Redict Report

The needs of the Business Community and Other Actors in the New Media Sector: a Report on the Dublin Region

3

EU 7th Framework Programme FP7-REGIONS-2007-1 REDICT project 206480

February 2009

Compiled by Dublin region REDICT partners

CLARITY Research Centre, Dublin City University

National Digital Research Centre

REDICT Report – Dublin Region 2

Table of Contents

1. EXECUTIVE SUMMARY ................................................................................................................... 3

2. INTRODUCTION............................................................................................................................... 7

3. ANALYSIS OF FINDINGS ..............................................................................................................11

3.1. WHO OR WHAT IS THE NEW MEDIA SECTOR IN DUBLIN ...............................................................12

3.2. WHAT DO NEW MEDIA COMPANIES ACTUALLY DO?................................................................. 14

3.3. NEW MEDIA SEGMENT OVERVIEW IN DUBLIN REGION ................................................................18

3.4. STORIES FROM THE SECTOR........................................................................................................ 26

3.5. LEARNING FROM OTHER SUCCESSES ..........................................................................................29

4. DIGITAL MEDIA STAKEHOLDERS AND THEIR VIEWPOINTS.......................................................32

4.1. DIGITAL MEDIA STAKEHOLDER LANDSCAPE................................................................................ 33

4.1.1. The Private Sector.......................................................................................................... 33

4.1.2. The Public Sector ........................................................................................................... 34

4.1.3. Knowledge Institutions .................................................................................................. 36

4.2. FEEDBACK FROM THE PUBLIC, PRIVATE AND KNOWLEDGE INSTITUTION SECTORS ...........................37

4.3. OTHER STAKEHOLDERS AND THEIR VIEWPOINTS ........................................................................... 42

4.3.1. Networks and Facilitators .............................................................................................42

4.3.2. Financing Bodies............................................................................................................ 45

4.3.3. Services............................................................................................................................46

4.3.4. Incubators and Science Parks ....................................................................................47

5. CONCLUSIONS .............................................................................................................................48

APPENDIX 1 ............................................................................................................................................ 51

APPENDIX 2 ............................................................................................................................................ 52

APPENDIX 3 ............................................................................................................................................ 55


1 EXECUTIVE SUMMARY


The Dublin City Region has a small but growing digital media sector, made-up of over

140 domestic companies or Small and Medium Enterprises (SMEs) in total covering all

the main sub-segments but with a concentration in a few (Mobile, Animation, Digital

Video/Film/Television and Services). In this document we report on our findings from a

detailed investigation into the composition and business needs of the new media sector in

the Dublin region. The report is an outcome from the EU FP7 REDICT project, which

brings together 18 partners from 6 city regions throughout Europe – Amsterdam, Paris,

Copenhagen, Bucharest, Berlin and Dublin – each with a strong R&D presence in the field

of ICT, and new media in particular.

The REDICT project aimed to determine the factors that influence the transfer of

knowledge into SMEs and to better understand these in order to identify commonalities

and boost economic performance. We conducted almost 30 interviews with a range of

stakeholders and companies as well as an SME survey which received a 22% response

rate, carried out in 2008.This report also uses a range of other information sources,

including information from ForFás, Dublin Chamber of Commerce, Enterprise Ireland and

the Digital Hub.

As a conclusion from our investigation we identified the following business needs in the

new media sector:

• A major skills shortage was identified both in terms of technical skills and also

sales/marketing skills;

• Intellectual Property issues were identified both in terms of general education

across the sector but also in terms of working with knowledge institutions (e.g.

time-lag, bureaucracy involved);

• There is a need for improved ways of working with knowledge institutions

resulting from the differing needs of the SME and the educational sectors

involved;

• The sector needs new and possibly ‘alternative’ networks both within Dublin but

also at European level;

• A dedicated source of funding, specifically for collaboration, would greatly enhance

knowledge transfer into SMEs.

We suggest, based on feedback from the sector, that the digital media sector may

weather the current downturn better than many of the traditional industries in the Dublin


area. As a result of our assessment of the sector we make the following

recommendations:

• Accelerate the development of the digital hub and ensure that it links with the

other digital media companies in the wider Dublin region

• Develop entrepreneurship modules in courses related to the digital media sector in

the various colleges and universities

• Continue to develop concepts such as the Irish Learning Alliance and Animation

CEO Forum to accelerate development in other core segments of the digital media

sector in Dublin;

• Further examination of skills development by the further and higher education

sector in Dublin and use gap analysis to identify issues in the digital media sector

that are not being addressed;

• Create a forum for the universities and colleges to discuss skills needs with

industry;

• That organisations that deal with retraining of workers look at creating a suite of

training and education in the digital media and related technology areas as a real

and current skills gap exists

• Encourage the development and roll-out of the Creative Dublin Alliance and its

plan to brand the city as a ‘knowledge city’

• Seek common IP agreements for development between the sector and knowledge

institutions via Enterprise Ireland and through initiatives such as the National

Digital Research Centre (NDRC)

With a skills shortage very obviously not being currently dealt with in the sector and with

rising unemployment in most of the rest of industry in the Dublin region, there is a real

opportunity to drive growth and jobs in this sector via skills training, further and higher

education solutions.

We would like to thank all those stakeholders, companies and individuals who contributed

to the report.

Alan F. Smeaton, Dublin City University

Gordon McConnell, Dublin City University

Kathryn Parkes, National Digital Research Centre



2 INTRODUCTION


Ireland has in general, and in the capital city Dublin in particular, created a cluster of high technology and software companies in the last decade. As part of the development of the so-called ‘Celtic Tiger’ the Industrial Development Agency (IDA), Ireland’s inward investment state agency, has been successful in attracting considerable technology investment. Initially this was centred in a number of industries such as financial services (in the International Financial Services Centre in Dublin), high technology manufacturing (i.e. Intel) and software (i.e. Microsoft EU Headquarters). The sector globally was worth over $965 billion in 2004 and is projected to grow to $1.5 trillion by 2009. Dublin has advantages as a location for the digital media SME sector. As part of this report, we conducted an SME survey which will be detailed later and which included the question “To what extent has the company's location within the Dublin region added value to your business?” Overall, 85% of respondents believe their location in the Dublin region has added medium or high value to their business, as the table below shows.

None at all Low Medium High 11% 4% 41% 44%

Source: ReDict Dublin SME Survey The reasons listed for this (in terms of the ‘top three advantages to your company of being located within the industry cluster’) were:

• Collaboration • Networking • Support available

Over time, a national strategy for Ireland has been aimed at moving Ireland ‘up the knowledge ladder’ as the level of manufacturing activity in the country has dropped. The objectives have been mainly focused around research and development. IDA Ireland has now attracted newer ‘dotcom’ companies as well as increasing the investments of the original technology companies. Ireland is now home to companies such as Intel, Yahoo!, Adobe, Microsoft, HP, Apple, Google, eBay, and Amazon.com. This background is important, as the high technology landscape has meant not only potential partners for the new media sector but also is a source of founders and staff for the new domestic companies. The Irish Government announced in June 2006, a new Strategy for Science, Technology and Innovation, involving an investment of €8.2 billion over a seven year period, which is tied in with Ireland’s National Development Plan. The strategy aims for a doubling of postgraduates, with 1,000 graduating PhDs every year by 2013. Government

departments, funding agencies, regulatory authorities, academia and industry are now creating a dynamic research environment in Ireland.

“Ireland and Irish technology companies have a great reputation internationally and this is something that can be really traded on.” Donal O’Shea CEO of Slidepath from Sunday Business Post interview


Growing Market A survey in late 2008 by IBM, that focused on consumer digital media and entertainment habits, showed that over three-quarters (76 percent) of respondents said they have watched videos on their PC, a huge jump from the 27 percent who said they watched online videos last year. Interestingly, for both PC and mobile video, over 70 percent of respondents said they would prefer advertising-supported models as opposed to consumer-paid models. IBM says this represents a "huge growth opportunity for industry". Irish digital media companies are poised to exploit such consumer behaviours. The lower cost of home entertainment should help cushion large segments of the industry during the downturn in consumer spending. Despite the recent economic turmoil in the world markets, we have found the industry to upbeat particularly in Dublin. Merger and acquisition activity has been brisk, with two leading Irish digital media companies having been taken over the last year – Havok and Changing Worlds. In recent months other companies based in Dublin have been expanding: Facebook will create 70 jobs in Dublin, in addition to 400 positions being created by US educational publisher Houghton Mifflin Harcourt and 400 jobs by GOA Games Services. Ireland has advantages as a location for foreign direct investment with the youngest population in Europe (40pc under 25), a well ranked educational system, an English-speaking workforce and a low corporate tax rate of 12.5%. Dublin as a Knowledge City In recent months a group called the Creative Dublin Alliance has been formed in the city through the Dublin City Council. This alliance is between the local authorities, the higher education sector in the city, the business sector and the private sector. The aim of the alliance is to develop a “creative/sustainable city with a rich quality of life and a vibe that is difficult to replicate elsewhere – distinctly Dublin.” The alliance draws on work relating to creative or knowledge communities such as Richard Florida and could be a key mechanism to further developing the digital media industry – often seen as a key ‘creative’ industry for the future. There is also the Dublin Chamber report on “Developing a Knowledge City Region” (www.dubchamber.ie/economy_item.asp?article=824 ) It is with this background that the REDICT project, funded by the European Union under the Regions of Knowledge programme, commenced work in 2008 for a two year period. The project brings together 18 organisations from six major cities in Europe – Amsterdam, Paris, Copenhagen, Bucharest, Berlin and Dublin – each with thriving R&D activities and an emerging new media sector. The project aims to determine the factors that influence the transfer of knowledge into SMEs and to better understand these in order to identify commonalities and boost economic performance. Each of the six cities involved carried out investigations into its own new media sector. The city of Dublin is represented in REDICT by CLARITY: the Centre for Sensor Web Technologies, and by the National Digital Research Centre (NDRC):

• CLARITY is a Centre for Science Engineering and Technology, sponsored by Science Foundation Ireland and by industry partners, to carry out research into and to contribute to the development of the sensor web.

• The NDRC was founded in 2006 by a consortium of third level institutions with the

support of the Department of Communications, Marine and Natural Resources. The NDRC operates as an independent, not-for-profit centre of excellence with a focus on converting digital research into marketplace success.

The Dublin strand of the ReDict project followed the methodology agreed upon by the various project teams as a whole and is detailed as follows:


For the Dublin region and its input into the REDICT project, we conducted almost 30 interviews with a range of stakeholders and companies as well as an SME survey, which received a 22% response rate, and was carried out in June and July 2008. This report also uses a range of other information sources, including information from ForFás, Dublin Chamber of Commerce, Enterprise Ireland and the Digital Hub.


3 ANALYSIS of FINDINGS


3.1. Who or What is the New Media Sector in Dublin As in many countries, we found that the new media/multi-media sector in Dublin is often being created through the exploitation of new technology (such as Web 2.0 applications) or through the convergence of technology. This has meant there have been issues in getting nomenclature similarities e.g. new media, digital media, media and entertainment, and creative industry, many of which can include non-digital or traditional companies. In this report we have attempted the first analysis of the new media sector in the region that we are aware of. Analysis of the sector is made more difficult by the speed at which many of these companies appear and in some cases disappear. Some of our analysis has shown that many of these companies are small and ‘under the radar’ due to a lack of interaction with organisations such as State agencies or venture capital funds and Figures 1 and 2, taken from our own findings in Appendix A, support this finding.

Source: ReDict Dublin SME Survey Figure 1: Size/Number of Companies in New Media Sector in Dublin (Using EU Scale)


Source: ReDict Dublin SME Survey Figure 2: Growth Stage Model for Companies in the New Media Sector in Dublin As with the question of company size, the growth profile of companies in the sector in Dublin is in keeping with the age of the companies identified in our survey. Although not all of the start-up companies were ‘young’ in terms of years founded, some companies have been using a ‘boot strapping’ model, self-financing the business, which has ensured slower growth in terms of employees. One of the questions that has been asked in Ireland is why we have not produced a ‘Microsoft’ or large sized international player in any of the technology sectors despite increased resources and activity in these sectors. It is true that many small and medium sized companies, particularly in the digital media sector tend to grow organically until they are either bought by larger, usually non-national, companies or run out of working capital and close down. Again this can be shown through the answers to survey question: “What year was your company founded?” shown in Figure 3.

Source: ReDict Dublin SME Survey Figure 3: Age of Companies in the New Media sector in Dublin


In keeping with discussions with the industry and with stakeholders, the majority of the Dublin region digital media cluster is still quite young, many having been formed in the past 5 years.

3.2. What do New Media Companies Actually Do? The Dublin region has a small but growing digital media sector. At present it is mostly a small, ‘cottage’ industry which exists for the most part ‘below the radar’ of many of the stakeholders of the sectors. This is particularly true where these firms are not in a ‘designated’ cluster area such as the Digital Hub or Media Cube. These companies also share the space with local subsidiaries of multinational companies such as Microsoft, GOA, GALA networks, Google and Amazon. New companies continue to grow and develop; leading Web 2.0 social networks company Facebook named Dublin as the site for it’s European headquarters while games company GOA announced several hundred jobs for their digital hub subsidiary during October 2008. Nurture versus Nature One of the questions we have attempted to ask in the Dublin region is whether the source of digital media companies is a component in their innovation and collaboration with each other or with knowledge institutions. For example, it can be put as a ‘nature versus nurture’ concept. Did these companies come from a university or multinational spin-out? Are these more likely to engage with these organisations? Physical location is also a ‘nurture’ criterion, as proximity to other companies and intermediaries in locations such as the Digital Hub should increase probability of collaboration outside of their normal parameters. As mentioned earlier, many of the newer start-ups are immediately ‘international’ because of the internet and use global, often informal, collaborative networks based on trust. Defining the population in the Dublin region proved difficult as many of these companies were ‘under the radar’ of many of the organisations that would normally deal with the sector such as the Irish Software Association or Enterprise Ireland.

B2B versus B2C A consistent message from people interviewed in the Dublin region was that the emerging digital sector is ‘different’ from the normal software sector that has thrived in Ireland for the last 20 years. This ‘difference’ was articulated in various ways depending on the source of the quote; “…in the digital sector the financial model is different in that it is less involved with the venture capital sector, less connected in general with government agencies And has mostly consumer target markets whereas in software, the clients are often businesses.”

“Each of the cluster initiatives have fed into the others.” Sharon Kaliouby Senior Vice-President for Learning Solutions Enterprise Ireland


Similarly the ‘rules’ on intellectual property may be different, particularly in the era of ‘free software’ much of which is in the digital media space (unpatented widgets for Facebook or Bebo applications for example). Ireland due to its size is at best a test market for many of these companies. Yet there is no doubt that the domestic digital media sector is engaged in research and development as it is, as we asked the question “Please enter the number employees in your company dedicated to R&D” in the survey and the answers were:

• 33% have both full & part-time • 24% have full-time R&D employees • 24% have part-time • Only 6% do not have employees dedicated to R&D

(Total 94% involved in R&D activity) Again we found that there is a high level of active R&D involvement, though how much of this is ‘research’ versus ‘development’ would be worth asking in any follow-up work. In terms of dealing with knowledge institutions, which is covered in-depth later on in this report, we asked the question “What are the greatest barriers to knowledge transfer from knowledge institutions to your company?” The responses, in descending order, were:

Lack of information about service offering of knowledge institution 50% Offering does not match the need of your company 42% Insufficient resources 42% No competent contact person in knowledge institution 27% Difficult to measure need for knowledge transfer 27% Problems with financing of collaborative projects 23% Legal issues 23% Lack of opportunity to get in direct contact 19% Lack of networking opportunities 19% Other* 19% No need for knowledge transfer 12% Lack of intermediation from transfer institutions 12% Risk of loss of know-how is too high 8% Lacking project management skills for research projects 8%

The 50% response rate for the greatest barrier being a ‘lack of information about the knowledge institutions’ service offerings is quite stark. In terms of those issues listed under ‘other’ the responses included issues with intellectual property (several mentions in the survey and also in interviews) as well as the perceived timelines and work practices of universities and colleges in terms of collaboration.

“The trend towards companies building global innovation networks is something that we in Ireland have recognised as an important development. As companies collaborate more closely with external and international partners, including universities and research centres, there is much to be gained for countries around the world that can offer strong innovation skills and capabilities to leading global organisations.” Sean Dorgan CEO, IDA Ireland from IDA website


Web 2.0 Companies Even within the digital media sector there seems to be a difference between older companies who follow traditional start-up evolution, and many of those who have started in recent years. Many of these more recent companies were started by groups of friends who begin with ‘hobbyist’ companies started in their spare time e.g. Vanishing Point, Balcony.tv. Most of these companies are not members of traditional representative organisations such as the Irish Software Association as they tend not to operate like traditional technology or software companies. These start-ups, many in the web 2.0 space, don’t rely necessarily on the domestic market. There are some attempts to network among these new companies, for example with an online presence for Web 2.0 companies (www.web2ireland.org ) which is aimed at being “…a resource of, by and for the web2.0 community in Ireland.” It lists about 29 companies, which are a mix of B2C and B2B players, some of which would be classified as digital media companies. Irelands First Wave – eLearning Some of the earliest ‘winners’ from the Irish domestic technology sector were in the area of eLearning. The first indigenous software company to list on a major international exchange was Smartforce (formerly named CBT Systems) when it listed on the Nasdaq in 1995. Riverdeep, another pioneer in eLearning listed on the Nasdaq and the London Stock Exchange in 2000. Another recent success story has been that of Thirdforce. ThirdForce is a provider of eLearning solutions and services to over two million learners in education, government, healthcare, hospitality and commercial organisations worldwide. The company has offices in the UK, Ireland, Australia and Canada and currently employs 130 people. Like other Irish companies they have become involved in mergers and acquisitions with the acquisition of Electric Paper (EP) in 2003, Creative Learning Media (CLM) in 2005 and MindLeaders in 2007. In 2006 EP and CLM changed their names to ThirdForce. Irish eLearning companies have tended to be niche market driven for example Riverdeep, now Houghton Mifflin Harcourt has concentrated on the K-12 (pre-teen school) market in the US. Successes in eLearning has led to a newer generation of niche players particularly coming out of the higher education sector in Ireland such as eLearning/informatics company Slidepath (Dublin City University), Authentik (Trinity College Dublin) and Broadcast Learning (University College Dublin). SME Collaboration in eLearning

During interviews with Enterprise Ireland, they outlined various collaboration projects for domestics SMEs in the eLearning space which they have developed in recent years. There are three cluster initiatives currently led by Enterprise Ireland (EI), namely:

• KESP: collaborative project to develop product for new Knowledge Economy Skills Passport (KESP) certification.

• ELITE: EI funded industry-led research project. • ILA: Irish Learning Alliance, collective marketing initiative to increase

opportunities for Irish eLearning companies in US market.

“Content is no longer King – the user is now King.” Michael Cantwell Manager – International Services Enterprise Ireland


Sharon Kaliouby, the Senior Vice-President of Learning Solutions for Enterprise Ireland believes that ‘each of the cluster initiatives have fed into others’. The Irish eLearning cluster is predominantly in Dublin. The collaboration between the elearning companies was originally initiated by Enterprise Ireland as far back as 2001 with the CEO Forum being established. The ‘eLearning Research & Development Roadmap for Ireland’ was then produced in 2004 with the support of Science Foundation Ireland. eLearning and Knowledge Institutions Ireland was an early leader in eLearning particularly in Applied Learning technologies. When we researched the involvement of the knowledge institutions, particularly the area of academic research, some issues appeared. For example some in the industry (including some academics) believe that innovation from academia to the industry has been slow due to issues such as differing relative understanding of projects. For example, academic timelines are often too long and academics think of projects in terms of postdoctoral funding rather than in terms of technology transfer or applied research in general. This is common across many countries as research is rarely commercially driven in academia. Successful Initiative: Irish Learning Alliance The Irish Learning Alliance (ILA) is a collective marketing initiative to increase opportunities for Irish eLearning companies in international markets, in particular the US. This is not a legal initiative, but the companies involved agreed to collaborate to raise the profile of Irish eLearning internationally. The ILA has led to increased interest from the US with the creation of a number of strategic partnerships. At first it was difficult for the companies to decide how the ILA would work but it became clear it was not a sales tool but a form of collaborative marketing initiative. The initiatives in Ireland are quite different from how things would work in US where there isn’t the same equivalent of EI to get small clusters working together. Leading the Digital Way – Havok The most visible success story in the Irish Digital Media sector is one of the earliest spin-outs from the university sector. Havok, which spun out of Trinity College Dublin in 1998, has had an impact on the gaming industry internationally and now is starting to have the same impact on the movie industry. Havok produces a ‘physics engine’ designed for computer and video games by allowing interaction between objects or other characters in real-time. Havok thus allows for more lifelike worlds and animation. Havok works in partnership with many game developers, including Sony, Microsoft, EA Games, Ubisoft and Activision. Havok’s cross-platform technology is available for the Sony Playstation (2, 3 and portable) Xbox, Gamecube, Wii and PC. Announced in September 2008, Havok and Intel have launched a worldwide competition with a cash prize of $40,000 to find the “next big thing” in video game development. Called the “Havok Physics Innovation Contest”, the company wants amateur game developers to create an inventive, playable PC game demo using the Intel sponsored no-charge PC version of the Emmy award-winning Havok Physics software. Havok sees this as “supporting the growth of future video game developers.” The company has also released a Havok Animation engine. In 2008, Havok was honoured at the 59th Annual Technology and Engineering Emmy awards for advancing the development of physics engines in electronic entertainment. Like many Irish success stories in the past, the company was purchased by a multinational corporation, in Havok’s case by Intel late in 2007.


In a real sense it can be argued that Havok is a ‘red herring’ in terms of a role model for other companies. Unlike much of the sector it is a middleware company, whose clients are large OEM organisations such as Sony or Microsoft. Whereas most of the digital sector in Ireland is actually selling directly to the consumer market or where consumers are their final customer for content.

3.3. New Media Segment Overview in Dublin Region From our own analysis of the market in the Dublin region, the following is the total breakdown of the companies identified as in the new media or digital media space in the Dublin region. As with many small companies, many of these firms seemed to operate in more than one segment but we attempted to identify the primary product or service for the company. Unsurprisingly, the main sub-segments of the Irish digital media sector are:

• Services (19%) • Computer graphics and animation (18.4%) • Mobile Applications (15.6%) • Digital Video Film and Television (13.5%) • eLearning (12.8%)

These five represent over 79% of the total population identified in the Dublin region out of a population of 144 companies. The full breakdown is shown in the table below. Full Breakdown

Electronic Games - 5% of the total for the region Computer Generated Animation and Special Effects – 18.5% of the total for the region Digital Video, Film & Television – 13.5% of the total for the region Digital Radio & Music – 2.1% of the total for the region Mobile Services – 15.5% of the total for the region eLearning – 12.8% of the total for the region eHealth – 1.4% of the total for the region ePublications – 0.7% of the total for the region eSecurity – 2.8% of the total for the region Enabling Technologies – 5% of the total for the region eHeritage – 2.1% of the total for the region Services – 19.1% of the total for the region Other – 2.1% of the total for the region

“In an industry where there is a ‘big four or five’ the trick is not to take them on directly – but look for the niche market to dominate.” Helgard de Barros Chief Operating Officer Vanishing Point Vanishing Point


We then looked at the sectors in which these companies were involved and the results are shown in Figure 4. Q4. What is the primary sector your company operates in?

Source: ReDict Dublin SME Survey Figure 4: Operating Sectors for Dublin’s New Media Companies Although this is only a sample, the percentage figures are not totally dissimilar from the main population e.g. CGA of 14% versus total population of 18%, DVTF of 17% versus total population of 13.5% and eLearning of 11% versus total population of 12.8%. Q5. Which additional sectors does your company operate in?

Source: ReDict Dublin SME Survey Figure 5: Dublin’s New Media Companies Additional Sectors


Many of these smaller companies offer a range of products and services – this is not uncommon with early stage companies that are trying to survive, so the survey attempted (along with the general SME sector research) to identify between a ‘primary’ digital media segment and also additional ones. The fact that this sector is also a major area of technology convergence would add to this. Growth Cycle Stages Case Studies As part of the analysis of the digital media SME sector in the Dublin region, we carried out a number of interviews with the senior management of companies in each of the life cycles identified, where the life cycle stages are shown in Figure 6 below. We now report on 8 of these case studies.

Figure 6: Life Cycle Stages of a Company

Select Case Studies from the Dublin Region Case Study 1 – Start-Up Stage Company Name: Vanishing Point Start Date: 2004 Sub-segment: Computer-Generated Animation and Special Effects (CGA)


Details: Vanishing Point is a 3D modelling and animation web company, that both sells to the hobby or ‘prosumer’ market in terms of models and also offers discreet modelling and animation services to the film industry, as well as other media services including advertising. As with many self-starters, the Vanishing Point management team are not interested in venture capital and have instead been ‘boot strapping’ the company over the last few years. Originally developed from online collaborators in Dublin and Orlando Florida, the company is now legally set-up in Ireland though the revenues are held in the U.S. Selling 3D models happened by accident as the two founders originally worked on models as a hobby. As their network grew, they became a marketplace for 3D modellers before starting to look at developing a corporate account. Several film and animation companies have been approaching Vanishing Point in recent months as their international reputation has developed. As a niche player they have developed 3D models and animations for particular software packages. The original ‘hobby with benefits’ has now turned into a full time business (both founders left their day jobs in the last year). They work with collaborators around the world, and as the material is sold on the internet, their client base is also global. Despite the fact that the founders are on two sides of the Atlantic Ocean, they use good online reporting systems, and Skype/instant messenger/email to communicate. Although the company has no relationship with any knowledge institution, there would seem to be scope to link with courses producing graduates in animation or related areas from the main universities as well as smaller colleges such as Dun Laoghaire College of Art and Design or Ballyfermot College of Further Education. Case Study 2 – Early Stage Company Name: Muzu Start Date: 2008 Sub-segment: Digital Radio and Music (DR&M) Details: The Muzu TV service was launched in Dublin in July 2008 and aims to create a personalised TV channel for music fans to manage their favourite music and present it on their various social networking sites, such as MySpace. Users can also interact with bands and labels and share music legally and at no cost. Muzu was named ‘New Software Company of the Year’ at the recent Irish Software Association Awards. Muzu TV has created a platform that allows labels and bands to develop a homepage while also generating revenue through an ad-supported model created by the company. Here the revenues from ads are shared 50/50 between Muzu and the labels and artists. Another aim of the site is to allow unsigned bands to generate revenue from advertising and possibly sign record deals. The company’s Dublin headquarters boasts a recording studio where bands can drop in and create videos. Muzu has a wide cross-section of the industry including artists, venues, festivals and music magazines already signed up. This includes over 200 labels and content producers. Muzu has offices in Dublin and London, as well as an R&D base in Waterford. The company has spent the past two years building technology, negotiating with labels and artists and having built up a strong digital content library is ready to hit the road.


Case Study 3 – Build Stage Company Name: Slidepath Start Date: 2003 Sub-segment: eLearning Details: Slidepath is a DCU campus company that was founded in 2003 and now employs 25 people. It is a specialist niche player in eLearning, with an elearning toolset aimed at medical schools. Their markets are currently Ireland, UK, European clients and some global reach. They are currently diversifying into digital data management and bespoke solutions in ehealth. Slidepath has a collaborative network internationally. They found that the pure eLearning offering was available from other providers and they needed to expand their offerings. The CEO did report that there had been some internal resistance to start-ups in the academic world, with an anti-commercial view being taken in some parts of academia. It is interesting to note that yet again, the company reported that all first sales of product have been overseas. The company has some private backers and some additional funding from Enterprise Ireland. They also commented that they had been winning contracts with collaborators internationally. Some of the issue raised in terms of collaboration with higher education was the area of intellectual property; - That university IP agreements can be vague. - An inflexible attitude to IP by semi-state organisations. There was also a view that the nature of industry/university collaboration in Ireland is somewhat contrived; in many cases it is not about commercialisation but research funding targets by the institution or the academic involved. Case Study 4 – Expansion Stage Company Name: ThirdForce Start Date: 2003 Sub-segment: eLearning Details: ThirdForce is a leading supplier of e-learning solutions to education, government, healthcare, hospitality and commercial organisations. The company is based in Deansgrange in South Dublin and this is the HQ for the company’s software development. There are approximately 70 people employed in Dublin. In addition there is a sales office in London as well as a small development team in Canada. The primary market has primarily been the UK. In 2007 the company acquired MindLeaders in the US, bringing access to the world’s largest e-learning market. The company has a strong commitment to ongoing R&D with a dedicated team in-house. They are currently in the process of completing a second round of R&D funding from Enterprise Ireland under the RTI programme. Technology transfer to the company has been predominantly from industry, online networks and information sites. Historically, there has not been a large volume of technology transfer from third-level to the R&D team. This is due to the difficulty in obtaining information from third-level institutions and a lack of awareness around what the relevant issues are in the industry. Most


information is likely to be gleaned from online articles and papers, and industry conferences. Thirdforce have engaged in a number of areas of collaboration with other companies, particularly within the eLearning space. CEO Brendan O’Sullivan was involved as an industry advisor in the ‘eLearning Research and Development Roadmap for Ireland’ produced by the National College of Ireland (NCI) in 2004 which was sponsored by SFI. eLearning was identified as a strong potential growth area for Ireland at the time and a CEO forum was set up by Enterprise Ireland to encourage collaboration and joint ventures between the Irish eLearning companies. One project, KESP (Knowledge Economy Skills Passport) involved a number of industry and third-level partners working together to produce an e-learning qualification for knowledge workers. Enterprise Ireland have been behind a number of initiatives to strengthen the eLearning sector including a two-year funded industry-led research project (ELITE), collaboration partnerships between eLearning companies and third-level institutions and e-learning showcases which target Irish companies entering into the US market. ThirdForce has been an active participant in the ELITE project since its inception with input into the research objectives, project outcomes as well as providing expertise in eLearning pedagogy and instructional design. Case Study 5 – Start-up Company Name: vStream Start Date: 2007 Sub-segment: Digital Video, Film & TV Details: This recent start-up company is located in the Digital Hub due to the availability of reasonably priced serviced office space and the ability to expand the space needed as the company grows. The recognised reputation of the Digital Hub brand and their city centre location helped to get skilled employees on board. There has been less inter-company collaboration in the Hub than perhaps originally expected but most start-ups don’t have the time or budget to work on projects that don’t produce immediate financial results. As vStream needed to build a digital video recording studio they required a strongly built, well sound-proofed space, which the Hub agency was able to provide. The Hub provides a good service package including good fixed rates on electricity, broadband etc. Electricity supply is particularly important to vStream case as they are running powerful lights etc in the studio. vStream have yet to engage with knowledge institutions other than currently providing industry placements for new graduates from Dublin City University (DCU). DCU is acting as the agency for recruitment which is a great help to a busy start-up. vStream have also recruited talented graduates from the Interactive Media courses at Institute of Art, Design and Technology (IADT). Start-up companies often don’t really have time or resources for engagement with knowledge institutions for collaboration/knowledge transfer. vStream would like to but don’t really know of relevant research/projects and are not sure where to look to find out. Collaboration opportunities are secondary to keeping the direct business going but they are still important. The Digital Hub does provide good contacts and the chance to get in early with other companies. Networking opportunities have been provided but they have


found very few attended. Most companies are too busy to take time out. The Digital Hub intranet message boards have not been used that much. Start-ups can’t collaborate at present as they need to dedicate all time/resources to the bottom line. vStream would be very interested in collaborative projects with others in the Digital Hub but would need to have a fund available in order to do this. Collaboration is more likely with larger companies who have resources or budgets for research and innovation. vStream are currently operating in Irish and mainland European markets. They would like to increase their activity in Europe but cost is the main barrier i.e. cost of setup, market research, gaining local knowledge and understanding market characteristics. The company will need venture capital or state funding in order to expand into European markets. The growth of the company may also possibly be by acquisition. Case Study 6 – Early Stage Company Name: Customer Minds Start Date: 2006 Sub-segment: Services Details: CustomerMinds was set up in 2006 and provides online marketing services to reach contacts via mobile, email and personalised landing pages. The company is located in the MediaCube which is an incubation centre for digital media companies on the campus of the Institute of Art, Design and Technology (IADT) and is about 10km from the city centre. There has not been too much networking/collaboration between companies in the MediaCube as yet. The distance from the city centre has reduced the likelihood of attending events at the Digital Hub. There has been a small amount of collaboration with IADT with use of the Enterprise Ireland Innovation Vouchers for usability testing lab work. The firm’s technology allows clients to combine communication and marketing through a single online channel. Clients can access a number of different marketing methods through the CustomerMinds.com platform. The company has been expanding its sales in the UK and the US, with all the company’s deals being structured on an annual fee basis, with contracts yielding between €10,000 and €70,000 each year. Earlier this year, the company completed its second funding round of €1.1 million. It has now raised a total amount to date of €1.7 million, having previously secured early-stage funding of almost €600,000 from Enterprise Ireland. The company has used the funds to aid its entry into the British market, with a small team now operating from Britain. In total, the company employs 17 people and has 38 clients. It is expected that turnover for the firm this year will be circa €1 million. Case Study 7 – Early Stage Company Name: Digitary Start Date: 1999 Sub-segment: eSecurity


Details: Digitary was established as Framework Solutions in 1999 and provided security software design and development services for large corporate and third-party systems for clients such as Intel, Siemens and Baltimore Technologies. This company initially developed in the National University of Ireland (NUI) Maynooth before ‘migrating’ to the Invent Incubator facility in Dublin City University. Many colleges and universities entice ‘spin-ins’ with serviced incubator offerings with the hope that they will work with researchers in the University. Unfortunately this rarely happens in reality. Digitary have a good relationship with DCU in general but no major research links exist at the moment. The company worked over a number of years with the Higher Education Sector on the development of the Digitary system for the secure online issuing and authentication of tamper-evident official graduation documents, which was first implemented in 2005. The Digitary® workflow for the European Diploma Supplement and other educational documents replicates the process traditionally in use for official graduation documents and has three stages. The company has been targeting the higher education sector initially in Ireland, but with significant wins within Europe. Case Study 8 – Expansion Stage Company Name: ChangingWorlds Start Date: 1999 Sub-segment: Mobile Details: Set up in 1999, ChangingWorlds was one of the first campus companies at the University College Dublin incubator NOVA. The two founders of ChangingWorlds have an academic and technical background and they quickly recognised the need for inclusion of business acumen. One of their key successes has been establishing links with the university on directing the research undertaken and enabling placements of students. The company R&D facility is currently located in the NovaUCD business incubation, innovation and technology transfer centre. The original focus was on TV but shifted into the mobile arena when they identified opportunities to use their expertise in personalisation. Their main market is currently in Europe but they are expanding worldwide. In some countries they are tied in with every mobile provider. Interestingly they have found it easier to do business in Europe as a small company than with large Irish providers. The company is still expanding and looking for new offices. The expectation is that there will be well over 100 personnel in Dublin and they may move some product development back into the new offices, but they would like to keep the R&I core in NovaUCD. There is a high skills level in the company. Close connection with students was excellent in the early days at getting the top graduates to join ChangingWorlds. This has been more difficult recently particularly with continued expansion and finding that people are snapped up quickly. ChangingWorlds is now trying to rebuild links with the university to get graduates early and encourage industry placements from the courses. ChangingWorlds was acquired for US$60m by US-based CRM software service company Amdocs in late October 2008. It is reported that Amdocs plans to use ChangingWorlds’ personalised portal technology, presumably ClixSmart, beyond the mobile platform.


3.4. Stories from the Sector Digital Hub – Dublin’s Cluster Home The Digital Hub Development Agency is the state agency established by the Irish Government with responsibility for the management of The Digital Hub. Established in 2003 to manage the project, the task of Digital Hub Development Agency is to implement some of the most radical enterprise and social development strategies so far attempted by the Irish Government. In a recent international study conducted by the Intelligent Community Forum (ICF) the Digital Hub project was ranked within the top 18 digital media communities in the World, out of over 150 projects in 31 countries. The Digital Hub has a range of high specification city centre buildings close to all transport links, and forming part of a new city quarter. Office, workshop, studio and exhibit spaces are being specifically created to meet the demands of digital media companies. The make-up of the cluster is actively managed, by the Digital Hub Development Agency, to ensure each entity is close to a consumer and supplier of its product, service or concept, and its composition is shown in Figure 7. It was announced in August 2008 that the number of tenant organisations at the Dublin Hub had exceeded the 100 mark. Collectively, these companies employ over 750 people. The majority of these companies are domestic small and medium sized companies, including service companies such as marketing and graphic design. There are also a number of large multinational companies based there including Amazon. Digital media firms based at the government-backed Digital Hub district are predicting a 35% increase in employment numbers in 2008, an economic impact study reveals. Again this supports our belief that this is a high potential sector for employment during any downturn that might occur over the 2009-2011 period. The report also found the majority of digital media companies in Ireland – 79% – are in the start-up or early growth stage.


Source: Digital Hub Survey 2007/9 Figure 7: Industry Classifications for Companies in the Digital Hub Innovation is a key characteristic of digital media companies: some 43% of Digital Hub companies have a product that is completely new to the market, while 25% have developed unique business practices and 24% use a business model unique to their particular market. The chance to collaborate with other industry players is a key attraction for companies located in the Digital Hub, with 80% of claiming to have collaborated with other companies in the Digital Hub. This figure is expected to rise to 98% during 2008.


Source: Digital Hub Survey 2007/9 Figure 8: Lifecycle of Companies in the Digital Hub Again similar to the rest of the sector, the Digital Hub companies are younger than the rest of the software or ICT sector in general, as shown in Figure 8. Another issue highlighted in the Digital Hub survey with resonance in the ReDict survey is the area of staff and skills. Recruiting suitably qualified staff is a major challenge for digital media companies in Ireland. Some 55% in the Hub survey have experienced difficulties in this regard, in particular when recruiting experienced project managers, interactive designers, programmers or sales and marketing staff. Under a new plan adopted in 2007 the Digital Hub Development Agency's (DHDA) envisages a threefold expansion of the centre for digital media from a current 92,500 square foot footprint to 250,000 square foot in the coming five years, housing over 200 companies by 2012. The aim is to create a "complete city quarter based on digital media enterprise".


3.5. Learning from Other Successes There has been much discussion in Ireland over the years of repeating the success of the Irish Financial Services Centre, which in some ways may be the original spark for the development of the Digital Hub. The International Financial Services Centre (IFSC) is a major financial services centre in the North Wall area of Dublin City (near the Docklands). It currently employs over 14,000 people and was the idea of now billionaire industrialist Dermot Desmond. Created in the late 1980’s when Ireland was in the grip of a long recession, the Irish government made the controversial idea the centrepiece of their economic manifesto through the Finance Act of 1987. The IFSC is a prestigious integrated development located in central Dublin which incorporates world-class office accommodation, educational institutions, executive housing, restaurants and shopping facilities. It has expanded beyond its original site and has become a vital part of the wider Irish economy. The IFSC now houses many of the world’s premier financial institutions, together with the leading law firms and accountancy and taxation advisors who support them. At its heart,

is the National College of Ireland, which provides continuing education to the financial professionals who work there. Leading authorities on digital media have called for the creation of an International Media Services Centre (IMSC) that would manage digital rights for Hollywood and the music industry from Ireland and would have the same impact as the International Financial Services Centre. According to the official IDA Ireland statement on the centre “the main driving forces for attracting foreign investment to set up in the IFSC include: competitive corporation tax rate of 12.5 %; the fact that Ireland is the only English-speaking common-law

"The growth of the Digital Hub in 2006 has consolidated our reputation, in Ireland and abroad, as one of Europe's most desired locations for companies in the digital media sector." Philip Lynch CEO Digital Hub Development Agency

“There’s a good opportunity for Ireland Inc to grasp the digital media world and set it up as a centre of competence equal to the IFSC. Ireland can be a host for all kinds of digital media – content management, distribution, IP protection –if the right environment was put in place.” Bartley O’Connor Associate-Director PricewaterhouseCoopers


jurisdiction in the Euro zone; an extensive tax treaty network (41 treaties, and nine others awaiting ratification); EU and OECD approval; sophisticated pro-business regulatory environment; proactive, all-party political support; and world-class professional services. The country also boasts a relatively strong economy, a young, educated workforce and a modern infrastructure.” Digital Futures Report The Digital Futures Group and Digital Competitiveness Stakeholders’ Consultation, chaired by Microsoft Ireland’s managing director in Ireland Mr. Paul Rellis, is currently compiling a report that will synthesise the views of current stakeholders. The report is being compiled under the auspices of the Institute of International and European Affairs (IIEA). The aim of the report is to lay the foundation for new thinking on a uniquely Irish model of a digital sector which the rest of the world will want to emulate, similar to the Celtic tiger of the Nineties. The report is seeking feedback on five key questions from a broad range of people involved in Ireland’s emerging digital sector. These include regulators, start-ups, subsections of the financial services arena, digital media content providers, games development companies, media and culture providers, finance and capital providers and foreign development initiatives. The five questions are:

1. What are the current policy (or other) opportunities and challenges that Ireland faces in the digital sector?

2. Which emerging trends are potentially dominant in the digital sector? 3. In which niches can Ireland become a world leader? 4. What is the most important strategic investment of relevance to the digital sector

that Ireland could make at this point to enhance its competitiveness in the next 10 years?

5. What are the next three steps Government should take? The impact of this report, when it is finalised and published, will be an important consideration, especially with regard to the recent economic downturn. Media Lab Europe – Failure to Launch Media Lab Europe (MLE) was set up in 2000 as the centrepiece of the Digital Hub project in Dublin. The centre closed in January 2005 and its failure cost the State €35 million. At launch, MLE was pegged as a research facility mirroring the Massachusetts Institute of Technology's (MIT) Media Lab. The project was developed by the Government in partnership with MIT, and ultimately produced just 15 peer reviewed papers over the course of its five-year existence. MLE primarily focused on innovation in digital technology and human-machine interaction. The lab was unfortunate to have been founded just as the internet bubble collapsed. This probably affected its ability to find corporate sponsors. Compounding difficulties, some members of the Irish university sector expressed concerns about the government money invested in the Lab. The Department of Communications, Marine and Natural resources has now converted the site into a new National Digital Research Centre, which was a tender won by three Irish Universities and two other higher education institutions. The Department will invest €25 million in the project over the next five years. In July 2008 The National Digital Research Centre (NDRC) announced €2m in funding for six new health projects that include using mobile technology to better manage chronic illness and using special sensors to identify human postures. The bid for the NDRC was


won by a consortium of higher education partners including Dublin City University, University College Dublin, Trinity College Dublin, National College of Art and Design and the Institute of Art Design and Technology. Media Cube – the Digital Hub’s Little Brother A state-of-the-art digital media centre has been set-up at the Dun Laoghaire Institute of Art, Design and Technology. The Media Cube is an incubation centre that fosters start-up business and research ideas in the digital media industry in Ireland. IADT was awarded funding of €2.5m to develop the Media Cube, both from Enterprise Ireland under the National Development Plan and from Bank of Ireland. The Cube works in conjunction with the Digital Hub, operating as an external centre to develop new clients. The Cube houses companies in the digital media sector, in the areas of film production, graphics, content provision and technology platform companies among others. Media Cube will also offer advice to burgeoning digital media companies as well as resources and manpower from IADT current students and graduates.


4 DIGITAL MEDIA STAKEHOLDERS and THEIR VIEWPOINTS


Ireland has a well-developed network of semi-state and lobby groups for industry, some of which have developed around the software sector in the last decade. Organisations representing the newer digital media companies are starting to appear now and further development of these and other network organisations will be needed going forward as the cluster develops.

4.1. Digital Media Stakeholder Landscape The landscape of stakeholders, as we see it, is divided into a number of linked groups, with examples shown below:

In conducting research for this report we sought and obtained feedback and input from representatives from each sector. In the following three sub-sections we give some background on the composition of the private sector, the public sector and the knowledge institutions and then present their feedback grouped together, as a whole. This is because there is so much interconnectedness and overlap in what they each have to say. Following that, we examine the feedback from the other sectors

4.1.1. The Private Sector Dublin has been very strong in terms of foreign direct investment (FDI) in the last two decades. The city is now home to the European headquarters of some of the leading companies in the high tech world including Google, Amazon, PayPal, Microsoft, IBM, HP as well as a number of international eLearning companies many of which originated in Ireland.


4.1.2. The Public Sector Government departments and semi-state bodies have become more integrated in their approach to achieving their goals in recent years. This is particularly true of the agencies involved in enterprise development and innovation/research policy, which tend to sit under the auspices of Forfás. Established in 1994, Forfás is the national policy and advisory board for enterprise, trade, science, technology and innovation. Forfás provides the Department of Enterprise, Trade and Employment (DETE) and other stakeholders with analysis, advice and support on issues related to enterprise, trade, science, technology and innovation; including on the development and coordination of the enterprise development agencies:

• IDA Ireland • Enterprise Ireland • Science Foundation Ireland

Forfás provides administrative and/or research support to a number of independent bodies including:

• Advisory Council for Science, Technology and Innovation • Expert Group on Future Skills Needs (EGFSN) • National Competitiveness Council (NCC)

“We have huge potential in the digital media sector and efforts like the Digital Media Forum skillnet will help a lot. We could have a very exciting industry on our hands. The software industry has an advantage in that it’s been around for a while and has a lot of serial entrepreneurs with the scars on their backs to prove it.” Shane Dempsey Director of the Irish Software Association From siliconrepublic.com interview

“Ireland’s ambition is to become a leader in innovation. Our goal is to develop an innovation-driven economy that maintains competitive advantage and increases productivity. The publication of this innovation policy statement marks our progress to date and also explores opportunities where innovation can be better exploited.” Forfás Statement of Intent (from website)


Forfás also conducts ongoing evaluations of development agency programmes, at the request of DETE, to optimise their effectiveness and to inform future policy developments. Forfás manages Discover Science and Engineering, the national science awareness programme and hosts the Office of the Chief Scientific Advisor to the Government. Enterprise Ireland: responsible for helping to grow the sales, exports and employment of Irish-owned companies. Also administers national and EU supports for building technological innovation capability and co-operation between industry and higher educational institutions. IDA Ireland: responsible for securing new investment from overseas and encouraging existing foreign enterprises in Ireland to expand their businesses. Science Foundation Ireland: invests in academic researchers who are most likely to generate new knowledge, leading edge technologies, and competitive enterprises in the fields underpinning biotechnology and information and communications technology. SFI also advances co-operative efforts among education, government, and industry that support its fields of emphasis and promotes Ireland's ensuing achievements around the world.

Source: ForFas Figure 9: State Agencies for Science and Innovation Forfás is committed to focus on the following public policy areas which it believes has the scope for greatest impact on enterprise in Ireland.

• Capturing the economic benefits of public investment in research • Human capital development to support an innovation driven economy • Improving framework conditions for innovation and enterprise development • Advancing coherent and dynamic enterprise development policies


Overall expenditure on research and development in the Irish economy has been growing strongly in recent years (see GERD chart in Figure 10), as the government try and move the economy from a manufacturing/services core to a more knowledge based economy. This has been done by increased funding for research in knowledge institutions such as universities (mostly via SFI), joint funding to establish corporate research often in collaboration with universities (mostly via IDA) and by driving innovation and development amongst Irish small and medium sized companies (mostly via Enterprise Ireland).

Source: ForFas Figure 10: R&D Expenditure

4.1.3. Knowledge Institutions There are a number of knowledge institutions in the Dublin region:

• Dublin City University • University College Dublin • Trinity College Dublin • National College of Ireland • Institute of Technology Tallaght • Institute of Technology Blanchardstown • National College of Art and Design • Institute of Art Design and Technology

Other smaller colleges also cater for this sector such as the Ballyfermot College of Further Education. Although this may seem like a lot of higher education institutions, it should be pointed out that Irish universities and colleges would be smaller than continental equivalents. For example University College Dublin has approximately 17,000 students while the


University of London has over 90,000 students, with a further 41,000 students studying by distance learning.

4.2. Feedback from the Public, Private and Knowledge Institution Sectors

The feedback from the public, private and knowledge institution sectors had a lot in common so we present this as a whole and not separated by sector. Digital Skills There is a problem in Ireland in relation to the number of students going from second level to third level to study engineering, computing or science subjects. Not only have the numbers gone down steadily since the dotcom bubble burst in 2000 but also with the quality of students coming out of Irish university and college courses. This issue is not just for Ireland but most Western economies. There have been a number of reports and commentaries on this issue in recent years. The Expert Group on Future Skills Needs (EGFSN) launched in June 2008 its latest report, Future Requirement for High-Level ICT Skills in the ICT Sector. The findings of this report were:

• The Irish ICT industry has largely recovered from the global downturn experienced in 2001 and that there now is a substantial shift in the skills mix and levels.

• Projected demand for ICT skills is set to exceed domestic supply. Industry has

also identified issues relating to the supply of people with high levels of technical skills due in part to the lower numbers of high-performing school leavers choosing to study in computing and electronic engineering disciplines.

• A greater share of all ICT employment is now accounted for by people with high-

level skills, with lower skills jobs being replaced by those with requirements for strong technical, computing and engineering based skills.

• Graduate numbers in computing and electronic engineering have declined from a

peak in 2002 although overall the intake into these courses appears to have stabilised.

“Many of these people have developed from technologists into business people and there’s a mature cross-pollination between technologists and serial entrepreneurs. If we could foster cross-pollination between software entrepreneurs, digital media start-ups and serial entrepreneurs – it would be a powerful combination” Shane Dempsey, director of the Irish Software Association From siliconrepublic.com interview


• The numbers entering computing courses have seen a small increase and the number of PhD graduates in computing and electronic engineering is expected to increase significantly over the coming years.

• Inward migration will continue to be an important source of ICT skills into the

future. Ireland is seen as a location to which experienced talent can be attracted from all over Europe.

This report recommended:

• Incentives for studying higher level maths at Leaving Certificate • Introduce bursaries to boost the numbers studying in ICT related disciplines. • Enhance the professional mathematical development of primary and second level

teachers • Better communication of career opportunities and skills needs of the ICT sector • Increase the number of graduates/postgraduates in ICT related disciplines and

develop cross-disciplinary skills • Better preparing graduates for the workplace • Boost postgraduate training • Encourage highly skilled overseas graduates to study and work in Ireland

Within our own survey of SME’s in the digital media sector in the Dublin Region we asked “Do you currently actively engage with any knowledge institutions?” and the answer was:

• 52% Yes • 48% No

The survey also asked “If yes, please indicate what form(s) of engagement your company has with knowledge institutions in your region” and the answers were: (Sorted in descending order)

Industry-led research projects 50% Consultancy - business to academia 50% Sub-contracting 43% Joint research projects 29% Commercial Sponsorship 21% Contract research 14% Consultancy - academia to business 14% Other - recruitment scheme 14% Technology licensing 7%

Industry-led research and consultancy (business to academia) is the most common form of engagement. We then asked “Please list the knowledge institutions, within the Dublin region, with the highest level of engagement with your company” and the results were:

IADT 5 TCD 4 DCU 3 DIT 2 UCD 1 RCSI 1


Griffith College 1 NCTE 1

When asked “Please indicate regions, outside Ireland, where you have active engagement with knowledge institutions” the results shown in Figure 11 demonstrate that these companies are well connected internationally:

Source: ReDict Dublin SME Survey Figure 11: Foreign Engagement Future Skills Report and Skills Required In 2006, a report by the Expert Group on Future Skills Needs (EGFSN) and Forfás identified a set of skills for the digital media industry going forward and reiterated that these skills were crucial to Ireland’s continued growth in the digital media industry. The report stated that “a high quality mix of creative and technical skills will be required to meet the future needs of the digital media sector’. The Key Findings and Recommendations of the EGFSN were:

• Non-technical skills such as project management, sales and marketing, communication and interpersonal skills are increasingly important in the industry.

• “Ramping-up” of skills is required to stimulate overseas investment and to boost the indigenous industry. Specific proposals for achieving this include:

• Specialised courses and modules for the wireless and mobile sector, the film and television sectors, and the e-learning sector, among others.

• Creative courses (film making, design etc.) should incorporate more training in the use of technology.

• Course curricula should incorporate practical, industry-oriented elements, e.g. practical work on projects such as games prototypes and animation show reels. This should apply to both creative and technical courses, e.g. group projects could bring both content creators and programmers together to build a complete games prototype.

• Closer links between colleges and the industry through mechanisms such as structured work placements and internships for students, and the use of guest lecturers from industry


In the ReDict survey of digital media companies in Dublin we asked “Have you experienced a skills shortage in the required skills for your company?” of which 66% of respondents stated that they have experienced a skills shortage. Issues regarding availability of skills within graduates and the availability of applicants with appropriate backgrounds for the digital media industry was a recurring theme during interviews, and is supported by information gathered by the SME survey where we asked “please list the top three areas of skills shortage you have experienced” and responses listed the two most prominent areas:

• Adobe Flash Actionscript • Digital Video specialists

A more complete list of areas is given in Appendix 3. The survey went on to ask “How well do knowledge institutions in your region cater for these listed skills requirements?” and the response was:

Not at all Somewhat Good Very good Don't know 10% 43% 19% 0% 29% 25% 31% 25% 0% 19% 29% 36% 14% 0% 21%

In early September 2008 at an Ernst & Young’s Irish Employment Permit and Immigration briefing, similar sentiments were expressed. Mr Jim Ryan, an E&Y Partner in the Human Capital Practice said the severe shortages in certain sectors could only be addressed in the short term by adapting the country’s migration policy to tap into other countries’ skills pools. Since the 2006 report the higher education institutes, both private and public institutions have been developing new courses to try and fill these gaps. The Forfás/EGFSN report called for greater specialisation in the courses provided in the institutes of technology and the universities of Ireland and specified the need to develop creative skills. In particular, it highlighted the need to develop skills around the business potential of new media areas, such as e-music and gaming. Griffith College, a for-profit private institute in Dublin, launched a new master’s degree course in digital media in 2006.The MSc course modules cover digital storytelling, video and audio production, desktop publishing, e-learning and 3D modelling and animation. According to Griffith College, course graduates can expect to find work as designers and

“With few exceptions, we are finding that Irish graduates do not meet the standard required. The computer science graduates coming out of universities are too few in quality and quantity. It’s unlikely that we would offer a job to more than one graduate in a year or two. It’s a bad situation.” David O’Meara CEO of Havok, from Siliconrepublic.com


creative directors across a variety of cross-disciplinary industries. It also said that the course would foster entrepreneurial skills to turn an idea into a business opportunity. The Institute for Art Design and Technology (IADT) has just launched a new master’s programme - the MA/MSc in Digital Media. This two-year programme consists of a postgraduate diploma followed by the master’s in the second year. The course will include digital media for broadcast and digital media for mobile. The Digital Media Forum organisation has supported the development of the MA/MSc in Digital Media, both financially and through input from member companies. There does however seem to be a lack of information freely available on what collaboration may be possible between the digital media sector and the knowledge institutions. For example our SME survey asked “What are the greatest barriers to knowledge transfer from knowledge institutions to your company?” and they answered in descending order:

Lack of information about service offering of knowledge institution 50% Offering does not match the need of your company 42% Insufficient resources 42% No competent contact person in knowledge institution 27% Difficult to measure need for knowledge transfer 27% Problems with financing of collaborative projects 23% Legal issues 23% Lack of opportunity to get in direct contact 19% Lack of networking opportunities 19% Other* 19% No need for knowledge transfer 12% Lack of intermediation from transfer institutions 12% Risk of loss of know-how is too high 8% Lacking project management skills for research projects 8%

Research and Development Growth Funding for digital media is not only domestic. Trinity College Dublin’s (TCD) School of Computer Science and Statistics has been chosen among 10 universities for a technology donation to conduct several research and development (R&D) animation projects. The award is part of the IBM Shared University Research (SUR) award and it is one of only two universities in Europe to receive a donation of IBM’s Cell Broadband Engine (Cell BE) technology, which is used in the Sony Playstation 3. The research will be undertaken by TCD’s graphics, vision and visualisation group (GVG) and will focus on next-generation animation systems. Recommendations for Knowledge Sector In our SME survey we asked “In your opinion, what steps can knowledge institutions take to improve the transfer of knowledge to SMEs in the Digital Media sector?” and the answers were:

• Better shared vision of long term goals with more frequent contact • Streamline the IP licensing process • Over valuing of IP - legalistic rather than commercial focus of TTO - slow at

responding - inability to make IP relevant to market needs (lack of follow through)

• Take an industry-centric instead of academic-centric view of knowledge requirements.


• Be more pro active about the benefits that dealing with SME ventures may bring • Create [financial] incentives to work with SME's to narrow the divide between

institutional academic culture and industry • Encourage innovation outreach and the relationship between research, science

and society • Reach out instead of waiting for us to call. • Disseminate knowledge in a better way - there should be an online info store that

is easy to use and info that is in a readable form for industry. There needs to be a unified approach across all colleges - like following open-source principles.

• They can find out what companies are doing to see if there is a good fit between their research and commercial applications.

• Colleges need to make the effort to engage SMEs and to focus on the needs of industry more

• Transparency and a recognised track record of working well with industry. Trust is vital, especially when opening up ideas, so the risk in presenting an idea to an institution with many researchers available to run with projects is high for SME's who have limited time, limited resources and probably don't want to go down a legal route. Embedding researchers in the SME may be a better option.

• Let people know what you are offering. • Better supply of information and areas of expertise

4.3. Other Stakeholders and Their Viewpoints We now examine the feedback and viewpoints of the other stakeholders in the new media sector.

4.3.1. Networks and Facilitators A key part to any successful cluster is the network and facilitation organisations. Although there are a number of official and unofficial networks and groups in Ireland, many of them in the early stages of development, this would seem to be a key area for further development, not only in terms of getting companies in particular industry sub-segments to work together, as Enterprise Ireland is trying to do, but also in terms of different segments working together in this convergence space. One network that has been developed specifically within the Digital Media space is the Digital Media Forum. The Digital Media Forum is an enterprise network that develops and administers enterprise resources for companies in the digital media industry. It was formed by a number of industry players who found that there was a lack of collaboration and networking within the sector. To date the Forum has successfully administered two Skillnets Network Training calls (www.skillnets.com) and has raised significant funding to develop its enterprise training network on an all-island basis. The aim, over the next two years, is to develop a network of 200 companies in the Digital Media area on a national basis. Securing and managing funding for the network has proved very difficult and it is unclear whether the DMF will be able to continue after the current round of funding ends. The DMF is setting up collaboration and networking opportunities with Northern Irish companies at present under an InterTrade Ireland grant. Lack of cluster organisations or networking groups within specific sub-segments may also be an issue e.g. many such organisations existed during the dotcom bubble but ceased operations afterwards. There was a general consensus amongst the stakeholders that we interviewed that new networks were needed for this, for example a suggestion from IBEC


(Irish Business and Employers Confederation) was to set-up a ‘meeting’ in second life for industry and stakeholders to meet. Related to the Web 2.0 website (www.web2ireland.org ) a form of new networking event called “open coffee” meetings which originated in London and have now spread to other cities, including Dublin. The aim of these coffee meetings is to “…encourage entrepreneurs, developers and investors to organise real-world informal meet-ups to chat, network and grow.” Unfortunately for those companies not based in the Digital Hub there seems to be a certain lack of connection with other organisations outside of their comfort zone. Many of these newer start-ups have their own networks of ‘friends’ and collaborators whom they trust and work with. Many of these collaborators are international and new web- based tools along with communications advances, such as instant messaging and Skype, have allowed better contact on a regular basis. These collaborations often take place on a project-by-project basis. Another networking event is Techludd (www.techludd.com ). This is a free monthly social networking event for Irish start-ups and those interested in them, from founders to funders to fans. TechLudd was founded on the idea of nurturing a network around start-ups. The idea came about after the ‘Paddy’s Valley’ trip to Silicon Valley in December 2007. Paddy’s Valley is an ad-hoc group of Irish business and technology people who have decided to form their own delegation to tour Silicon Valley and create closer bonds with companies and Silicon Valley. The group witnessed at close hand the ecosystem that exists in Silicon Valley in terms of helping to nurture entrepreneurs with access, funding, contacts and communication (www.paddysvalley.org ). The visit was part funded by the state agency Enterprise Ireland. There is also the Darklight Festival (www.darklight.ie ). Darklight is Ireland's premier festival for filmmakers, animators and artists whose work explores the convergence of art, film and technology. Digital Media Awards The digital media awards, now entering their seventh year, recognise the best work in the areas of podcasting, blogging, web design, film animation, advertising, innovation and e-learning in Ireland. Overall there will be 17 categories, including four new categories introduced in 2007: the Connect-World Student Digital Storytelling Award, the Blogging Award, the Independent Podcast Production Award and the Commercial Radio Podcasting Award. Digital Media Forum Skillnet Skillnets is an enterprise-led support body dedicated to the promotion and facilitation of learning as a key element in sustaining Ireland's national competitiveness. Skillnets supports networks of enterprises to engage in training under the Learning Networks Programme. These Learning Networks, now referred to as 'Skillnets', are led and managed by the enterprises themselves and have created and delivered training programmes across a broad range of industry and service sectors nationwide. Skillnets stakeholders include the Irish Business and Employers Confederation, Chambers Ireland, the Construction Industry Federation, the Small Firms Association and the Irish Congress of Trade Unions as well as SME’s and individual trainees. The network comprises of 47 companies primarily based in the Digital Hub who work digital media sector. The objectives are:

• Attain accreditation. • Build Partnerships with academia.


• Develop commercial acumen to next level. • Provide the identified training. • Network growth and building of international links

The training part of the skillnet is focused on:

• Commercial Business Skills • Sales & Marketing • Technology Training for Digital Media Specialisations • HR People Management • Developing in-house Potential for Growth and Succession • Project Management in Digital Media Industry

The skillnet programmes are funded by the Irish Government’s Department of Enterprise Trade and Employment from the resources of the National Training Fund. Application in the Digital Media Sector Enterprise Ireland has been working to develop an “Innovation Capability Programme” within the digital media sector:

• Six animation companies • Technology and business innovation • 6-8 days consultancy from the UK • What was happening in the market; US networking (qualification of their

technology area) They have also developed a CEO forum in the animation sector. This group meets every 2 months and involves about 20 companies in total (domestic and international, from across Ireland). Events like these have helped identify key players, helped to build relationships amongst players, and helped Enterprise Ireland to understand the market. For example one result is that Enterprise Ireland will now start looking at funding ‘content’ start-ups which would not have been the case before now.

New Idea: Using the Dragons Den Formula The Digital Media Forum skillnet is planning on getting SME’s from the digital sector to pitch their business ideas to panels consisting of some of the heads of the largest tech multinationals in Ireland. The aim is that these senior executives will listen to and advise

“It needs to be realised that the digital media sector in Ireland in 2008 faces the same issues as software companies realised in 2002. These firms need greater support in getting their products to international market, as well as greater academia/industry involvement to ensure the business talent is up to scratch alongside the technical talent….If we could foster a cross-pollination between software entrepreneurs, digital media start-ups and serial entrepreneurs – it would be a powerful combination.” Shane Dempsey Director of the Irish Software Association from Siliconrepublic.ie article


these digital media companies. The initiative is called The Digital Media Panel and will include companies such as Microsoft, IBM, Vodafone, Google and Dell. Applications for the panels closed at the end of July with the first of two panels due to sit in September. Need for an over-arching network? There has been a call for the development of an organisation that can represent the entire digital industry including web, mobile and all mediums that digital content can be delivered through, similar to the British Interactive Media Association (BIMA). It seems that the BIMA is contemplating setting up a similar organisation in Ireland. This call has been echoed by other stakeholder interviews during this process including those from IBEC and in particular the Chair of the Irish Software Association (ISA) who talked about the ‘eco system’ in which digital media companies grew and the need to increase cross-communication with them. Particularly with those organisations that many of them have no connection with, from state agencies to venture capital firms to association organisations like the ISA.

4.3.2. Financing Bodies As well as funding from the semi-state or government sector such as Enterprise Ireland, there is also a small but active venture capital community in Ireland. This has been supplemented by activity from venture capital firms from outside Ireland such as Intel Capital. The Irish Venture Capital Association (IVCA) is the representative body of the venture capital industry in Ireland. The association was established in 1985 to represent the views of its members and to promote the Irish venture capital industry. The IVCA represents members who professionally manage over 95% of the EUR1.25 billion managed by venture capital funds on the island. Our membership also includes accountancy firms, corporate financiers, lawyers, consultants and financial institutions. In terms of full members:

• ACT Venture Capital Limited • AIB Seed Capital Fund • Bank of Scotland (Irl) Ltd • Delta Partners Limited • Dublin Business Innovation Centre • Enterprise Equity Venture Capital Group • Fountain Healthcare Partners • Growcorp Group Limited • Intel Capital

"We view the digital media industry as an area with significant potential for future investment. It is important that we identify the necessary skills sets and talents required for this knowledge-driven industry to fully exploit future opportunities for Ireland". Sean Dorgan CEO IDA from ForFas press release on ‘Future Skills Requirements of the International Digital Media Industry: Implications for Ireland’ Report


• Irish Bioscience Venture Capital Fund (Seroba) • Kernel Management Partners Ltd • NCB Ventures Limited • Trinity Venture Capital • Western Investment Fund • 4th Level Venture University Seed Fund Limited Partnership

These companies are generally interested in more than one sector of the economy, as can be seen by some examples below:

Name ACT Venture Capital Limited

Website www.actventure.com

Fund Size €300m

Investment Range €750,000 - €15m

Sectors

Information and communications, technologies, medical devices and life sciences

Name Delta Partners Limited

Website www.delta.ie

Fund Size €130m

Investment Range 1/2m +

Sectors Communications technology, software, life sciences

An economic impact study conducted by the Centre for Entrepreneurial Studies in UCD found R&D expenditure by VC-backed companies represented 25pc of total Irish indigenous spend on BERD (business expenditure on research & development). R&D expenditure in these companies rose by 25pc in 2007, compared to an increase of 7pc by other indigenous companies. The UCD study also found that graduates represent just over three quarters (76pc) of the workforce of VC-backed companies, and PhD employment increased by 20pc in 2007.

4.3.3. Services Quite a few of the companies analysed as part of our work have been services companies for the digital media sector or for clients seeking digital media solutions for marketing or communications. In addition to this there is a small number of services companies that deal with the digital media sector, though not exclusively, such as legal companies (Arthur Cox and company) or intellectual property experts (Tomkins). Two main online sources of tech news which fall into the “services” category, not including various podcasts and blogs, are Electric News Network (www.enn.ie ) and Siliconrepublic.com (www.siliconrepublic.com ). ENN was founded in 1999 by a technology journalist Sheila Averbuch and was one of Ireland's first pure digital communications companies. ENN publishes a number of email newsletters under the ENN brand and for corporate clients. The free-access newswire (www.enn.ie ) reaches more than 65,000 unique readers a month.


Siliconrepublic.com is a major source of technology news in Ireland with over 80,000 visitors a month. They have introduced new site sections such as Digital Life and New Media to reflect the importance of technology in mainstream business and lifestyle. Siliconrepublic also produces tech news for one of the mainstream newspapers each week. All the main newspapers and their online versions have technology sections and business sections that would cover the digital media world at various times. There are also various bloggers and podcasters that comment on the sector including Web2Ireland and others mentioned earlier in the report.

4.3.4. Incubators and Science Parks All Irish universities have incubators such as INVENT in Dublin City University or NOVA in University College Dublin. Most of the Institute of Technology now also have incubators; of particular interest is the relatively new MediaCube incubator facility in the Institute of Art Design and Technology also in Dublin. When we asked in our survey “At what level in the knowledge institution do you most commonly initiate knowledge transfer projects?” the answers were:

Department Office 36% Principal Investigator 36% Other (careers office, management office) 18% Post-doctorate level 9% PhD level 9% Technology transfer office or equivalent 0%

Interestingly not one responded that they engage with the technology transfer office! Obviously there is a need for TTOs to become more involved with industry in particular ensure SMEs are aware of their existence and how they can help in initiating knowledge transfer opportunities.


5 CONCLUSIONS


While there are many recommendations that could be implemented in Dublin alone, there does seem to be a fundamental shift needed in the relationship between the digital media community and those capable of supporting or working in collaborative, innovation ways. For example one of the questions in the survey was “Rate the importance of knowledge transfer from knowledge institutions to improving the competitiveness of (a) your company (b) the digital media sector in your region.” Whilst most companies agreed that knowledge transfer is important for the digital media sector, 36% do not believe it is important for their company with an additional 24% only believing it somewhat important.

Not important

Somewhat important Important

Very important

Your company 36% 24% 20% 20%

The Digital Media sector in your region

17% 42% 21% 21%

Recommendations During the period of time that the report was conducted, the external financial situation deteriorated considerably. Between now and 2011 it is expected that industrial output will continue to slide, bringing with it job losses in many sectors including construction and the financial services. Despite the negative external environment we are confident that the digital media sector may actually grow in Ireland during this time period. As consumers cut back on their spending, we expect to see the maintenance of spending on various elements of digital media, as more people entertain at home. Other trends coming from the US, such as the increase in sales of DVD rentals and take-out operations such as Domino’s pizza are an early example of this. Another example is that movie box office grosses rose during five of the last seven recessions in the U.S. As a conclusion from our investigation we identified the following business needs in the new media sector:

• A major skills shortage was identified both in terms of technical skills and also sales/marketing skills;

• Intellectual Property issues were identified both in terms of general education across the sector but also in terms of working with knowledge institutions (e.g. time-lag, bureaucracy involved);

• There is a need for improved ways of working with knowledge institutions resulting from the differing needs of the SME and the educational sectors involved;

• The sector needs new and possibly ‘alternative’ networks both within Dublin but also at European level;

• A dedicated source of funding, specifically for collaboration, would greatly enhance knowledge transfer into SMEs.


We suggest, based on feedback from the sector, that the digital media sector may weather the current downturn better than many of the traditional industries in the Dublin area. As a result of our assessment of the sector we make the following recommendations:

• Accelerate the development of the digital hub and ensure that it links with the other digital media companies in the wider Dublin region

• Develop entrepreneurship modules in courses related to the digital media sector in the various colleges and universities

• Continue to develop concepts such as the Irish Learning Alliance and Animation CEO Forum to accelerate development in other core segments of the digital media sector in Dublin;

• Further examination of skills development by the further and higher education sector in Dublin and use gap analysis to identify issues in the digital media sector that are not being addressed;

• Create a forum for the universities and colleges to discuss skills needs with industry immediately;

• That organisations that deal with retraining of workers look at creating a suite of training and education in the digital media and related technology areas as a real and current skills gap exists

• Encourage the development and roll-out of the Creative Dublin Alliance and its plan to brand the city as a ‘knowledge city’

• Seek common IP agreements for development between the sector and knowledge institutions via Enterprise Ireland and through initiatives such as the National Digital Research Centre (NDRC)

With a skills shortage very obviously not being currently dealt with in the sector and with rising unemployment in most of the rest of industry in the Dublin region, there is a real opportunity to drive growth and jobs in this sector via skills training, further and higher education solutions.


Appendix 1

List of Stakeholder Interviews Networks and Facilitators: Digital Media Forum, Irish Software Association, ICT Ireland, IBEC, Irish Internet Association, Digital Hub Development Agency, Digital Futures Group, Institute of International and European Affairs Public Sector: Enterprise-Ireland (EI), Industrial Development Agency (IDA), SFI Services: Arthur Cox, Tomkins Incubators/Science Parks: Invent (DCU), Nova (UCD), MediaCube (DLIADT) Private Sector: Google Knowledge Institutions: Oscail (National Distance Learning), National Centre for Technology in Education, DCU, UCD, DLIADT SMEs: ChangingWorlds, Vanishing Point, vStream, Digitary, CustomerMinds, Slidepath


Appendix 2

List of SMEs by Segment Location Company Name Primary Focus

Digital Hub Baydon Solutions eLearning Calico Media Services Gaumina CGA Kavaleer CGA SONAS Innovation Enabling Equinox eBusiness Solutions Enabling Eirplay Games Gaming GALA Networks Gaming GOA Games Gaming Lincor Services PutPlace Services Blinck Mobile Mobile Cibenix Mobile DMF Mobile TV Network Mobile Glantel Mobile Macalla Software Mobile Mobile Travel Tech Mobile MobileAware Mobile Relevant Media Mobile Sentry Wireless Mobile Zamano Mobile Athena Media DVFT Access Media DVFT Journeyman Productions DVFT Binarie Digital Media Services Clonboofilms DVFT Cubedroute Services Tinpot Productions DR&M Vstream Digital Media DVFT Pixalert eSecurity Datahaven Enabling CNA Holdings eSecurity Fluid Rock Services GigaBeam Ireland Enabling Group Interactions Enabling Heraghty Internet Services Imagine Marketing Ireland Services Lightbox Media Services New Graphic Services Pixelsoup Services Redrage Films DVFT Softwaredesign Enabling Phoenix Safety eHealth Pembroke Technology Ltd Enabling


Digital Animation Media CGA Space Synapse Services Digital Depot Xwerx Services V Rising CGA Virtual Eye eHeritage Studio Rua CGA Spline Design CGA Sentry Wireless Infrastructure SchoolSpace Mobile Relevant M Services Putplace Infrastructure Clintech eHealth Ballywire DVFT Zinc Films CGA Access Media Productions DVFT Higher Education Incubators DCU (Invent) Slidepath eLearning INSERO Mobile Digitary eSecurity Jeebers Services UCD (Nova) eLearning Union eLearning Ionic Design Services Broadcast Learning eLearning ASimil8 eLearning Cornerstone Knowledge Int eLearning TCD Authentik eLearning Haptica eLearning DLIADT (Media Cube) AdLib Media Mobile C/B New Media DVFT CKSK Services Customer Minds Services eTailor Services MaxMedia Communications ePublications Mobile Cultures Mobile Mug Media CGA Ossidian Technologies eLearning Price Web Designs Services VidaTech eLearning ITT (Synergy) Global Security Devices eSecurity Docklands Innovation Park Doop Services Guiness Enterprise Centre Free Key Animation CGA East Point Park Babelgum DVFT South Dublin Changing Worlds Mobile Random Thoughts Mobile Broadcast Learning eLearning Webfios eLearning Time2Go DVFT Quinridge Ventures Mobile Purplenose Games Gaming Upstart Games Gaming


Vanishing Point CGA Digitalounge Media DVFT Anistock CGA Element Pictures DVFT Puca Mobile Box Creative CGA

Jimmy Murakami Film Production CGA

Keg Kartoonz CGA Martello Media eHeritage Combined Media eLearning West Dublin CompuPharma eLearning Kratos Services North Dublin Vimio Mobile Delicious 9 CGA Brown Bag Films CGA Movidia Gaming Interactive Services eLearning Sia Group Services Dwarfed Films DVFT Emotional Sack CGA Graflicks Scripting CGA Illusion Animated Productions CGA Pixel Lab CGA City Centre WidWave DVFT Anam Mobile Newbay Mobile Ammeon Mobile Jam Media CGA Muzo DR&M Boulder Media CGA Vyro Games Gaming Learnex eLearning Balcony TV DR&M Intuition eLearning Innerworkings eLearning Channel Content eLearning X Communications Services DV4 Services Glimpse Digital CGA Mapflow Other Monster Animationand Design CGA Rocket Animation CGA Screen Scene DVFT Pirhana Bar CGA Cybercom Services ICAN Services Sink Digital Media eHeritage Windmill Lane DVFT Tailored Films DVFT The Farm Media Group DVFT


Appendix 3

Survey Full Results

Q1. What is your role in the company? All respondents at senior management level and 67% were CEOs or equivalent. Q2. How many employees are there in the company? EU Scale

Growth Stage Model


Again the growth profile is in keeping with the age of the companies identified in question 3 although not all start-up companies were ‘young’ in terms of years founded, some companies have been using a ‘boot strapping’ model which has ensured slower growth in terms of employees. Q3. What year was your company founded?

In keeping with discussions with the industry and with stakeholders, the majority of the Dublin region digital media cluster is still quite young, many having been formed in the past 5 years.


Q4. What is the primary sector your company operates in?

Although this is only a sample, the percentage figures are not totally dissimilar from the main population e.g. CGA of 14% versus total population of 18%, DVTF of 17% versus total population of 13.5% and eLearning of 11% versus total population of 12.8%. Q5. Which additional sectors does your company operate in?

Q6. Please give a description of the main business activities of the company. See Appendix 2 for participants list Q7. Please input the number of employees that have achieved the following academic qualification levels. 14% of respondents have employees up to PhD level


41% up to Masters level 39% up to Degree level 6% up to Diploma Unsurprisingly there is a high level of academic achievement in this sector as a whole. Q8. Please enter the number employees in your company dedicated to R&D. 33% have both full & part-time 24% have full-time R&D employees 24% have part-time Only 6% do not have employees dedicated to R&D In total 94% of respondents indicated R&D activity in their company. There is a high level of active R&D involvement in Dublin in digital media, though how much of this is ‘research’ versus ‘development’ would be worth asking in any follow-up work. Q9. Rate the following sources of information in regard to their contribution to knowledge acquisition in your company.

Answer Options Not important


Very important

Internal employees 4% 7% 11% 79% Knowledge institutions 22% 52% 11% 15% Public organisations 21% 43% 32% 4% Collaboration with companies in your cluster 15% 37% 37% 11% Industry Support Services 18% 32% 32% 18% Local industry networks 18% 32% 36% 14% European network organisations 36% 29% 25% 11% International network organisations 21% 32% 36% 11%

Q10. Do you currently actively engage with any knowledge institutions? 52% Yes 48% No Q11. If yes, please indicate what form(s) of engagement your company has with knowledge institutions in your region. Industry-led research and consultancy (business to academia) is the most common form of engagement. Sorted to descending order:


Industry-led research projects 50% Consultancy - business to academia 50% Sub-contracting 43% Joint research projects 29% Commercial Sponsorship 21% Contract research 14% Consultancy - academia to business 14% Other - recruitment scheme 14% Technology licensing 7%

Q12. Please list the knowledge institutions, within the Dublin region, with the highest level of engagement with your company. IADT 5 TCD 4 DCU 3 DIT 2 UCD 1 RCSI 1 Griffith College 1 NCTE 1

Q13. Please list the knowledge institutions, outside the Dublin region, with the highest level of engagement with your company. Low engagement with Irish institutions outside Dublin – only 4 responses NUI Galway NUIG - DERI University College Cork Waterford Institute of Technology

Q14. Please indicate regions, outside Ireland, where you have active engagement with knowledge institutions.


Q15. At what level in the knowledge institution do you most commonly initiate knowledge transfer projects? Department Office 36% Principal Investigator 36% Other (careers office, management office) 18% Post-doctorate level 9% PhD level 9% Technology transfer office or equivalent 0%

Note: No one responded that they engage with the technology transfer office! Q16. Rate the importance of knowledge transfer from knowledge institutions to improving the competitiveness of (a) your company (b) the digital media sector in your region. Whilst most companies agreed that knowledge transfer is important for the digital media sector, 36% do not believe it is important for their company with an additional 24% only believing it somewhat important.

Not important


Very important

Your company 36% 24% 20% 20% The Digital Media sector in your region 17% 42% 21% 21%


Q17. What are the greatest barriers to knowledge transfer from knowledge institutions to your company? In descending order: Lack of information about service offering of knowledge institution 50% Offering does not match the need of your company 42% Insufficient resources 42% No competent contact person in knowledge institution 27% Difficult to measure need for knowledge transfer 27% Problems with financing of collaborative projects 23% Legal issues 23% Lack of opportunity to get in direct contact 19% Lack of networking opportunities 19% Other* 19% No need for knowledge transfer 12% Lack of intermediation from transfer institutions 12% Risk of loss of know-how is too high 8% Lacking project management skills for research projects 8%

barriers listed under ‘other’ category: Time is a big factor, in particular time it takes to inform and present ideas that are outside of core business where we tend to be pigeon holed We are a micro-enterprise (two employees -- the rest are contractors). Our small size is not conducive to building relationships with knowledge institutions. Colleges behind the pace, institutionalised work practices & mentality Technology transfer agreements to date have been onerous IP and IP Licensing issues

Q18. In your opinion, what steps can knowledge institutions take to improve the transfer of knowledge to SMEs in the Digital Media sector?

• Better shared vision of long term goals with more frequent contact • Streamline the IP licensing process • Knowledge institutions over value IP and have an inability to make IP relevant to

market needs. The TTO should have a commercial rather than a legalistic focus and needs to follow through with fast response

• Take an industry centric instead of academic centric view of the knowledge requirements.

• Be more pro active about the benefits that dealing with SME ventures may bring • Create [financial] incentives to work with SME's to narrow the divide between

institutional academic culture and industry • Encourage innovation outreach and the relationship between research, science

and society • Reach out instead of waiting for us to call.


• Disseminate knowledge in a better way - there should be an online info store that is easy to use and info is in a readable form for industry. There needs to be a unified approach across all colleges - like following open-source principles.

• They can find out what companies are doing to see if there is a good fit between their research and commercial applications.

• Colleges need to make the effort to engage SMEs and to focus on the needs of industry more

• Transparency and a recognised track record of working well with industry. Trust is vital, especially when opening up ideas, so the risk in presenting an idea to an institution with many researchers available to run with projects is high for SME's who have limited time, limited resources and probably don't want to go down a legal route. Embedding researchers in the SME may be a better option.

• Let people know what you are offering. • Better supply of information and areas of expertise

Q19. Are you involved in any industry-led research programme(s) with knowledge institutions? Yes 26% No 74% Q20. Have you experienced a skills shortage in the required skills for your company? 66% of respondents have experienced a skills shortage. Q21. If yes, please list the top three areas of skills shortage you have experienced. The two most prominent areas:

• Adobe Flash Actionscript • Digital Video specialists

Here is the complete list of answers collected, sorted into general skills areas: Interactive Media: Digital Media Specialists - web video producers DV Director Video editor Image and video processing Adobe Flash Actionscript Technical - Flash Actionscript Technical - particularly Flex and ActionScript Programming Excellent 3D Modellers High end graphics artists with video experience High level skills in interactive graphics software development Professional level storyboard artists Professional level layout artists User Interface design Software development:


Software Engineers Systems Architect Net developers Sim toolkit development Systems/ Business Analysts Embedded programming c/java Community Server Standards based web designers and coders Business skills: Business administration Business Analysts Commercial - Sales in particular Account Managers with experience in Digital Advertising Consumer Marketing Other: Team skills Senior project management Administration European Commission Framework 7 proposal writers to outsource to Auditors Q22. How well do knowledge institutions in your region cater for these listed skills requirements? The response was: Not at all Somewhat Good Very good Don't know 10% 43% 19% 0% 29% 25% 31% 25% 0% 19% 29% 36% 14% 0% 21%

Q23. To what extent has the company's location within the Dublin region added value to your business? 85% of respondents believe their location in the Dublin region has added medium or high value to their business. None at all Low Medium High 11% 4% 41% 44%

Q24. Please list the top three advantages to your company of being located within an industry cluster. Top:


Collaboration Networking Support available Full answers No. 1 Advantages:

• Some collaboration • Good support network • Exciting developments going on with other companies • Opportunities for organic networking • Bit of a vibe but quite intangible • Cheap rent • The brand of the Digital Hub has been a good recruitment draw • Access to shared expertise • Referral for services • Closeness to other similar companies - collaboration • Information exchange with other companies in the cluster • Shared resources • Linkage with other companies • More of our customers are located in Dublin • Pool of experienced personnel • Availability of good people • Collaboration and network • Access to knowledge network • networking • Involvement of similar size companies • Close to clients • Proximity

No. 2:

• Clusters reputation is well known and therefore has positive associations • Don't feel as isolated, like-minded people around • Infrastructure solutions (e.g. internet access) are already in place • Have made some good contacts but fairly informally • Good IT Infrastructure • Shared services and low rent in the Digital Hub a huge plus • Access to investment capital • Support structure of hub - mentoring in 1 year and flexible rent and support

systems • Use each others contacts • Working environment • Shared facilities • More networking opportunities • Access to potential clients visiting the cluster looking for a vendor • Ready access to relevant business services - design, legal, financial, etc. • Concentration of expertise - outside buyers looking in • Involvement within similar technologies • Networking • Collaboration

No. 3:


• Access to similar companies • Crossover events and launches • Clients are familiar with the cluster and being part of the cluster adds a

"validation" in the eyes of the client • Good Support Services • Have done business with other people in the Digital Hub • Access to facilities • network and international brand association • prestige • More scope for contacting potential customers and contacting them because

Dublin is the main hub • Informal networking opportunities • ready access to air transport • In-house clients • Skilled workforce • Knowledge share

Q25. Please indicate whether you are involved in the following types of projects. collaborative project(s) with other SMEs in your cluster

80.0%

collaborative project(s) with large indigenous companies in your cluster

33.3%

collaborative project(s) with multi-national corporations in your cluster

20.0%

Q26. What are the greatest barriers to collaboration with other companies within your industry cluster?

• The downturn in worldwide markets leading to a lack of funding for projects • Lack of information re other companies interest areas • Possible competition from other companies for same client • Knowing that the opportunity is there • Many are competitors • Distance - even the 10km from MediaCube into the city takes a half-day out of

schedule • Little similarity • Nothing major, just having the time free to do and the need being strong enough • Our size • Lack of knowledge of other capabilities - no forum to exploit same • Often companies are afraid of loss of IP • Intellectual property ownership • Common clients • Too many companies claim to be able to do more than they can (i.e. web design,

film, animation) • Similar (competing) client base • Conflicts of interests • It is often more attractive (i.e. there is more strategic gain) by collaborating with

companies in other geographies - spreads network further. • Knowledge leakage to larger partners/IP protection/legal costs • Time needed to research the key areas of the other companies. • Trust • Fear of poaching of staff, clients etc • competitive advantage


• Local broadcasters resistance to sufficiently investing in home grown projects • We are too small in size for collaborations -- we are too busy dealing with client

work • Too busy focusing on starting up the company at present • Complementary opportunities • competitiveness nature of companies • The standard of many companies in our cluster is poor - everyone sees

themselves as an expert • Lack of time for collaboration • lack of knowledge of potential for collaboration • Finding common company values • Lack of understanding of the others needs • Legal issues • Lack of formal structures to support collaboration • Potential competition - they could steal our clients • Different areas of focus • Lack of market driver for collaboration • Competition for clients

Q27. How would you rate your level of collaboration with companies within your region versus with companies outside your region?

Much less Less About the same More Much more

20% 12% 44% 12% 12% Q28. What support services are needed to improve collaboration with other companies in your cluster?

• Broadband speeds need to be improved • Open communication of resources available. • Better networking • Online forum that highlights projects where possible collaboration would be

possible, something akin to Cordis (European programme) • Someone to run a cluster who is knowledgeable, well-rounded and good

experience. Someone entrepreneurial and with start-up experience. Someone who will contact and come to see you, not just a forum where you are expected to send still. Unfortunately the cost and difficulty of finding such a person is prohibitive.

• Most digital media companies are predominantly start-ups with no money. Would like to set up collaboration projects but it needs time and money. There should be a collaboration fund available to start-ups so time can be given to investigation opportunities.

• Legal frameworks. • Role models • Structures • Networking – i.e. every month • Resources for companies, not intermediaries like knowledge institutions. • More networking events between counties • Common, independently hosted collaboration tools e.g. Wikis for sharing non

client specific information • Hosted open days


• Networking events, market drivers for collaboration - companies need to be able to make joint pitches to potential end customers so that a cluster of SME's can deliver a project to a large multi-national client.

• IP support - standard contracts and legal support • Incentives and networking forums" • Education and information on companies and the type of companies around. We

have found that joint projects have come from talking about what we can offer, or how we can help. This time is not always there. Other companies may be slow to pick up on some of the larger tenders floating around Ireland and by a simple joint venture the two companies learn from each other and are left in a positive place where they can put their company up for more exciting projects.

Q29. Please rate the following mechanisms in regard to adding value to your company.

Answer Options None at all Somewhat Good Very good

Network meetings 11% 30% 41% 19% Industry Events 7% 15% 67% 11% Technology Fairs 23% 19% 46% 12% Competitions & Awards 33% 30% 22% 15% Public Funding 22% 26% 37% 15% Coaching 16% 56% 16% 12% Public policy 27% 50% 15% 8% Focus groups 56% 32% 8% 4% Round table meetings 48% 24% 28% 0% Online information 11% 11% 41% 37%

Q30. Please indicate which industry support and networking organisation(s) your company is a member of and/or actively engaged with. All respondents indicated engagement with at least one support organisation. Irish Software Association 40.0% Irish Internet Association 40.0% Irish Business and Employers Confederation (IBEC) 20.0% ICT Ireland 10.0% Small Firms Association 5.0% Irish Small & Medium Enterprise Association (ISME) 10.0% Dublin Chamber of Commerce 10.0% Digital Media Forum 40.0%

Q31. To what extent are industry support organisations in your region engaged in lobbying the general interests of your company? Not at all Somewhat Good Very good 24% 40% 32% 4%


Q32. To what extent has your engagement with industry support and networking organisations added value to your business? Not at all Somewhat Good Very good 13% 39% 26% 22%

Q33. Are you actively engaged with any technology transfer intermediaries in your region? Yes 7% No 93% Q34. How would you rate the funding mechanism(s) available in your region regarding:

Answer Options Don't know

Very poor Poor Good

Very good

Information 15% 4% 15% 58% 8%

Availability 15% 7% 22% 48% 7%

Application procedure 22% 15% 19% 44% 0%

Response time 23% 12% 27% 38% 0%

Ease of management 23% 15% 27% 35% 0% Q35. Please indicate the level of funding raised for R&D within your company to date. None 25.9% €1 - €20,000 25.9% €20,001 - €50,000 7.4% €50,001 - €100,000 3.7% €100,001 - €200,000 0.0% €200,001 - €400,000 3.7% More than €400,000 33.3%

Q36. Please comment on how funding mechanisms could be improved to increase R&D and knowledge transfer to your company. Parameters are usually set too narrowly. The only agency we approached for funding was EI. I believe their process has improved since then. For us at the time, the effort outweighed the reward.

• Have found it good • More government aid • Think it's good, just haven't yet utilised any.


• Make all EI processes web based. Don't make me enter the same information 1500 times. Give some insight into the total process at the start rather than dribbling it out.

• Be accessible online and allow for preparatory submissions; allow for funding without using employee numbers (increasing) to be a KPI.

• Could take us out of survival mode • Specific funding initiatives to sponsor PhD level research • The application procedures are too bureaucratic - we should be able to pitch for

funding initially. Digital media companies find it hard to outline everything on paper, we prefer to sell our concept in person. Also the wait time regarding responses is very slow - we applied for funding and it took seven months to hear back.

• We are currently moving R&D to the USA due to greater support available there.

• More active brokers, consultants and open information • More joint industry funding would benefit the sector

Q37. Do you currently generate revenue from markets outside Ireland? Yes 76% No 24% Q38. If no, do you plan to expand into international markets within the next three years? Yes 100%! Q39. What are the greatest barriers for expansion into European markets for your company?

• Competition from other companies with better access to funding • Cost base • No great barriers, actually we are well positioned with employees already poised

to work in other markets • We do not have a presence outside Ireland • Not great barriers, just need the time and money to do it • Regulation • Cost of setting up a presence • Capital • Lack of resources to market our company • Resources • Funding • Language • Different standards bodies/approaches in each country • Internal finance • Finance • Language issues • Skills - need more good sales people in order to be able to target new regions • Cost of market research, local knowledge and getting to know local characteristics • Capital • Competition • Time/capital/human


• Irish market too small - have to go for Europe straight away, even before really ready for it

• Qualified sales staff • Contacts abroad • Comparative lack of uptake in eLearning (compared to US) • Need for local market presence in every country • Capital • Easy access to market research for target markets • Localisation services • Staff - scaling upwards without funding • Language barriers

Q40. Are you aware of any consulting agencies/other agencies that can stimulate a growth process for your company? Yes 56% No 44% Q41. By 2010 how many employees do you forecast there will be in your organisation? 1 – 10 18.5% 11 – 25 37.0% 26 - 50 25.9% 51 - 75 14.8% 76 - 100 0.0% 100 - 250 0.0% More than 250 3.7%

Q42. What is the business strategy for your company within the next three years? Organic growth 85.2% Growth by acquisition 25.9% Venture Capital funding 29.6% Acquisition of the company 7.4% Other (please specify) 14.8%

Other: Enterprise Ireland funding Private funding from BES investors Organic growth for our production company - but we would like to franchise our film school model Strategic partnership


Q43. In this project, we are developing a European network for knowledge transfer in the ICT/Digital Media sectors. Please indicate whether this type of network would be something your company would be interested in joining and detail what your main areas of interest would be. 82 % of respondents indicated that they would be interested. Areas of interest:

• Post production - all areas • Content Management • Open Source • Aps • Standards • Only if done properly, currently there is a European tech transfer site but it

really is not very good. • 3D software development. I would like to get involved in talking to some

institutions regarding developing a 3d engine that will work on mobile devices based upon ISO standards such as X3D and vrml.

• Yes but only if done in such a way as it's easy to use and no steep learning curve. Needs to be something can dip in and out of fast to find the right info. Need a standardised online knowledge repository across European institutions.

• Usability, web design, consumer marketing, consumer focused software. • Information security; electronic signatures to facilitate trade. • Digital radio, television, online content etc. • Mobile software/infrastructure • Post Doctorate research and development projects • Potential collaboration with companies in a similar space • Funding, contacts abroad, collaboration • Developing networks of companies with complimentary skills/services that can

jointly respond to commercial and public tenders - or other business opportunities

• Multi-media • Gaming • Space and biomedical science • Bluetooth Mobile Marketing • 3D, Realtime 3D, Visual Thinking • eLearning • Digital media

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