Professor Cathal O'Donoghue:

I am grateful for the invitation to appear today. I will speak about a document prepared by the Commission for the Economic Development of Rural Areas, both in its report and its research report. I acknowledge the input from my colleagues who are present. It very much drew upon work within the Western Development Commission and NUI Galway.

Within the commission we regard the creative sector as being very important. We devoted an entire chapter to it in the research report and there were some very specific recommendations for the sector, recognising the importance to which Dr. Cunningham referred. It is a relatively varied sector building upon performance and expression, technology, and applications such as arts and crafts, etc. It is recognised as a sector that can have an important impact, particularly in rural and more peripheral areas.

OECD research has shown that up to the middle of the last decade, the creative economy grew at twice the annual rate of the service industry and four times that of manufacturing. There is a very high growth potential particularly for the sectors linked into the knowledge economy.

Given the structure of those businesses, they can be complementary to the needs of rural economic development. The Western Development Commission highlighted the fact there are 5,000 businesses and 11,000 direct employees. This is, therefore, a relatively big sector in the west.

The creative economy is a strength and has a competitive advantage for Ireland's rural regions, drawing upon our rural image and capitalising on the creative strengths, thus being a potential source of employment. WDC research shows there is a difference between urban and rural creative industries, with the creative industries in rural areas drawing more upon the land and building, for example, fashion clusters in Donegal and craft clusters in Connemara and places like Offaly and Westmeath. The WDC forecast estimates there are 17,000 potential jobs in the western region alone.

Some of the potential advantages of the sector are due to the fact it is an important indigenous sector providing incomes that benefit people living in Ireland. It has strong growth potential, in line with other aspects of the economy, and often produces high-quality jobs, particularly in the locations in which they are based and especially in more peripheral areas where there may be fewer quality employment opportunities. As a knowledge and creative sector, the sector can help stimulate innovation in the wider economy, particularly given its links with other sectors. It can also play an important social role in making an area more attractive. If there is a strong creative sector in an area, this can have spin-off effects on tourism and other visitor-based businesses and, as a result of its location, can promote rural and regional development.

As in all other economic sectors, people are important drivers for this sector, along with their skills, creativity and innovation. However, there are skill needs. The location of an industry relates to the attraction of a region, in terms of landscape, heritage, infrastructure, social network and quality of life. This feeds in both directions, both drawing upon the environment in which it is based and contributing to the view of that area. As in other sectors, creative supports relate to the infrastructure that can facilitate development, whether funding, networking opportunities, marketing capabilities and infrastructure, especially broadband infrastructure for IT-based businesses. This is critical and was the number one requirement at every meeting CEDRA had throughout the country.

Our document provides a SWOT analysis. I will not go through all the detail on that, but I will mention some of the high-level strengths, such as the high level, quality and diverse mix of skills throughout the country, the natural attributes of locations, and the creative supports where there is critical mass, particularly in Galway, Sligo and Leitrim. On some of the opportunities, there are hidden skills and skills that are not marketed which do not generate an economic return within the sector. There are also possibilities of having more businesses within unspoilt landscapes and opportunities for more export access. A theme across rural economic development concerns how we move from supplying to a local economy to a global economy.

Some of the weaknesses in the sector are not unique to the creative sector and are typical of SMEs elsewhere, for example, capacity and business skills. This fundamental gap was identified across the CEDRA report. There may also be gaps in creative skills, for example, where we want to change the way we do things. There are also gaps in terms of the availability of low-cost workspaces and challenges in terms of networking. Some of the threats are the loss of key skilled people and, perhaps, a policy of focusing on attracting new skills rather than sustaining and encouraging existing skills. Gaps in infrastructure also exist and we also face some of the other issues in terms of SME development, such as funding.

In regard to policy, concern was expressed in the report on the multitude and different sources of support and advice on capacity building. This is not unique to the creative sector.

That was the fundamental point made across the CEDRA report, and the 21st recommendation in that report was the development of a co-ordinated strategy for the creative industries that places a specific focus on potential to contribute to the development of the rural economy, with consideration given to a specific mechanism that combines the creative economy's support competencies with the relevant Departments, many of which have been mentioned, as well as existing lead agencies. In particular, there is the Western Development Commission, the Crafts Council of Ireland, the Arts Council and the Irish Film Board. This should introduce a more integrated approach to funding in line with the overall approach advocated by the commission.

Fundamentally, the challenge in promoting rural economic development highlighted in CEDRA was the lack of co-ordination. There are many institutions involved in supporting sectors but the question remains as to who is choreographing or directing all these different activities in particular directions. In particular, we highlight the gaps within the creative sector.