1. The need for skills and R&D to enhance business opportunities in the digital economy Paul Sweetman Director, ISA and ICT Ireland, Ibec

2. Presentation Overview of Associations Sector review Skills challenge Importance of R&D and the issues The European Agenda

3. ICT Ireland and the Irish Software Association ICT Ireland: Representing the multinational technology sector Chair: Barry O’Brien, IBM ISA: Representing the indigenous digital technology sector Chair: Cronan McNamara, CremeGlobal

8. Importance of the Irish Software Sector Employment at 12,000+, 640+ companies €1.9BN in annual revenues (of which €1.2BN is exports) Vision for 2020: 20,000 employed, €3.75BN in revenue Challenge: Accelerating start-ups and scaling established companies. 90% of established software companies are below €3M in annual turnover.

9. Why Ireland? 1 st Availability of skilled labour 1 st Flexibility and adaptability of workforce 1 st Investment incentives for foreign investors 1 st Attitudes towards globalisation 2 nd Openness to foreign investors 2 nd Adaptability of companies 4 th Corporate tax rate and real corporate taxes

13. Skills Demand how to solve it.

14. Skills demand across sectors

15. ICT Skills Action Plan

17. Skills for the sector - successes New technology apprenticeship pilot has started: ICT Associate Professional Visa and work permit reform Upskilling, conversion and college courses increasingly available Promotion of STEM careers (Smart Futures) and bonus points for maths ICT Skills Action Plan – Strong work underway: Maintain this momentum – Important that industry feedback is gathered to assess effectiveness of Plan – Skills availability remains a pressing issue Action: Immediate need for computing and coding courses on primary/secondary education curriculum – a business imperative for the sector

18. R&D Spend why it matters.

19. Setting the scene

20. R&D a major driver of innovation - strong economies have strong R&D spend

21. Funding gap across economy is large Extra € Ireland would need to spend to match countries %GDP spend on R&D

22. Proportion of R&D spend relative to gross profit of private sector (market sector value added)

23. Progress in last decade

24. Small companies have scope for more innovation - innovation measured via Community Innovation Survey of EU

25. Medium firms performing better

26. A cultural issue? # of employees = employees in Irish office

27. Management training a solution? - management score is reflection of structures in place for ‘good’ management of company (Stanford/LSE model)

28. Funding gap remains an issue - when loans are costly, risky spend is stopped

29. Information is crucial 34 innovation schemes for SMEs across 14 different bodies. 1 stop shop and Ibec funding guide a step in the right direction but many SMEs don’t know where to start.

30. New challenge - competitiveness: Ireland vs. the UK Ireland now behind in facilitating entrepreneurship and investment in software companies Structures in UK are far more attractive: – Seed Enterprise Investment Scheme (SEIS) – Capital gains and inherence tax structure for investment – Tax treatment of share option schemes Consequences are already being felt on the ground Action: Bring Ireland at least in line with UK offerings via Budget 2016

31. Digital Single Market the system sees the opportunity, not just the tech sector.

32. Digital Single Market - strategy of EU Commission, 6 May 2015 1. Better access to digital goods and services 3. Maximise growth potential of digital economy 2. Create right conditions for digital networks and services

33. What we want from the DSM 1.Smart regulatory approach 2.Secure trust 3.Free flow of data 4.Unlock investment Infrastructure Content 5.Encourage talent, develop skills 6.Encourage e-commerce Awareness Cut red tape