As the digital economy surges, local firms must not be consigned to history

Irish people spent €6bn online this year, but only €1.1bn of that is likely to have found its way into the coffers of local businesses.  

To correct this, BearingPoint and the Innovation Value Institute are going to help firms develop long-term strategies.

Recent studies that reveal while Irish consumers are spending heavily online, most are buying from international, rather than Irish, retailers.

In 2014, Irish consumers will have spent €6bn, according to the Second UPC Report on Ireland’s Digital Future. But according to the Irish Government, only €1.1bn was spent on Irish goods and services online in 2013, suggesting Irish businesses are missing a trick.

Ireland’s internet economy is worth 5pc of GDP, and is estimated to grow to 10pc, or €21.1bn, by 2020 – which means there is a window of opportunity for Irish firms to get their online affairs in order.

In that time, as many as 150,000 jobs linked to the digital economy could be created in Ireland. The question is, how many of these jobs will be created by traditional, local companies.

“Irish businesses can forge an entirely new digital environment using technologies like big data and cloud computing,” said Michael O’Dwyer, partner at BearingPoint Ireland.

“These are widely available and widely regarded, and can have hugely transformative effects on a business, particularly in delivering new value to customers. We are confident that the know-how delivered by our new partnership with the IVI will be of huge benefit to Irish businesses in this regard.

“Adoption of these new technologies drives up not only productivity and efficiency, but profitability. An innovative Ireland that embraces this new digital economy will not only remain relevant, but encourage business creation and attract continued foreign investment,” O’Dwyer said.

Firms must ensure they don’t become digital debris

A new BearingPoint digital economy report claims that the convergence and mass adoption of new technologies is creating a new digital environment, where businesses are investing in new skills and looking to their digital-focused partners to provide technological insight and value to their operations.

While the report outlines the consistently strong value of physical stores (consumers can see, touch and test products), through innovative use of emerging digital technologies, businesses can offer bespoke, personalised services, resulting in new customer experiences.

The BearingPoint Institute report highlighted how car manufacturers – through the use of integrated digital services like music streaming, automatic traffic updates and anti-theft tracking – are embracing a combination of new technologies to enhance customer experience.

However, there is concern that an unwillingness to adapt to new technologies, or a general ignorance of them, may be holding back Irish businesses.

The report cited Blockbuster, Kodak and EMI as businesses that had failed to adopt a meaningful digital strategy in the face of internet-born competitors, suffering considerably as a result.

“We believe our mix of academic research with BearingPoint’s hands-on digital knowledge gained from working with digital leaders across Europe will help define the digital adoption roadmap which will significantly help Irish organisations accelerate their digital readiness,” Martin Delaney, general manager at the IVI said.

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As the digital economy surges, local firms must not be consigned to history

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