Thursday, November 8, 2012

8/11/2012: OECD Internet economy outlook 2012: Part 5 Conclusions

By now, I have posted 4 different posts on the OECD Internet Economy Report 2012 and the implications arising from the OECD data for Ireland. The core points of these posts are:

  1. Overall ICT-linked employment in Ireland is declining, not rising, as the share of total employment in 1995-2009, despite the fact that we have experienced a virtual collapse in the traditional sectors activity over the same period of time (Part 1 post);
  2. Growth in ICT sector revenues has been below OECD average in Ireland during 2000-2011 period, in contrast to the claimed successes in attracting ICT sector FDI into the country and contradicting the Government claims that Ireland-based ICT suppliers are consistently enhancing the value-added activity here (Part 1 post);
  3. In addition, growth rate in the sector revenues in Ireland at roughly half the OECD average rate of growth is coincident with unprecedented growth in expatriated profits by the MNCs and massive in scale tax optimization ongoing within the MNCs component of the ICT economy here. This suggests that actual real activity might be declining, not growing, in Ireland (Part 1 post);
  4. ICT investment by asset-type and overall in 2010 in Ireland was exceptionally poor, ranking the country as the 5th from the bottom despite the Government claims that Ireland was the leading destination for attracting FDI in Europe (with FDI into Ireland dominated by ICT services)  (Part 1 post);
  5. Business R&D investment in ICT-related areas in Ireland ranked the country in 10th place in the OECD in 2010, once again contrasting the claims by the Government that Ireland is an ICT investment hub  (Part 1 post);
  6. Business use of the internet in 2011 sees Ireland ranked 5th from the bottom (Part 4 post) despite having access to a broadband connection above OECD average (Part 4 post);
  7. We score rather poorly in terms of our broadband infrastructure quality, penetration (Part 2 post) and poorly (well below average) for broadband access in the most economically developed region of the country (Part 4 post);
  8. More significantly, we score poorly in terms of the quality of our human capital when it coms to ICT-enabled economy: less than OECD average is the share of Irish residents who used internet for communicating in 2010; we have the third lowest percentage of internet users who created a web page in 2011; we score at the average in terms of individuals engaging in ordering or purchasing goods or services online in 2011; below OECD average in terms of use of banking services online and close to average use of internet for learning in 2010 (Part 2 post);
  9. For the 'smart workforce' claimed, irish share of employed persons at work using an internet-connected computer ranks below EU15 average and Ireland sports average rates of growth in this metric for 2005-2011 period (Part 4 post);
  10. Despite having above average proportion of schools with internet connection in 2009, we had well below average usage of these connections, suggesting that our education system is incapable of using modern tools of learning (Part 3 post);
  11. Consequently to (9), we have below average percentage of individuals using the internet to obtain information from the public authorities websites in 2011 - the outcome that can be expected in a country where education system is incapable of using web-based platforms (Part 3 post);
  12. Ireland scores fifth from the bottom in terms of internet users using P2P file sharing to exchange content in 2011 (Part 3 post);
  13. Ireland scores average in internet use by the highest educated segment of its population, below average in internet use by medium-educated households and average in internet use by the low-education households (Part 3 post);
  14. Irish businesses have close to average (OECD) percentage of businesses with a website (Part 4 post);
  15. Less than EU15, EU27 and OECD average proportion of Irish companies share information electronically externally, and the same holds for companies using automatic data exchange to receive or send e-invoices in 2010-2011 (Part 4 post);
  16. We rank 9th in the OECD in the total turnover of companies from e-commerce in 2011 (as % of total turnover) despite the fact that we are clearing huge volumes of transactions for ICT services MNC giants like google, linkedin, etc (Part 4 post);
  17. We rank 10th in the OECD in terms of companies selling over the internet in 2011 (Part 4 post)

In brief, Ireland is not an ICT services and culture hub, but at best an average performer in the group of advanced economies.

Furthermore, per OECD data:

So Ireland scores 6th from the bottom in terms of share of ICT specialist users in the total economy back in 2010, with that share growing by lowest percentage of all countries save Greece and Portugal. The outcome is made more egregious to the Government claims of Ireland being a global ICT hub by the fact that between 1995 and 2010 Irish economy has been attracting massive inflows of FDI in the sector.

The OECD report is extremely disturbing in terms of the picture it paints of Irish internet-based economy and flies in the face of a number of traditional assertions about Ireland as the global ICT hub made by the Government, IDA and Enterprise Ireland, as well as our business lobby and quangoes.
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