the sharp downturn became apparent

to many sectors, starting with retail, in the summer of 2008. By

January 2009 we had a very clear understanding that the business

model for many business had changed fundamentally, so we had

to change our own strategy to reflect that.”

Dublin Chamber engaged in an extensive consultation process,

which included an online survey, a number of focus groups

and in-depth discussions with the Chamber’s elected Council

members. Organisational development consultancy Genesis was

brought in to ensure that the Chamber’s strategy was of the

highest standard. With a large body of data relating to members

and Chamber staff, Genesis developed an analysis of the issues

affecting the Chamber. “We established the ‘forces for change’

– what key issues are driving the need to refocus,” explains Gary

Joyce, Managing Director of Genesis. “This was then set against

the capacity and key strengths of the Chamber itself, allowing

us to consider how it could address these issues. Given that

the Chamber doesn’t possess limitless resources, we had to

decide where it should prioritise its time and efforts to have the

biggest impact for members. The outcome of that process was

this plan.”

StrategicDIreCTIon

Dublin Chamber’s Strategy for 2009 to 2011 sets out a plan to meet the rapidly changing needs of their members by increasing its ability to ‘hear’ them which will allow the Chamber’s member services to be more efficient and effectively while at the same time ensuring continues to be the ‘Voice of Dublin Business’.

Digital EngagementThe Obama election campaign was a clear inspiration to

businesses and government, showcasing how effective digital

engagement can be. The Chamber wanted to make sure it

was at the vanguard of the use of online interaction, where

business-to-business relationships can dynamically prosper at

a much faster rate than traditional methods. “There is a new

way of communicating that wasn’t used as frequently when we

put our last strategic plan together three years ago,” says Quin.

“Digital engagement offers us an opportunity to communicate on

another platform and we must bring best practice in this area to

our members.”

Moreover, using the available technology is a very cost-effective

means of allowing a company to promote its own business.

To this end, Dublin Chamber is rolling out a series of digital

offerings, all of which act as another layer in the Chamber’s

core areas of connecting and influencing. “The main thrust of

our digital engagement strategy is twofold,” says McGibney.

“Firstly, the Chamber is developing a members-only section for

the Dublin Chamber website that will allow members to check

their membership details, renew membership, book events and

access members-only documentation. Secondly, we are creating

greater opportunities for members to network with each other,

reinforcing the Chamber’s networking offering, which currently

involves running over 100 events per year.

“Hand-in-hand with this is the continuing progression of the

range of print media that the Chamber provides, including

Business Ireland, Dublin Business and the Dublin Chamber

Yearbook. We’ve worked very closely with members and

Ashville Media, as publishers, to make the Chamber’s range of

publications relevant to members’ needs.

The Chamber on LinkedInThe potential of online interaction is already evident.

The Chamber’s members-only LinkedIn group, which was

soft-launched in March 2009, already has 500 members, making

it one of the top five groups in Dublin and within the top 20 in

Ireland. “Given the fact that these include large open groups

with unrestricted membership, such as the UCD alumni group,

we believe ours is one of the largest B2B networking sites in the

country, if not the largest,” says McGibney. “Our goal with the

soft launch was to see what our members wanted to do online.

Now that we’ve seen it, we will look to facilitate their wants and

needs by the end of the year and actively promote the use of

LinkedIn by members.”

Central to the strategic plan is the empowerment of members,

says Quin. “LinkedIn offers members the ability to self-organise,

creating groups of mutual interest. We want to see our members

more engaged with us, becoming more proactive in their

membership. They can give us feedback through LinkedIn and

access the Chamber in a much easy way, including online booking

systems so that members can control their own bookings and

customise the Chamber offering to their particular needs.”

Let More, Get More and Lead MoreThe Strategic Implementation Plan details a three-pronged

mnemonic that summarises the Chambers’ digital engagement

direction: ‘Let More, Get More and Lead More’. “Let More

refers to providing enhanced services to members and

reinforcing the things they want from their membership. The

Chamber provides the best physical networking events in the city

and we want to provide a similar services for those online.

“Get More is designed around allowing members to gain access

to members-only documentation resulting from business briefings,

presentations, events etc, which are not publicly available.

“Lead More is concerned with allowing the Chamber to better

represent its members to see where there are particular areas

of concern, for instance the quality of broadband. Members

can debate the issues and provide us with a more focused and

effective consultation process.”

All of this leads back to increasing members’ value for

money and business opportunities, says Jean Hoey, Director of

Business Development. “The Chamber has always been value

for money but now we are looking at generating a return on

everything that our members invest in,” she says. “Our research

into members’ needs is ongoing and the digital engagement

plan enables us to reach out to members in a completely

different way. For example, not everyone wants to network

face-to-face. Some are more comfortable with, and more adept

at, doing it through the web and others would prefer to work in

a special interest group related to their sector.”

To view the full text of the Dublin Chamber Strategy

Implementation Plan 2009-2011 visit www.dublinchamber.ie. k

What MeMbers Want

The feedback gleaned from Chamber members highlighted

growing needs in three particular areas, which Dublin Chamber

aims to satisfy through its Strategy Implementation Plan:

1. OPPOrTUNITIES to network and promote their business

through events and online offerings.

2. CASHFLOW The working capital requirements of many

companies has increased, from 30 days in 2008 to 90 days

today, due to slower payments by debtors. Dublin Chamber

is working on restoring the bank’s capacity to lend and

seeking prompt payment by government.

3. COSTS Members have asked the Chamber to represent

them in cutting business costs – commercial rates, waste and

labour costs. The Chamber ran a very strong campaign in

the local election in June, urging every councillor to make

business rates an issue.

Gary Joyce, Managing Director, Genesis.

Aebhric McGibney, Director of Policy and Communcations, Dublin Chamber.

Gina Quin, Chief Executive, Dublin Chamber.

Jean Hoey, Director of Business Development, Dublin Chamber.

22 23

Begging and homelessness are sensitive issues, but drug

addiction seems to be even more so. “I think it's an indictment

of our society – we’ve had a drug problem for years and we

haven't properly addressed it. The people who are on the

streets with drug issues have a number of intertwining difficulties

from mental health issues, an inability to cope with society,

and addictions and dependencies. I think we need a proper

integrated approach, and one that recognises the complexity

of the issue and involves the various stakeholders, including

the business community,” says Guiney.

Urban Regeneration Inner city regeneration has taken strides in recent years,

the rejuvenation of O'Connell Street being the most obvious

example. It is time to plan further improvements so that people

can feel safer and business can be done better – particularly with

opportunities such as the opening of the Convention Centre

on the horizon. “We've asked our businesses: what makes your

street work? What makes your street not work? How do you

think your street could be improved? What are the things that

would make your location more attractive for people to come in

and do their shopping and recreation? What I've seen in other

countries working very will is allowing businesses to invest in

the physical environment in which they operate,” says Guiney.

An example can be found in Leicester, in the UK midlands,

where the private sector is encouraged to make improvements

in return for tax breaks. The strategy is likely to be a focal point

of future DBID campaigns.

Colm Carroll says that the time to act is now: “Dublin’s

reputation is at stake – tourists take their view of the city home

with them, acting as ambassadors on our behalf. This is still a

great city and a great place to do business, but we must ensure

that our reputation – and the impression that tourists take away

with them – is a positive one.”

Richard Guiney agrees: “If we fail to take action to curb

antisocial behaviour soon, we will be addressing it from a

position of weakness rather than a position of strength. We

need immediate engagement by the public sector, working

hand-in-hand with the private sector and voluntary groups.

Then I think we need to set ourselves targets and goals. Then

we really have to go for it. This is our window of opportunity.” k

COMMUNITY COURTS

ANTISOCIAL BEHAVIOUR turns customers away from businesses, turns tourists away from the country and undermines much of the good work that has been done. After years of physical regeneration in the city centre, the time has come to tackle the issue of antisocial behavior in the city centre through an integrated approach that includes the business community. Dublin Chamber President, PJ Timmins, has an action plan for businesses and Government departments to focus upon. It includes dealing with issues surrounding begging on the streets, decentralising social support services to their clients' localities, upgrading stricken parts of the city so that visitors and residents feel safe and, finally, introducing community courts.

One example of an integrated effort to tackle social issues in

the city centre is the recently formed alliance between Dublin

City Business Improvement District (DBID) and the Anna Liffey

Drug Project. “I was hoping, but not expecting, to see positive

results. But I've been very encouraged. I'm quite confident that

where there's a will there's a way, and if the public sector, the

private sector and the voluntary sector all pull together in the

one direction we can certainly make an improvement in our

environment,” says Richard Guiney, the Chairman of DBID.

“At the minute there's a view that when the airport bus pulls

up, and people come over to ask tourists for money, the tourists’

first impression of the city and of Ireland is not very favourable,”

says Guiney. One way of countering this, he suggests, is to

implement a modern replacement for the fallen Vagrancy Act,

which was found to be unconstitutional as it interfered with a

person's freedom of expression.

“It's now a constitutional issue. There's a lot of anger that

the Gardaí’s hands are tied behind their backs at present,”

says Guiney, citing his regular meetings with large groups of

businesses and stakeholders in the Dublin business community.

The feeling is that Gardaí need increased powers in order

to move people on – or detain them. “I am in constant

communcation with 50 or 60 city centre businesses and we all

believe that this issue

needs a comprehensive

and immediate resolution

– even if that requires

constitutional change.”

One such city centre

business is Carroll’s Irish

Gift Stores – a retail chain

with nine outlets in the

city centre. Colm Carroll,

Chairman of Carroll’s Irish

Gift Stores, says that there is a high price to pay for being at the

coalface of antisocial behaviour. “The direct cost of antisocial

behaviour is security. We have nine stores, each with one to

three security staff, and it can cost €20-50,000 to install camera

systems. That’s before factoring in the cost of theft itself,”

he says.

Tackling the CausePart of what Richard Guiney repeatedly calls a “more mature”

outlook is an emphasis on the causes of social problems, and

this informs how business can work with the public sector

and with charitable organisations.

“It's important that we consider why people end up on

the streets,” he says. “A lot of people end up with drug

dependencies because they have mental health issues that

we don't care for properly in our society. They find it difficult

to integrate into a society the way the rest of us do, they end

up becoming drug addicted and they end up living on the

streets. They have a myriad of difficulties that really need to

be looked after.

“However, there are still too many instances of begging with

intimidation and there is a bill in front of the Oireachtas that

would outlaw aggression and aggressive begging.” This could

include begging at ATMs, outside churches and at al fresco

seating laid on by restaurants and pubs. “There's a constitutional

right to go about your business without being hassled,”

argues Guiney.

Tourism offers a route back to competitiveness and prosperity – and now is the time to fight for both. Business leaders are calling on the public, private and voluntary sectors to act in a co-ordinated way against antisocial behaviour, writes Ruraidh Conlon O'Reilly.

Cleaning up Streetsthe

Community Courts have been active in the United States

since 1993, and over a dozen examples have been established

throughout the UK. Their introduction was recommended by

Ireland's now-defunct National Crime Council in 2007.

“Community courts take a problem-solving approach

to low-level offenders, using a range of health and social

services while some defendants may be required to undertake

community work in the neighbourhood to make some reparation

for their offending in that neighbourhood,” explained Padraig

White, head of the National Crime Council at the time the

council's report was published.

The type of offences in question might range from drunk and

disorderly conduct through graffiti to assault.

“I'm very, very taken by the idea of community courts as

a means of dealing with low-level crime, which is currently a

huge drain on Garda and court resources,” says Richard Guiney

of DBID. “Each case is time-consuming to put together and

often there is no sentence, which only leads to repeat offences

because of the lack of disciplinary procedures.”

Advocates of the community court system emphasise both the

problem-solving approach and the fact that justice takes place

in a person's neighbourhood. It is seen as a way of unclogging

Garda, District Court and Circuit Court time from low-level

offences, and can help to get repeat offenders out of cycles of

crime. Punishment often takes place within the neighbourhood –

for example, a graffiti offender might be forced to clean graffiti.

Dublin Chamber President PJ Timmins explains that “community

courts view low-level crime as a crime against the community,

and offenders must recompense to the community for

their crime.

“Moreover,” he says, “this system addresses the underlying

cause of such crime, establishing why the offenders committed

the crime. This can lead to entry into rehabilitation programmes

in order to combat an addiction problem, for example. Most

importantly, everything is done visibly so that members of the

community can see the offenders making recompense

to society.”

Timmins called for the judiciary and government to seriously

consider introducing community courts, citing the successful

model implemented in New York during the 1990s, which was

instrumental in strengthening the city’s reputation as a safe and

attractive place to live or visit.

For more information see www.courtinnovation.org and

www.crimecouncil.gov.ie.

Dublin Chamber President PJ Timmins

Richard Guiney, CEO, DBID.

Colm Carroll, Chairman of Carroll’s

Irish Gift Stores

BI_Autumn09_1-58.indd 22-23 16/09/2009 12:33:16

24 25

WITH CLIMATE CHANGE still one of the greatest challenges facing our generation, perhaps now is the time for Ireland to really move forward with plans to introduce battery-powered electric vehicles into our everyday lives. That is the view, at least, of the Joint Oireachtas Committee on Climate Change and Energy Security. The committee has argued that the Government’s current plans for electric vehicles in particular are simply not ambitious enough.

Currently, Ireland’s per capita emissions of greenhouse gas

are the fifth highest in the world, with the transport sector

accounting for 14.4 million tonnes of our emissions. To combat

this, Minister for Communications, Energy and Natural Resources

Eamon Ryan has pledged to make ten per cent of Irish cars

electric by 2020 which, based on current numbers, would be

amount to approximately 230,000 Electric Vehicles (EVs) on our

roads. However, in its recent report – ‘Drive for Zero: Electric

Vehicles are a Winning Proposition’ – the Joint Committee insists

that these targets should be far greater.

Taking initiativeThe report argues for a 50 per cent increase on the

Government’s 2020 EV target and goals a long the way. In

the short-term, it says, Ireland should have 100,000 EVs on

the road by 2016. By 2020, 15 percent of Irish cars should be

electric, with no cars powered by fossil fuels being offered for

sale. Ultimately, this will lead to every private car in the country

being an EV by 2030. Simon Coveney, the report’s Rapporteur,

is adamant that Ireland can not afford to wait for other countries

to start their EV rollouts.

“Transportation is the big problem area in terms of emissions

in Ireland. Not only does it make up more than 20 per cent of

our entire national emissions, it is by far the biggest growth

area,” explains Coveney, who is also Fine Gael’s energy

spokesman. “The change to Electric Vehicles could potentially

be the biggest carbon reduction project that Ireland will ever

embark on. You’re talking about getting rid of eight million

tonnes of carbon a year. Electric cars will be the norm in the

developed world at some stage in the future,” he notes. “Do we

want to let other countries get on with it first so we can copy it

or do we want to be the ones creating and shaping

the technology?”

Challenges AheadBy spearheading the move towards this new technology, not

only will Ireland significantly reduce its carbon emissions but,

according to the report, will also herald “the start of an exciting

new industry employing tens of thousands of highly skilled

workers”. Indeed, if the Government is serious about persuading

the public to make the switch from their current vehicles to

EVs, then establishing an accessible charging infrastructure

for batteries is vital. Simon Coveney admits that this will be

a challenge, but one that will bring great rewards. “This is a

construction project that’s bigger than the M50. You’re talking

about putting charging points in every village and town and city

in Ireland, in every multi-story car park, outside every shopping

centre, linking up a charging capacity with every home and every

business in the country.” The building of this infrastructure,

of course, will have a positive effect, re-introducing many to

the country’s workforce. “It can employ project managers,

architects, engineers and construction workers. From that point

of view it’s a huge physical job,” he says.

But if Ireland is to avail of these opportunities, adds Coveney,

it is clear that we must act quickly. “If you look at big auto

shows in France and Germany, the stalls that are attracting the

most attention are those with electric vehicles on them. Car

manufacturers are starting to shift towards electric transport in a

major way and Ireland needs to be the destination of choice for

these companies,” he insists.

The Time for ChangeSome will doubtless argue that, given the current economic

conditions, building a whole new transport infrastructure is just

not feasible. However, Coveney argues that there has never

been a better time to make the change. “For me, the time for

building the really ambitious infrastructure is now when we’re

in recession and when people are out of work because the car

industry needs a boost and we need to give people a reason to

buy cars again.”

Perhaps the most difficult part of implementing the

changeover to EVs will lie in convincing consumers that they are

getting value for their money. At the moment, the initial cost

of EVs tends to be higher than that of traditional vehicle costs,

largely due to the high cost of batteries. This can be solved, says

the Joint Committee, by improving the economies of scale for

battery production in Ireland, allowing for the mass production

of batteries. Until this mass production is achieved consumer

purchases of EVs will remain low and significant improvements

in our carbon emissions will not be seen. Despite the high

price of batteries, though, the cost of running an EV is still

significantly cheaper than the cost of running a petrol or diesel

fuelled car. At the moment, the average family will spend €149

on fuel every month, or €1,788 per year. The cost of running

an EV, on the other hand, will be just €204 on electricity costs,

representing a saving of €1,595 per annum. It is this, says Simon

Coveney, which makes the switch to EVs inevitable.

Despite calls for the Government to quicken the

implementation of EVs in Ireland, there are signs that it too

recognises the benefits of converting the national transport

fleet to electricity. Minister Eamon Ryan has already stated that

he wants Ireland to become a centre for electric vehicles and

insists that the country is “open for business”. This statement

is backed up by new policy initiatives: the Government has

already introduced an incentive for businesses to buy EVs by

allowing them to write off 100 per cent of their purchase cost

against tax under the Accelerated Capital Allowance Scheme.

In addition, the Government will fund a €1 million project

through Sustainable Energy Ireland to research, develop and

demonstrate the vehicles nationally. They will also publish a

‘Buyer’s Guide’ and ‘Cost of Ownership Calculator’ to assist

people purchasing EVs, while the establishment of a National

Task Force will look at infrastructure options for the national

roll-out of EVs.

The Government has recently signed non-exclusive

Memoranda of Understanding with the ESB and Renault-Nissan

as they aim to meet its target of 230,000 EVs on the road by

2020. These Memoranda will guarantee that the first major

consignment of EVs will be in Ireland by 2011. The ESB will

allow open access to other electricity suppliers and is currently

in discussions with 14 different car manufacturers about bringing

EV fleets to Ireland. It is also exploring the option of introducing

a pilot scheme in one part of the country, where 1,500 charging

points will be installed in an order to test the infrastructure. The

Joint Committee report insists that this isn’t enough, and points

to more ambitious projects in Denmark and Israel where plans

have been drawn up to replace all petrol and diesel powered

vehicles by 2020. Moreover, effectively confining the essential

infrastructure for EVs to one specific area will almost certainly

guarantee the pilot’s failure, as drivers in the area chosen will

still need to use conventional cars to travel any long distance.

The Irish Government has been urged to show more ambition in their plans to introduce Electric Vehicles (EVs) to the masses, writes David Clarke.

A Need for More

At the moment the average family will spend €1,788

on fuel per year. The cost of running an EV, on the other hand, will be just €204.

Drive?

Senan McGrath, Sustainability Manager, ESB.

Effectively confining the essential infrastructure for

EVs to one specific area will almost certainly guarantee the pilot’s failure, as drivers in the area chosen will still need to use conventional cars to travel any long distance.

Fine Gael energy spokesman Simon Coveney.

It's electric! - Mitsubishi's new electric car.

BI_Autumn09_1-58.indd 24-25 18/09/2009 12:38:11

26

NorwayElectric cars exempt from car registration tax. For a B class car the registration tax is around €7,500. VAT (25%)does not apply to electric cars.

DenmarkElectric cars are not subject to the annual car tax of €345. EVs do not have to pay road tolls in Oslo. EVs qualifyfor free parking which can provide annual savings of around €2,000-€4,000. EVs are permitted to use bus lanes.

Sweden Low or zero carbon emission vehicles get a subsidy of 10,000 SEK (€2,500).

Netherlands Electric cars in the Netherlands are exempted from car registration tax.

Belgium Belgian vehicles which emit less than 105g CO2/km will have a €4,100 reduction in registration tax.

Switzerland Individual cantons provide their own EV incentives.

GermanyGermany is currently considering inner circle parking and congestion charge incentives for EVs similar to thosein London.

FranceA French initiative named Eco-pastille, which began on January 1st 2008, sees that people who buy electric cars receive €5,000 back. Free parking spaces for EVs (equipped with charging apparatus) are also being reviewed.

GreeceNo road tax or car registration fees for electric cars. Electric cars are also free to drive in Athens when parts of it are restricted to other vehicles to reduce traffic congestion. There is also free charging on the street of some cities.

ItalyCertain cities in Italy have restricted driving within the city to EVs only. Some cities also allow free parking andcharging for EVs.

Spain For an electric car bought in Spain €6,000 or 15 per cent of the price of the vehicle will be returned to the customer.

IsraelThe Israeli government is providing tax incentives to help Project Better Place achieve its goals. It taxes petrolcars at 72% while electric cars are only taxed at 10 per cent.

However, Senan McGrath, the Sustainabilty Manager at ESB

Networks, is adamant that current Government targets are

sensible. “Even getting to a stage where ten per cent of cars are

electric is ambitious,” says McGrath. “Unless the Government

were to offer far more incentives then this target is the right

one. And let’s not forget that there is no ceiling; we won’t stop

when we get to ten per cent. We will do our best to have more

EVs on Irish roads than our current target sets out. But if we had

a higher target, like the 15 per cent that’s been suggested, we

wouldn’t be doing anything differently.”

Caution to the WindThere is a fear, however, that this cautious attitude will see

Ireland left behind as other countries embrace the electric car

revolution. “The way to do this is not to have a pilot project in

some small area because people will never buy into that. People

have to really buy into this as a national project and that’s the

big difference I have with the Government,” asserts Simon

Coveney, adding that deals such as that made with Renault-

Nissan need to be negotiated with other car manufacturers.

Coveney adds that this will ensure that, once the infrastructure

for EVs is built, there is a steady flow of vehicles coming into

the country. He has also called for the research into the

building of infrastructure to be open to the private sector

and not just the ESB.

“We should be inviting Expressions of Interest to get the

best solutions. The ESB will be involved as they have to open

up access to the electricity grid but I don’t see why they should

have a monopoly on the charging infrastructure just because

they’re a state owned company. We should be getting value

for money here. Maybe the ESB will get the tender, but it

should be open. Companies like Better Place should be

allowed to offer solutions.”

National ProjectIf Ireland is committed to reducing its carbon emissions, we

must look in particular at the transport sector where a solution

is on hand in the form of EVs. The current 10 per cent target

will only have a modest impact on our greenhouse gas

emissions and, by not fully getting behind the project right

now, Ireland could well be missing out on an excellent

opportunity to establish itself as a leader in EV development.

“This shouldn’t be seen as a fluffy green project. It should

be seen as a national project that is going to transform the

country and the way in which we move around. Electric

Vehicles are much cheaper, much cleaner and it’s going to

be much more intelligent in terms of the technology we use,”

says Coveney, adding that failure to act now will see Ireland

left behind. “If we continue down the route we’re going,

in five years time we’ll have emitted another 20 or 30

thousand tonnes of carbon footprint into the atmosphere

and we’ll be asking how we’re going to upgrade from pilot

projects. The opportunity of being the first mover will have

passed us by.” k ADS

Source: Drive for Zero, Electric Vehicles are a Winning Proposition, April 2009.

INCENTIVES TO PROMOTE UPTAKE OF EVs

BI_Autumn09_1-58.indd 26-27 18/09/2009 12:38:12

60

THE IRISH TIMESThe Irish Times has been the standard bearer of news for Irish men and women now for 150 years. Geraldine Kennedy, Editor of The Irish Times reflects on how the newspaper has helped to shape Irish society, and how Irish society has helped to shape it.

“When Lawrence Edward Knox founded The Irish Times in

1859 (at the age of 22), he launched it into a crowded market.

The four-page newspaper started off being published only

three days a week and its prospects for survival were uncertain,

given the competition and the fact that, at the time, half

the population could neither read nor write. However, the

former army officer was convinced that the newspaper would

flourish if it offered readers both balance and moderation in its

reportage –something not commonplace at the time. This it did

and accordingly The Irish Times has lasted and prospered for

150 years.

The newspaper’s continued success, lies in its determination

to be innovative. It was the first in Ireland to invest in colour

printing, the first to produce an online edition, and the first

to offer readers a digitised searchable archive. The desire to

innovate is also reflected in the content. Editorial coverage

was expanded to give comprehensive coverage of events in

Northern Ireland even though many readers did not believe that

greater Northern coverage was either of interest or warranted.

An investment was also made in overseas bureaux so that

readers would not be fed news and opinions from wire services.

Offices were opened in Beijing, Berlin, Brussels, Johannesburg,

Moscow, Paris, and Washington DC. Correspondents were

also appointed in other major cities. Today the newspaper’s

determination to have its own journalists report from the world’s

capitals and trouble-spots is undiminished.

So, The Irish Times expanded and developed by adding

coverage that we felt would improve the package on offer

and attract new readers of all age groups and interests. The

newspaper contains far more pages and sections then it did at

the time the 100th anniversary was celebrated. But back then its

circulation was some 40,000; today it stands at 114,000.

The newspaper is not immune to the economic downturn,

but it benefits greatly from the fact that the company is owned

by The Irish Times Trust Ltd and does not have shareholders,

therefore, in the good years funds were readily available to

re-invest in the product.

Ireland, of course, has helped The Irish Times to prosper.

Investment by successive governments has greatly raised the

educational standing of the population, thereby there is now a

greater demand for quality news, analysis and opinion.

We would hope also that The Irish Times has aided the

development of Ireland and improved the way of life for its

people. We have not been slow to criticise short-comings

in government policies and have fought to improve

the protections available to those on the margins of

society, the elderly, the sick, the unemployed. We

have also recognised our responsibility to the

democratic process by encouraging involvement

in politics. This perhaps found its greatest

expression in the newspaper’s determination,

over decades, to assist and encourage those

striving for a peaceful solution to the conflict

in Northern Ireland.”

Geraldine Kennedy,Editor, The Irish Times.

Whether a business has been in existence since the beginning of the 20th or the 21st century, an anniversary is the perfect time to sit back and reflect on what has been achieved. Business Ireland speaks to some of Ireland’s most successful companies who are celebrating significant milestones this year to find out the secrets of their longevity and success.

After All These YearsStill Going Strong

61

ENERGIASince the turn of the century, a lot of energy has gone into making Energia the largest independent energy supplier in Ireland.

“Energia is celebrating ten years in business this year and

over that period, the energy market in Ireland has experienced

unprecedented change, commencing with the liberalisation of

the market in 2000, the record growth in energy demand fuelled

by the Celtic Tiger, the emergence of a renewable agenda,

the introduction of an all island electricity market, and now the

challenges of the economic downturn.

Energia was established in 1999 as the competitive retail

business of the Viridian Group plc. The business was focused

on providing customers with real choice for the first time in

the Irish energy market with the key to success being the

provision of sustainable competitive prices delivered through an

expert workforce.

Our competitive position was established through the building

of Ireland’s first independent power plant in Huntstown, North

Dublin in 2002 providing 350 MW of output to the national grid

at a critical time in the growth of energy demand.

By 2003, Energia had established itself as Ireland’s leading

independent energy business, supplying over 30 per cent of

large industrial electricity requirements and offering significant

price savings.

The environmental agenda has been an important element

of our development strategy and following initial wind farm

investments in 2003 in Derry, a €650 million investment was

made in 2006 to support the development of over 165 MW of

wind farms throughout Ireland.

As the pace of deregulation increased in the retail market,

Energia expanded its offer to all business customers and

committed an additional €250 million in the development of a

second 400MW plant at Huntstown which was commissioned in

2007 to coincide with the start of the all island energy market. In

latter years we have entered the retail gas market and were the

first independent supplier to enter the unmetered public lighting

supply sector.

Today, Energia has over 50,000 business customers

representing over 25 per cent of the business electricity market

and over 20 per cent of the business gas market. From a start up

position in 1999, the company now employs over 150 staff and

generates annual revenue of over €1.2 billion.

The past ten years has been mutually beneficial for Energia

and Ireland. We continue to be a significant contributor in

helping the country meet its renewable targets as one of the

largest investors in the renewable sector and we have provided

customers with real choice, and delivered real value with over

€175 million in customer energy savings since we began.”

Gary Ryan, Director – Sales and Marketing, Energia.

Still Going Strong

Left: The Irish Times Dublin Head Office.

Above: Tom Gillen, Managing Director and Gary Ryan, Director

of Sales & Marketing, Energia.

63

GAAThis year sees the GAA celebrate a historic 125 years at the forefront of Irish culture. Christy Cooney, President of the GAA is taking it all in his stride and already looking to the future.

“This has been a very special year for the Gaelic Athletic

Association (GAA). It has provided us with an opportunity to

take stock of our position, as a vibrant and successful sporting

organisation, and allowed us to reflect on how we have

managed to reach this point over the last 125 years.

The reasons for our success are often a topic of debate but

it’s hard to get away from the belief that the same key values

that helped a fledgling association blossom in its early days

remain central to the ongoing prosperity of the GAA.

Community identity and representation, a commitment to a

highly valued amateur ethos and a real appreciation for the role

of the volunteer helped our exciting and attractive games to

capture the imagination of the Irish sporting public at an early

stage in our history and they continue to do so today.

Of course, for us to remain at the fore we have had to evolve

as an organisation. We have made bold decisions, many in

recent years, to reflect the changing face of Ireland, and our

facilities have improved dramatically, nowhere more than at

Croke Park, but also in the many parishes across the island and

indeed in foreign outposts too.

We have recently re-evaluated our position in Irish life and

acknowledge the challenges that await us in the areas of finance

and urbanisation to mention just two, and we have developed a

Strategic Vision and Action Plan that will take us up to 2015.

Our commitment to culture and An Ghaeilge remains high

on our list of priorities, meaning we are so much more than

just a sporting body, and our willingness and ability to grasp

modern technology and methodology in areas such as coaching

and administration leaves us in a strong position to meet

future obstacles.

All in all, remaining steadfast to our core principles while also

embracing change when required, has helped ensure we have

a presence in every community in Ireland. It is a position and a

responsibility we cherish and one that inspires us to attain best

practices in everything we do.

Celebrating our 125th Anniversary has been hugely important

to us but no more significant than planning for the next chapter

in our illustrious history – something we believe we are fully

engaged in.”

Criostóir Ó Cuana, Uachtarán Chumann Lúthchleas Gael

UCD SCHOOL OF BUSINESSUCD’s School of Business has helped to shape Ireland’s business community and wider society for 100 years. Professor Tom Begley looks back on UCD’s century in business education.

“The year 1908 was particularly auspicious for University

College Dublin. In the same year, the young university received

its royal charter and the UCD Faculty of Commerce came into

existence. The college started small, with just ten students

recorded in the 1912-13 session.

From the outset, UCD captured an emerging mood in the Irish

people who realised they had an important role to fulfil in the

direction of their nation. Now, 100 years later, UCD School of

Business graduates remain critical to the growth and success of

Irish society.

One commerce graduate in particular was to have a profound

effect on business education in UCD and, in turn, on the nation.

Michael MacCormac completed his Bachelor of Commerce

degree in 1947. In the 1950s, Ireland had a very small business

community, most of which was family-owned. Willie Norton, then

Minister for Industry and Commerce, nominated MacCormac

to tour business schools in the US along with a group of

American academics.

It was here that MacCormac saw the potential for the

higher education sector and businesses to work together. He

recognised that through collaboration, academia and business

could play a vital role in the development of the Irish economy.

In 1964, nearly ten years later, Sean Lemass was Taoiseach

and UCD was launching the part-time MBA Programme. It was a

milestone, not just for Ireland, but also for Europe as it was the

first postgraduate degree to be aimed at professionals working

in business. Then, in 1991, the business school embarked on

another radical departure. For the first time, MBA students

could complete the course on a full-time basis in one year. UCD

Michael Smurfit Graduate Business School separated from the

undergraduate faculty, and relocated entirely to a new campus

at Carysfort in Blackrock. In 2000, the business school became

the first to receive triple accreditation from MBA awarding

bodies in North America, Europe and the UK. Today, it remains

Ireland’s only world-ranked business school.

From humble beginnings with low student numbers, UCD

School of Business has grown into an institution of national

significance, with more than 3,000 students and 30,000 alumni. It

will undoubtedly continue to play a key role as the Irish economy

steers out of recession.”

Tom BegleyDean of UCD School of Business

The reasons for our success are often a topic of debate but

it’s hard to get away from the belief that the same key values that helped a fledgling association blossom in its early days remain central to the ongoing prosperity of the GAA.– Christy Cooney, President of the GAA

Above left: Christy Cooney, President of the GAA. Above right:

Professor Tom Begley, Dean of UCD School of Business.

64

INTELIntel’s Jim OHara explains how embedding a business culture has helped them remain as one of Ireland’s most innovative technology companies.

“This year marks the 20th anniversary of Intel in Ireland. It

feels like only a few years ago since we started and as I reflect

on the last 20 years a few things come to mind.

I believe the fundamental reason why Intel has been so

successful in Ireland is that we have taken on the challenge of

embedding the Intel culture, which was created by industry

icons like Gordon Moore and Andy Grove. Discipline, results

orientation, and risk-taking are some of the fundamental values

that we have embraced, and these values guide how we work

and how we behave. I am particularly proud of one other value,

and that’s making our Intel site a great place to work for all our

people. It’s not perfect but we will work hard each and every

day to make it so.

Our primary task over the years has been to produce a

continuous stream of high-tech silicon products, using our

state of the art production facilities. Our organisation has

embraced and delivered on the challenge to perform at world

class standards on safety, quality, speed, cost and output. Our

people on the site are highly innovative and have developed

new and exciting business opportunities in digital health, silicon

development, IT innovation, technology solutions for education,

research in nanoscience and many other areas. In particular, our

team in Shannon are doing amazing things in silicon research

and development.

Over the last 20 years we have managed to become a

highly valued and respected site both inside the company and

externally. Corporations must act responsibly and I hope we

have met that standard as we engage as a trusted and leading

corporate citizen at both a local and national level. We have

listened to, learned from, and communicated openly with all

of our stakeholders. Our neighbours here in Leixlip and across

Kildare have been great, and I sincerely hope we are viewed as a

positive force in the community.

Intel has, I hope, been good for Ireland over the last 20 years

and Ireland has certainly been good for Intel – we look forward

to the next 20 years of success working as a team on the Intel

site and across the community and country.”

Jim OHaraGeneral Manager, Intel Ireland and Vice President, Technology Manufacturing Group.

GUINNESSIn 1759 Arthur Guinness took a 9,000-year lease on a small and ill-equipped brewery in Dublin city centre. 250 years later Guinness and St James’s Gate have become icons and familiar symbols of Ireland itself.

Arthur Guinness built his brewery on foundations of quality,

enterprise and innovation that continue to inspire the company’s

ethos today. The St James’s Gate brewery became the world’s

largest brewery by 1886, with an annual production of 1.2

million barrels and an increasing global profile. In order to

ensure quality was maintained internationally, Guinness began

sending ‘Overseas Travellers’ (international quality controllers)

around the world.

This commitment to quality has been a cornerstone of

Guinness’s success to date. Through world-class research,

development and ongoing improvement to the brewing,

distillation and dispense processes, Guinness has enjoyed 250

years of success in Ireland and abroad and is recognised as one

of the most important Irish cultural icons. k

• Energia – Celebrating 10 years

• Intel – Celebrating 20 years in Ireland

• Snap Printing – Celebrating 25 years in Ireland

• DART – Celebrating 25 years

• GAA – Celebrating 125 Years

• Sisk – Celebrating 150 years

• The Irish Times – Celebrating 150 years

• Guinness / Diageo – Celebrating 250 years

• UCD School of Business – Celebrating 100 years

• GMB – Celebrating 30 years

• Network Architects – Celebrating 10 years

• Cisco – Celebrating 20 years

Happy Anniversary to…

Above left: The Intel site in Shannon. Above right: Jim OHara,

General Manager of Intel Ireland.

John Kennedy, Managing Director, Diageo Ireland.

34 35

Credit COCKTAIL

The the Republic of Ireland and Northern Ireland economies. We

are fully committed to supporting viable businesses through

these challenging times. The recent Review of Lending to SMEs

conducted by Mazars confirmed that we continue to support

our SME customers by maintaining current lending levels and

meeting new demand for lending,” she says, pointing to the

€1bn Finance Support Package for SMEs on the island of Ireland

launched by the bank, recently launched products (including the

Farm Cash Flow Package) and awards such as the Ulster Bank

Business Achievers Awards as evidence.

Taking the InitiativeMark Fitzharris, a spokesman for AIB, says his bank is also

working to keep viable businesses going. “It’s very important

that we’re working with our customers. And where they’re

experiencing difficulties, we’re taking the initiative with them –

either they make direct contact with us or we’re making contact

with them – to help them deal with those issues and support

them through these difficult times,” he notes. Fitzharris adds

that AIB’s policy over the

last year has been more

open to extending credit

than some media reports

suggest. “Our actual

experience from internal

research and analysis is

that eight in ten enquiries

to ourselves result in

approval of the facilities.

That approval increases to

nine in ten for enquiries

that advance to the formal

application stage.”

Moreover, he adds, the bank does not rule out applications

based entirely on the sector on which a business operates.

“Ultimately, the way we’re structured is that we would approach

every lending transaction or opportunity very much on an

individual basis. Our focus is very much around supporting

our customers through this cycle and that’s about meeting

their needs and overcoming the key challenges. I wouldn’t be

prescriptive in any way,” says Fitzharris.

How to Successfully Obtain CreditSo what, then, does determine which businesses are successful

in obtaining credit and which businesses are more likely to be

rejected? Unsurprisingly, strong factual evidence of a viable

business even in straitened times is essential. “There are a

number of elements to be looked at here in terms of managing

your business. A lot of that is in a ‘back to basics’ sort of

scenario,” Fitzharris says. “In a general sense, you’d be talking

about the financials. That would obviously be your audited

accounts. Your working accounts, if you have your cash-flows

and projections, would be another aspect of it. Those financials

would be very important in telling the story of what’s going on

in your business,” he adds. “What we really would be looking for

is the type of information needed to evaluate the proposal:

PARTICULARLY in times of a crunch, cash is King. The results from the Dublin Chamber June Credit Supply Survey underlined this point, painting a vivid picture of a city with small and medium businesses increasingly scrambling to keep the cash flowing in. A striking 92.6 per cent of companies responding to the survey either ‘agreed’ or ‘strongly agreed’ that it was taking longer for them to be paid by their debtors. Over half of businesses said that this was causing them in turn to take longer for them to pay their creditors. Understandably, many businesses found a need for more working capital, with three-quarters of respondents saying their needs had increased by over five per cent in the last year, and 35 per cent saying that the increase in necessary working capital had been over 50 per cent. 28.9 per cent of businesses told the Chamber that their company needed more credit, with two-thirds of businesses stating that they were unable to increase credit facilities.

The results of the survey – which were passed to Billy

Kelleher TD, Minister of State for Trade and Commerce –

show a dramatic increase in the pressure on Dublin’s bottom

lines even since January. In advance of the 2009 emergency

budget, 58 per cent of companies responding to a Dublin

Chamber survey had said that they weren’t taking longer to

pay their creditors, while a smaller but still significant majority

of businesses (86.7 per cent) were finding their debtors taking

longer to pay. In January 2009, a minority of companies (47.4

per cent) had said they needed more credit, and 43.9 per cent

reported that they were unable to increase their credit facilities.

This change, according to Dublin Chamber’s director of Policy

Aebhric McGibney, underlined the need for Government

action. He has brought to the attention of Minister Kelleher

that there is a need to address the tax burden on businesses

at a local level, and also to ensure that agencies of the State

(rather than just Government departments) would pay

creditors promptly. Furthermore, McGibney underscored

that the implementation of the NAMA proposals was

essential to recapitalise the banking system and ease the

pressure on businesses.

Hungry for CreditDublin Chamber’s point has also been raised in an independent

consultants report by Mazars for the Government, which

found that policy measures to enhance the flow of credit to

business were sorely needed. Mazars produced its report

for the Department of Finance (under the terms of the Bank

Recapitalisation Programme introduced in February 2009),

which assessed the credit flow to SMEs in Ireland. The report,

compiled and completed in June, showed a sector hungry for

more credit. 52 per cent of the SMEs surveyed reported that

they had requested credit during the last 12 months, with

a quarter saying that their requests had been turned down.

The rates of decline varied in both the size of the enterprise

concerned and by sector: micro-enterprises of ten or less

employees reported the highest rate of decline at 30 per cent,

and companies in the construction, real estate and non-high

manufacturing sectors had the most difficulty obtaining credit.

Mazars also obtained statistics from banks participating in the

survey, which included Bank of Ireland, Allied Irish Banks (AIB)

and Ulster Bank. Their data suggested an average decline rate

of 14 per cent, and there was evidence that banks were working

to help keep viable businesses open. Despite a rising proportion

of loans to business

being ‘on watch’

or ‘impaired’, and

the value of new

applications for

credit decreasing by

more than 40 per

cent, total lending to

SMEs remained static

between June 2008 and

February 2009.

Orna Stokes, a senior

manager of Strategic

Operations & Risk at

Ulster Bank, emphasises

this supportive picture.

“Ulster Bank is deeply

embedded in both

SMEs are in serious need of credit, but what can a business owner do to get it? Derek Owens discovers how SME managers can deal successfully with their banks to secure the funding they need.

Credit COCKTAIL

The

Orna Stokes, Senior Manager of Strategic Operations & Risk, Ulster Bank.

Mark Fitzharris, AIB.

BI_Autumn09_1-58.indd 34-35 21/09/2009 09:51:36

36 37

the facilities you have – show them that this is a professional

organisation. The case is not just watertight on paper. It needs

to be a case where people actually have faith in you, a feeling

for your business, an understanding of your business.”

Being sensitive to the bank representative’s need to

understand your business is important in adapting to

circumstances where requests for credit are closely scrutinised.

“You’ve got to understand that the dynamic has changed on

both sides of the communication. Banks are looking much

more closely at cases now than they were. The person to whom

you’re speaking is going to be challenged more closely at credit

committee. Therefore, you need to have a tighter argument,”

says Finnegan, who adds that “there was a day when the

banks just didn’t have money”. Now, the picture has changed,

and banks need to lend to business. However, they’ll still be

picky about where to send their money. “In researching this

and talking to some bankers, they’re telling me that they have

money. What they’re lacking are some credible cases being put

forward,” Finnegan says. “The figures, the projections, have got

to be realistic. They’ve got to be 2009, 2010, 2011 – based on

the environment in which we are now. The bank’s job is to give

out money, but they want to get it back. They want to know

how much the guy wants, what he wants it for, when they’re

going to get it back, how much of a margin are they going

to get, and what security is there if it goes wrong,” he adds.

“When someone’s putting his neck on the line in a banking

situation now, he needs to be sure that this thing is going to

work. The communication that they get needs to be much more

complete than it was before.”

No SurprisesWith better communication an important part of the credit

cocktail, it’s perhaps unsurprising that withholding information –

whether deliberately or accidentally – is a major mistake. “Don’t

forget, that’s the person who’s going to be dealing on your

behalf. They don’t want surprises. They don’t want to be finding

something out after it happens, because one of two things has

happened there,” says Finnegan, adding that the typical banker

will ask themselves two questions if such a situation comes to

light. “Was it that management didn’t know? (That enough can

be a frightening enough prospect for a banker.) Or was there

a problem and management weren’t telling? It really doesn’t

pay to have the bank person operating on your behalf getting

surprises. Take any chance you have of being proactive,

talking to the person and letting him know things are

about to happen.”

Communicating properly and being able to demonstrate

on paper that your business has a future seem like simple

enough steps. However, you need another essential ingredient:

a viable business at the heart of the proposition. If your

business is operating profitably – and can continue to do so

through 2009, 2010 and 2011 – your chances of getting credit

remain solid, according to Ireland’s leading banks. Well-honed

communication skills may not change a banker’s perceptions,

but demonstrable profitability always helps a business survive

– and obtain the credit it needs. A keen eye on cash-flows and

your business’ cost base, therefore, remains key to surviving

the downturn. k

the financials, assets and liabilities of the owner, the business,

or any third party involved in the business, that your tax affairs

are up to date for example. If you have some independent

professional evaluations, particularly in terms of looking forward

and cash-flow projections, they’re important both for the

business owner and the bank to be able to indicate if a business

has the capacity to generate sufficient profit.” As a general rule,

Fitzharris says, up-to-date and relevant information on what’s

going on within the business greatly enhances the chances of

obtaining greater credit facilities.

However, he’s also keen to emphasise another important

ingredient: communication. “The critical piece is that one-to-one

engagement with their branch, with their relationship manager,”

he says. “It’s very important to stay in close contact with your

bank, with your relationship manager within that bank.” By

working closely with your relationship manager, adds Fitzharris,

you’ll be better able to determine what kind of future your

business has and what your credit needs really are. “On the

basis that the customer and the bank have sat down and gone

through the customer’s business, the financials available, all

the indicators of the business, and they’ve gone through it in

a professional and detailed fashion, you’d be expecting that

the customer should be able to stack up the viability for that

business to go on and grow.” The suggestion is echoed by Orna

Stokes, who says that “Ulster Bank customers looking for advice

should contact their relationship manager directly, with whom

they can discuss a number of options for their business.”

The Importance of RapportPeter Finnegan, Managing Director of business consultancy firm

Communiqué International, also emphasises the importance

of establishing a relationship and rapport with the bank’s

representative. “In banks these days, the person to whom you’re

communicating is not the person making the decision. Therefore,

you need to be very clear on that person’s understanding of

your business. It’s not just a matter of the maths of it. In getting

across your case, you need to be absolutely clear cut in the

case that’s to be made,” he says. The need for crystal-clear

communication stems from a fact of modern banking: whoever

is dealing with you on the bank’s behalf will have to understand

your needs well enough to explain the situation to another

person or group. “That person has to go and make the case

for you to a credit committee or somebody else. If they can’t

explain that top-line logic in about 30 seconds, then they really

don’t have it,” explains Finnegan.

“We work with bank people on communication and

developing communications skills, and we work with businesses

developing their communications skills, often right across the

board. One of the reasons communication falls down is that,

sometimes, there’s a presumption on the business’ behalf

that because they have a case on paper that it is actually

convincing. From our experience, I would say that banks need

to be communicated with in different ways. Really they need to

be communicated in a way that they would get to understand

your business. It’s not just a matter of the case on paper,” he

continues. “The person who’s going to be making the case

for you needs to be able to feel the business, to touch and

understand it, see what it’s like, to see your premises and see

the processes that you’re doing. Get them to see the state of

THE EIB SME FUND – A SOURCE FOR NEW INVESTMENT

The European Investment Bank (EIB) has made €350m

available to finance loans to SMEs that are preparing

to invest in expansion or research and development.

The loans, which are offered at a lower rate of interest

than prevailing commercial rates, are given out through

intermediary banks: AIB, Bank of Ireland, Bank of

Scotland (Ireland) and Ulster Bank. “If an SME is looking

for money under this fund, they need to go to their

local branch,” explains Marion Jammet of the Enterprise

Europe Network, which assists companies interested

in operating within the EU and offers free advice on

funding opportunities. Jammet notes that the fund

does have certain criteria. “All SMEs are eligible, but

it’s an investment fund. They can’t use it for the daily

operation of the business or for working capital – it’s to

finance investment. It can be research and development,

equipment, taking over distribution networks in Ireland

or Europe.” Most of the queries received by the network

today, Jammet says, are linked to the EIB SME fund or

other funding opportunities within the EU.

For more information, contact Marion Jammet at

marion@dublinchamber.ie.

Peter Finnegan, MD, Communiqué International.

Marion Jammet, Enterprise Europe Network.

BI_Autumn09_1-58.indd 36-37 21/09/2009 09:51:37

88 89

spot l light

Once Stephen Felice starts talking in earnest about the business world today, it’s clear that he has a lot of sympathy for the small operators. Felice, currently the President of Small and Medium Business at Dell, may have been with the publicly-traded computer giant for ten years (with extensive experience as the company’s key man in the Asia Pacific region) but he knows how to make a smaller enterprise work: a former CEO of DecisionOne Corp, Felice helped grow the business into the largest independent provider of computer-maintenance and technology-support services in North America. Moreover, his presentation at a recent breakfast briefing for Dublin Chamber members emphasised how smaller businesses are the essential engine-room of the global economy. “Everyone always wants to talk about the large corporates, and everyone likes to talk about what consumers are spending on. But if you really look at economic growth, it comes from the small and medium enterprises,” he insists.

Dell’s attention to the sector is partly a matter of

straightforward commercial sense – the world’s 72 million

small and medium enterprises, Felice reveals, are the largest

global buyers of technology, well ahead of large businesses

and consumers – and partly a matter of empathy. The business,

founded 25 years ago by then college student Michael Dell, may

have grown since then into a global powerhouse but, if Felice

is anything to go by, it has kept fairly close to its roots. From

his understanding for the concerns of small businesspeople

weighing up new technologies, his cautious approach to rapid

expansion and deep regard for innovation, it’s just as easy to

imagine Felice steering a modestly-sized business through these

tricky times as it is him giving a visiting presentation to the

potential clients of a global technology powerhouse.

The Technology FactorFelice’s presentation, however, was hardly a marketing exercise.

Rather, he briefed Chamber members on some of the more

exciting new technologies that are filtering down into the SME

sector, and their undeniable potential. The three innovations

that Felice was particularly keen to highlight – virtualisation,

cloud computing, and remotely managed services – are usually

seen in slicker technology magazines along with derision for

businesspeople wary of investing in the tools of the future.

Felice’s thoughts on those businesspeople are decidedly more

sympathetic. “These technologies can be complex, and most

small businesses don’t have resident technical resources. They’re

reluctant [to embrace them] because of a lack of knowledge

about how the technology works, and a fear that it might be too

complex for the business. That’s why the emergence of these

technologies that are truly easy to use is very good for small

businesses,” he says. “These things are growing pretty rapidly,

because we’re helping customers simplify the deployment of

these technologies. Once they’re comfortable that they can run

them, they can see the benefits.”

In explaining the benefits of concepts like cloud computing,

Felice stayed away from gushing endorsements of technological

advance for its own sake. Instead, he was keen to emphasise a

result dear to any owner-manager’s heart: less pressure on the

bottom line. Coupled with a characteristically straightforward

business case for regularly replacing computers – the fact that

it costs more to power a five-year-old desktop than to buy a

new one – Felice’s frank advocacy for new technology is more

effective than any trendy gadget-worshiper’s.

However, many of the technologies that Felice promoted offer

quality performance that’s not reliant on high-end hardware.

Asked why Dell (still the world’s second largest seller of PCs and

servers) is promoting software that stands to take a chunk out

of its business, Felice offers an answer that says a lot about a

no-nonsense but far-sighted approach to business still prevailing

at the company. Trying to ignore the new technology, he says,

would be “like Intel saying ‘I don’t want to design these lower

cost chips because it’s going to hurt my revenue’.” Fortunately

for Dell, he reveals, the company benefits from widespread

adoption of the new technologies: virtualisation often happens

on Dell servers, and the companies that are thriving from cloud

computing also use Dell. “In some cases, we’ve had to move

to being the back office instead of the front office. Our server

business has done quite well. If we hadn’t gotten into the server

business about eight or nine years ago, we’d probably be in a

lot of trouble,” he reveals.

SME SteveDell’s President of Small and Medium Business, Stephen Felice, recently spoke at a Dublin Chamber breakfast briefing on the potential of new technology. Derek Owens met the man with a place in his heart for SMEs.

I’m a believer in ‘go maximise the areas you

can concentrate on, gain some decent share and do it properly,’ because the investment in going global is exponential.

BI_Autumn09_59-120.indd 88-89 16/09/2009 15:22:57

90 91

In fact, like many small enterprises, Dell is changing its

business mix to suit the times, moving into more service and

software. “We’re going through a transformation. A much

larger share of our revenue is going to come – and it already

does – from enterprise products, services, software, solution-

oriented offerings. We’re well on our way. Even in the small

to medium business, 40 per cent of our revenue is not from a

desktop or a notebook. It’s something else. That will get to be

over half of our revenue as quickly as possible. It is a primary

transformation,” says Felice, who’s sanguine about the days of

rapid growth in PC sales coming to an end. “We’d still like that

business, but it’s probably not going to grow like it has in the

past,” he admits. “We’re just going to have to keep evolving.”

InnovatingGiven that, when talking of Dell’s future, Felice can sound like

an owner-manager of a rapidly-developing small business, it’s

little wonder that he puts innovation and competitiveness at

the heart of his prescription for business success. The most

successful enterprises, he says, “are the ones that maintain that

entrepreneurial spirit. The key success factors of that are making

decisions quickly, focusing exclusively on your customers and

your marketplace, trying to reduce your internal focus and look

outside, very good cost managers – a lot of good businesses

fail because they don’t manage their costs – and a heavily

competitive winning experience. Businesses that preserve those

attributes will do well, whether it’s a small or large business.

Those that look at a large corporation and say ‘I want to emulate

them’ don’t do as well. When a company gets very big, they

start to develop attributes that go against those winning success

factors. That’s why there are so many innovators in the world of

small business.”

Indeed, Felice’s admiration for the innovators of the small

business sector is matched with a certain sense of caution about

shooting for rapid growth. “Most companies have artificial walls

that develop in their growth. They hit walls at certain points.

A company gets big to a point, and then has trouble. When it

breaks through that, it gets bigger, and then has trouble,” he

explains. “I find that a lot of companies get distracted and try

to do too many things. When you stay focused, you usually have

a better path to success. Developing talent is probably the key

thing. A lot of businesses have people that are acceptable today

but then, when they want to be twice the size, the talent’s not

ready for that. This is why good entrepreneurs are evolving all

the time.” Growth and Going GlobalSimilarly, Felice is careful about international expansion, only

advocating it when a company is prepared to think the process

through and invest properly. “I don’t have a magic answer on ‘is

it the right thing to do?’ I’m more of a believer in ‘go maximise

the areas you can concentrate on, gain some decent share

and do it properly,’ because the investment in going global is

exponential. If you don’t hire the right person, you’re dead,” he

says. “The first caution I would offer is that I think people should

take a hard look at their own backyard and what they can get. In

Ireland, it’s clearly a different situation, because you’re limited in

the market potential here, so you don’t have a lot of choice.”

“In our own business, when we want to introduce something

new, we try to do it in places where we can do it more quickly,”

Felice points out. “What’s really critical is to understand the

market potential that you have in different places around the

world. Pick the spots where your barriers to entry are the lowest.

That’s usually places you’re more familiar with.” In particular,

Felice cautions against barrelling head-first into exotic emerging

counties such as China. “Everyone wants to go to China, and

we have a business down there that’s almost £4bn. I spend a

lot of time in China. It is an extraordinarily difficult place to do

business. I would highly question people going to emerging

countries – India, China, Brazil, Russia – unless they’re really

prepared to put the right resources in place and have a very

close control over what’s going on.”

Looking EastThe smartest companies, he says, “take a more cautious

approach, go to fewer places, make sure they have the right

leaders in place, and take it that way as opposed to taking the

world by storm.” Those that try to rapidly crack an alien market,

spot l light

THE BIG IDEAS At his presentation, Felice tipped three new technologies to make a serious impact on the small and medium business world

however, are setting themselves up for a rude awakening.

“There’s a lot of naivety in expansion and people need to be

realistic. There are great opportunities out there, but you see a

lot of people get burned,” he notes.

For all the words of caution, however, Felice is adamant that

Asia is a worthwhile place to be. “First of all, the Asia-Pacific

region has a terrific labour pool. People are very motivated,

they’re hard-working, and they’re ambitious,” he says.

Developing a business, moreover, is far easier if you choose

the right spots. “We’ve had tremendous success in countries

like Malaysia, Singapore, and parts of china in developing a

very skilled labour pool. I would encourage people to look at

Asia as a place of expansion, because the long-term potential

is incredible there. It will clearly be the world’s largest economy

in the next 50 years. To not invest in Asia, if you’re looking to

invest internationally, would be a mistake.” Evidently, there’s

a degree of sympathy with the ambitious entrepreneur at the

heart of his advice.

Perhaps it is that empathy with smaller enterprise that has

helped Dell – itself a small business that grew rapidly – attain

and keep a dominant place in the small business technology

market. A willingness to adapt to new circumstances and a

certain wariness of bombastic expansion has also helped. At

any rate, those traits help make Stephen Felice a convincing

advocate for smart investment in technology, and a credible

source of smart business advice. k

VirtualisationThough the technology behind server

virtualisation has been around for some

time, it has been refined to a point

where it makes a meaningful impact

on data storage and, consequently,

lowers power use. “It enables you to

get greater capacity out of servers,”

explains Felice. Virtualisation also

enables safer storage of information.

Given that 70 per cent of businesses

that suffer catastrophic data loss

(where servers and hard drives are

wiped permanently) fail, that security

can be priceless.

Cloud ComputingMany businesses that use web-based

applications such as salesforce.com are

already familiar with cloud computing

in practice. Simply put, the technology

allows a business user to access an

application via the internet. The

advantages of the approach are

twofold. Firstly, it ensures that a

professional organisation maintains the

software essential to doing business.

Secondly, it turns software into a

variable rather than a fixed cost,

allowing a company to ramp up or

wind down their use of software in line

with their needs.

Remote Management Services“These are something that, even

a year ago, I would have never

recommended,” says Felice. Remote

management allows a third-party

company to maintain sites and

technology essential to the business,

significantly reducing the I.T. bill.

It is particularly useful in patch

management and controlling viruses.

While previous remote management

services came with long-term contracts

and plenty of restrictions, more

agile operators have brought about

the flexibility needed for smaller

businesses during the past year.

To not invest in Asia, if you’re looking to invest

internationally, would be a mistake.

BI_Autumn09_59-120.indd 90-91 16/09/2009 15:22:59

8 9

One of the key benefits of our central position in the EU has

been the gateway to the market we have provided for US

multinationals and increasingly now for companies from a wide

range of other countries outside the EU. Sixty per cent of

everything this island produces is sold to trading partners within

the EU’s single market. A vibrant, efficient and streamlined

European Union is vital for all of us whose livelihoods depend

one way or the other on this trade. Interestingly while other

sectors of the economy, especially retail and construction-

related activities, have suffered badly in this recession, exports

have held up rather well and we should do everything we can to

protect this vital sector of our economy.

Public SectorThe EU is equally important for our public sector. EU structural

and cohesion funds have helped to transform this country.

The European Commission has provided a wide range of

career opportunities where Irish talent has risen to the highest

levels. The skills and relationships they built have benefited this

country far more than our size alone would justify. We have

all gained from EU initiatives in workplace, competition and

environmental legislation.

Building ConfidenceWe cannot afford to weaken the position of our exporters or

make it less attractive for future investment from around the

world. Many of the nearly one million jobs created in Ireland

over the past 15 years have been in export oriented businesses.

While our competitiveness remains a serious issue for this sector,

a strong 'Yes' vote for Lisbon will build confidence in Ireland

among international and indigenous investors and contribute to

our economic recovery and to job retention.

Streamlined Decision-MakingAn organisation as complex as the EU cannot remain static – it

must continue to evolve. The Lisbon Treaty will deliver a more

efficient and effective institutions with streamlined and faster

decision-making processes. Consider the following:

The new rules proposed for qualified majority voting will �

protect the interests of small economies like Ireland and at the

same time make it easier to make important decisions

The elected President of the Council of Ministers will give the �

EU a more stable system of leadership and a stronger position

in international negotiations

Ireland will retain its right to decide on important issues such �

as taxation, education, healthcare, justice, family law and

defence without any interference from Brussels

The treaty will also facilitate cross-border co-operation against �

organised crime

It will allow for further enlargement of the union, �

increasing the size of the single market and offering further

opportunities, and of course competition for business

The treaty gives legal status to the Charter of Fundamental �

Rights with its commitment to continuing social progress,

fair employment legislation and the responsibility of member

states to deliver education, health and other public services.

Permanent RepresentationOne notable feature of the Lisbon debate has been the

agreement by the European Council to reverse the decision

of the Nice Treaty reducing the number of commissioners.

Ireland will therefore retain permanent representation on the

commission. This will only apply if the treaty is passed and

our commissioner has always been a key contact for Irish

business in Brussels.

No Going BackWhile I don’t want to dwell on the negative consequences

of saying 'No', it is something we all have to consider before

voting on October 2nd. These consequences are real and

cannot be ignored.

Ireland is small but we have always punched far above

our weight in Europe. Despite the size of our economy, we

have become a respected partner of Europe’s most powerful

countries including the UK, Germany, and France. I believe a

'No' vote, blocking progress in Europe, would seriously

undermine this position.

The business community wants Ireland to be at the heart of

a stronger, more streamlined Europe. Now is the time for us,

as members of that business community, to speak out on this

critical issue, for whatever is decided on October 2nd, there will

be no going back. k

Jack Golden, Human Resources

Director, CRH plc

Jack Golden is a former president of

Engineers Ireland and the German-Irish

Chamber of Commerce. He has worked in

the USA, Germany, France and Ireland in

industries from metal processing to electrical

appliances, food and building materials. He

spent six years with Continental AG as MD

of Semperit Ireland and Continental Pneus

in France. He is currently Group HR Director

of CRH plc, which employs 80,000 people in

35 countries.

The outcome of the referendum will have an irreversible impact

on business, employment and more particularly on the prosperity of future generations in this country.

Sixty per cent of everything this island produces is sold

to trading partners within the EU’s single market.

8

We face one of the most important decisions about the future direction of Ireland’s relationship with Europe on October 2nd. The outcome of the referendum will have an irreversible impact on business, employment, and on the prosperity of future generations in this country. This issue is vital for Ireland’s future and it is important that leaders in the Irish business community are strongly supporting a 'Yes' vote on the Lisbon Treaty.

Europe has been good for business, good for jobs and

remains vital to our economy. Despite the current downturn we

have succeeded with the help of our EU partners in creating the

modern, prosperous society that we see around us – investing in

education, improving transport and communications networks,

increasing trade, updating our employment and competition

legislation and helping to protect the environment. Living

standards have improved significantly and approximately a

million new jobs have been created.

The Benefits for IrelandThere are two important grounds for supporting the Lisbon Treaty:

Ireland needs to remain at the heart of Europe to promote 1.

job creation, business success and economic growth.

Ireland and Irish business will benefit from the proposed 2.

changes in the treaty which make the EU institutions

more efficient.

As Ireland prepares for the second coming of the Lisbon referendum, Jack Golden (Human Resources Director. CRH) says that, this time, there’s no going back. Bust

Lisbonor

BI_Autumn09_1-58.indd 8-9 18/09/2009 10:18:55

119

Ciaran Ennis says that changing business models and increased globalisation dictate the need to refine EU governance through the Lisbon Treaty.

Much has been made lately of the need for a Yes vote in the forthcoming referendum on the Lisbon Treaty if Ireland is to remain “at the heart of Europe”. How well does this ‘heart’ stand up to scrutiny? In my view Ireland is peripheral to Europe in many ways and always will be. However, over the past four decades Ireland has played a very good game of understanding how the world has evolved and, to an extent, exploiting this peripheral position.

Passing on the BusinessFor the first four decades of its history the Irish Republic was an

inward-looking and closed economy. The consequence of this

was felt most keenly in the 1950’s when economic growth fell

well behind post-war Europe, and close to 15 per cent of the

population had no option other than to pack their bags and

leave. By the end of that decade it was clear that our economic

policies had failed.

It was at this point that Ireland began its journey towards

becoming an open, progressive and forward-looking country.

Protectionist policies were abandoned and the country

developed an outward orientation and started to engage with

external bodies such the IMF and the World Bank. The IDA,

which had been in existence since 1949, was granted greater

autonomy and began to aggressively promote Ireland as a

destination for foreign direct investment with, as we all know,

some considerable success.

Accession to the EU in 1973 enabled the country to expand

its trade horizons and to develop markets outside the United

Kingdom, which had long been its most important market by

a considerable margin. It also brought with it considerable

investment from European Community which enabled the

country to begin the process of catching up with the rest

of Europe.

With the introduction of the Single European market in

1992, the country became an even more attractive location for

overseas companies seeking to establish a base in Europe and

further investment flowed. Ireland’s Atlantic location,

English-speaking population and a legal system based on

common law made Ireland a particularly attractive location

for US-based companies.

The introduction of the euro in 2001 greatly eased the

burden of doing business in Europe and further enhanced

Ireland’s attractiveness.

As a result of all this Ireland has, over the past four decades

or so, gone from being a closed economy to the point where it

is one of the most globalised economies of the world. In fact,

throughout the first decade of the 21st century, the country

has been consistently rated in the top five most globalised

economies of the world in the annual survey carried out by AT

Kearney in conjunction with Foreign Policy magazine.

This has been a remarkable transformation by any standard.

The success of Ireland has been in no small part due to its

ability to understand how the world is evolving around it and

how to adapt to change. We now have a generation who have

developed world-class capabilities without having to leave

Ireland. Not only have they developed the capabilities, they have

developed the confidence to play in a global world.

Our future prosperity, notwithstanding the current difficult

economic situation, will depend on our ability to continue to

adapt and change.

But how is the world changing around us? I would like to offer

some observations from the perspective of one who has worked

for a large international company for the past 25 years.

A Different View of the World Firstly, I would like to take a look at how large international

companies, of the type that have invested in Ireland over the

past couple of decades, view world markets. Up until recently

they used a fairly standard model, sometimes know as a ‘triad

model’. According to this model, companies tended to organise

themselves around three major markets: Americas; Europe,

Middle East and Africa (EMEA); and, the Asia Pacific (AP) Group.

This triad model worked very well for many decades.

No? Lisbon

A GLOBAL PERSPECTIVEYes or

BI_Autumn09_59-120_17090.indd 119 18/09/2009 12:40:03

120

However, as the 20th century drew to a close the limitations

of this model were becoming evident. Countries, which for

political, religious or cultural reasons had been closed, began

to open up.

Initially it was considered adequate to simply bolt these

countries onto the existing triad model, so Russia and Eastern

Europe became part of EMEA and China and India became

part of Asia Pacific (AP). However, it became clear that the

fundamental characteristics of the countries within a grouping

were often radically different.

A new and more logical way to view countries was to

group them by their state of economic development –

‘Mature’ or ‘Growth’.

The key to success in the future will be our ability to leverage

skills developed in Mature markets to help Growth markets

achieve their objectives. Mature markets have infrastructure that

has evolved over many centuries. Growth markets are looking to

build infrastructure that will last several centuries. They can learn

from Mature markets; how to do things but also how not to do

things. And because they are often starting from scratch the

learning can also flow in the other direction. In both markets

the question of sustainability is unavoidable.

The Rise of the Globally Integrated EnterpriseThe second matter I would like to turn to is the question of

how international companies are organising themselves. In the

past, multinational companies organised production market-by-

market within the traditional boundaries of the nation states in

which they operated. In essence the company replicated itself

wherever it wanted to do business.

However in an article first published in Foreign Affairs journal

in 2006 Sam Palmisano, CEO of IBM, observed that three

important developments have taken place over the past three

decades that have impacted how international companies are

organising themselves.

Firstly, trade and investment barriers have receded; secondly,

there has been a revolution in IT; and, thirdly, standardisation

has facilitated the interlinking of work both within and among

companies. This is giving rise to a new organisational model or

structure which is, in effect, a Globally Integrated Enterprise. In

this world the company’s supply chain can be spread across the

globe and work flows to where it can best be performed.

Europe is part of this globalised world. Business can flow into

it or from it. Its success will depend on how well it can develop

the Mature and Growth markets that lie within its boundaries,

and the extent to which it can develop business with those that

lie outside it.

We have recently seen positive economic signals coming from

France and Germany which have more to do with their success

in Growth markets than their more traditional Mature markets.

Future success will depend on the extent to which Europe can

build enterprises that are truly globally integrated.

A key consideration for the EU, however, is its governance

regime. This has evolved over many decades. In many ways

the EU is like a house, originally designed for a small number

of people and has had an extension added every time a new

person comes along. Eventually after several decades, and with

27 people living there, the house may keep the rain out but it is

unlikely to be pretty.

The Lisbon Treaty is an attempt to deal with some of the

aspects of EU governance that may hinder progress in our

globalised world. The ins and outs of the last referendum

have been relentlessly debated. If there is a benefit in the

rejection of the Treaty the last time it is that it helped surface

the genuine concerns which people had and it has enabled

these to be addressed.

It is in this context that the Lisbon Treaty deserves a ‘Yes’

vote. Ireland has benefited from its membership of the EU and

from its ability to adjust to the winds of change. We have built

considerable skills in Ireland over the last 15 years in areas such

as medical devices, pharmaceuticals, information technology

and international financial services. In a global world, work flows

to where the skills are. And this will continue to be the case.

Because Ireland has been adaptive and progressive we have

benefited from this trend.

In the longer term, the financial crisis we are facing will pass

and we will be able to refocus our attention on the forward-

looking approach that has served us so well for half a century…

… Or we can vote No. k

Ciaran Ennis is Head of Communications and Corporate Affairs at IBM Ireland and a former President of the American Chamber of Commerce in Ireland. Prior to joining IBM, Ciaran spent ten years in the Irish Civil Service. The views expressed in this article are entirely personal.

Ciaran Ennis, Head of Communications and Corporate Affairs, IBM Ireland

BI_Autumn09_59-120_17090.indd 120 18/09/2009 12:40:04

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Digital Media Networking Event

Rick Kelley, Head of European SMB Sales, Facebook; Richard Delevan, Managing Director, McConnell's Digital; PJ Timmins, Dublin Chamber President; Mike Roche, Chief Architect, IBM; Ronan Harris, Director Online Sales & Operations, Google; Aengus McClean Vice President and Managing Director, AOL Global Operations Ltd; and Gina Quin, Dublin Chamber Chief Executive.

Brian Clancy, Perot Systems, and speaker Aengus McClean, AOL Global Operations Ltd.

Kathryn Byrne, Limelight Commications, and Eithne Harley Mason Hayes & Curran.

Kristina O' Regan, IBM Ireland and Caitlin O' Connor, Accelerating Performance.

Martin Crotty, BFK; Rhyna Mc Carthy, Fuse Graphic; Anne Hartnett, Fuse Graphic; and Aine Murray, Dalkia

Cecilia McLernon, MII; David Wells, IT Support; and Fred Caballero, Channelship.

John Nolan, Walls Group Ltd and William Parker Accounts IQ.

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Business After Hours at Ulster Bank

Ken Murnaghan, Director Region East Business Banking (Republic of Ireland), Ulster Bank; PJ Timmins, Dublin Chamber President; and Declan Fitzgerald, Managing Director of Business Banking (Republic of Ireland), Ulster Bank.

The Business After Hours events are one of the Chamber’s most popular events for networking. There deals to be done! Over 200 members attend this event. Members were busy making new contacts and opportunities for their businesses.

Simon Gray, Tomkins & Co, and Lorcan Power, Ulster Bank Ireland Ltd.

Therese Forken, The Project Network, and Roisin Haugh, Exsite Communications Ltd.

Vinny Kearns, Xpert Taxis; Michael Shine, Ulster Bank Ireland Ltd; and Martin Mills, Procure Ireland.

Peter O'Connor, Blanchard International, and Greg Fry, Careers Coach.

Veronica Walsh, CBTandFeelingGood.com; Austin Rutledge, Export Edge Training Ltd; and KD Ryan, Oxfam Ireland.

Ian Jackson, Go 2 web; Cailtan O'Connor, Accelerating Performance; and Karen Bolger, Howtoprojectmanage.com

Mary Kelly, Ulster Bank Ireland Ltd; Gerry O'Brien, Enterprise Ireland; and James Nolan, Baggot Cleaners.

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Cool Grey 5u

Cool Grey 11u

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Business Breakfast with John Kennedy, Diageo

Above: John Kennedy, Managing Director, Diageo Ireland; PJ Timmins, Dublin Chamber President; and Gina Quin, Dublin Chamber Chief Executive.

Sean Coughlan, Chief Executive, Social Entrepreneurs Ireland, and John Kennedy, Managing Director, Diageo Ireland.

Business Briefing with Stephen J Felice, Dell

Clockwise from left: Gina Quin, Chief Executive, Dublin Chamber, and Stephen J Felice, President, Small and Medium Business, Dell; Stephen J Felice and Frank Corr, CEO, ProData Consult Ireland.