Enterprise Survey

www.thedigitalhub.com

The Digital Hub Enterprise Survey 2010


Digital Hub based technology and content companies are innovating and growing out of recession. They expect to grow both turnover and jobs signi�cantly during 2011.

Survey Highlights

According to our survey 22% say that their business has been “unaffected” or

“positively affected” by the economic downturn in 2010. This response

illustrates an important opportunity for economic growth and jobs coming

from the digital technology and content sector for 2011 and beyond.

The digital technology and content enterprise cluster growing up in and

around The Digital Hub represents a significant critical mass of the developing

Irish industry. As the largest cluster of digital companies in Ireland The Digital

Hub acts as a leader for the indigenous industry. This survey conducted in

November 2010 allows us to capture an up-to-date and accurate snapshot of

these businesses at a local level.

The recession has had little impact on companies’ investment in

product/service development. This points to an industry sector which will

invest in securing its future and innovating its way out of recession - the

perfect example of a Smart Economy. This contrasts with other sectors of the

Irish economy.

Details on the staffing of businesses illustrate a clear and substantial increase

in the number of subcontractors being used by companies since 2007. The

majority of companies that were looking to recruit staff this year have

indicated that they experienced difficulty in finding suitably qualified and

experienced applicants. The conclusion can be drawn that despite high levels

of unemployment in Ireland, candidates with industry experience and

qualifications are in short supply. This corroborates recent reports by Forfás

that there is a significant shortage in highly skilled digital workers.

Source: Forfás, Profile of Employment and Unemployment, February 2010.

“At present, there are few areas of skills or labour shortages. Any shortages are

now confined to areas for persons with third-level qualifications and specific

expertise and work experience”.

“The knock on impact of the lack of credit has resulted in a dramatic reduction

in investment, with 83% of companies, dissatisfied with their banks. The

uncertainty of the availability of credit to finance and maintain projects has

reduced applications and this is doing untold damage to an already fragile

economy”.

Source: ISME, Quarterly Bank Watch Survey September 2010.

We asked companies to outline their innovative activities and co-operation

arrangements. Their response indicates that co-operation arrangements on

innovation activities amongst companies in The Digital Hub have increased

significantly since 2007. This demonstrates that the clustering of digital

businesses together is having an increasingly important role in their

development. There is also a clear correlation between the types of

collaboration going on in the cluster and the various enterprise development

activities taking place in the cluster, such as The Digital Hub Leads Exchange.

“A business environment that is conducive to innovation facilitates collaboration

and networking. It values (and invests in) education and knowledge; it facilitates

the exchange of ideas and knowledge and provides a strong intellectual

property framework; it stimulates demand for innovation in enterprise through

strategic use of public procurement and regulatory frameworks; and it promotes

the commercialisation of new ideas.”

Academic co-operation with companies in The Digital Hub has also increased

and this is due to a greater effort by academic institutions to actively

encourage companies to partner on projects.

Source: Forfás, Making It Happen: Growing Enterprise for Ireland, September 2010.

*

**

Companies were asked to provide details on their forecast turnover for 2011.

Companies anticipate a growth rate of 44%, which is in line with their

expected growth in employment of 43%. Access to credit in 2011 is

fundamental to this growth.

* Consistant with trends in ICT sector, Forfás Enterprise Statistic 2010

** Digital Hub Enterprise Survey 2007

What best describes the sector your business operates in?

TechnologyContent Creation

BothOther

56%29%

10%5%

At what stage is your company at in the business lifecycle?

Start-up StageGrowth StageExpansion Stage

37%

55%

8%

Survey Results

32 companies in The Digital Hub cluster responded to the survey, representing a 44% response rate.


What category of employment will your company utilise in Ireland at 31/12/2010?

What category of employment will your company utilise in Ireland at 31/12/2010?

Full-time employeesPart-time employeesSub-contractors

64%

25%11%

23%11%

66%

Full-time employeesPart-time employeesSub-contractors

In general has the economic downturn affected your business in 2010?

0% 2% 6%4% 8% 10% 12% 14% 16% 18%

Income growth

Increased market share

Withdrawal of access to finance

Reduced sales

Reduced cash flow

Late debtors payment

Freeze on new product development

Reduction in business confidence

Laying off of staff/recruitment freeze

No effect 2%

7%

9%

2%

17%

15%

12%

15%

8%

12%

What is your current staff profile?

0% 10% 30%20% 40% 50% 60%

College/University Interns

Leaving Cert

Industry Certified

Graduate

Masters and Postgraduate

PHD’s 3%

26%

50%

7%

10%

5%

Have you experienced difficulty in recruiting suitably qualified staff in 2010?

0% 5% 15%10% 20% 25%

Inadequate skills & qualifications

Inexperienced candidates

Limited supply of qualified local candidates

Resources to recruit limited (budget,manpower etc)

Did not recruit

No difficulty

Other difficulties 4%

18%

16%

13%

22%

18%

9%

Please indicate at which of the below levels your full-time staff in Ireland are remunerated (salary, overtime & bonuses).

0% 5% 15%10% 20% 25%

Up to €29,999

€30,000 - €49,999

€50,000 - €74,999

€75,000 - €99,999

€100,000 - €124,999

€125,000 - €149,999

€150,000 + 1%

1%

5%

17%

25%

37%

24%

30% 35% 40%

What was the company’s turnover in 2010?

The average value of revenue in 2010 is €605,000

What is the company's forecast turnover for 2011 ?

The average expected revenue in 2011 is €873,000


What were the company's main Export Destinations in 2010?

0% 5% 15%10% 20% 25%

UK

Other - Europe

USA

Other - Americas

China

Other - Asia

Middle East 0%

3%

5%

3%

13%

18%

33%

30% 35%

Africa

Does not export

0%

25%

What percentage of total company revenues in 2010 were accounted for by exports?

For companies who export, they average 47% revenues from those exports.

If you are looking to raise new funding for the business in the near future, which funding sources will you be looking to primarily?

Most popular sources will be grants, personal funding and banks.

If the company is likely to seek new funding in the near future (12-24 months) please indicate the levels of funding to be sought. Investment of the order of 4.2M is required by the cluster to fund growth.

Investment in the business to date has been sourced as follows:

0% 5% 15%10% 20% 25%

Owners cash equity

Owners “sweat” equity

Business Angels

Venture Capitalists

Enterprise Ireland support

Research & Development Grants (RTI, etc)

BES Funding 2%

9%

9%

5%

5%

30%

33%

30% 35%

IDA Grants

County & City EnterpriseBoards

0%

4%

Other State Funding

Bank Loans (excludingoverdraft facilities)

0%

4%

How would you best describe your company’s innovative activity?

Product innovator (new to market products)Business model innovator

None at present Process innovator (new to market processes)

38%

30%

5%

Innovation related expenditure

23%

5%

What type of co-operation arrangements, if any, does your company have on innovation activities?

With Competitors

With Research Organisations

With Suppliers

31%22%

16%

8%

4%

18%

With Clients or CustomersWith Academic Institutes

None / Not Applicable

Select the most important factors in terms of their effect on your company's ability to innovate:

Partnering and Business Development

Cost Factors

19%

23%

5%

14%40%

Knowledge FactorsMarket Factors

Other Factors

What is the geographic spread of your co-operation arrangements?

0% 5% 15%10% 20% 25%

None / Not Applicable

Other – Rest of World

USA

Other – Europe

UK

Other – Ireland

Other Hub companies 16%

33%

16%

16%

6%

7%

6%

30% 35%

0% 5% 15%10% 20% 25%

None

Business process outsourcing

Product development and commercialisation

Ad hoc co-operation on business strategy

Sub contracting components of project delivery

Co-operation on sales/referringbusiness

Consortium formation

21%

14%

12%

5%

5%

28%

30% 35%

Joint venture 12%

5%

What type of collaboration, if any, have you had with other Digital Hub companies, organisations and partners in 2010?

Documents

Enterprise Survey