Seanad debates

Thursday, 17 October 2002

Digital Hub Development Agency Bill, 2002: Second Stage.

 

Question proposed: "That the Bill be now read a Second Time."

10:30 am

Photo of Dermot AhernDermot Ahern (Louth, Fianna Fail)
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This is my first time in the new Seanad. I congratulate you, a Chathaoirligh, on your elevation and congratulate all the Senators who were elected.

I am very pleased to be able to introduce the Digital Hub Development Agency Bill, 2002 to this House. The main purposes of the Bill are to establish Digital Media Development Limited, DMDL, the body established by the Government to oversee the development of the digital hub, on a statutory basis as the Digital Hub Development Agency; to provide for the necessary corporate and governance structures for such a State body; and to define the functions and role of the agency in relation to the development of the digital hub. These include promoting and facilitating the development of the digital hub as a location for digital enterprises and related activities; promoting and facilitating the development of the physical and communications infrastructures for the digital hub; formulating strategies to promote the digital hub; preparing a development plan for the hub and estimates of the costs of its implementation; and consulting local community interests as part of the implementation of the development plan.

Before going into the details of the Bill, by way of background, I would like to give an overview of the digital hub project, the rationale for it, the structures in place for its delivery and what has been achieved so far. I hope this will give Senators a good understanding of how the remit of the new agency has been arrived at.

First, let me explain what is meant by the term "digital hub". The digital hub refers to the area in the Liberties-Coombe areas of Dublin, where it is intended to cluster Irish and international digital media companies, research and development and education initiatives. The term "digital hub" refers to the creation, management and distribution of digital content across multiple Internet and digitally enabled platforms such as PC, television, games, consoles, mobile phones and other devices, as well as packaged media such as DVD.

Digital content is essentially anything that can be stored in digital form, such as video, graphics, animation, games and so on. Core areas within the industry include media software and technologies, publishing, content creation, post/production and specific effects, broadcast and distribution, data management, music and games.

Having explained what is meant by the concept of the digital hub and the types of enterprise which will be located there, let me now give the House a brief outline of the history of the project and how the thinking behind it developed. Over the last three years a great deal of work has been done by our development agencies on market trends within the IT sector. Reports such as, Technology Foresight, produced by Forfás and Enterprise Ireland's ITS2007 strategy have resulted in a number of clear findings.

If we are to build on our success as a location for IT manufacturing and keep pace with global trends, we need to move our IT sector as a whole up the value chain. In the new economy, competitiveness depends increasingly on goods and services which embody a high knowledge content. Ireland has significant deficiencies in regard to the nurturing of these knowledge based enterprises and our research and development capacity.

We must be prepared to invest in research and development, nurture knowledge based enterprises and facilitate the full commercialisation of the intellectual property they produce if Ireland is to develop as a knowledge based society with the capability of producing high value-added goods and services. By the same token, we must build our existing skills base, excellent as that is. New technologies will only grow here if we have the people who can develop, apply and manage them. Building up our human capital is crucial to creating the enterprises and high skill jobs of the future. Ultimately, innovation and the capacity to produce intellectual property will be a key driver of our economic growth. That is the reason both Enterprise Ireland and the IDA have targeted digital media as a key growth area within the IT sector and an opportunity to establish Ireland in a leading global position in this emerging sector.

It is true that the economic slowdown, particularly in the United States, in the latter half of 2000 and through 2001, has had an impact on the sector. However, it is illustrative that the market value of the digital media industry was estimated at over $178 billion for 2001 and is forecast to increase to US$434 billion by 2006. This growth will be driven by a continued rise in the levels of global penetration of the Internet and mass market access to broadband services and devices which will, in turn, lead to an increasing demand for digital content. Developments such as this cannot be seen in isolation – they are critically dependent on other deliverables.

A critical factor in taking advantage of the opportunities offered by the new knowledge economy is the provision of quality and competitively based telecommunications infrastructure and services. This is the reason the Government and my Department have made the widespread availability of open access, affordable, always on broadband infrastructure and services for business and citizens a three year priority. This strategy, announced last March, recognises that a modern high speed, low cost communications and broadband network is an essential enabler of economic activity and social inclusion, particularly in the regions. In a liberalised market the primary responsibility for the provision of this infrasturcture resides with the private sector communications service providers. The Government has recognised the need to give an impetus to this service provision by deploying broadband infrastructure in the regions. To this end, an indicative amount of €200 million, from Exchequer funds, was provided for the development of broadband infrastructure in Ireland to cover the years of the National Development Plan 2000-2006.

Another key element in the development of a strong knowledge economy is a clear and consistent regulatory framework. This must be provided to encourage the growth of knowledge enterprises and protect the rights of intellectual property holders and consumers. What must be avoided is over-regulation leading to new barriers for business. These have been the principles behind recent legislation such as the Electronic Commerce Act, 2000, which gives legal validity to electronic signatures and documents, and the Copyright Act, 2000, which brought Irish law on copyright into line with EU and international law in this area. In addition, the recent Communications Regulation Act, 2002, provides, inter alia, for the establishment of a new Commission for Communications Regulation to replace the Office of the Director of Telecommunications Regulation and the updating of our regulatory framework to take account of developments at EU level.

Having explored the wider issues involved, I wish to briefly outline how the digital hub project came into being. In mid-2000 the Government established MediaLab Europe, a third level research and development institute, in partnership with the Massachusetts Institute of Technology. It was out of this that the idea for a digital hub grew, the thinking being that the clustering of high-tech enterprises around MLE would optimise the impact of its activities on the commercial sector and, therefore, maximise the return on the Government's investment in MLE. The digital hub and MLE therefore, are key elements in this strategy, which I have already discussed, to build on our success in the IT sector and move it up the value chain by targeting the new growth area of digital media.

I turn to the structures by which the digital hub is actually run. The Government decided in 2000 to establish a new body, Digital Media Development Limited, on an interim basis pending the enactment of legislation, under the aegis of the Department of the Taoiseach, to oversee the development of the digital hub. Following this, in June 2000, the board of DMDL was appointed by the Taoiseach, consisting of members from the relevant State agencies and the private sector. It is the responsibility of this board to formulate and implement strategies for the actual development of the digital hub. To this end, a development strategy for the digital hub was published by DMDL in December last year. Day-to-day operations are carried out by an executive services team appointed by the board in November 2000.

The Government has provided funding for the digital hub amounting to $130 million in total. Property purchase amounting to $74 million has now been completed by the Office of Public Works on behalf of DMDL. This property remains vested in the Office of Public Works pending the enactment of this Bill. Also included in this is property to house MLE, in line with the agreements to establish it between the Government and the MIT. This will remain vested in the Office of Public Works. With property purchase for the hub now completed, the process of refurbishment has begun with the first phase of enterprise space coming on stream this month. The second phase, a joint venture between DMDL, Enterprise Ireland and Dublin City Council to develop the former Guinness Print Works as a high-tech accelerator centre, is due for completion next summer.

Earlier this year DMDL launched a tendering process for the refurbishment of the remaining property on a PPP basis. A total of 12 expressions of interest have been received in response to this. An evaluation of these submissions is being carried out by DMDL and its team of advisers. It is envisaged that, following detailed negotiations, contracts would be signed with the successful bidder in the early part of next year with a view to work beginning shortly afterwards. In addition, construction of a high speed broadband network, a vital prerequisite for a project such as this, has been completed by Dublin City Council with over €2 million in funding from my Department. A number of educational initiatives for the local community are also under way.

Ultimately, the development must be aimed at fostering an attractive working and living environment, both to ensure companies want to locate there, their staff want to live there and the local community benefits from the regeneration of their locality. All Senators who are familiar with the Thomas Street area will not only be aware of the significant deprivation it has suffered in recent decades, but also of the great heritage of the area, its outstanding potential, being adjacent to the city centre, and its vibrant community.

The digital hub, while in the first instance an enterprise development project, is also about delivering that development in a sustainable way. This is the reason a partnership approach is such a key element of the strategy of the project. To this end, DMDL has been working with the IDA and Enterprise Ireland in the area of enterprise development and Dublin City Council for urban regeneration in the context of the council's integrated area plan for the Liberties-Coombe. These partnerships show what can be achieved by tapping into the particular expertise of different public bodies and stakeholders in a project such as this. There is one other important stakeholder in the hub, that is, the local community in the Thomas Street area.

An early priority for DMDL was extensive consultation with the local community with a view to ensuring the project delivers sustainable and measurable benefits to the area. In the preparation of its development strategy DMDL worked with the IAP monitoring group, which included local community and public sector representatives, to agree recommendations for the delivery of local benefits. These recommendations were subsequently included in the development strategy. This process is continuing as an ongoing dialogue with the many community groups in the area.

I wish to outline briefly the main provisions of the Bill which is separated into three Parts. Part 1 contains standard provisions covering the short title, interpretations, laying of orders and regulations before both Houses etc. Part 2 deals with the establishment of the Digital Hub Development Agency. Part 3 deals with transitional provisions arising out of the transformation of Digital Media Development Limited into the Digital Hub Development Agency. Subject to the necessary Cabinet procedures, I propose to introduce a new Part in this Bill, Part 4, which will give effect to certain minor amendments to the Communications Regulations Act, enacted on 27 April 2002. I also propose to amend the long title of the Bill to reflect the fact that the proposed amendments to the Communications Regulation Act, 2002, are made in this Bill.

Part 1 contains standard provisions in relation to the short title of the Bill, the interpretation of words and phrases used, procedures for laying orders and regulations before the Houses of the Oireachtas, the establishment day and the usual provision for expenses. In Part 2, section 7 relates directly to the establishment of the agency and is similar to many found in other legislation establishing State bodies of this type. The functions and role of the agency are set out in sections 8 to 10.

Having outlined these functions I emphasise how they correspond with the overarching strategy for the development of the knowledge economy, on the one hand, and, on the other, how they reflect the need for DMDL to work in partnership with the major stakeholders in the area. Senators will notice that the agency is required to work with the development agencies and Dublin City Council as well as to have regard to the needs of the local community, be it consultation or educational initiatives. These provisions also set out the mechanisms through which the agency will interact with my Department in the carrying out of its functions.

Sections 11 and 12 are important provisions, enabling the Minister to confer additional functions on the agency and issue policy directions to it. Sections 13 and 14 provide for the agency operating as a commercial entity by allowing it to form subsidiaries, make investments and enter into joint ventures for the purposes of fulfilling any of its functions. However, any such arrangements may only be entered into with the consent of the Minister and the Minister for Finance. The agency may also, with the consent of the Minister, make charges for the provision by it of services.

Provisions in relation to the composition of the agency, its chairperson and procedural matters relating to its meetings and committees are set out in sections 15 to 18. These provisions follow recently enacted legislation establishing similar bodies. Section 19 covers the appointment and terms of office of the chief executive, which include ex officio membership of the board for the duration of their appointment.

Sections 20 to 21 and section 23 deal with matters relating to staff. Provision is made for the agency to appoint staff, make schemes for superannuation and draw up a code of conduct for staff. Procedures to be followed in the event that a member of the agency, the chief executive or a member of staff becomes a Member of either House of the Oireachtas or the European Parliament are set out in section 22. Sections 20 to 23 are standard provisions and follow recently enacted legislation establishing similar bodies.

Standard provisions in relation to the declaration and disclosure of interests and the disclosure of confidential information by both members of the agency and members of staff are dealt with in sections 24 to 27, inclusive. The conditions whereby the agency may accept gifts of money, property, etc. are set out in section 28. It also stipulates that the particulars of any gift accepted should be included in the annual report to the Minister.

Sections 29 and 30 deal with the finances and accounts of the agency. The Minister may, with the consent of the Minister for Finance, make advances to the agency to cover expenditure by the agency incurred in the performance of its functions. Procedures in relation to the keeping of accounts and the providing of financial information to the Minister are also covered, as is the requirement that accounts of the agency be submitted for audit to the Comptroller and Auditor General.

Sections 31 and 32 provide for the chief executive to be accountable to the Committee of Public Accounts and other Oireachtas committees. Section 33 is another standard provision which sets out the format and procedures to be followed in relation to the submission of the agency's annual report to the Minister. Section 34 allows the agency to engage consultants and advisers as it considers necessary and provides that payment for such services would be met from the agency's budget.

The seal of the agency is dealt with in section 35. This is a standard provision and is in line with current legislation for State bodies. Sections 36 and 37 are also standard provisions which deal with indemnification of certain persons carrying out their duties in pursuance of the agency's functions, and the immunity of the agency in respect of damages.

The sections contained in Part 3 are again standard transitional provisions for the transfer of functions to a new body. It should be noted that section 38 provides for the dissolution of the company, DMDL. This is a necessary legal step in transforming it into the agency. Any references in legislation, for example, the Freedom of Information Act, will automatically be taken to refer to the agency on the enactment of this Bill. This is covered in section 39. An adjunct to the dissolution of DMDL is contained in section 43, where the drawing up of the final accounts of the company is provided for.

I would also draw the attention of the House to section 40, which deals with the transfer of assets and liabilities. In the main this is a standard section. What has been added is the provision whereby the property acquired on behalf of DMDL by the Office of Public Works, and which has remained vested in the Office of Public Works pending the enactment of this Bill, is transferred to the new agency. Sections 41 and 42 are also standard provisions dealing with the transfer of contracts and any legal proceedings from the company to the agency.

As I have already mentioned, I also propose to insert a new part into the Bill, Part 4, amending the Communications Regulation Act. A number of the proposed amendments are of a technical nature relating to the drafting of the Act, while the remaining amendments relate to the transfer of certain minor functions from the Director of Telecommunications Regulation to the new Commission for Communications Regulation, which were inadvertently omitted from the original text.

The Schedule to the Bill defines the geographical area of the digital hub, and so defines the area within which DMDL has its remit. The digital hub, and the associated MLE project, are key elements in our strategy for growth in the knowledge based economy as a whole. The decision to establish the digital hub as a location to cluster media enterprises was taken in the light of the success of other high tech clusters around the world. While each has its own unique conditions, a number of critical success factors make it clear that this approach is the one to be followed.

Bringing similar enterprises and research initiatives together in this way creates the critical mass of knowledge and expertise which is crucial for the fostering of growth based innovation. However, these enterprises and individuals need more than just the technical ability. They need to be able to tap into a network that facilitates the development of research projects and business ideas, access to venture capital investment, links with the global industry and with academia. They need to be able to do this in an environment that is not averse to the type of risk that goes with innovation.

I ask the House to facilitate the early passage of the Bill into law. I commend the Bill to the House.

Michael Finucane (Fine Gael)
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I wish to share my time with Senator James Bannon.

An Leas-Chathaoirleach:

Is that agreed? Agreed.

Michael Finucane (Fine Gael)
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I welcome the Minister to the House and wish him well in his capacity as Minister for Communications, the Marine and Natural Resources. This is an area which interests me greatly because I was my party's Front Bench spokesman in the other House.

I welcome the legislation but I am surprised it was not brought forward sooner, and I expressed those comments to the Minister's officials when I met them in the briefing session. My concern stems from the fact that when I was chairman of the Committee of Public Accounts, we had many meetings about the operation of Campus Stadium Ireland Limited. I will not go into the details of those meetings other than to say that it is important to have legislation to put this area on a statutory basis. There has been a significant amount of spending in this area over the past few years, including when MediaLab Europe came on board in conjunction with an arrangement with Massachusetts Institute of Technology, and now we have the digital hub.

When a significant amount of funding is being spent on projects like that, it is important to have a legislative base for it because we are talking about taxpayers' money. We should at least have a reporting back mechanism in place but the mechanism to date with regard to the operation of DMDL, as we know it, and MediaLab Europe has been unsatisfactory.

The analysis done originally by the Comptroller and Auditor General was in the context of the Department of the Taoiseach which had overall responsibility for this area, and subsequently the Department of Public Enterprise, which is now the Department of Communications, the Marine and Natural Resources. Over that period of time a great deal of funding has been spent. At one stage DMDL requested £150 million, which has now risen to over €180 million, for property acquisition. That was a significant amount to spend on property, admittedly in the Thomas Street area which was in need of economic regeneration, but we all know that when the State is interested in any property there is a natural impetus for the amount requested for that property to increase. It is all very fine investing in property, but in this case we will have to resort to a public private partnership to refurbish the properties purchased.

I welcome the fact that the Office of Public Works is involved on behalf of the State in purchasing the properties required to date because as chairman of the Committee of Public Accounts I was very impressed with the dedication, commitment and responsibility with which the Office of Public Works carried out its functions. It was necessary, therefore, for the Office of Public Works to have an overall responsibility when it came to purchasing property because this is to do with being on the leading edge of technology in these areas.

At the end of the day the people will analyse the performance of the digital hub concept on the basis of job creation in the Thomas Street and Liberties areas. Staffing will consist of many educated people with significant degrees and research experience. I understand collaborative research is taking place in conjunction with various third level colleges. That research will be meaningful and important if it leads to industrial investment in the properties acquired in the digital hub area. The intention is to emulate the types of industries found in Silicon Alley in New York. The Minister prefaced his comments with a description of what is happening in the USA on the industrial front.

It is still early on in the project and the gestation process will probably take a few years, after which its performance will be measurable. A significant amount of taxpayer's money, in the context of the present difficult economic climate, has been invested in this project as well as in MediaLab Europe. We must, therefore, consider future job creation possibilities in that area. The Minister might elaborate on the cost, to date, of the ten year agreement entered into with Massachusetts Institute of Technology about MediaLab Europe. I understand the cost was £8.4 million. Was this an upfront payment, paid directly to MIT from day one? What technical expertise and competence, what international panel of people with experience in the areas envisaged for MediaLab Europe, has MIT brought on board by virtue of its expertise in the USA? How much funding has gone into the MediaLab Europe operation?

Will the Minister also clarify the amount of funding being paid on an annual basis to the executive area of expertise being provided? A similar arrangement has been operated in Campus Stadium Ireland and questions were asked about the percentage aspect of the contract and the incentive it gave to deliver at the lowest possible cost. I have been told it is on a fee basis which I welcome because the other method would probably cost us more. Will the Minister give us a breakdown of the current staffing arrangements in the Guinness Hop Store? How many undergraduates, researchers and technical staff work there and what kind of projects are they involved in?

The Minister dealt with various aspects of the legislation, although I have a copy of the Bill in front of me. I would prefer to know more about the project itself and what is being achieved. What are the projections for the numbers who will eventually be directly employed in research? I am not talking about the job creation we hope will flow from this project when the companies start to move in and the various properties in the Liberties-Thomas Street area are done up under public-private partnerships to house various tenants. At what stage will the Office of Public Works divest itself of those properties? Will it be as a result of this legislation? There is a reference to this in the Bill. They will then become the properties of Digital Hub, but are they ultimately still the property of the State? What kind of arrangement will operate when the public-private partnership is finished? I understand the refurbishment could cost up to €130 million, although the Minister may correct me if I am wrong. Who will actually own the properties? Will the State always have a stake in them? Should anything go wrong in years to come, would they become an asset of the State?

As I said, I welcome the concept and the developments which are to take place. I also welcome the impressive composition of the boards of both MediaLab Europe and DMDL. The boards consist of many formidable people with much international expertise which should give a lot of credibility to this project, particularly if we are to attract international investors. Where are the offices in the Guinness Hop Store at present? Where do both of these boards meet? I hope they are not meeting in lavish hotels, because it lends credibility to the project if they meet in Thomas Street, as well as ensuring the project becomes part of the area. It may appear a trivial point whether a board meets in the Berkeley Court or Thomas Street, but we want the project to become integrated into the area. Whatever business takes place should be identified with the area.

After the events of 11 September 2001 and subsequent events in the USA, is the commitment of MIT to the MediaLab Europe project as great as it was on day one? The project was first embarked on in mid-2000. Does the Minister think the State will get a significant return from this arrangement? Properties purchased in 2001 and 2002 have in many cases been refurbished. Is that the extent of spending on properties or will the Minister wait until these properties have been reconstructed under public-private partnerships and then allocated? One could then take stock based on the success of the allocation and the number of jobs created and decide whether one wants to move again in order to increase the number of properties required. We would all like if that happened as it would result in the creation of jobs in an area which needs economic regeneration and vibrancy. It would be good for the area.

I welcome the fact that this body will be answerable to the Comptroller and Auditor General. I understand that, like other bodies of that sort, it will be subject to scrutiny. I am not saying it was not subject to scrutiny in the past – it was. In the Comptroller and Auditor General's report of 2000 he referred to many inadequacies and expressed certain concerns about the operation of DMDL, as we know it. He was concerned that the project was going on without a legislative base. Now DMDL, in its own right and as a separate entity, will be answerable directly to the Comptroller and Auditor General. Therefore, its performance may be analysed. This is preferable to its being taken as an adjunct to the Department of the Taoiseach or the Department of Public Enterprise in his report. I also welcome the fact that many of the State organisations, including the Minister's Department, will have an overarching role as a committee. It will be up to that committee to monitor the success and effectiveness of this operation.

I welcome the legislation, which is timely, and it is only right that it should happen now. My only regret is that it did not happen much sooner because large funds should not be spent unless there is responsibility, ultimately through the Legislature, to the taxpayers. In this case the provision will be statutorily underscored when the legislation is passed.

Photo of James BannonJames Bannon (Fine Gael)
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I welcome the Minister to the House and thank my colleague, Senator Finucane, for sharing his time with me.

This Bill is designed to set up a new State agency. The main function of the body as outlined by the Minister is to promote and facilitate the development of the digital hub as a location for digital enterprises and related activities. To be successful with the strategy, the Government must begin with radical decentralisation of Government administration services and quality state-of-the-art infrastructure for both our physical and electronic communications needs. Enterprise Ireland's strategic plan sets out ambitious targets to be achieved in the identified sectors such as informatics, digital media, e-business and health and sciences by 2007. It is a public private partnership project. I understand there is major investment in the region of €130 million by private sector developments to meet the criteria laid down in the strategy for the digital hub. The aim is to increase sales to almost €4 billion in the next five years, increase exports to almost €3 billion and increase employment to an ambitious 29,000 people over the next decade. I hope the current wide-reaching cutbacks by the Government will not destroy this ambitious plan as it is forward-thinking and exciting.

Digital is ideally suited to a well educated Irish work force and, if given the chance and support, will be effective and productive for the country. There will be risks involved, particularly with such ambitious targets at a time of economic gloom. At times like this it is imperative to develop resources and infrastructure of a new nature. Within the Digital Hub Development Agency and through the functions conferred on it by this Act, the opportunity will exist to do something wonderfully new, different and well suited to our technical business and well educated work force. It is important that all agencies, bodies, etc, work closely with the people who manage digital hub development to market the centres to a wide variety of companies involved in all facets of development.

My party has detailed a number of key objectives in its technology policy. Primary among these is the extension of broadband. We must possess and advance national communications infrastructure if we are to secure our future prosperity. The development of a competitive market for broadband services is crucial to sustaining a high level of growth in incomes, employment and overall economic growth for the next few years. Ireland is currently lagging behind, ranked near the bottom by the OECD, 26th out of 28 countries, for the provision of broadband services. I and my party wish to see the potential for broadband expanded throughout the entire country. It is an important component of our spatial plan.

The Minister spoke about deploying broadband infrastructure in the regions. In light of what happened in Longford in recent weeks with the deferral of the Cardinal Healthcare project for at least two years, a development of this nature would be very welcome in the area. Perhaps this could be considered by the Department of Enterprise, Trade and Employment in the near future to lift the morale of the county. It is important that this project is driven forward aggressively by the Government and that the Digital Hub Development Agency is not allowed to bounce around between Departments, Ministers and civil servants. I welcome the legislation and hope it will be enacted in the not too distant future.

Photo of Brendan KenneallyBrendan Kenneally (Fianna Fail)
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I am pleased to commend the Digital Hub Development Agency Bill, 2002, to Seanad Éireann. Before examining the proposals that will transform a significant slice of Dublin's south inner city and, more specifically, the provisions of the Bill for the establishment of Digital Media Development Limited on a statutory basis with a new title, Digital Hub Development Agency, I would like briefly to look at digital media as a concept.

The definition of digital media encompasses many sectors and sub-sectors, platforms, software and technologies. It is about content creation, management and distribution across the Internet and multiple digitally-enabled channels such as personal computers, television, game consoles, mobile and other portable devices. More importantly, it is a major opportunity for Ireland as it involves the convergence of two of this country's core competencies, technology and creativity. The digital hub is an initiative of the Government to create an international digital enterprise area in Dublin city. The sponsoring partners are the Government, through the Department of Communications, Marine and Natural Resources, Dublin City Council, Enterprise Ireland and IDA Ireland.

Digital Media Development Limited was originally established by the Government in April 2000 under the aegis of the Department of the Taoiseach. Responsibility was then transferred to the Department of Public Enterprise on 22 May 2001. Following the recent election, the project is now with the new Department of Communications, Marine and Natural Resources. Through the Department, €130 million of public funding has already been committed for the digital hub and MediaLab Europe, a third level research and education centre already located in the digital hub. This also includes the acquisition of property by the Office of Public Works for Digital Media Development Limited and MediaLab Europe. The core development is located within the historic Liberties area in Dublin's south inner city.

The objectives of the digital hub are to create a state-of-the-art infrastructure to cluster leading edge Irish and international digital media companies in a core development located in and around Thomas Street, Dublin 8, facilitate new connections between the creative, technological, research and development, educational and community sectors for collaboration and value added outputs, design and deliver a sustainable, vibrant and inclusive living and working environment – to benefit the local and enterprise communities – in the core development and to deliver the project through public sector investment, public private partnership developments and community participation. How then is this to be achieved? The strategy is to establish a vibrant base of digital media enterprise and entrepreneurship with Enterprise Ireland, IDA Ireland, MediaLab Europe and third level institutions, provide dynamic and accessible pathways through learning into enterprise and employment with local and national education providers and to provide new infrastructure, with Dublin City Council, in the core development to enhance the existing environment and heritage of the Liberties-Coombe area.

In a nutshell, the digital hub is Ireland's flagship in the digital media sector. The hub will be a home for early stage, fast growth and established companies to undertake research and development into digital industries. It was initiated in response to recommendations from a number of bodies, including the Information Society Commission – advisory group on the content industry; Irish Council for Technology, Science and Innovation in its report – Technology Foresight, published in 1999; and Enterprise Ireland in its report on growth potential in high tech internationally traded services – IT 2007, published in 2000. The project will also include a learning-training component, particularly geared to the local community in the technology learning arena.

It is proposed that the digital hub academy will initially facilitate the delivery of a range of digital media courses in the areas of television/film, computer games and animation. The academy will assist a small group of existing digital media course providers located in a custom built building on the digital hub site. By locating courses in the digital hub academy, colleges will have easy access to a range of digital media and creative companies. Such proximity will enable mentor-practitioner relationships to develop between companies and students, enable students to secure placement in new and emerging digital media companies, promote knowledge transfer and idea testing to stimulate the development of new digital media start-ups, and facilitate the identification and securing of employment by the emerging graduates in the digital hub. The digital hub academy will comprise a number of existing digital media institutions, under an alliance model, to provide a range of undergraduate and industry-focused digital media courses in a modern, well-equipped learning building.

Feedback from the immediate Liberties and Coombe communities confirms that although the area is rich in cultural heritage it has many educational, social and employment needs. The digital divide manifests itself locally in a significant lack of access to information technology and information and communication technologies, ICT, skills.

The digital media industries and their supporting enterprises also have very particular skills and personnel needs. The digital hub strategy is to marry these two sets of pressing needs and find mutually beneficial solutions. This will be achieved by facilitating and co-ordinating, with existing education providers, learning pathways that are targeted, appropriate and accessible.

The decision to undertake this project was taken in the context of the necessity of moving the economy up the technological value chain and the establishment of MediaLab Europe, MLE, the third level research facility established by the Government in association with the Massachusetts Institute of Technology. It was decided that the development of a digital hub, clustering digital enterprises around MLE, would optimise the impact of MLE on both the local and national levels.

MediaLab Europe is already up and running in the digital hub area. This facility is a separate legal entity from the digital hub. It has separate legal agreements with Government, with its own board jointly appointed by the Government and MIT.

Government funding for MLE, which includes the purchase of a suitable premises, has been provided over a four year period from 2000 to 2003. The focus of MLE is primarily on high-tech research, while the digital hub is an enterprise development project. Both projects are monitored by a Government liaison committee, which is chaired by the Department of Communications, Marine and Natural Resources and comprises members from the Departments of Finance, Enterprise, Trade and Employment, Education and Science, and Environment and Local Government, as well as Enterprise Ireland, the IDA, the Higher Education Authority and the Office of Public Works.

Digital Media Development Ltd., DMDL, was the body established by the Government in April 2000 to oversee the development of the project. The board of DMDL has had responsibility for formulating and implementing strategies for the development of the digital hub. To this end, it is partnering with the IDA and Enterprise Ireland for enterprise development and with Dublin City Council for urban regeneration. In August 2000 the board of DMDL appointed an executive services team to oversee day-to-day operations for the digital hub, which include ongoing consultation with the community and businesses in the local area.

With regard to the board of DMDL, it may be recalled that the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, announced last month that the chairman and managing director of IBM Ireland, Mr. William James Burgess, was succeeding Mr. Paddy Teahon as chairman of the company. Mr. Burgess, who is retiring from his IBM posts shortly, held a number of key positions with the company both at home and abroad. He is also a board member of the Irish Management Institute, immediate past president of the employers' group IBEC, former chairman of IBEC's e-business strategy group and a non-executive director of Ulster Bank. In July last he was appointed chairman of the National Competitiveness Council. In short, he is a man of just the calibre required to drive this ambitious project forward. His skills and experience could scarcely be more relevant and I do not doubt that his appointment by Deputy Dermot Ahern will prove a wise one.

In terms of looking at best practice world-wide, Enterprise Ireland has reviewed several international models of technology hubs, including Internet City in Dubai and a technology development in Sydney, to garner ideas.

In June of this year it was confirmed that Dublin's digital hub will receive €2.3 million in a joint venture to develop the first phase of enterprise space at the site in the Liberties. Enterprise Ireland, Dublin City Council and Digital Media Development Limited will refurbish the former Guinness Print Depot building in Thomas Street, which will create a broadband-enabled facility with 20,000 square feet of enterprise space for start-up companies and established corporations working in digital media.

Enterprise Ireland has identified the digital media sector as one of the best opportunities for Ireland to develop our high-technology, internationally traded services sector. More than half the space in the new development will be reserved for start-up and early-stage companies, with room for up to 20 companies employing up to 180 people between them.

Enterprise Ireland is working closely with Digital Media Development Limited, which manages the digital hub, to market the centre to companies involved in film and television, music, animation, design, games and post-production. I understand that more than 50 firms have inquired about locating in the €130 million digital district.

Details of the €250 million public private partnership project published in tender documents show firms will be invited to develop two lots of land with a combined area of 6.8 acres. This will require the refurbishment of properties fronting both sides of Thomas Street and the construction of several new buildings. It is expected that private sector developers will have to invest about €120 million in the area to meet the criteria laid down in the strategy for the digital hub.

Under guidelines outlined in the tender, half of the site will comprise office space, a quarter of the land will be used to provide residential accommodation, and the remainder will be used for educational and retail activities. Developers will make a return on their investment by renting out offices and properties in the area to firms and individuals. There are no special tax incentives available for developers in the digital hub area.

Strict pre-qualification criteria have been laid down in the tender, which require firms to have a minimum annual turnover of €60 million to be considered as developers for the smaller 0.8 acre site, and a €150 million annual turnover to develop the larger six acre lot.

High-speed broadband access has been put in place to facilitate the location of Irish and international new media companies, research and development and educational initiatives at the hub. Agreement has been reached with Enterprise Ireland and Dublin City Council to develop the former Guinness Print Depot as the first phase of enterprise space, which is expected to come on stream by next summer.

On foot of the Government decision of April 2000, which established DMDL, the Digital Hub Development Agency Bill, 2002, was published on 14 January 2002. It provides for the establishment of DMDL on a statutory footing as a State agency. The Bill sets out the role and functions of the agency with regard to the development of the hub and provides for the necessary regulatory and corporate structures for a State agency. The Second Stage of the Bill is being taken in the Seanad today with a view to its enactment by the end of the year. The Government approved publication of the Bill at its meeting of 18 December 2001.

Property of a value of €73.64 million has been purchased by the State in the Thomas Street area to provide accommodation for digital enterprises and related activities to be attracted to the digital hub. As part of this, the former Guinness Hopstore building and another former brewery building adjacent to it have been purchased for MLE in line with its establishment agreements. The property for the digital hub was acquired by the Office of Public Works on behalf of DMDL and remains vested in the Office of Public Works pending the enactment of the Digital Hub Development Agency Bill.

As part of its development strategy, DMDL has recently launched a public private partnership process for the refurbishment of property acquired for the hub. The first phase of enterprise space, involving the former Guinness Print Depot, is due to be delivered in summer 2003 in a joint venture between DMDL, Enterprise Ireland and Dublin City Council. The broadband network in the digital hub has been completed by Dublin City Council with funding provided by the Department of Communications, Marine and Natural Resources.

The Bill before us today provides for the establishment of Digital Media Development Limited on a statutory basis with a new title under the auspices of the Minister for Communications, Marine and Natural Resources. The purpose is to develop the digital hub even further.

Aside from standard corporate governance provisions and the usual statutory requirements applicable to a State body, the most important sections of this Bill relate to the functions of the Agency and the requirement to prepare a development strategy.

The main function of the agency is the development of the digital hub as a location for digital content enterprises and related activities. Other functions include formulating strategies to attract enterprises and individuals engaged in digital content activities to locate in the hub and assisting in the procurement of a suitable technical and communications infrastructure.

In advancing the project the agency is obliged to consult Enterprise Ireland, the IDA and other relevant bodies. As part of its statutory remit, the agency is required to prepare, cost, manage and oversee a development plan for the hub. Consultation with the local community is part of the preparation of the development strategy. The legislation describes the critical elements of the development plan, including strategies for property purchase for suitable accommodation for digital content enterprise, management and disposal of property and educational provision, especially in the field of digital arts and technology.

In preparing the plan the agency is required to take account of Dublin City Council's integrated area plan for the Liberties-Coombe area and Dublin city's development plan and allow for submissions on the draft development plan. In order to undertake its development remit the agency is empowered to acquire, hold and dispose of land and property with the consent of the Minister. There are also a number of provisions common to statutory bodies, such as preparation of strategic and other plans for submission to the Minister, conferral of additional functions on the agency by the Minister, the issue of directives to the agency by the Minister, appointment and conditions of office of the chief executive of the agency, appointment of staff, consultants and the chairperson of the agency and the appointment and conditions of office of board members.

The legislation also includes a number of standard corporate governance provisions, including, inter alia, a code of conduct for members of the agency staff and consultants, a declaration of interests, where applicable, conditions relating to the acceptance of gifts, accounts and audits and the appearance by the chief executive officer before the Committee of Public Accounts and other Oireachtas committees. A number of transitional provisions are included. These relate mainly to the dissolution of Digital Media Development Limited and the transfer of property, including property purchased for a digital hub currently vested in the Office of Public Works.

A geographical description of the digital hub is also provided in the Bill, which I am happy to commend to the House. It might be appropriate for the Joint Committee on Communications, Marine and Natural Resources to visit the digital hub and see what is happening there.

Photo of Feargal QuinnFeargal Quinn (Independent)
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I welcome the Minister and I am pleased to note it is his first visit to the new Seanad. I hope we will see more of him. I am a little concerned that, as Minister for Communications, Marine and Natural Resources, he has been given a very wide brief, but in view of his experience I am pleased he has been appointed to this Department.

I speak on this topic with some experience of communications. As chairman of An Post from 1979 to 1989, I recognised the speed at which things change. As I recall, we started making three and five year plans for An Post in 1985. At the time we had never heard of the fax machine and our big worry was that couriers were taking away our business. When I planned my re-election campaign to the Seanad, I started by writing to all the graduates I could trace. I asked my 24 year old son, a graduate of UCD, to write to all his friends with degrees. He told me that none of them writes, they use text messages or e-mail. He did not think any of them even had pens. It is a reminder of how quickly things can change and how fast we must act if we are to succeed. Some years ago Singapore identified that it wanted to become the digital hub of Asia. It took appropriate steps to achieve this, recognising that coming generations would not write because they would communicate in a different way.

I welcome the Bill, especially as it sends a much needed signal to the outside world that the Government is serious about the digital hub project and that it intends to pursue it vigorously and to completion. There is a danger it may falter because it may be regarded as a pet project of the Taoiseach. Given the dismal failure at Abbotstown, that may be the kiss of death.

Photo of Dermot AhernDermot Ahern (Louth, Fianna Fail)
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That will not happen.

Photo of Feargal QuinnFeargal Quinn (Independent)
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I do not think it will.

Photo of Dermot AhernDermot Ahern (Louth, Fianna Fail)
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As contributions will be sought from the private sector, perhaps the Senator will contribute.

Photo of Feargal QuinnFeargal Quinn (Independent)
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As an opponent of the Abbotstown fiasco, I am happy to laud this project and wish it well. It is very risky and may not turn out to be a success, but that is no different from what happened in 1987 when Dermot Desmond approached the then Taoiseach, Mr. Haughey, with his concept of a financial services centre. The Taoiseach and the Government took it on board and it became a great success. At the time it was risky and others argued against proceeding with it. In this instance, the risk is worth taking. If it succeeds, the pay-off to the national economy will be huge. Some of the figures involved have been outlined.

This is a flagship on which Ireland can launch itself into the information age. The project should be seen in the context of what in recent years has been adopted as a national aim to carve out for Ireland the leadership position in the new world of e-commerce. It is an aim worth pursuing and achievable. In recent times there has been an ominous weakening of the Government's resolve in this matter. By comparison with the situation five years ago, a great deal of energy has gone out of the Government's approach to the information age. Having been an early champion of the possibilities that e-commerce could bring to the country, I was delighted when it was given priority in Fianna Fáil's 1997 general election manifesto. I was even more pleased when the then Minister for Public Enterprise, who has now moved to higher things as Leader of this House, brought great energy to the task of putting her party's general election promises into effect.

Much water has flowed under the bridge since then. The Minister referred to the debacle covering some of the areas involved. There has been a worldwide collapse of the telecommunications sector, brought about because of excess optimism about its investment prospects. The Eircom debacle has left the State in a much weakened position with regard to the telecommunications industry and plunged the company back into a position where its first priority must be to cope with what would have to be regarded as on overwhelming burden of debt. In tandem with this, the dot com bubble burst, largely as a result of untrammelled greed and unlimited wishful thinking in the sector.

All of this means that the information age is not as sexy an issue as it was before any of these things happened, but that is no reason we should lessen our interest in the area or write it off as yesterday's fad. The information age is still a reality of the future. It may not reach its full development potential as quickly as some of us thought, but that does not mean we should not move as speedily as the Minister is proposing.

In 1974 when in America I saw a development called scanning and bar coding in the supermarket business. I recognised the huge impact this could have in my business. On my return to Ireland I became involved in 1975 in the establishment of the Irish Article Number Association, which allocates bar codes to products. We asked businesses to amend their packet designs to incorporate the code. It was 1985 before the first supermarket used the technology, yet a number of companies refused to change their packaging. They were so wrong. When the first supermarket opened in Ballincollig, County Cork, it had great difficulty in trying to get people to realise that the world was changing fast.

The information age is coming. It may not be the pot of gold at the end of the rainbow that some people took it to be, but it will happen and it will revolutionise the way the world is run, especially the world of commerce. That much remains certain, but what is not at all certain is the role Ireland will play in it. That is entirely up to us, and that is why I deplore the way our aim to achieve leadership in this area seems to have dropped in priority in recent times. What has certainly happened is that this aim has dropped in terms of visibility.

As I have said on many occasions, for Ireland to take a leadership position in commerce is more than a matter of attracting a few key foreign firms to invest in this country. It is more than a matter of giving those firms the communications infrastructure that allows them to do e-business from here – vital though those facilities are. Taking a leadership position in this new world means, above all, making the information age a reality for everybody in Ireland. We must make it an integral part of our culture, make it part of how we do things, part of how we do business, part of how we talk to each other and part also of how we govern ourselves as a community. I do not have the feeling we yet realise that in order for the country to gain the full benefits of the information age, we must bring the new technology to everyone. We must become a wired country, literally as well as metaphorically.

The wide availability of affordable broadband access to the Internet is a touchstone in all this. By now we should be one of the European leaders in broadband access. Instead, incredibly, we are almost at the bottom of the league. That is today's reality, despite all the Government's promises, plans and schemes in this regard. The reality is that we are at the back of the pack, not at the front where we need to be.

If I were in charge of this national aim – and part of the trouble is that nobody seems to be in charge of it – the first thing I would do is buy a season ticket to Singapore. That country set itself the aim of becoming the digital hub of Asia and it is interesting to see what it has done. Every citizen was given an e-mail address. That country faces many of the same challenges that we do, but the difference is that it is implementing an aggressive strategy to address them. On broadband, it has set itself the target of making it available to all citizens and to all businesses in the country within the next two years – and they are already a long way down the road to achieving this.

Let me come back to the question of who is in charge of this matter here. Is it the Minister for Communications, the Marine and Natural Resources? I thought one of the objects of the re-organisation of ministerial portfolios was to bring all the functions relating to the information age under one Minister. If that is so, he has not yet given any convincing evidence that he intends to restore the aim of achieving leadership in e-commerce to the top of the national agenda. I am not sure it is possible for any Minister, even this one whom I regard very highly, who also has all these other responsibilities. At the Taoiseach's level, responsibility for the information society agenda rests with the Government Chief Whip, whose abilities I do not doubt, but whose plate is already full with a multitude of other tasks. What is needed is to put this responsibility into the hands of a single person who would become the national champion of the information age, and whose sole job would be to co-ordinate all our efforts and to provide the leadership and motivation that are needed to realise our goal.

Our neighbours in Britain have taken this route, with the appointment of an e-envoy to do just the job I have outlined. It is too early yet to say if the idea will work for them but if we wait until their success is obvious we will already have missed the boat. Time is running out for Ireland in this race. If we want a leadership position in the new world that is opening up, we must act now – and we must act decisively. The passing of this Bill will be only a small step in that direction and on its own it is not enough.

I used to enjoy a cycle race called devil take the hindmost. It is years since I have seen it. Some 20 cyclists would start the race and at the end of each lap whoever was at the back had to drop out. They would go reasonably slowly around the track and then race to make sure they were not last when the announcer called on one to leave the track. Eventually only one was left. That is the sort of race we are in for the information age and if we are to make sure we are left in the race to get to the top we have to act in a different way from that in which we are acting now.

I have used this Bill to talk about the wider area of ensuring we are leaders in the information age. I am delighted with the Bill. I am pleased with what the Minister is doing and encourage him in his endeavours. However, we have much higher ambitions to achieve in this area and we will not manage them without making some changes.

Photo of Timmy DooleyTimmy Dooley (Fianna Fail)
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I join my colleagues in welcoming the Minister. It is great to see him and the evident commitment he is giving to the IT sector. I know the Minister is personally very interested in technology and look forward to future developments he will bring before us.

Having studied computer science and worked in the IT sector myself prior to being elected to this House, I welcome the opportunity to speak on this Bill as well as the broader area of IT. I also welcome the fact that the Bill is being introduced in the Seanad and look forward to more of that. If such a trend continues we may get to a point where the reform we spoke about last week will certainly be addressed.

Although we have gone through some tough times in the economy in the past months, we have certainly enjoyed an exceptionally strong economy over the past five years. That has helped us to turn around high levels of unemployment into what is classed as full employment. We have seen the quality of life rise sharply. Our economy has become the pride of Europe and this has been recognised world-wide. This strong economy could not have been achieved without a number of factors, among which membership of the EU was a major contributory factor in terms of enabling our companies to sell into a market of 350 million people. Some other elements are the steps we have taken to improve the structure of education and develop courses and syllabuses that worked in tandem with some of the multinationals that wanted to set up operations here. Our tax policies have certainly been helpful in that area as well.

The ability to attract foreign companies was undoubtedly one of the most important aspects of our strong economy. A large number of the companies that have set up are in the area of the information technology and communications sector. Thousands of people are currently working in these companies. They are pushing us into being one of the most technologically advanced nations in the world. The experience we have developed in this sector has positioned us extremely well. We all know that when dealing with technology one has to keep advancing. When it comes to technology it really is a case of blink and you miss it.

For this reason the digital hub is of the utmost importance for the future. The idea of the digital hub and the development agency this Bill will establish is to provide us with the opportunity to take the next steps in technological advancement. It will set up what will become our very own flagship in the digital media sector to be located in the Thomas Street area of Dublin. This will be home to start-up facilities for early stage, fast growth and established companies to undertake research and development into digital industries.

We need to move up a gear if we hope to win the contracts of the new stream of IT companies that will be looking for bases for their operations in the not too distant future. Although we have had much success in doing that so far, the fact remains that, with the development of digital technology, we could soon be left behind.

An important element of the philosophy behind the digital hub is to develop the area of research and development. That is an area in which we probably have not had great success to date, but the impetus created by the digital hub will allow this to happen in the future. This will mean we will not be dependent on some of the other aspects which have attracted companies previously and that we will be able to provide the seed to develop the nucleus of these companies which will provide future employment.

The need for a digital hub has been advanced by a number of bodies: the Information Society Commission, to which a number of Members referred, the Irish Council for Technology, Science and Innovation and Enterprise Ireland. The digital hub seeks to position Ireland's digital media sector at the forefront of the emerging global media revolution. Ireland's reputation in traditional creative activities gives it a head start in developing the digital media content industry. Traditional creative talents need to be aligned with new technology and new media expertise in a hothouse environment so that ideas and knowledge can be easily exchanged.

This is the vision for the Dublin digital media district. It will seek to build on the strengths of existing players in the industry and co-ordinate their efforts to foster the rapid growth of a high value-added media sector. The decision of the MIT MediaLab to locate in Dublin will greatly enhance the international profile of the industry in the city and accelerate the development of this sector. This independent research institute will focus on cutting-edge, Internet and e-commerce applications. The district will provide access to state of the art digital production and post-production facilities as well as incubation centres and business services. It will have a leading edge telecommunications infrastructure to support high bandwidth, web-based services, such as digital music delivery, e-cinema and web-casting. It will have high bandwidth connections to other clusters of indigenous media companies, such as those envisaged for the Webworks in Galway and Cork.

As any of us who use technology will know – we in this House are certainly well aware of the advances in technology in recent years and what we are able to do within our working environment – there is always a necessity to upgrade software and hardware. That effectively is what the digital hub provides for the country. It will upgrade the level of technology and technological services and standards available to us which will assist in the future development of the information technology structure and the IT companies investing here. It will provide us with the capacity to attract companies at a higher level and provide much more enhanced work as we go forward.

Apart from attracting more companies to this country, the digital hub will also act as a learning and training component especially geared towards the local community. Nowhere will that learning and training component be more obvious than in the benefits the digital hub will bring to the MediaLab to which the Minister referred. This is a joint venture between the Government and the internationally renowned Massachusetts Institute of Technology, MIT. MediaLab is a university level research and education centre which has been running since July 2000. This is the first time that MIT has collaborated to establish an independent centre away from its Cambridge, Massachusetts home. That is something we should not take lightly. MIT is a renowned operation throughout the world and for Ireland to be the first place in which it established a base outside its home is something which gives us phenomenal credibility going forward and of which we should take note.

Although the MediaLab is operating already, its foundation was dependent on the development of a digital hub which could be based around it. With so many talented graduates set to come to the market through the MediaLab, it would be a shame if we did not have the facilities in place to maximise their knowledge and skills. This is why the hub is not only important but vital.

Through the hub these graduates will have the opportunity to develop a wide range of goods and services. It will allow for the creation, management and distribution of everything from digital television to computer games, from mobile phones to packaged media such as DVDs. With the hub graduates will have the opportunity to work on media software and technologies, publishing, content creation, post-production and special effects, broadcast and distribution, data management, music and games.

To think that this is just an opportunity for advancement in the computer sector is to look at the tip of the iceberg. Technology has never been developed just for the sake of it. It enables ability and with every new ability comes countless opportunities. For example, the film industry is one of the highest earners in America and is responsible for a large slice of the total exports of the US. Ireland has seen recently some of the benefits of this industry with a number of Hollywood productions choosing Ireland as a location. Imagine how many more would be likely to choose Ireland if they believed they had the full range of post-production digital facilities available to them. That would mean more jobs for film makers and the obvious associated spin-offs.

In most cases, technology provides opportunities in many areas we often do not recognise immediately. The embryonic nature of the approach to the digital hub, the idea of the incubation centres fostering new ideas, together with the research and development, create an opportunity for advances we would not have thought about or considered but which will result ultimately in the spin-off of assisting us in developing and continuing the development of our position within the IT industry.

The film industry is moving into the digital sector and, with the hub, Ireland will be to the forefront. We will be at the top of the queue to reap the benefits. This is not just true of the film industry but countless others as well. The jobs and the money the film industry could bring in could be multiple when these developments are applied to these additional sectors.

The digital hub will place us in a prime position of being the most attractive destination for any technological company from around the world seeking to establish a European base. An interesting statistic from 2000, the latest year for which statistics were available, was that 27% of US greenfield investment in Europe was in Ireland. This is a staggering statistic considering the population of Ireland compared to Europe. It speaks volumes about the way we have been able to position ourselves in terms of what we provide to foreign companies which want to invest here, especially the US foreign companies which have seen us as their base or home.

The digital hub, in parallel with many other ongoing initiatives to which Senator Quinn referred, ensures that we stay to the forefront and that we have the facilities, graduates, people, skills, research and development available to these companies. The digital hub will certainly ensure that we remain at the centre of advancement in technology. Perhaps the next Celtic tiger may be a digitally created one.

Photo of Dermot AhernDermot Ahern (Louth, Fianna Fail)
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I thank Senators for their contributions which indicate a wide knowledge of what is involved. I agree with Senator Kenneally that, when the committees are formed, a visit by the relevant committee to the MediaLab, which is up and running, and the digital hub area, which is to be developed, would be important. I visited them recently and received a briefing from the people involved. It is only when one sees the MediaLab in operation that one can appreciate the potential of what will be available in the digital hub area.

I was interested in the points made by Senator Finucane. The drafting of the Bill began in January 2001. As Senators will know, I am always impatient about getting legislation through the Houses. I will do my level best to have this legislation in place as soon as possible. Approval was given for the general scheme in July 2001 by the Government and this was followed by approval to publish in December of the same year. The Bill was published in January of this year. The volume of legislation made it impossible to bring it forward but I am delighted it is the first Bill I will take as Minister with responsibility for this area. I am also delighted that I am bringing forward such a Bill because it is an area of my Department I regard with some interest and in which I will try to make a mark in terms of progressing it.

The cost to the Exchequer of the MediaLab is €35.5 million over the three year period. There was also the cost of a suitable premises. Approximately €10.6 million has been paid as a fixed endowment to MIT, which directly answers Senator Finucane's question. It has a staff of 84, of which 19 are administrative with the remainder engaged in research. There are senior research scientists and also graduate students. The head of Media Lab serves as the chairman of the MLE board for five years. Two senior research scientists from MIT have been key in establishing the MLE and there continues to be ongoing involvement by MLE in many of the projects.

MIT has a number of advantages. Obviously we have its involvement and know how. As Senator Kenneally has indicated, there are a number of similar Media Lab arrangements around the world that have already been looked at, but we felt the MIT was the one upon which we could build. There are agreements in place for visits by researchers from MIT to Dublin and these are ongoing. MIT is also assisting in raising funds for the MLE.

I will give Senators a flavour for some of the projects that MLE has. One relates to sensors for science education in collaboration with DCU – collaboration with many of our colleges, particularly in Dublin, is a feature. This deals with integrating the use of sensor technologies in teaching science in schools. It also works with Trinity College Dublin on attention deficit disorder by developing computer software to analyse brain activity.

The MLE board meets in the Guinness Hopstore building, which is adjacent, while the DMDL meets at the company's office in 89 James's Street, giving visibility to the projects in the area. As the MLE board is largely international with many members from the US, it also meets on occasions in the US.

Some €75 million represents the total amount of Exchequer money which will spent on the purchase of the property of the hub. As the project develops, the PPP process will become more important and further property may need to be purchased by the agency using the revenue it will then be generating from the developed property. The contract was advertised in August 2000 and following a selection process conducted by the board of DMDL an executive service team was appointed in November 2000. The team comprises Magahy and Company, director of executive services; PriceWaterhouse Coopers; Murray O'Laoire Architects; BDO Simpson Xavier; and Judo Design. Members of the team were appointed for a three-year contract that expires at the end of 2003 and are paid a fixed fee per month. The total fees are capped at €4.97 million for the duration of the contract. The primary objective of the executive services team is to implement the mandate given to the board to develop the digital hub.

Senator Finucane asked about corporate governance. One of the key priorities of the Bill is to ensure the most up to date and well-defined governance and accountability framework is in place for the agency. The Senator already highlighted that the auditor for the agency will ensure the highest levels of financial accountability. On enactment of the legislation, the property will vest to the agency and will remain vested in it after the PPP process.

Senator Bannon made some excellent points. The Digital Media Development Agency is one of an integrated set of Government and State agency initiatives to drive the digital content sector forward. I do not necessarily agree with Senator Quinn. This Government is as committed to driving the whole e-commerce and e-government agenda as it has always been and much work is being done behind the scenes that is not visible but is bearing fruit and will continue to do so.

Senators referred to broadband and I covered it in my speech. This country has started from a low base and is somewhat behind others, but investment for the rollout of broadband is committed in the national development plan. The first phase of this rollout refers to 19 or 20 locations around the country and one of the first to be implemented will be the metropolitan ring around Cork city. It is a bit like the motorways we are providing – while we might allocate the money it takes some time for things to be put in place. However, I can assure Senators the broadband initiative is being rolled out. When a committee of the Houses is up and running to mirror the Department, more details can be given. I welcome Senator Kenneally's interest in this topic and I thank him for his very detailed submission, which shows a good knowledge of what is involved.

I agree with Senator Quinn that much work needs to be done. The day before yesterday, I attended a Cabinet sub-committee meeting on the issue of e-government and moving e-technology forward throughout Departments. That meeting involving Ministers and officials is chaired by the Taoiseach. I accept what Senator Quinn says in relation the developments in broadband. If this country is to be at the keen edge of added value we need to be ahead of the posse, just as Singapore was in yesteryear, although not so much in recent times because we have caught up. If we are to continue to keep major multinationals here, there must be value added, including infrastructure such as broadband.

I thank Senator Dooley for his comments on the impetus that the digital hub and Media Lab will provide to the sector. Senator Quinn knows about taking a risk in the private sector and it is true to say this is a risk, given that not everything that will be researched and developed for the companies involved and on behalf of universities will come to fruition. There will be failures and probably more failures than successes. Ultimately that will be judged on the basis of the success of the projects, but any experts we have consulted have told us the way this country is going in this respect is the correct way.

We have been well served by the planning of all Governments and agencies over the years, but in order to keep us ahead of the posse, we need to invest continually in research and development. To a certain extent we have relied on outside companies to use their own resources for that research and development. In recent years the Government made a strategic decision on technology by establishing the technology foresight fund focused on research and development in biochemistry and the pharmaceutical industry. This is an effort to move our IT sector, which is probably one of the most revered in the world, up the value chain and to develop new sectors and technologies which will become like the fax or telex machines I encountered in my legal office.

When I went to MediaLab most of what was being done there was unfamiliar to me, but I do not doubt there may be a practical application for what it is doing. We hope and pray something positive comes out of this for the companies involved. Obviously, the investment by Government in MediaLab is designed to train the next generation of graduates in cutting-edge technology. Over time we believe this will result in knowledge transfer that will benefit the wider community of technology companies in Ireland and attract more research and development into the country.

The Bill requires the agency to work in co-operation with all stakeholders, as I said. That is very important. About 150 local community groups are involved and there have been meetings with all of them, both individually and, in some cases, collectively, while digital hub officials have been earmarked to liaise with local communities. It has been said of some initiatives that there was no connection with local communities but an effort is being made to avoid that here. There was a public manifestation of that recently when local youngsters were brought in for the weekend for an open day and they participated in amazing events which tied into their leisure activities by using digital media; it was reasonably successful. I thank Senators for their remarks.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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I thank the Minister for his contribution and I wish him well in his Ministry.

Question put and agreed to.

Acting Chairman:

When is it proposed to take Committee Stage?

Photo of Brendan KenneallyBrendan Kenneally (Fianna Fail)
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Next Wednesday.

Committee Stage ordered for Wednesday, 23 October 2002.

Acting Chairman:

When is it proposed to sit again?

Photo of Brendan KenneallyBrendan Kenneally (Fianna Fail)
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Next Wednesday, 23 October at 2.30 p.m.