A REPORT BY cable company UPC has suggested that the internet will contribute €11.3 billion to the Irish economy on an annual basis by 2016.

The report, commissioned by UPC carried out Amárach Research, shows that despite the recession Irish people are forward-looking ‘digital optimists’ who are anticipating a host of new services that will enable them to work, shop, study and share from the comfort of their home in future.

Launched today by Communications, Energy and Natural Resources Minister Pat Rabbitte TD, the report says the Internet will contribute €11.3 billion annually to the Irish economy in 2016 – rising from €4.7 billion in 2010 – providing that current trends are maintained.

This projected increase will be underpinned by 2.6 million online shoppers who are expected to spend €3.7 billion in 2012, rising to €5.7 billion (7 per cent of all consumer spending) in 2016, according to the findings of survey.

At present, the internet economy accounts for roughly 3 per cent of Irish GDP and this is set to double to 6 per cent over the next four years.

Rabbitte welcomed the research, saying it provided further insights into the potential of the internet to contribute to economic renewal and recovery in Ireland:

We know that key ingredients in achieving our potential are high speed broadband and digital participation – by citizens and businesses. As a progressive knowledge economy, trading goods and services globally, we need to be better connected than most in the world and we need to embrace the opportunities the Internet makes possible.

The UPC Report estimates that employment can be increased of 18,000, or more, so long as Irish society and industry can “keep pace” with the digitisation levels of areas like the UK and Scandinavia.

The reported noted that internet usage in Ireland is growing exponentially, with an 800 per cent increase in total Internet traffic recorded per month since 2009.

Requirements ‘growing constantly’

UPC Ireland CEO Dana Strong said the company had noted that customers’ bandwidth and content requirements were “growing constantly” – a factor she says is driven by an explosion in video content available online.

“We were surprised to discover that people are spending 2.6 hours online every day, and that nearly 70 per cent of us frequently shop online. This indicates that the size of digital spend is large and is going to be enormous in years to come. We must ensure that these developments are met by Irish based productivity and innovation in the future,” Strong commented.

She noted that 55 per cent of businesses surveyed indicated they plan to hire new staff in the coming two years. “Businesses clearly recognise the opportunity that broadband represents – in fact one in four businesses think they could achieve an extra 5 per cent growth on top of their current prospects with the right online strategy. If we can achieve a digital economy equal to that in the UK, we stand to gain 18,000 jobs,” she said.

The UPC/Amárach research involved conducting two parallel surveys in August 2012: the first was an online survey comprising 1,000 adults aged 16 and over, representative of Ireland’s population; and the second comprised a telephone and web survey of 201 IT decision-makers in Irish SMEs and larger corporations, with quotas to ensure a cross-section of companies by size.

Key findings

Life Online

• 80 per cent of adults use the Internet in Ireland, up from less than 50 per cent in 2007
• Broadband take-up in Ireland matches the EU average at two thirds of homes
• Internet users spend an average of 2.6 hours online on a typical weekday, rising higher at the weekend.
• 69 per cent of people say their broadband speed is sufficient for current needs, however 44 per cent say it is not sufficient for their future likely needs
• On average there are two or more people using broadband in every home, with two or more devices connected at the same time.
• Shopping and social networks are the most popular online activities.
• There are 2.6 million online shoppers in Ireland, who are expected to spend €3.7bn in 2012. Some 15 per cent of the population (15s-24s) represent almost 20 per cent of online shoppers.
• On average Irish adults who shop online are spending €116 per month online (15-24s €61); (Over 55s €168).
• Over 60 per cent of online shoppers would buy from an Irish website if they knew about one that matched equivalent offers from international sites.
• 30 per cent of people use a laptop / tablet / smartphone at the same time while watching TV

Buisness

• 80 per cent of businesses are optimistic about their growth prospects in the coming two years
• 55 per cent of Irish businesses say they intend hiring in the next 12 – 24 months.
• Over 75 per cent of companies supply smart phones and laptops to about a third or more of their staff.
• A third of adults already use the Internet at home for work purposes
• Six in 10 workers are expected to work from home some or all of the time by 2016
• Half of all adults would be interested in running their own business from home at some stage, facilitated by digital technologies
• Nearly half of all businesses have observed an increase in online feedback from customers in recent years
• 1 in 4 businesses think they could have an extra 5 per cent growth on top of their current prospects with the right online strategy

When asked what is the one service in their homes that they couldn’t live without, the number one choice for over a third of Irish adults in 2012, is broadband – over electricity, television, phone and water (at just 6 per cent) in that order.

Read the full UPC report: Driving Economic Recovery

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