Digital Hub eventually starts rolling

After five years of debate and delays the first tenants of the Government's €250 million Digital Hub project will move into the Liberties area of Dublin next month.

Between four and eight digital media companies will be chosen from a pool of 15 to 20 applicants to take up temporary space in a building on Thomas Street. Building "OneFiveSeven" offers 8,000 sq ft of office space and is wired to take advantage of a €2.3 million telecoms network recently installed on the Digital Hub site by Dublin City Council.

"The type of firms who will locate here are going to be established companies. They will not be incubator firms," says a spokeswoman for the Digital Hub project. "We are looking at companies involved in a number of fields such as gaming, e-learning, e-music and digital TV."

For Digital Media Development Limited, the firm managing the Digital Hub project, getting companies on-site will be an important development following a difficult few years, which have encompassed a major financial review and management shake up.

Earlier this year the executive chairman of Digital Media Development Limited, Mr Paddy Teahon, resigned, shortly after joining the board of a property company that had undertaken work on behalf of the Digital Hub.

This followed a €70 million reduction in the project's budget forced by the Department of Finance in light of the downturn in the technology sector.

The Department also raised questions over the nature of the management contract agreed between Digital Media Development Limited and the State. This was later amended. These issues have significantly delayed the Digital Hub project and a shortlist of four consortia to compete in a tender to develop the main site in the Liberties was not drawn up until earlier this week.

The development timetable, which was provided with the shortlist of consortia, shows the main element of building work on the seven-acre site at the Liberties will not begin until early 2004.

The development consortia will shortly bid for the right to invest €130 million on the site, 50 per cent of which is reserved for digital firms, a quarter for residential dwellings, and the rest for educational and retail space.

When complete, the project will deliver some 500,000 sq ft of development in the Liberties.

But despite the slow start there are signs that the Digital Hub project is at last beginning to move forward.

The appointment of a new non-executive chairman, Mr William Burgess, last month was warmly welcomed by industry, and a new chief executive for the project will be appointed shortly.

In addition, development work at one of the main sites at the Digital Hub, the Guinness Print Works, will begin before Christmas. Enterprise Ireland and Dublin City Council have allocated funds to refurbish the building, which will be laid out in an open-plan design for up to 20 companies to locate and interact.

Firms should locate at the site by next summer, says the Digital Hub spokeswoman, who is confident it will be an attractive site for digital media companies to invest.

The concept of clustering is internationally recognised and one that has been proven to work, according to the projects spokesperson. "The city-centre location will provide a creative and high-tech space for firms that want to attract and retain talented people," she said.

Initial calls for expressions of interest to locate at the site made by the Digital Hub have been oversubscribed although there are no specific tax benefits attached to the site, unlike the IFSC. First-class infrastructure and the clustering effect remain the draw.

Mr Seamus Mulconry, senior manager at technology firm Accenture, says he remains very positive about the Digital Hub.

"The content industry has huge potential in Ireland but it needs the clustering effect that they have in Silicon Valley, where people meet to swap ideas and money," he said. "But I think it needs an anchor tenant like a Microsoft to lure smaller players to the hub."

It is important to realise that the hub is not just a property play, it's about people, says Mr Mulconry.

To this end, the Digital Hub hopes to invite universities and other research institutes to offer courses in digital media fields from its project offices next year.

It has also been chosen as a potential location for a major Government-backed multimedia initiative linked to the centenary celebrations of James Joyce's Ulysses. Ulysses @ the digital hub would be an integrated public attraction and digital media showcase linked to research and education resources. A feasibility study of the Ulysses project is being undertaken, and it is proposed that several US universities and RTÉ will become involved next year.

Indeed, although the main elements of the Digital Hub have taken longer than expected to proceed, the hub's anchor tenant - Media Lab Europe - has been up and running for more than a year.

Media Lab is a joint venture between Massachusetts Institute of Technology (MIT) in Boston and the Irish Government. It has 75 researchers and students on site at the Guinness Hopstore, who are focused on developing innovative technologies in digital media.

Mr John Callinan, chief financial officer of Media Lab, says it is researching diverse areas such as "palpable machines", which mix sensory interaction and machines.

One application of this technology would enable formula one engineers to experience the movements and G-forces that a driver would feel during a race.

Much like its sister institution established by MIT in Boston, Media Lab Europe has a much closer affiliation to private industry than traditional universities. Corporate sponsorship was originally intended to fund 80 per cent of the €130 million budget for the first 10 years of Media Lab Europe. In return for this investment, firms gain access to technologies developed at Media Lab Europe and the MIT Media Lab.

The downturn in the technology sector over the past two years has also hurt Media Lab Europe. RTÉ and US firm 360 Networks both pulled out of commitments made to the Lab recently, and corporate sponsorship is running below the level set out in its plan.

Media Lab Europe has about 10 corporate sponsors, including Eircom, Ericsson and AIB, which are contributing €2.5 million this year. This is well below the target of €10 million annual funding expected to be reached in the next few years.

Media Lab Europe is exploring other means to make up the shortfall including applying for European Union grants and inviting other European states to take a role in the institute.

But the institute also faces significant management and personnel issues now, following the resignation of its chief executive, Mr Rudy Berger.

Mr Berger resigned unexpectedly this week and has been replaced by an acting director for the next six months, which will prove crucial to the Lab's future.

Mr Callinan says he is optimistic and believes Media Lab will not have to curb ambitious growth targets of attracting 200 to 250 researchers and expanding to a new site called the Vathouse.

"The issue up to now has been to ensure we grew to a certain point of scale," says Mr Callinan, who believes the Lab has no immediate need to grow further.

But the dilapidated state of the 100,000 sq ft Vathouse means it will take at least two years to refurbish, and it is understood that Media Lab Europe is anxious for work to begin shortly.

Under the terms of an agreement with the Government, public funds need to be released by the Department of Finance to begin this work.

"Intensive discussions" between the Government and the Lab are ongoing, says Mr Callinan.

But with no specific date set for refurbishment work to begin, proponents of the Lab are anxious it does not suffer the same budget cut backs that initially hurt the Digital Hub.

After all, it would prove ironic if Media Lab Europe's growth was impeded just as the Digital Hub got the green light.