Posted on Thursday 15 March 2012 by Ulster Business

Why we can become a global digital player

Sinclair Stockman, Executive Director of the Digital NI 2020 initiative, explains why he believes that local businesses are well placed to grasp the opportunities afforded by our strong digital communications infrastructure and why Northern Ireland could become a hub for global digital trade

“The transformational impact of access to reliable high speed internet connectivity will be at least equivalent to that heralded by the advent of transport, power and water networks.”

This quote is taken from the papers of the UN Broadband Commission, which was established in 2010 with the objective of ensuring that all parts of the planet have access to these benefits.

It is estimated that from every 10 per cent increase in broadband penetration we can expect an average 1.3 per cent increase in GDP, making it one of the primary drivers of economic and social growth in the 21st century.

A little reflection quickly reveals why this should be the case. Interaction enables innovation and trade. Innovation and trade drive economic growth. Economic growth drives social growth, which in turn drives innovation and trade. High speed internet access, coupled with access to a wide range of increasingly useable access devices and information sources, enable companies to change the way they do business and to access markets and partnerships that were previously beyond their reach.

One of the myths we live with is that the primary role of digital technology for companies is to make them more efficient. Whilst this was certainly the case in the earlier era of industrial computerisation, this is now only one of the benefits. As the network has become more reliable, faster and more widely accessible, so the number of people, companies and things accessing the network has exploded, and the way people interact with people, businesses interact with markets, businesses interact with each other and devices interact with people and devices, has transformed.

GPS, once considered a miracle, is now taken as a given. Access to interactive maps is now normal. The ability to order what you want from where you want when you want it, without having to visit a store is transforming the retail market. Our children, and indeed most adults who are connected, are interacting with knowledge bases and learning tools to acquire skills at rates which were previously thought of as impossible. In this world, what the digital platform brings is not only efficiency, but more importantly effectiveness, and it fundamentally changes the businesses and administrative processes which are the basis of our society.

This is an exciting era, possibly one of the most exciting in the history of human beings. As individuals and companies we can interact with anybody anywhere, in rich and value adding ways. This opens up a world of opportunity for those with the ambition to exploit it.

It is estimated that 50 per cent of the world’s population now has access to the web. This figure continues to grow, bolstered by mobile phone penetration. In Northern Ireland, we are a relatively small country, with a population of 1.7m. We are, however, geographically well positioned between Europe and the Americas, and we have a fantastic digital communications infrastructure. We are probably the region in Europe best positioned to embrace this opportunity.

So, how do we go about this. The first step is to understand the scale of the opportunity. By the end of 2012, it is likely that more than 3 billion people will be actively connected to the internet. All government procurement departments, across the planet, will have access to e-procurement systems. The majority of companies in every country in the world will be purchasing services and products online. Put simply, this is one hell of a market to go for.

We already have companies who are successfully playing in the global space, selling the vast majority of their output overseas, via online channels, and providing employment to people in Northern Ireland.

In a nutshell, there are three ways to exploit the internet, which any business in Northern Ireland should consider.

Firstly, extend market reach. Rather than focusing only on local markets, create an interactive web presence, which acts as a marketing channel and also allows customers to purchase services. A common mistake made by many companies is to put up a static website and expect that this will generate business. For a trading entity, the website needs to be thought of as a global shop window, it needs to allow customers to interact with it and make it attractive and easy to purchase services and goods.

Secondly, use the internet to enhance product offerings. So, when a customer purchases a service, suggest additional services and products which may be of interest. Use various bundling mechanisms to make additional purchases more attractive. Whilst this may seem obvious, it is a technique which many online businesses fail to exploit imaginatively. Those which do achieve significant increases in business.

Thirdly, use online business process services to reduce the cost of running your business, and where appropriate, good quality web trading platforms to manage the logistics and business flow of your organisation. The potential to access business process applications available via the Cloud as a result of our high quality network, makes this eminently feasible for most businesses in Northern Ireland.

One consequence of engaging with customers online is that the interaction between the business and customer exhibits persistence. By that we mean that unlike in the physical case, when a customer leaves the shop, there is a high likelihood, especially for passing trade, they will never return, when a customer engages with a business online, you have access to that customer well into the future, and therefore the opportunity to sell to them over an extended period.

The above are in some ways, very straightforward consequences of trading online. What is surprising is that at present, only a minority of businesses in Northern Ireland use the internet as an integral part of their commercial relationship with their customers, and even fewer have engaged in tapping into the global marketplace, which really does offer the potential of limitless growth.

Northern Ireland is one of the best places on the planet to set up global trading businesses. There is a real opportunity for Northern Ireland businesses to buck the trend and grow despite the economic conditions. The challenge now for all of us is to start benefiting from this opportunity, before others take the lead.

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