Transcript IONA Technologies The Enterprise Portal Company™

Dublin as a Knowledge City?
IONA Technologies
June 2002
[email protected]
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Ireland as a
Knowledge
Enterprise ?
Chris Horn, Chairman
National Propensity to Innovate
• Swift, Beckett, O’Casey, Connelly, Yeats, Wilde, Friel, Yeats, Doyle..
• Boyle, Kelvin, Walton, Hamilton, Tyndell…
• The Chieftans, Christy Moore, Riverdance..
• Planxty, Clanad , The Corrs, The Cranberries..
• Thin Lizzy, Boomtown Rats, Van Morrison, Paul Brady, U2 …
A culture of shared learning and experience,
co-operation for the world stage
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• Jack Charlton, Mick McCarthy..
Ireland - a report card
Ireland has gained world wide recognition as the Celtic Tiger, based on our remarkable
ability to ride the surge in high technology industries, from computers to software to to
medical devices to pharmaceuticals. However, with the emergence of the Eastern
Europe cubs and the Chinese Dragon, we need to move on...
World’s Most Global Economy
Exports are 88% of GDP
UK still our primary trade partner
More US imports than elsewhere in EU
20 Years Ago - High Quality, Low Cost, Medium Technical Competence
Now - High Quality, Medium Cost, High Technical Competence
-- and High Reputation
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The Plain People of Ireland
• How does technology bring employment, social cohesion and high
quality of life to those at lower end of economic scale ?
• What is the tangible benefit of ICT to me ?
– The Digital Hub project
– “At the moment this project seems to have little more vision than to be
Temple Bar with PCs”
– when we have falling tax revenues, imminent benchmarking, woeful health
services, poor transport infrastructure, falling educational quality….
– where are the votes in the 2007 election ?….
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(Aren’t there bigger issues ? Like what is the future of Ireland ????)
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• Public finances are a car crash just about to happen…
• WHY invest in ICT, broadband infrastructure…. ?
Assessment by the Plain People of Ireland
• Get as close to full employment as we can
– Encourage high tech modern manufacturing and services in Ireland
• Increase tax base as a result, including tax take from overtime and
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bonuses and increased consumption
Also increase income tax take by building high value high paid jobs
Use high tax income to retrofit infrastructure and public services
manufacturing and services in Ireland...
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• That’s what the tangible benefit of ICT investment is to me!
• Do whatever it takes to attract and retain high technology
The Negative Argument (the stick!)
• BUT is our high technology economy sustainable ?
• Eastern Europe is now cheaper for ICT manufacturing
– Slovenia
– Czech Republic...
• South Korea
• China
– Business Week this week, June 17th 2002:
• China is the Global Factory !!!!
Employment costs are just 5% of those of equivalent US
High quality road infrastructure nationwide
Optical broadband throughout many urban areas
Medical and dental care rapidly improving to international standards
One child policy applies only to those who cannot pay the surchage!
Nanhai, size of Dublin, will produce 20,000 Computer Science graduates per year
from 2003..
– Urban China IS PERHAPS MORE ADVANCED THAN IRELAND TODAY…...
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Previous Low Cost ICT manufacturing centres
• Remember Spain as a centre for foreign direct investment in ICT
manufacturing ?
– Where are the Spanish ICT manufacturing centres going today..
• Remember Taiwan as a centre for foreign direct investment in ICT
manufacturing ?
– Where are the Taiwanese ICT manufacturing centres going today..
• Remember Singapore as a centre for foreign direct investment in ICT
– How has Singapore survived the loss of much of its high technology
manufacturing to elsewhere in Asia ?
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manufacturing ?
Our Vulnerabilities
• Geographic Position is distant from most consumer markets
• Geographic Position is distant from most manufacturing
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Other locations can offer good tax advantages and grants, well
qualified, English language competent, good quality of life,
and sometimes a huge domestic market….
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centres
Our cost base is now high compared to emerging, high quality,
alternatives
We don’t offer a huge domestic market
Our broadband infrastructure is poor
Our transport infrastructure is poor
Our health and education systems are under stress
Our public finances are limited
Our complacency
Some of previous presentations
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Dublin Chamber of Commerce e-City report, December 2001
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E-Logistics, Farmleigh, March 2002, the new Bush Administration
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The threat of Eastern Europe and Asia (especially China) on our manufacturing
The Microsoft X-box example
The opportunity to counter this by making Ireland the global e-logistics centre
How and Why we should proactively outsource to Eastern Europe and Asia
IMI, Killarney, April 2002:
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The dilemma for Innovators and Entrepreneurs - Customer Satisfaction vs Technology Capability
How technology often exceeds customer need, leading to industry disruption
The dilemma for National Policy Makers - Industry Requirements for continued Inward Investment in a
location, vs. National Capability and Cost
The need for focus on Innovation, the role of outsourcing out of Ireland, and the need to globally
compete
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Available from the Chamber web site at www.dubchamber.ie
Dublin ranks moderately, and is falling behind, as an international e-City
Report currently being updated for 2002
Farmleigh: Our leverage points
• Testing and Diagnosis
– opportunity to innovate, and further improve and automate
• Manufacturing Competence
– world class for computer products
• Product Development Centers
– indigenous sector buoyant; foreign multinationals weak
• Euro
– Clearer Procurement alternatives; cross border efficiencies increasing
– Exploit call centres further
• Financial Services Center
– eCommerce Billing & Support
• Supply Chain Command Centers
– Services Aggregation & Management
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• Customer Contact and Care
Farmleigh: The Opportunity for Ireland ?
Given
• Our widely respected competence in IT manufacturing
• The trust and respect held in us by US parents
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– In contrast to the IDA focus on inward manufacturing investment!
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– Our spiritual closeness to Boston - as well as Berlin
Our world class engineers
The emergence of High Quality, Low Cost, Medium Technical
Competence centres elsewhere
Enterprise Ireland’s encouragement and active assistance to the
indigenous sector to outsource to lower cost centres overseas
Farmleigh: Our opportunity
• We should not rely on manufacturing in Ireland for our future
– Manufacturers in this country are going to move abroad
– We need to create new jobs to replace the inevitable vacuum
• We should innovate new products and services
– By understanding products designed abroad and learning
– By research, innovation and entrepreneurship
• We should have them manufactured as cheaply as possible, without
compromising quality
• We should have them distributed to global markets as appropriate, as
cheaply as possible, without compromising channel quality
– We want to exploit foreign distribution channels ourselves
– We want products manufactured close to the markets in which they are sold
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– We want to exploit foreign low cost manufacturing centres ourselves
Fighting back:
The Xbox Case
Authorized Replicator
Germany
Authorized Replicator UK
Distribution Vendor
Front End Call Centre
Germany
Xbox Peripherals
Far East
Repair & Refurb UK
Peripherals
1st Party
Software
Develop & Test
Customer Care
Supply Chain Mgmt
Finance Mgmt
Software Manufacture
On Line Hosting
Consoles
Repair & Refurb
Germany
Xbox Console
Manufacture
(Motherboard)
Austria
Courtesy
Microsoft
Ireland
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Xbox Console
Manufacture
Hungary
Farmleigh Proposal - Ireland as the global
e-logistics command centre
• Commit to (US) Parents to fulfil manufacturing and distribution
• At lowest cost, keeping quality high
– Allows parent to focus on core competencies of product research and
development; marketing; business development; and customer care
• Decide what -- if any!!! - subsystems and components to manufacture in
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Ireland
Decide where to undertake final assembly, test and repair diagnosis probably Ireland, and upskill Irish staff
Obtain competitive pricing based on volume purchasing through global
procurement
Actively monitor quality and delivery management
Farmleigh Proposal - Ireland as the global
e-logistics command centre
• Pro-actively manage supply chain and end delivery in real-time
– the e-logistics command centre
– real time tracking of inventory and components
• Share competence and supply chain expertise amongst companies
based in Ireland
– Formally and periodically evaluate suppliers for quality, delivery, flexibility, price
and responsiveness
– Enterprise Ireland has head start here….
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– National asset of current “best practice” international suppliers
– Build a network of international procurement offices for leveraging global buying
power and ensuring access to limited allocation components
Research
• Our Universities and Institutes generally have high reputation
– We sometimes do not realise how good we are !
• Publicly funded research is now very positive
– Science Foundation Ireland
– Programme for Research in Third Level Institutions (PRTLI)
• Competition for research funds between Universities has been
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And needs to STOP
• Perhaps SFI Centres Programme will help…
– But we must not confuse Education with Research
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– Duplicate capital expenditures
– Poor sharing of ideas, stimuli, experiences and results
– Weakens the Quality of Irish Research
Innovation
• Usually innovative products result from systematic exploitation of
new combinations of existing technological principles
• Revolutionary new products are difficult to sell!
• Innovation is generally considered difficult
• In fact the bigger challenge in the Irish context is commercialisation
of the innovation
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– very small domestic market, difficult to test market a new product locally
Exploitation
• Europe in general yields great science, but poorly succeeds in
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commercialisation
Need to build practical business models for commercialisation of
academic research.
– And we must not confuse Research and Commercialisation
• We should not view our Indigenous and the Foreign companies as
necessarily in competition to exploit Irish research
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– We want to build wealth in the Economy
– Indigenous and Foreign companies can fruitfully co-operate -- recall Sun
Microsystems’ 1993 investment in IONA
Proposal - Ireland as a Focus for Collaborative
Research and Exploitation
• Establish focussed research centres
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Cross university, cross sectorial
Full time research staff -- no specific academic duties
Full time Director and Board of Directors
Board of Directors guide specific research objectives
Centre publishes general results, but builds IPR
Builds international reputation, attracts best in class researchers
Funding:
– Return to the tax payer is FDI, and social cohesion from research objectives
• IPR Licensing
– SFI on the way to establishing these...
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• Public funding
Proposal - Ireland as a Focus for Collaborative
Research and Exploitation
• Two categories: Basic Research and Applied Research Centres
• Basic Research - as last slide BUT no sponsoring companies!
• Applied Research:
– Companies can join Applied Research Centre - centre becomes a research consortium
• Annual membership fee
• Investment in kind via equipment, software
– Each member company (regardless of size) has one Board seat
• Recall: Board directs research objectives
– Each member company can second one staff member for research
– Companies can contribute IPR to centre, with prior Board approval
• all such IPR is licensible to all member companies at favourable rates
– Companies can exploit IPR generated by centre at favourable rates
• Non founder member companies pay additional fee
• Non founder member companies require Board approval to join
• Non members can license IPR as per basic research centres
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• minimum of six months commitment...
National Propensity to Innovate
• Ireland is on the world stage
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• We need to help each other and co-operate by sharing best practices
• We can develop best in world manufacturing management
• We can develop best in world academic research
• We can develop best in world innovation and commercialisation
co-operation for the world stage
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A culture of shared learning and experience,
IONA Technologies
© Copyright IONA Technologies 2002
Nasdaq: IONA