Digital economy set to more than double in value by 2020 - UPC

Ireland’s internet economy is set to more than double in value by 2020, a new report has claimed, with up to 79,000 jobs added over that period.

According to UPC’s second report on Ireland’s digital future, the digital economy is worth an estimated €8.4 billion this year, but will grow to just over €21 billion within six years. That means it will account for about 10 per cent of Ireland’s GDP by the end of the decade.

The growth of the sector will be fuelled by a rise in consumer spending, which accounts for about 60 per cent of the 2020 estimate. According to UPC’s projections, consumer spending will more than double by 2020, reaching €almost 13 billion. However, despite this, about 60 per cent of online shopping will be done with retailers outside Ireland, a trend that continues from UPC’s initial report in 2012, meaning that Irish retailers may not see as much benefit as they should.

Employment will also grow within the digital economy, with 79,00 jobs added directly and job creation hitting 150,000 when indirect jobs are taken into account. That will be driven by the continuing uptake of broadband services and the overall digitisation of society, industry and commerce in Ireland.

The availability of high speed broadband has also increased since 2012, with 30 per cent of Irish adults accessing speeds of 30Mbps or more, up from 10 per cent in 2012, and 44 per cent of homes able to access speeds of up to 200Mbps. To persuade people to give up their home internet connection, users would require an average of €130 per month, the reportfound.

On the business side of things, a quarter of Irish companies still do not have websites, representing about 47,000 in the SME sector. This is despite the fact that firms expect 21 per cent of their sales to be online this year, and companies predict digital productivity will lead to higher levels of digital growth.

Additionally, more than half of Irish businesses plan to expand their sales abroad in the next two years, using digital channels to grow their business.

However, the country is ahead of the EU average for the adoption of social media for businesses, with 53 per cent of companies saying online feedback from consumers influences them.

The report also revealed an encouraging trend in employment, with more than half of companies saying they would add to their headcount over the next two years, particularly in analytics, programming social media and digital marketing.