Inspiring entrepreneurs to innovate locally and collaborate globally
DUBLIN ECONOMIC MONITOR
CONTENTS PAGE 4
GLOBAL AND NATIONAL ECONOMY
COST OF LIVING FACTORS DO LITTLE TO DAMPEN DUBLIN’S INTERNATIONAL STANDING
SMART DUBLIN CHALLENGES SPUR INNOVATIVE MARKET FOCUSED SOLUTIONS
DUBLIN GETS TALENT: THANKS FOR COMING… PLEASE DON’T GO!
COMMERCIALISING VALUES: UNLOCKING OPPORTUNITIES FROM RESPONSIBLE INVESTMENTS
THE FUTURE AS WE KNOW IT
DUBLIN ECONOMIC INDICATORS
SMART DOCKLANDS INNOVATION DISTRICT DELIVERING WORLD LEADING COLLABORATIONS
FUTURESCOPE SPECIAL EDITION OF THE DUBLIN ECONOMIC MONITOR Richard Shakespeare Assistant Chief Executive, Dublin City Council The Dublin Economic Monitor (DEM) is a joint initiative on behalf of the four Dublin Local Authorities designed to provide consistent, reliable and freely available coverage of the performance of the Dublin Economy. Its full content is available here www.dublineconomy.ie This edition of the DEM has been specially prepared to add additional insights into the panel discussions at this year’s FutureScope and contains articles from keynote speakers, panel discussions on “Smart-Cities” and the “future of talent” and breakout sessions on “commercialising value in business.”
Run by Michael Culligan and the Dublin BIC team, FutureScope is one of the top events in the calendar for the Technology, Start-up, Investor & Business communities and this year’s event promises to build on past success. Dublin City Council is delighted to be supporting the event and we will have teams participating in panel discussions and breakout sessions across the Innovation, Collaboration and Entrepreneurship stages. We will also be showcasing some of the work we do in these areas from our Smart Dublin, Smart Docklands, Dublin.ie, the Local Enterprise Office and the Dublin Economic Monitor teams. We hope you find this special edition of the DEM useful.
THE SCIENCE OF WHERE
DUBLIN: ECONOMIC SCORECARD MAY 2018
This document provides general information on the Dublin economy. It is not intended to be used as a basis for any particular course of action or as a substitute for financial advice. The document is produced independently by EY-DKM Economic Advisory Services; the views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of the Dublin Local Authorities. The Dublin Local Authorities disclaim all liability in connection with any action that may be taken in reliance of this document, and for any error, deficiency, flaw or omission contained in it.
INNOVATION, COLLABORATION AND ENTREPRENEURSHIP
WELCOME TO FUTURESCOPE 2018 Michael Culligan CEO Dublin BIC
The pace of technological change continues at breakneck speed and represents both a threat and a strategic opportunity that can underpin competitive advantage for all businesses. The past decade has seen the advance of data analytics, cyber security, the rise of artificial intelligence and unprecedented connectivity. If you, as a business owner or manager, are exercised by the impact of this technological revolution then attending Futurescope 2018, in the Convention Centre on 31st May, is an investment in your business. Futurescope, now in its 5th year, is Ireland’s only tech business event dedicated to promoting collaboration and new business opportunities between start-ups, scale-ups, SMEs, multinationals and the research community. How will the maturing technologies of the last decade impact society and your
business? We are fortunate to live in an ecosystem of rich diversity with global tech giants and emerging innovative companies. This year, we open on the Insights Stage exploring digital transformation and we will hear perspectives from technology leaders on emerging technologies and how they will shape our future world.
“As an SME, your time is precious and based on the feedback we have from previous years, I am confident you will extract superb value from a day at Futurescope”” There are three parallel stages under the themes of: Innovation, Collaboration and Entrepreneurship. The Collaboration Stage, presented in partnership with
Dublin City Council, includes sessions on Smart Docklands, Smart Cities and an ‘Ireland Gets Talent’ session focusing on the challenges of creating and maintaining Ireland as a talent hub. The Innovation Stage includes sessions on the Internet of Things, Tech Innovation, Cyber Security and Artificial Intelligence. The Entrepreneurship Stage features a session highlighting Ireland’s leadership in animation, investor panels, fireside chats with entrepreneurs and the FutureScope One2Watch 2018 pitch battle to select Ireland’s most scalable business. We at Dublin BIC are thrilled to welcome you to Convention Centre Dublin today. It will be a full house, capped at 1200 people to facilitate networking and we thank you for taking the time to invest in your business by attending Futuresope 2018
See the www.futurescope.ie website for further information, including the event programme
DUBLIN ECONOMIC MONITOR
According to OECD’s Interim Economic Outlook the global economy will continue to strengthen in 2018 and 2019, with growth forecasts of close to 4 per cent in each year compared to 3.7% in 2017.
Preliminary estimates from the CSO indicate that GDP (volume) increased by 7.8% in 2017 while GNP increased at a rate of 6.6% for the same period. These estimates place Ireland as the fastest growing economy in the European Union for the fourth year in a row.
New tax reductions and spending increases in the United States will help US GDP grow by approximately 3% annually in the next two years. In March the Federal Reserve voted to increase interest rates for the sixth time since December 2015 and subsequently increased the target range for the federal funds rate to 1.5% 1.75%. The monetary policy stance remains accommodative, supporting strong labour market conditions in the US and a sustained return to 2% inflation.
The Irish economy recorded equally strong growth of 3.9% when measured via Modified Domestic Demand – a new measure introduced by the CSO which removes the distorting effects of intangible assets, contract manufacturing and aircraft leasing. An important barometer of how the domestic economy is performing is personal consumption expenditure, which grew by 1.9% in 2017. Industrial output increased by 8.9% while investment dropped by 22.3% in the year on foot of lower levels of intellectual property imports, compared to the exceptionally high levels recorded in 2016.
EURO: STERLING EXCHANGE RATE €1.35 €1.30
The key sectors contributing to growth continue to be Information & Communication and Construction, both registering growth of close to 17% in 2017. Industry (excl. construction) made the most positive contribution in Q4 2017, rising 8.9%, within which manufacturing grew by 9.1%.
Conservative Party Conference
General Election Result
IRELAND ANNUAL GROWTH RATE, %AGE CHANGE
Article 50 Triggered
Brexit Referendum Result
24% 21% 18% 15%
SOURCE: CENTRAL BANK OF IRELAND.
Growth in the euro area is set to remain robust although the OECD forecasts a moderation in growth levels from 2.5% in 2017 to 2.1% by 2019. Accommodative monetary and fiscal policies, improving labour markets and high levels of business confidence are all helping to boost demand.
9% 6% 3% 0% -3% 2011
Of the countries listed in the table below, the UK is forecast to remain the weakest performer with uncertainty surrounding Brexit expected to impact growth prospects into the mediumterm. By 2019, GDP growth of just over 1% is forecast on the back of slowing consumer expenditure and business investment. A transition agreement was secured in early March, subject to certain conditions regarding the Irish border with the UK, which will lead to the orderly withdrawal of the UK from the EU.
Modified Total Domestic Demand
SOURCE: CENTRAL STATISTICS OFFICE.
Brexit remains one of the key risks to growth in the Irish economy. Under the terms of the aforementioned transition agreement the UK must adhere to a ‘legal backstop’ plan whereby Northern Ireland will remain in full regulatory alignment. With the Republic, and therefore the EU, to avoid a hard border.
MAJOR ECONOMIES GDP GROWTH FORECASTS
IRISH MACROECONOMIC GROWTH FORECASTS
GNP GDP PRIVATE CONSUMPTION PUBLIC EXPENDITURE INVESTMENT EXPORTS IMPORTS UNEMPLOYMENT RATE EMPLOYMENT CPI INFLATION
SOURCE: OECD, MARCH 2018
6.6 7.8 1.9 1.8 -22.3 6.9 -6.2
4.9 4.9 2.5 2.6 8.0 6.3 7.1
4.1 3.8 2.2 2.6 7.6 5.4 6.1
5.8 2.2 0.2
5.1 2.0 1.6
4.6 2.0 1.9
SOURCES: EY-DKM FORECASTS E: ESTIMATE F: FORECAST
COST OF LIVING FACTORS DO LITTLE TO DAMPEN DUBLIN’S INTERNATIONAL STANDING Internationally published benchmarks are a useful means of measuring a city’s performance relative to its peers, and recent indicators for Dublin confirm the city’s strong showing across a range of dimensions (see table below).
it the highest ranked city across the UK and Ireland. London, the next highest ranking, is placed 41st in the survey. Commenting on the results, Consultant at Mercer Ireland, Noel O’Connor said: “Some of the key factors placing Dublin in 34th place in the survey include a stable political environment, lower levels of air pollution and a strong socio-cultural environment. The results demonstrate that Dublin remains an attractive location for international businesses to send their employees."
Dublin ranked 2nd place in the fDi Top 25 European Cities and Regions of the Future for 2018 leaving the Capital one place below London and ahead of key competitor cities for Brexit projects including Amsterdam (4th) and Frankfurt (7th). The city has maintained its 4th place ranking in the top ten cities for expansions and co-location projects in the fDi Reinvestment Ranking for 2018. The ranking also places Ireland 10th in the top ten countries for expansions and co-location projects for the second consecutive year. Dublin remains in 34th Place in Mercer’s 20th annual Quality of Living survey, leaving
The Global Talent Competitiveness Index, which takes into account the business and labour landscape, market openness, education and lifestyle, ranked Dublin 7th and Ireland 13th in its 2018 index. Uunder the indicator which captures R&D expenditure, ICT access and presence of Forbes Global 2000 companies, Dublin ranked 1st, followed by Stockholm and Zurich.
Ireland’s Capital moved six places up the ranking in the Economists Intelligence Unit Worldwide Cost of Living survey. In 2018 Dublin was ranked in 19th place from 25th position in 2017. Dublin is now 9% more expensive to live in than London due, in part, to the sharp decline of sterling and the continued uncertainty surrounding Brexit. Although recognised as a ‘global leader’ for both its broad and deep financial services activities, Dublin fell one position in the Global Financial Centres Index, from 30th to 31st position. This represents a marked deterioration from the top 10 ranking the city enjoyed in 2009, but a significant improvement on the 2014 ranking of 70th. Amongst western European financial centres Dublin ranks 8th, ahead of Madrid and Stockholm, and has also been identified as one of the “15 centres likely to become more significant”
DUBLIN'S LATEST INTERNATIONAL RANKINGS SOURCE
fDi Intelligence Global Cities and Regions of the Future
Global Financial Centres Index (GFCI)
Business environment, financial sector development, infrastructure, human capital, reputational and general factors; online survey
fDi Intelligence Reinvesting Ranking 2018
Attracting expansion and co-location projects
PwC/ULI Emerging Trends in Real Estate Europe
Real estate investment, development
Global Talent Competitiveness Index
Regulatory, market and business/labour landscape, external and internal openness, education and access to growth opportunities and, sustainability and lifestyle
IMD World Competitiveness Yearbook Rankings (Ireland)
Economic performance, government efficiency, business efficiency and infrastructure
Mercer 2017 Cost of Living Survey
Cost of consumer goods and services
Mercer 2018 Quality of Living Survey
QS World University Rankings
World Economic Forum Inclusive Development Index
Growth and development, inclusion, intergenerational equity and sustainability
The Economist Intelligence Unit Worldwide Cost of Living 2018
Compares more than 400 individual prices across 160 products and services
InterNations Expat City Ranking 2017
Quality of urban living, getting settled, urban work life, and finance & housing.
Colliers International Cities of Influence
Economic size and orientation, talent pools, affordability and country risk
* TCD. ‡CHANGE ON PREVIOUS PUBLICATION OF THE RELEVANT BENCHMARK. AN UPWARD-POINTING ARROW DENOTES AN IMPROVEMENT.
DUBLIN ECONOMIC MONITOR
SMART DUBLIN CHALLENGES SPUR
INNOVATIVE MARKET FOCUSED SOLUTIONS Smart Dublin in partnership with Enterprise Ireland’s Small Business Innovation Research (SBIR) programme is supporting a wave of innovative companies and start-ups that are testing and piloting new smart city services and solutions across Dublin. Jamie Cudden, Smart City Programme Manager, Dublin City Council. Cities and governments around the world are aspiring to be ‘smart’. This generally involves the use of technology and data to increase efficiencies, improve service delivery and also to deliver better outcomes for citizens. The Smart Dublin regional structure was established in 2016 to enable the four Dublin local authorities to collaboratively take advantage of some of these big tech trends that are transforming how we live and work. Through Smart Dublin, local government officials are actively engaging with smart technology providers, researchers and citizens to solve city challenges and improve city life. You can learn more at www.smartdublin.ie.
“Smart Dublin, through the SBIR process, has been invaluable in giving Analytics Engines the opportunity to demonstrate our capability in addressing a real world problem” Conor Dumigan Head of Smart Cities, Analytics Engines
RESULTS TO DATE
PHASE 1 APPLICATIONS
PHASE 1 CONTRACTS
PHASE 2 CONTRACTS
OVER €1 MILLION FUNDING CREATING NEW OPPORTUNITIES FOR ENTREPRENEURS Dublin is moving beyond the hype of ‘Smart City Tech’ and using the SBIR programme as a mechanism for delivering real projects that are taking advantage of Internet of Things (IOT), big data, machine learning and artificial intelligence (AI) to come up with effective, low-cost solutions to issues faced by cities. We are not only solving real urban challenges, but also promoting Dublin internationally as the ideal location in which to pilot and test new Smart City technologies, giving us access to global talent and funding.
The SBIR programme is a two-phase, precommercial challenge based procurement programme supported by Enterprise Ireland through their SBIR Ireland initiative. The first phase involves a short feasibility study with funding up to €12,500 while phase 2 allows the company to pilot their solution with funding ranging from €20,000 - 50,000. Four challenges have been delivered since 2016 which include: illegal dumping, low cost gully monitoring, improving wayfinding and scaling up cycling. Find out more during the panel session on SBIR at futurescope on the collaboration stage from 12.
WINNERS OF THE PHASE 1 SMART CYCLE CHALLENGE, 2016
SBIR QUICKFIRE PITCHES ON THE COLLABORATION STAGE FROM 12 NCLUDING:
ADDRESSING ILLEGAL DUMPING Analytics Engines is designing a new software tool to provide real-time monitoring of illegal dumping across Dublin. Using advanced analytics capabilities, they apply machine learning and predictive models to highlight problem areas and predict future risk areas, supporting proactive data driven decisions and targeted allocation of resources. www.analyticsengines.com.
LOW COST FLOOD MONITORING Carra Group - A wireless network of Sigfox-enabled low cost water sensors (over 30 are now deployed) that relay flood event data from the high risk gullies in the city in real-time. The system notifies the closest available drainage team with real-time data. www.carra.ie
Skytango - Part of the problem with litter is that we can not see it all – well at least not from the ground! Skytango’s aerial mapping flights use licensed drone pilots to identify and track litter. By first analysing anonymised aerial images, Skytango can present the local authorities with actionable data, tagged and georeferenced, which will allow them to monitor, quantify and predict problem areas. www.skytango.com
Danalto - Project Gully-Spy integrates low cost water presence and silt level sensors, with the latest Internet of Things (LORA) connectivity solutions and data analysis platforms to provide the insights at individual gully, street, district and city level so that City Operations can provide the most optimised response. www.danalto.com
Smart Dublin Live Challenges. Up to €800k funding available:
CALLING ALL START-UPS AND ENTREPRENEURS
Smart Mobility Hub – Dublin City Council and SEAI seek to provide more sustainable workplace transport options (€200k) Unheard voices – Fingal County Council and Cork City Council seek smart, low cost solutions to encourage engagement of the ‘unheard voices’ in decision-making about the future of their place. (€100k) Bathing Water Quality – Dun Laoghaire Rathdown and Waterford City and County C ouncil seek to address timely identification and communication of bathing water quality (€200k) Dun Laoghaire Rathdown County Council are seeking to facilitate connections over an IoT radio frequency mesh network (€70k) Last mile delivery – Dublin City council and Belfast City Council seek smart, low cost solutions to optimise freight and cargo deliveries in urban centres (€230k) See www.smartdublin.ie/challenges/ Deadline for applications is June 18th
DUBLIN ECONOMIC MONITOR
DUBLIN GETS TALENT:
THANKS FOR COMING... PLEASE DON’T GO! While Dublin compares favourably with its international peers in terms of attracting talent it still faces significant underlying challenges. This article seeks to explore some of the key factors affecting the ability of Dublin City and Region to act as a talent hub and to attract and retain the best people. Steven O’Gara, Senior Economic Development Officer, Dublin City Council
The accepted theory is that positive economic activity drives labour force gains, or in other words people will follow the jobs. Therefore, it can be said that successful cities are those that are growing, as they are creating sufficient new employment opportunities to attract additional people to work and to live in them. Dublin (both the City and the Region) offers an interesting perspective in this regard, in terms of its ability to generate employment, particularly through FDI, but also the changing population of both areas over the last 20 years. The table below shows the total population for Dublin (City and Region) from 1996 – 2016. Dublin City’s population has grown by 13% over this period, however, by comparison the Dublin Region has grown by 27% over the same period. Some of the reasons for this include access to and the affordability of residential accommodation. Dublin City is geographically constrained in terms of access to new land for development and relies on its existing stock of land. Also, the collapse of the construction sector during the recession has had a significant impact on supply. Density is also a recurring challenge as we are still mostly focused on building houses and not apartments.
These constraints on supply have not only seen young families and workers moving out of the City seeking affordable housing (accounting for some of the increases for the Dublin Region) but also an emerging trend of increasing household sizes in the City as more people live under the same roof. As a significant proportion of jobs are based in the City, this places additional pressure on the City’s and Region’s transport infrastructure as large numbers of people commute into the City each day. BENCHMARKING A CITY’S PERFORMANCE: Ultimately cities are much more complex systems than black and white metrics can depict, but these numbers can be very useful in monitoring performance. To get a better understanding of the issues, cities compare their performance against their international peers and Dublin is no different in this regard. We want to know how policy decisions, taken both at local and national levels, affect our ability to attract and retain talent. The issues surrounding talent will become more acute as our economy continues its strong recovery and we approach full employment. One of the benchmarks used to compare our performance is the “Cities of the Future” report from FDi magazine. The 2018 rankings have Dublin City displacing Paris from 2nd spot in the table and coming second only to London. Since their foundation in 1947, the IDA has done a very successful job of selling Ireland and Dublin to international business. The IFSC and Silicon Docks have Multi National Companies (MNCs) competing to access the additional 1m sq/ft of commercial space expected to come on stream by 2020 and the clustering effect can explain why 9 out of 10 of the largest ICT firms in the world call Dublin home. However, the greatest challenge facing Dublin may be its ability to attract and retain enough talent to fill the new positions emerging from this investment. ENABLE, ATTRACT, GROW, RETAIN AND BE GLOBAL The Global Talent Competitiveness Index (GCTI) 2018 is another key benchmarking metric we use to understand Dublin’s performance. The Index consists of 5 core pillars and 17 sub-categories under which cities are measured on their ability to act as talent hubs. Overall the performance of Dublin is very good having finished in 7th place, up from 13th in 2017, with a score of 66.1 (Zurich finished 1st on 71.0) and a
DUBLIN CITY & REGION POPULATION 1996-2031 1,600,000
Dublin Region ex Dublin City
2021 (P) 2026 (P) 2031 (P)
Projected Population Dublin Region including Dublin City
significant distance ahead of our traditional international competitors; Amsterdam ranked 11th (61.6), London 14th (59.6) and Berlin 29th (53.6).
Ultimately cities are much more complex systems than black and white metrics can depict, but these numbers can be very useful in monitoring performance.
However, when you dig into the results of the 5 pillars there are significant issues with two of them. Under “Enable”, “Attract” and “Be Global” we finish in 1st, 4th, and 10th respectively (this can be largely attributed to the number of MNCs based in Dublin, strong State support for research & development and a highly educated workforce). What is of concern is our performance in the remaining two categories “Grow” and “Retain” where we finish well outside the top 20. One of the sub categories for “Grow” would seem to suggest
that physical social networks, which allow people to find new employment opportunities, may not exist here, and that this forces talent to leave Dublin in search of career growth or promotion. Unsurprisingly, the key issues under the pillar “Retain” where Dublin scores very poorly concern the cost of living and the cost of renting accommodation. It is clear that one of the key challenges influencing talent retention for Dublin is access to affordable accommodation and while the supply side response remains sluggish it is anticipated that the Rebuilding Ireland Programme and Local Government responses will soon begin to take hold. There is also potential to target talent retention as a key objective under a number of local policy initiatives such as the Regional Action Plan for Jobs and the Local Economic & Community Plan. This could assist in focusing resources for the City and Region on the attraction and retention of the talent necessary to keep Dublin as one of the best global destination to live and work
The topics outlined in this article will be explored in more detail on the Collaboration Stage during the Ireland gets Talent panel from 2.45pm.
DUBLIN ECONOMIC MONITOR
UNLOCKING OPPORTUNITIES FROM RESPONSIBLE INVESTMENTS Trends are moving fast toward responsible investments, value-oriented customers and employees which are impacting business strategies and innovation. Rapid change means there is an emerging need to redefine business practices.
CEO The Impactor & co-founder, Responsible Innovation Summit Adapting to a changing business environment in terms of innovation, product development, branding and sales, human resources or access to funding, continue to present a significant challenge. However, new factors like climate change depletion of natural resources and ethical issues related to technological innovations (artificial intelligence, machine learning and crypto currencies) are helping to shape new strategies to create viable products and services. It is no longer an option to focus only on profitability in a new environment when clearly other issues are influencing business performance. The new question is: How to create profitable solutions and integrate new values at the same time?
The main driver behind this trend is that investors are seeking a new approach to manoeuvre through geo-political uncertainty and ESG gives a wider and deeper understanding of a company’s performance. It is like looking at a 3D image instead of using only 2 dimensions when evaluating investment options. BlackRock, the world’s largest asset manager, has defined in its 2018 priorities that “It is the responsibility of BlackRock’s Investment Stewardship team to engage with portfolio companies to understand their approach to corporate governance, including the management of relevant environmental and social factors.” Start-up funding and scaling options are expected to be heavily influenced by these expectations. Innovators should prepare to provide more diverse information on their impact. MARKETING 3.0 – VALUES, IMPACT, COLLABORATION According to a study by Nielsen (2015) 66% of global respondents are willing to pay more for products and services that
UNDER PRESSURE – INVESTORS’ DEMANDS Responsible investing constitutes a major emerging force across the global financial markets. This is an approach to investing that aims to incorporate environmental,
Globally, there are now $22.89 trillion of assets being professionally managed under responsible investment strategies, an increase of 25% since 2014. In 2011, just under 20% of S&P 500 companies in the US reported on their sustainability, corporate social responsibility, ESG performance and related topics. In 2017, this increased to 82%.
“The question now is how can we create profitable solutions and integrate new values at the same time?”
social and governance (ESG) factors, into investment decisions to better manage risk and generate sustainable, long-term returns (Principles for Responsible Investment).
Inte rac tio n
BUSINESS SPIRIT AWARD To be the ﬁrst in something is inspiring and challenging at the same time. This recognition is for those who have a business idea or an already running business where shared values are key elements of their strategy, including product development, marketing, organisational culture. More details and application
ical environment hys p e th
HEALTH AND SAFETY HUMA
y is g
ov e r n e d
PRIVACY AND DATA SECURITY
The 17 Sustainable Development Goals (SDG) defined by the United Nations gives a great picture of a more holistic approach. Improved productivity, better business performance and unlocking market potential are just a few advantages for companies to further explore the opportunities of how to implement SDGs into their practices. Value-driven business models are integrating company goals with relevant social and environmental factors. This is not a new concept, considering the triple bottom line, but it is becoming more and more relevant in order to build a resilient company. This approach results in products and services which are socially desirable, acceptable and sustainable at the same time as enhancing competitiveness in the market
TRANSPARENCY BOARD INDEPENDENCE
The objective of marketing 3.0 is to generate a positive impact together, to make the world a better place (Kotler). Brand values, mission and vision with a visible impact are at the heart of modern communication strategies, where transparency based on impact management is a key success factor in brand positioning and differentiation. BUSINESSES REORGANISED How to respond to these changes and demands?
HTS N RIG
come from companies that are committed to a positive social and environmental impact. Based on recent reports 50% of belief-driven customers choose, avoid or boycott a brand based on its stance on societal issues (Edelman Trust Index), therefore a strong USP should incorporate these values. Today’s consumers are not just recipients, but active creators of the content or even the product itself.
AIR AND WATER POLLUTION
ciety, commun n so itie ct o s pa Im
This is an illustration not a comprehensive list of ESG factors. Created by The Impacter©
If you would like to learn more about commercialising values for business, this will be explored in more detail on the Breakout stage from 12.15pm.
DUBLIN ECONOMIC MONITOR
THE FUTURE AS WE KNOW IT Technological advancement demands adaptive strategies to deal with rapid changes Martina Larkin Head of Regional Strategies Europe and Eurasia, Member of the Executive Committee, World Economic Forum Geneva
It took the telephone 75 years to reach 50 million users. The Internet: 4 years. Angry Birds: 35 days. This shows just how quickly technology and its applications have spread and so will their impact on business models, government policy and society at large. Todayâ€™s disrupters (Airbnb, Alibaba, Uber) were relatively unknown just a few years ago. The Iphone has 2 billion users today, and it was only launched in 2007. The convergence of multiple technologies means we are seeing an emergence of entirely new ways in which our lives will evolve. In fact, the world is experiencing unprecedented change, driven by the technological shifts of the Fourth Industrial Revolution. We now live in an interconnected system of systems. Disruption is not confined to individual industries, countries or regions; one single innovation has the power to impact entire global structures. Our current business models, governance models and societal models are struggling to adapt to the speed of this revolution.
Companies need to build their innovation ecosystems because strategies which are focused on reducing costs are less effective than those that are offering products and services in more innovative ways.
Many companies ask themselves a fundamental question. Which it worth owning, the platform, or the underlying technology? Today we have 23 billion connected devices worldwide, a figure that is projected to increase to 75 billion by 2025. We are witnessing profound shifts across all industries marked by the emergence of new business models, the reshaping of production, consumption, transportation and delivery systems. On the societal front, we are seeing a paradigm shift in the way we work, communicate and entertain ourselves. The future of jobs and work is a major challenge and we do not yet know exactly how the Fourth Industrial Revolution will
impact jobs. We do know that lifelong learning and technical skills will become increasingly important. It has always been the case that industrial revolutions have destroyed some jobs and replaced them with jobs higher up the value chain. In the early 20th century 90% of people worked in the agriculture sector, today it is 2% globally. The app or gig economy provides new jobs, which provide more flexibility to the workers, but this also requires new approaches on how to protect these workers in case of unemployment or illness. Agile governance is a must in the future â€“ and this applies to governments and institutions, as well as businesses, which will need to have adaptive strategies to deal with the rapid changes. The Fourth Industrial Revolution will have a monumental effect on the economy and society. We must be at the frontier and we must ensure that we benefit from the immense opportunities it provides, by working together to make sustained, positive and systemic change and developing the collaborative platforms to do so
Martina will be a keynote speaker on the main stage from 9am
FURTHER BOOST IN NUMBERS EMPLOYED IN DUBLIN DUBLIN & NATIONAL UNEMPLOYMENT RATE % (SA) Dublin’s seasonally adjusted unemployment rate increased marginally in Q4 2017 to 6.4% in spite of the strengthening labour market and an additional 10,500 employees added to the workforce in the quarter. YoY however, the unemployment rate has declined by 0.4pp. The observed downward trend in Dublin’s unemployment rate continues to be mirrored at the national level with both rates now 6.4%. This is the first time since Q2 2007 that the Dublin and national unemployment rates have been the same.
16% 14% 12%
6.4% 8% 6% 4% 2%
Q4 ‘17 DUBLIN UNEMPLOYMENT (SA)
YEAR ON YEAR CHANGE % POINTS (SA)
DUBLIN EMPLOYMENT ‘000S (SA)
YEAR ON YEAR CHANGE ‘000S (SA)
CONSTRUCTION SECTOR RETURNS TO THE FORE IN EMPLOYMENT GROWTH EMPLOYMENT BY BROAD SECTOR ‘000S (SA) Employment levels in Dublin continue to strengthen with public sector employment registering strong YoY growth of 6.1% in Q4 2017. Growth in the private sector was slightly more subdued with YoY growth of 1.2% in the same period. Construction grew by 17.3% YoY, surpassed only by human health & social work. Industry continues to act as a drag on the market with a YoY contraction of 12.1% in Q4 2017, likely due to recent changes in statistical methodologies. SOURCE: CSO LFS SEASONALLY ADJUSTED NOTE: INDIVIDUAL SECTOR VALUES MAY NOT SUM TO TOTAL DUE TO ROUNDING
700 600 500 400 300 200 100 0
Private Sector Services
Q4 ‘17 SERVICES EMPLOYMENT ‘000S (SA)
YEAR ON YEAR CHANGE ‘000S (SA)
INDUSTRY & CONSTR, EMPLOYMENT ‘000S (SA)
YEAR ON YEAR CHANGE ‘000S (SA)
DUBLIN ECONOMIC INDICATORS
National Excl Dublin
0% Q2 09
SOURCE: CSO LABOUR FORCE SURVEY (LFS). DUBLIN SEASONALLY ADJUSTED BY EY-DKM.
DUBLIN ECONOMIC MONITOR
INCREASING DUBLIN RENTS CONTINUE TO EXERT PRESSURE ON THE GDA RESIDENTIAL RENTS € PER MONTH The YoY growth rate in average rents for residential properties in Dublin has moderated slightly in Q4 2017, following 17 quarters of growth in excess of 5.5%. Average rents grew by 5.3% in the year and now stand at €1,511, have been following a strong upward trend for the past six years. Rental pressures in the Capital have been feeding into the GDA where rents are now just over €1,100, 8% higher than when RTB records began in Q3 2007.
€793 800 600 400 200
Greater Dublin Area (ex Dublin)
Q4 ‘17 DUBLIN AVG RESIDENTIAL RENT € PER MONTH
YEAR ON YEAR CHANGE €
OFFICE RENTS MAINTAIN PEAKS IN Q1 2018 DUBLIN OFFICE RENTS INDEX (2006 = 100) Following a boost in city centre office rents at the end of 2017, YoY growth has moderated in Q1 2018 increasing by 4.0%. In the south suburbs YoY growth was marginally lower at 3.6%. In both areas, rents remained unchanged QoQ and are now 4% higher than they were at the previous peak in Q2 2008. Office rents in north and west suburbs continue to recover and registered YoY growth of 12% and 6% respectively in Q1.
City Centre Max
120 110 South Suburbs Max
100 90 80 70
Q1 ‘18 CITY CENTRE OFFICE RENT INDEX
YEAR ON YEAR % CHANGE
SOUTH SUBURBS OFFICE RENT INDEX
YEAR ON YEAR % CHANGE
40 Q1 08
DUBLIN ECONOMIC INDICATORS
SOURCE: RTB. NOTE: GDA (EX DUBLIN) IS KILDARE, MEATH AND WICKLOW.
PUBLIC TRANSPORT CONTINUES ON STRONG UPWARD TREND PUBLIC TRANSPORT MILLION TRIPS (SA) Passenger trips on Dublin’s four public transport systems rose sharply in Q4 2017 with 54.6 million trips (seasonally adjusted) undertaken in the quarter, representing a YoY increase of 8.9% or 4.5 million trips. Much of this was driven by growth in Dublin Bus trips which recorded growth of 9.8% YoY. Passenger trips on the Luas grew 5.7% YoY, however it is expected that growth will be boosted further in 2018 with the opening of the Luas Cross City in December.
SOURCE: NTA. SEASONALLY ADJUSTED BY EY-DKM
DUBLIN ECONOMIC INDICATORS
Q4 ‘17 PUBLIC TRANSPORT MILLION TRIPS (SA) JAN 18
YEAR ON YEAR CHANGE MILLION TRIPS (SA)
PASSENGER ARRIVALS AT DUBLIN AIRPORT CONTINUE TO RISE DUBLIN AIRPORT ARRIVALS ‘000S (SA) Following a slight decline in October 2017, passenger arrivals at Dublin Airport reached a new peak of 1.25 million (seasonally adjusted) in November. According to Dublin Airport, growth in traffic is a result of a combination of 14 new services and extra capacity on 40 existing routes. Passenger numbers are expected to increase further with the introduction of Dublin’s first direct services to Beijing and Hong Kong. YoY there was an increase of just over 75,000 passenger arrivals (+6.4% increase).
1,250 1,150 1,050 950 850 750
Q4 ‘17 TOTAL ARRIVALS ‘000S (SA)
YEAR ON YEAR CHANGE ‘000S (SA)
Severe Winter Weather
Icelandic Ash Cold
SOURCE: CSO, SEASONALLY ADJUSTED BY EY-DKM.
DUBLIN ECONOMIC MONITOR
DUBLIN HOTEL RATES SURPASS 2015 PEAK LEVELS DUBLIN HOTEL AVERAGE DAILY RATES (SA) In March 2018 occupancy rates in Dublin hotels rose to 85.8% (seasonally adjusted) surpassing the previous peak set in November 2015. Average Daily Rates for rooms in Dublin peaked in March at €141, a 6.3% increase on March 2017 and the highest daily rate recorded since the series began. STR in their latest European Hotel Market overview report identified Dublin as on of only five key European markets with in excess of 3,000 hotel rooms in construction (Dublin currently is estimated to have 31 projects with 3,152 hotel rooms in construction).
JAN 18 HOTEL OCCUPANCY RATE % (SA)
YEAR ON YEAR CHANGE %AGE POINT
INDEX OF HOTEL ROOM SUPPLY (SA, 2011=100)
YEAR ON YEAR CHANGE %
MASTERCARD SPENDING PULSE
TOTAL RETAIL SPEND IN DUBLIN CONTINUES ON UPWARD TREND TOTAL RETAIL SALES INDEX (SA) Both Ireland and Dublin saw increases in retail sales growth in Q1 2018. Dublin’s 4.8% annual growth rate was impressive while Ireland grew by 5.2%. On a quarterly basis the growth in Dublin was .3% which marks the seventh consecutive quarter in which QoQ growth has been positive and continues to reflect the strengthening Dublin economy. The eCommerce channel showed impressive growth in the mid-teens, in both Dublin and across Ireland reflecting a continued shift away from traditional retail.
SOURCE: MASTERCARD SPENDING PULSE SEASONALLY ADJUSTED BY EY-DKM
120 Ireland Max
CONSUMER EXPECTATIONS Q1 2018
YEAR ON YEAR CHANGE
QUARTER ON QUARTER CHANGE
DUBLIN ECONOMIC INDICATORS
SOURCE:STR, SEASONALLY ADJUSTED BY EY-DKM
CREATING A SMART CITY TESTBED Michael Guerin Smart Docklands, Programme Manager
Taja Naidoo Smart Docklands, Innovation Lead The tech landscape has changed drastically in the past ten years with advanced computing becoming more visible in daily life which in turn is having an impact on how we measure and manage the performance of our cities. In this era of Neural Networks, Machine Learning and the Internet of Things, Dublin City Council (DCC) is establishing new ways of working with stakeholders to drive the implementation of technologies and policies that will make our capital more sustainable, efficient and engaging for residents and visitors alike. One example of this is ‘Smart Docklands’ – a Smart Dublin district, which was officially launched in February 2018 under DCC’s Smart City Program. It is the result of a significant collaboration between Dublin City Council and the CONNECT Centre (Ireland’s Research Centre for Future Networks and Communications for future networks) based at Trinity College Dublin, and is aimed at creating a world-leading smart technology testbed in the heart of Dublin. A SMART CITY DISTRICT The Dublin Docklands was selected as a location for this testbed due to its unique potential as a Smart City District.
It has a diverse and growing population of residents and workers, and is home also to many of the world’s leading global technology companies, who are ready and eager to make use of having a cutting-edge urban technology ‘sandbox’ in their backyard. Furthermore, the area has benefited from significant property and infrastructure investment in recent years under DCC’s Strategic Development Zone plans. Building on these foundations, our vision is to make the Dublin Docklands one of the best districts to live and work in the world. We do this through connecting diverse communities with each other, and empowering them to take an active role in developing and harnessing technology that will improve their lives. The initiative is also supported by corporate partners such as Google, Intel, IBM and Vodafone and is recognised as a highly effective mechanism for spurring more technology innovation in Ireland. CONNECTIVITY & PARTNERSHIPS Some focus areas for the Smart Docklands initiative include delivering 5G-connectivity testbeds in partnership with innovative telecoms company ‘Dense Air’; working with TCD spin-out company ‘ThinkSmarter’ to measure pedestrian travel patterns and flows in the area to ultimately improve transport access and safety; and building a highly accurate,‘open source’ 3D Virtual Reality model of the Docklands that can be used in planning, transport and environmental modelling contexts, as well as for gaming applications.
Our work in the Docklands has just begun, but is already garnering significant international attention. Earlier this year, in recognition of the unique nature of the Smart Docklands initiative, Harvard University Technology and Entrepreneurship Centre presented DCC and partners with an achievement award for their contribution to the development of Smart Cities globally
“There is already a fantastic entrepreneurial ecosystem in the city, as well as world-leading R&D facilities. With more collaboration between academia, city authorities and industry, Dublin can capitalise on this and encourage real innovation in the urban environment.” Paddy Flynn Director of GeoData Operations at Google
A panel session on Smart Docklands will be held at FutureScope at 11:30 am on the collaboration stage.
DUBLIN ECONOMIC MONITOR
THE SCIENCE OF WHERE The concept of “Geography as a Platform” may be new to the business world but evidence suggests there is no better way to make sense of complex business problems than by harnessing the power of location. Joanne McLauglin Head of Marketing ESRi Ireland Although this is their first year to be involved in the event, ESRi are no stranger to the Tech space, having been around since 1969. ESRi are a leader in GIS (Geographic Information Systems) and help customers the world over record where things happen and analyse why, with the aim of providing insight and helping them to make better decisions. ESRi believe in the role of geography in understanding our world. This is what ESRi call “The Science of Where”; how geography condenses data, information and science
“Taking a geographic approach to data will help cities make evidenced based decisions”
into a common visual language that we can all easily understand - on a map! “The Science of Where” pioneers a common visual language that combines mapping and advanced analytics to connect real-time data to the organisations and people who need it most. You’ll hear some fascinating insights from ESRi Ireland’s CTO Eamonn Doyle during his keynote speech “The Science of Where – Bringing Meaning to Maps and the World Viewed through Data”. THE RISE OF SMARTCITIES With the rise of smart cities, always-on connectivity and IoT have heralded locationbased analytics and services taking a critical role in our connected future. These technologies and trends are also supporting scientific exploration and innovation. This new pattern integrates all types of geographic information—maps, data, imagery, social media, crowdsourced information, sensor networks, and much more. The convergence of GIS with these trends will enable business and society to integrate geographic knowledge into everything they do.
WHY KNOWING WHERE MATTERS Charles Kennelly, CTO of ESRi UK brings his experience to bear on the Collaboration Stage, focusing on “Making Smarter Cities Smarter -Why Knowing Where Matters”. The daily management and co-ordination of city wide operations to provide efficient services in a large, dynamic, complex and vibrant city is no easy task. Knowing where things happen; where coverage is poor; where assets are located; where demand is coming from and where it’s likely to increase, are all fundamental ‘location’ based questions. Taking a geographic approach can help make sense of these data in a way that helps cities and communities make more evidenced based decisions. In their breakout stage ESRi will take you on a deeper dive into its technology in action
Hear ESRi Ireland CTO Eamonn Doyle speak on the Insights Stage from 9am
DUBLIN: ECONOMIC SCORECARD MAY 2018 Note: These "petrol gauge" charts present the performance of the particular indicator relative to a range of performances from most positive (green) to least positive (red). Each gauge presents the latest value compared to the peak value and the trough value over the last decade (except for public transport trips which cover the past 5 years). The Commercial Property gauges are red at the high and low extremes, in recognition of the undesirability of rents or vacancy rates that are either too high or too low.
IHS MARKIT BUSINESS PMI Q1 2018
KBC/ESRI CONSUMER SENTIMENT Q1 2018
UNEMPLOYMENT RATE Q4 2017
3 MONTH MOVING AVERAGE (SA)
AIRPORT ARRIVALS NOV 2017
SEAPORT CARGO Q1 2018
INDEX (2003 = 100) (SA)
PUBLIC TRANSPORT TRIPS Q4 2017
MILLION TONNES/QUARTER (SA)
MILLION TRIPS/QUARTER (SA)
AVERAGE RESIDENTIAL RENTS Q4 2017
RESIDENTIAL PROPERTY PRICE INDEX JAN 2018
HOUSING COMPLETIONS JAN 2018
INDEX 2005 = 100
DUBLIN CITY CENTRE OFFICE RENT Q1 2018
DUBLIN 2/4 OFFICE VACANCY RATE Q1 2018
DUBLIN SUBURBS OFFICE VACANCY RATE Q1 2018
SOURCES: CSO, EXCEPT CONSUMER SENTIMENT KBC/ESRI; IHS MARKIT; SEAPORT CARGO DUBLIN PORT; PUBLIC TRANSPORT NTA; RESIDENTIAL RENTS RTB; COMMERCIAL PROPERTY CBRE RESEARCH