Naughten publishes two reports which highlight the growth of the digital economy and major opportunities for small businesses.
31 May 2016
The Minister for Communications, Energy and Natural Resources, Denis Naughten, T.D., has published two reports which he says "highlight the critical importance of digital to economic growth and prosperity in Ireland". The two reports show the value of the digital economy in Ireland, increased consumer activity online, and the significant growth opportunities for businesses which trade online.
The Minister was speaking in Dublin Castle where his Department was hosting a workshop for the Local Enterprise Offices (LEOs), who administer the Government's Trading Online Voucher Scheme.
Minister Naughten said, "These reports give us a snapshot into just how important the digital economy is to householders and businesses, no matter where they are located in Ireland. As the digital economy grows, it is essential that the benefits are felt in every city, provincial town and rural area".
Indecon's Assessment of the macro-economic impact of the internet and digital on the Irish economy, commissioned by Minister Naughten's Department shows that:
- the digital economy represents 6% (€12.3bn) of Ireland's GDP
- it is growing fast, at approximately 40% since 2012
- the digital economy is expected to expand to about €21.4 billion or 7.9% of GDP by 2020
- currently almost 116,000 direct and indirect jobs are supported, of which 68,000 are directly linked to digital
- the largest single contributor to the internet part of the economy is online consumer spending
- Irish consumers spend around €850,000 per hour online, 24 hours a day, which represents more than a 20% increase since 2012
- Irish consumers expect this to grow by 25% in the next 3 – 5 years
- 88% of Irish consumers research products online before buying, compared to 79% across the EU
- approximately one in seven Irish people (13.5% of the adult population) make a supplementary income on the internet.
The Trading Online Enterprise Impacts Report, which was also published today, shows that small businesses which trade online see immediate positive results. The report is based on survey responses from 600 small businesses that have availed of the Government's Trading Online Voucher Scheme and shows that the scheme is highly successful in helping small businesses to grow and expand. Digital trade is, therefore, contributing to sustainable regional economic development, with both urban and rural based businesses benefitting equally from the online opportunity.
Specifically, the survey results show that:
- 21% was the average increase in sales
- 84% experienced an increase in customer enquiries
- 73% said that the new online business was additional and did not displace existing sales
- growing businesses expect to recruit on average 1.4 more employees
- 3 out of 5 businesses begin to export, and
- 89% said that the trading online component of their business will become more important in the next six months.
At the workshop, the LEOs shared best practice and experience in delivering the scheme. The Minister met with the LEOs and two of the small businesses which have participated in the scheme and started to trade online.
Commenting on both reports, Minister Naughten underlined the Government's commitment to supporting a thriving digital economy. He noted that delivery of high speed broadband to every premises in Ireland is a top priority for Government. "A major procurement process is well underway in my Department, and will deliver at least 30mbps to every small business, home and school that cannot get access to such services" Minister Naughten said. "This will involve a major new telecoms network build across Ireland, covering 100,000km of road and 96% of the land area of Ireland, akin to rural electrification in the last century".
The Minister said while the Government's priority is to deliver this new network as fast as possible, the ambition of Government goes far beyond the provision of a network. "Under the Programme for a Partnership Government, we will establish regional broadband taskforces, working with the Western Development Commission, Leader Groups, Local Authorities, the LEOs and the telecoms industry to help accelerate the broadband network build. These taskforces will develop rural digital strategies to assist in the rollout of high speed broadband as well as developing regional digital hubs, so that communities can realise the full benefits of a digitally enabled society".
The Minister also noted that he will be looking at ways to build on the success of the Trading Online Voucher Scheme, putting Ireland further ahead of our European counterparts in realising the benefits of selling goods and services online.
The Minister concluded by calling on all small business to avail of the digital opportunity, saying "I would encourage any small business owner who wants to begin their trading online journey to contact their Local Enterprise Office today and apply for a Trading Online Voucher".
Note to Editors
The full text of the Trading Online Voucher Scheme Enterprise Impacts Report, including case studies on businesses, are available at www.dcenr.gov.ie
The full text of Indecon's Assessment of the macro-economic impact of the internet and digital on the Irish economy, are available at www.dcenr.gov.ie
Consumer behaviour is changing because of digital connectivity and content. Irish small business is in the midst of an online revolution. All Irish businesses are affected by the changes occurring in consumption patterns. These trends are growing rapidly in importance and impact.
Digital can help small and micro businesses to gain efficiencies, drive innovation, expand and grow. This is why they need to be part of the online conversation. Customers are looking for brands they trust, as well as products and services of quality and value.
The Government's Trading Online Voucher Scheme was launched nationally in July 2014 and is a key action under the National Digital Strategy and the Action Plan for Jobs. Operated through the national network of 31 Local Enterprise Offices (LEOs), the scheme offers a financial incentive of up to €2,500 to develop their trading online capacity along with training, mentoring and networking support.
It aims to support Irish small businesses to fully exploit the growth of the internet to grow their business, find new international markets, reduce operational costs and create jobs.
The scheme is attracting applications from across a wide range of sectors including retail, arts, crafts and design, manufacturing, food, and professional services. The data and case studies set out in the Trading Online Voucher Scheme Enterprise Impacts Report shows that small and micro enterprises which invest in their trading online business can expect to achieve business growth of 21%, a 35% increase in employment and 3 in 5 begin to export.
The research also indicates that the results obtained by businesses are not dependent on their physical location. Analysis of business growth and job creation illustrates that supporting businesses to trading online is making a sustainable contribution to regional economic development in Ireland.