5/11/2012: OECD Internet economy outlook 2012: part 2

Here comes the second post on OECD Internet Economy Outlook 2012 report (first in the series was here), focusing on Ireland and the mythology of our 'global ICT services hub'.

So wading deeper into the OECD report, take a look at this chart:

Ireland hardly can boast of an advanced fibre infrastructure that would be consistent with real ICT economy, especially ICT services economy. Per OECD: "Fibre-based broadband connections offer the fastest data transfers..." Now, in many countries, deployment of fibre broadband is lower due to home ownership rates being lower (people tend to invest less in a fixed connection quality when they rent, other things held constant). In Ireland, abysmally low fibre coverage is coincident with very high home ownership rates.

Next up, given lack of fibre coverage, you'd think we should lead the world in overall penetration of the substitutes (e.g. wireless), although, of course, fixed fibre and wireless can be complementary to each other (e.g. fixed line at home, mobile on the go). Alas, not really:

And subsequently, the gap between broadband connections and overall internet connections in Ireland is high by comparative standards:

In fact, we are below both EU27 and OECD average on broadband coverage per above chart.

Next up: the world of data is becoming portable. And in particular it is becoming portably mobile - in other words, more and more access to data is now taking place via mobile devices, rather than portable computers... And in Ireland?

Despite all the talk about the new generation of mobile users, etc, Irish 'younger and more educated workforce' seems to be not using mobile devices.

Having netted into Ireland all flagships of ICT web communications services providers and having established ourselves as social networking capital of Europe, we show neither a dramatic rate of coverage for internet communications, nor a dramatic rate of growth from 2007 through 2011 in this category:

In fact, per OECD data, we have fewer internet users engaging in social networking than Greece, Portugal, Poland, Slovakia and Hungary (overall, we rank 12th in the group of 24 countries in terms of this parameter).

And we are not exactly content-creative either:

E-commerce is absolutely average in its reach in Ireland too and is growing relatively slowly:

As is internet-based learning:

Do note that e-learning is associated strongly with continued or life-long education, so the above suggests we tend not to upskill much via continued education once we get our degrees. Not exactly a badge of honour.

More on this in the third post.

Economics 08/12/2009: Irish businesses ICT use

Per CSO release yesterday: “in 2009, 95% of all enterprises had a computer connected to the internet while 66% had a website or homepage. Access to the internet using broadband remained high in 2009 with 84% of all enterprises having a broadband connection. High-speed DSL broadband was used by 45% of enterprises compared with 41% in 2008. The use of mobile broadband reached a level of 27% in 2009 compared with 24% in 2008. As a consequence there has been a decline in the use of lower-speed DSL broadband and other fixed connections (e.g. cable, leased line etc).”

Sounds good? Well, actually… More detailed data shows the following worrisome trends:

• Use of computers has actually fallen from 98% of enterprises surveyed in 2008 to 97% in 2009. It has remained static at 98% in Manufacturing sector, fallen from 99% to 96% in Construction sector (possibly a function of inactive enterprises, or in the opposite direction – a surprising result if the survivourship bias applies to the sample). In Services sector there was a decline from 98% to 97% between 2008 and 2009. These results are rather strange. On one hand, if the sample included inactive firms, then one can expect the declines due to companies folding operations in Construction and lower value-added Services sectors. But if only actively trading firms were included, then this suggests that survivourship bias was actually selecting against the ICT-using firms for some unexplainable reason.

• Interestingly, the proportion of firms with a written ICT strategy has increase overall from 20% in 2008 to 21% in 2009, and in no sub-sector was there a decline in proportion. Construction sector firms led here with an increase from 8% in 2008 to 11% in 2009, which suggests that CSO sample incorporates survivourship bias. And this is really bizarre – on one hand, sample selection clearly favoured surviving firms that have ICT policies, but on the other hand the same sample favoured survivor firms with lower penetration of ICT… Hmmm…

• Proportion of firms using internet fell from 96% to 95% between 2008 and 2009. The declines were showing in all three broader sectors, with Construction firms registering the largest drop from 99% to 96%. This is again inconsistent with survivourship bias apparently present in the data. But even more strange were the results for the percentages of firms having their own websites. In Manufacturing, the number of firms with their own websites rose strongly from 72% a year ago to 77% in 2009. In Construction sector, surviving firms actually dramatically increased their websites presence from 48% to 58% despite having shown a decline in internet use in general. There was a decline in proportion of companies with their websites in Services sector – from 65% to 64%.

• Overall use of e-services (interfacing either with the public sector or private sector clients) has declined across the board except for Manufacturing sector.

• E-commerce is growing strongly with percentages of purchases and sales via e-commerce pathways as a share of total purchase costs and turnover, respectively, rose strongly between 2008 and 2009. But as in 2008, most of e-Commerce appears to be driven by purchases, not sales. And in volumes, e-Commerce has declined in line with overall economic activities. There is only tentative evidence that e-Commerce has taken up some of the traditional purchasing and sales activities share during this recession.

• Another interesting and surprising feature of the data shows that enterprises with access to broadband have reduced their e-Commerce-based purchases from 60% to 54%, and also reduced their e-Commerce-based sales from 28% to 23%. Enterprises with no connection to broadband have lowered their purchases via e-Commerce vehicles from 29% to 24% and their sales from 14% to 9%. This seem to show that access to broadband does not result in more resilience to the recessionary contraction in enterprise activities. But, enterprises with broadband connection have retained their propensity to employ workers who e-work at 37%, while enterprises with no broadband connection have increased this share from 9% to 10%. Rising workforce mobility and flexibility for those with no broadband connection while static workforce mobility / flexibility for those with broadband connection? Clearly this can’t be happening…