Even with relatively small investments, the integration of existing technologies could create new services bringing more reliable, real-time traffic information and better routing.
as well as reducing the need for new investments in additional roads. Continuing progress in ICT and sensing devices will open the door to even more radical advances.
extensive infrastructural investment and complex in-car equipment, but this has some limitations. For example, issuing aâ black ice warning to all vehicles approaching aâ particular
High investment in fixed equipment for this purpose is justifiable in urban areas, where most congestion occurs,
making informed investment decisions. Key Performance Indicators (KPI) will enable the impact of ITS to be measured
infrastructure investment, strategic mobility management is becoming the most important tool for meeting this demand
A Review of the Equity Investment Landscape In Ireland Forfã¡s January 2013 Regional Labour markets Bulletin 2012
proximate cause is simply the lack of investment in ICT capital: European countries have lagged significantly behind the United states in ICT investment, both as percent of total
investment and as a percent of GDP, since the 1990s. And this is true not just of the ICT
-producing sector itself. ICT-using sectors, primarily the service sector, that have been large drivers of growth in the United states have been untouched relatively by ICT in Europe
the cost of ICT investment, and slows down market forces that can push firms to adopt
a role as well as depreciation rates for ICT capital investments are generally less generous than in the United states
to achieve economies of scale from ICT investments. Moreover, Europe†s much higher proportion of small firms makes it hard for firms to surmount the high fixed costs of many
ICT investments. In the latter case, regulation has provided the significant bottleneck to firm growth, by favoring small firms at the expense of large ones
from ICT investments requires organizational redesign, and that U s. firms are better at employing management techniques that can facilitate such transformation
right conditions for ICT investment and adoption. The government can do this through its own procurement and adoption of ICT products,
investment. By minimizing taxes on ICT investments, policymakers encourage the productivity effects of ICT use.
These tax incentives are particularly important because while ICT investment provides large benefits for the broader economy, the nature of these
benefits makes them hard for any single firm to capture; therefore, firms tend to underinvest in ICT.
Additionally, the Transatlantic Trade and Investment Partnership TTIP) would better facilitate access to U s. markets
-structures capital investment is in ICT, and the number would be even higher if all IT
At both the firm and the country level, greater investment in ICT is associated with greater productivity growth. †36 In fact,
2000s found that investment in ICT capital increased productivity by three to eight times more than investment in non-ICT capital. 43 Likewise, Wilson finds that of all types of
capital, only computers, communications equipment, and software are associated positively with multi-factor productivity. 44 Hitt and Tambe find that the spillovers from IT nearly
double the impact of IT investments. 45 Rincon, Vecchi, and Venturini confirm the GPT nature of ICTS through an exhaustive industry-level study of both productivity benefits
Castiglione measures the impact of ICT investments in Italian manufacturing firms and finds that they had a positive and significant effect on firms†efficiency,
IT investment/hour PAGE 14 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION JUNE 2014 of national growth. 63 Also in Italian firms, Hall, Lotti,
investment is associated strongly with productivity. 64 In Spain, Romero and Rodrã guez find that e-buying had significant impacts on firm performance over the 2000-2005 period. 65
productivity growth. 70 These studies confirm that ICT investment goes hand in hand with firm productivity growth,
slower without investment in ICT Moreover, ICT doesn†t just increase firm productivity, it enables firms to be more
investment, broadband use, and e-commerce are all very important for innovation in the service sector,
and that ICT investment and broadband use are less but still important drivers of innovation in manufacturing as well. 75
Amount of ICT Investment Firms in Europe do not invest as much in ICT as firms in the United states. Higher levels
of ICT investment drive higher productivity growth: in a recent survey of both micro and
over the last two decades an increase of ICT investment by 10%translated into higher
States have maintained a healthy lead in both ICT investment as a share of overall investment and ICT investment as a share of GDP. 83 (Figures 8 and 9) And that lead has
grown, not shrunk, since 2000: the EU invested about 80 percent as much as the United
States in ICT as a share of total capital investment in 2000, but by 2011 that number had
investment. ICT investment both as a percentage of GDP and as a percentage of total
nonresidential investment peaked in the late 1990s for both the United states and the European union. However, the United states has maintained much higher levels of
investment in ICT as a share of fixed capital investment since the 1990s.86 (Figure 10
Moreover, U s. ICT investment is significantly higher as a percentage of overall investment than in any other large European nation other than the UK. 87 Continuously higher levels
of ICT investment by the United states mean that it has built up a larger stock of ICT
capital goods, even though these goods normally depreciate faster than other capital goods From 1991 to 2007, ICT capital stock†the total accumulated ICT investment†tripled in
ICT investment by 10 percent translated into higher output growth of 0. 5†0. 6 percent. â€
Gross fixed capital formation (investments) by type as a percentage of GDP (EUR-W is
Shares of ICT investment as percent of nonresidential investment93 Economists see U s. ICT investment as a key reason the United states has maintained its
place at the â€oetechnological frontier†as one of the most productive countries. 94 The effectiveness of greater ICT capital investment in the United states suggests that additional
ICT investment in Europe is likely to have significant benefits as well. Strauss and Samkharadze argue that â€oeus productivity has outgrown the EU-15 mainly because of
stronger ICT capital deepening and faster progress in productive efficiency. †95 0 %5 %10
Other investment as%GDP ICT assets as %GDP 0 %5 %10 %15 %20 %25 %30
ICT investment shows up in survey data on ICT use as well. The 2013 and 2014 World
Drilling down into the lack of investment, another reason Europe has experienced not the same macroeconomic impacts from ICT as the United states is that it has not been able to
from their ICT investment means not only that productivity is lower, but also that fewer projects meet investment hurdles and firms in Europe end up investing less than firms in
the United states One product market regulation that appears to have a negative effect on ICT-enabled
the effectiveness of IT investment include the new law requiring websites to obtain â€oeexplicit consent†before placing web cookies,
Labor market regulations have a large negative impact on ICT investment and the benefits firms can obtain from it.
reduce the return on investment from ICT purchases, leading firms in Europe to invest less
Companies make decisions about capital investment on the basis of return on investment If the return is low due to factors like product market regulations, labor market regulations
investment. However, higher taxes on ICT consumption do discourage ICT use by consumers, making it more difficult for businesses to use ICT to adopt customer-facing
Europe†s high consumption taxes may only affect business investment decisions indirectly but corporate tax policies play a more direct role.
Another important channel through which tax policies influence investment is depreciation rates†the rates at which corporations can write off capital investments for tax purposes. 126
Accelerated depreciation decreases tax revenues in the United states by 6. 6 percent, and thus comprises a substantial incentive to invest in new equipment,
which companies can depreciate ICT investments. 129 Over time these rate differences could have significant effects on ICT investment and thus
accumulated ICT capital stock. Unfortunately this is not a well-developed body of research and further work is necessary to determine
significant effect on investment Scale Economies Two additional reasons European firms lag in their investment in ICT capital are related to
scale. The first scale problem is with firm size. The United states has a higher percentage of
IT adoption by firms, ICT investments have high returns to scale because of their low marginal costs but higher fixed costs. 130 To be sure, the increased provision of software
Regulation that favors small firms has been a significant bottleneck for ICT investment in many European nations. 133 The firm-size problem ties into the regulatory issues above
there are larger potential returns to ICT investments for U s. firms, again because of the high fixed costs relative to marginal costs in many ICT capital investments.
Moreover larger markets mean more competition, which in turn spurs firms to invest more in order to innovate and cut costs.
While regulations and taxes affect the return on ICT investments, in any given environment firms still have investment choices.
These choices are in part dependent on management practices which vary not only between firms but between nations
expensive and reduces ICT investment by firms and other organizations. As noted above this is already a key problem in most European nations,
which has less investment in ICT than does the United states. There is compelling evidence that tariffs ON IT products will
reduced domestic IT investment. 162 In a cross-national study of countries in the Asia
investment, including network externalities and â€oechicken-or-egg†issues that slow digital transformation absent smart and supportive public policies. 165 Health care is a leading
Use Tax and Trade policy to Spur ICT Investment It is only through investment in ICT that ICT innovation is diffused throughout the
economy. For this reason, public policies should focus on spurring additional investment by organizations in the latest-generation ICT.
Policymakers should minimize, if not eliminate, taxes on ICT investments, including broadband telecommunications, Internet usage, and data.
They should allow companies to more rapidly depreciate ICT investments for tax purposes, including allowing firms to expense them in the first year
Some economists might question such policies, arguing that such tax incentives should only go to investments in areas like R&d where companies seldom capture all the benefits
However, there is evidence that because ICT transforms organizations and leads to innovations within other organizations, it operates in the same way as research, with high
environment, the socially optimal amount of investment will lag behind actual investment As such, it makes sense for the tax code to spur additional ICT investment, or at least to
avoid having the tax code penalize ICT investment At the same time, the EU should continue to embrace the ITA agreement in order to
ensure low prices for European ICT users. The ITA has played a critical role in the spread
investment in ICT goods would decline, and productivity growth would slow. 169 Create Larger Markets for EU Firms
for an organization to recoup its ICT investments. The EU has been advancing frameworks for better intra-EU digital compatibility and access through the Digital Agenda for
Finally, the Transatlantic Trade and Investment Partnership (TTIP) would significantly expand markets for many European firms by reducing non-tariff barriers in the United
on investment on more ICT projects for firms in the EU Reduce Preferences for Small Businesses
crisis has kept Euro-area investment on the decline while preoccupying policymakers with other issues. Meanwhile, productivity rates continue to lag behind U s. rates in the
ICT investment (particularly in ICT-using sectors), lower taxes on ICT products, and larger economies of scale at both the firm and market levels.
Saving and Investment, Table 5. 3. 5; accessed March 3, 2014 http://www. bea. gov/histdata/NIYEARAPFFILES. asp?
Kraemer, â€oemeasuring Payoffs from Information-technology Investments: New Evidence from Sector -Level Data on Developed and Developing Countries†(working paper, Center for Research on
Investment, ICT Use and UK Firm Productivity, †Economic Trends 625 (December 2005; Nicola Matteucci et al.
Concetta Castiglione, â€oetechnical Efficiency and ICT Investment in Italian Manufacturing Firms, †Applied Economics 44, no. 14 (2012
Investments on Innovation and Productivity in Italian Firms, †Economics of Innovation and New Technology 22, no.
OECD, Country Statistical Profile 2012 (Investment Data and Shares of ICT Investment in Total Nonresidential GFCF;
Investment in ICT: Shares of ICT investment in nonresidential gross fixed capital formation; accessed April 2, 2014) http://www. oecd-ilibrary. org/economics/oecd-factbook-2013 factbook-2013-en;
World Bank, Databank: World Development Indicators (Gross Fixed Capital Formation as percentage of GDP); ) The Conference Board, Total Economy Database:
Statistical Profiles 2012 (shares of ICT investment in nonresidential gross fixed capital formation accessed January 20, 2014;
from R&d Investment: Are High-tech Sectors Still Ahead? †(discussion paper, Institute for the Study of
Figure 2. 1. 3 ICT investment by asset, 2000 and 2011; accessed January 28, 2014), http://dx. doi. org/10.1787/888932890599
Dammon and Lemma W. Senbet, â€oethe Effect of Taxes and Depreciation on Corporate Investment and
Kenneth L. Kraemer and Jason Dedrick, â€oepayoffs From Investment in Information technology: Lessons from the Asia-Pacific Region†(University of California, Irvine:
Bradford Delong and Lawrence Summers, â€oeequipment Investment and Economic growth: How Strong is the Nexus? †Brookings Papers on Economic activity 23 (1992;
Voth, â€oehuman capital, equipment investment, and industrialization, †European Economic Review 42, no 7 (1998:
from Information technology Investments, †1793; Xavier Sala-i-Martin, â€oe15 Years of New Growth Economics:
Committee, the Committee of Regions and the European Investment Bank, November 2013 http://eur-lex. europa. eu/legal-content/EN/ALL/?
Amount of ICT Investment Limited Impacts in the Services Sector Regulation and ICT Adoption Tariffs and Taxes
Use Tax and Trade policy to Spur ICT Investment Create Larger Markets for EU Firms Reduce Preferences for Small Businesses
themselves and so have been rapidly increasing investment in the new technologies. 1-3 The rhetoric of vendors and governments
•Investment in information and communication technology (ICT in the health sector can bring important benefits.
Finally, we compare the main areas of planned investment with sectoral data on firms, employment and patents, with the conclusion that the connection between priorities and the
in order to ensure effective and efficient investments in research and innovation (R&i)( European Commission, 2010b. One essential feature of RIS3 is the concentration of funding on a limited
and users/civil society to develop a better understanding of both future and private investment
It argued that research investments in Europe have been overly fragmented, have lacked critical mass and have been plagued by a †me too†syndrome, which
manifested as regions making investments in very similar and fashionable areas such as information and communication technologies (ICT),
investment were disconnected often from actual local capabilities, and, in many cases, based on hopes of developing future industries.
The lack of connections between these investments and existing capabilities was probably one of the greatest problems;
investments in R&i were expected to increase considerably in ESIF, DG REGIO and the Joint Research Centre set up the Smart Specialisation Platform at the Institute for Prospective
as of 2012, identifying priorities for their RIS3 investments 3. Developing an open data tool for mapping innovation priorities
which also influence planned investments Table 1: Number of priorities within the main category †research and innovation capabilityâ€
that these investments stem from political priorities, rather than from a real discovery process and
this, they had to select a limited number of investment priorities, via an entrepreneurial discovery
Finally, we compare the main areas of planned investment with sectoral data on firms, employment and patents, with the conclusion that the connection between priorities and the economic and
Investment subsidies required per customer for each geographic cluster 46 Figure 19: The traditional one-way cable TV network 50
Impacts of high speed broadband investment in Europe 2012-2020 26 Table 4: Typical maximum achievable speeds for various wireless solutions 33
The recently published study by J. Hätã nen of the European Investment Bank (EIB
EIB European Investment Bank EU European union FTTX Fibre to the â€oexâ€; x=N c, B, H;
ROI Return on Investment RSPG Radio spectrum Policy Group RSPP Radio spectrum Policy Program SMP Significant Market Power;
See also European Investment Bank (2011), â€oeproductivity and growth in Europe; ICT and the e-economyâ€
A series of studies by the European Investment Bank appropriately raised the question What do the bandwidth targets in the DAE signify
2009) 22 find that an additional â¤5 billion investment in broadband networks would create or retain an estimated 280,500 UK jobs for a year
-economic impact of high-speed broadband investment in Europe. To this end, three main indicators were calculated
•Return on investment (ROI), and •Cumulative impact on GDP Table 3: Impacts of high speed broadband investment in Europe 2012-2020
Expenditure EUR bn Expenditure per head (EUR I/O benefit EUR bn) ROI Cumulative impact on GDP
which takes into account the respective investment expenditures for electronic equipment, construction and telecoms 30 Intermediate results were presented at a public workshop in Brussels in February 2012.
investment (ROI) of 2. 2. The cumulative impact on GDP is estimated to be 2. 0
â€oethe economic impact of fixed and mobile high-speed networksâ€, European Investment Bank (EIB 45 See Feijã o, C,
In conclusion, the graph shows a pattern of investment relatively close to the distribution of the proportion of the total population among the
%of the total investment Average price per subscriber EUR/subscriber Zone 45 Four fibre-based telecommunications architectures were considered:
Investment subsidies required per customer for each geographic cluster Source: WIK. 57 57 See Jay, S,
Investment subsidy per customer (at 70%penetration) AFTER CROSS SUBSIDIES Investment per customer (at 70%penetration
Investment per customer EUR Profitable clusters profitable through cross subsidy additional invest subsidies required 47
The apparent conclusions are that a full 100%fibre-based ultra-fast broadband coverage cannot be profitable in Germany under today†s circumstances.
or else an investment subsidy of up to â 2, 500 per access would appear to be required. 58
attenuation) and economic (costs of additional investments) considerations 56 Rethinking the Digital Agenda for Europe (DAE
â The recently published study by J. Hätã nen of the European Investment Bank
The recently published study by J. Hätã nen of the European Investment Bank (EIB), 76
private investment, complemented by carefully targeted public investments, without re -monopolising our networksâ€; however, it seems to disregard any concerns that a European
82 †Enhancing the broadband investment environmentâ€, 12 july 2012, at http://europa. eu/rapid/pressreleasesaction. do?
x Increase efforts and investment in ICT infrastructure of appropriate performance and interoperability x (Re) design and/or (re) arrange physical space
financial investment,(ii) a complex array of different types of support and strategies (targeted at
investment in infrastructure developments (e g. broadband, cloud computing, creative learning spaces etc. to support effective implementation and progressive mainstreaming of ICT-ELI
high investment in school infrastructure to support the longstanding innovation history of the school Kampylis, Breä ko, et al.
In conclusion, policy should increase efforts and investment in infrastructure developments e g. broadband, cloud computing, creative learning spaces etc.
Increasing efforts and investment in ICT infrastructure (e g. broadband, cloud computing) of appropriate performance and interoperability (any device, anywhere, any
while for teachers/trainers increased efforts and investments in ICT infrastructure to support effective implementation and evolution of innovation for learning is more
it is recommended highly that more investment be made into teachers'Continuous Professional Development and Initial Training and that
Policy should increase efforts and investment in infrastructure developments (e g broadband, cloud computing, creative learning spaces etc.
Increasing efforts and investment in ICT infrastructure (e g. broadband, cloud computing) of appropriate performance and interoperability (any device
Increasing efforts and investment in ICT infrastructure e g.,, broadband, cloud computing) of appropriate performance and interoperability (any device, anywhere
Increasing efforts and investment in ICT infrastructure e g.,, broadband, cloud computing) of appropriate performance and interoperability (any device, anywhere
these require significant investments for their successful implementation. In fact, these systems require abundant resources including skilled labour
Both the survey and literature reveal the pressing need for investment in human resources and ICT
leverage the investment in developing such systems. Free open source software is particularly a boon to
leverage the investment in trained human resources for maximum benefit A major and well recognized obstacle to the adoption of patient information systems, particularly
the Member States and institutions such as the European Investment Bank and the European Investment Fund, consistency in policies aimed at SMES is ensured
The relevance of knowing whether your business is an SME thus lies in the eligibility
2. Innovation, 3%of the EU€ s GDP should go to investments in R&d 3. Climate/Energy, the â€oe20/20/20†targets in the fields of climate and energy
ensure a fair return on investment for your business The Single Market Act is included also into the framework of the Europe 2020
investment in SMES. For the same reason, SMES can benefit less from State aid. Therefore, the Commis
finance for SMES and for investment in innovative activities The European commission entrusts the CIP funds to the European Investment Fund (EIF.
The EIF, a first link in the risk-sharing chain, shares some of the risk with financial intermediaries in the participating
start-up and growth of SMES and for the investment in innovation, technology transfer and cross-border
The facility covers investment into venture capital funds which have an early stage focus (GIF1) and funds with a focus on SMES with high growth potential in their expansion stage
they focus on investment financing •Microcredit guarantees help financial institutions to provide financing to micro enterprises
•Equity and quasi-equity guarantees warrant investments in SMES in the seed and start-up
umbrella of the European Investment Fund. Its aim is to improve access to finance for SMES.
-ing Funds and investments in Technology Transfer Funds under the umbrella of a Holding Fund.
intended to inform future investment and development and ensure that maximum regional benefits are obtained from future
†Smart Specialisation/RIS3€ for supporting investments ex-ante conditionality. This ex-ante conditionality requires
policy supports and investment on key national/regional priorities. In Ireland, the Department of Jobs, Enterprise & Innovation/Forfã¡
investment and supports on these identifi ed regional strengths thus ensuring value for money in times of tighter budgets and scarce public resources while at the same time supporting the
Strategy as most likely to benefi t from smart specialisation policies and investment in the Mid
impacts of investments 7 Research & Innovation Strategy for the Midwest Region of Ireland 2014-2018
technology transfer, investment forums, start-up and commercialisation support and increased awareness amongst new and existing businesses of the supports that are available.
such as firm investments, finance & support, intellectual assets and outputs and employment in knowledge-intensive
investments Furthermore, the IMD World Competitiveness Yearbook 2014 puts Ireland at number 15 in an overall global competitiveness
•Investment incentives These global and European rankings present a snapshot of the current economic and social climate and are testament to
focus policy supports and investment on key national/regional priorities. In Ireland, the Department of Jobs, Enterprise &
future investment and development and will ensure that maximum regional benefits are obtained from future R&i developments.
closely related, thereby ensuring maximum benefi t from future investments in the Region Research, innovation & smart specialisation
funding under a number of European Structural Investment ESI) funds such as the European Regional Development Fund
and will focus policy supports and investment on key national /regional priorities 2. 0 Introduction
it is essential that policy and investment decisions are focused on emerging global growth areas. Research, innovation and
The EU Cohesion Policy will be the EU€ s principal investment tool for delivering the goals of Europe
investment of the European Regional Development Fund (ERDF) in key priorities such as support for small and medium-sized enterprises. 7
and create jobs through investment in research The goal is to ensure Europe produces world-class science,
The Research Prioritisation Report identifies a number of priority areas around which future investment in publicly-performed research should be based.
competitive edge exists, maximising the amount of foreign direct investment secured, supporting innovation, enterprise and start-ups,
and innovation investment and growth are testament to the importance of R&i development to our national and regional economic future
fi nancial investment, with funding becoming increasingly dependent on evidence-based strategies that demonstrate the strengths of a
Large enterprises and foreign direct investment FDI) are both a significant economic contributor and employer
National and regional investment in research, development and innovation is of paramount importance and a significant level of investment has been made in the Region in recent years
albeit at a lower level than that of our regional and European counterparts. A number of
have been examined to establish the current level of investment and growth 3. 5. 1 Innovation Vouchers
amount of investment made in the Region due to the implementation of the Programme Border 12
figures outlined in Table 3. 5 indicate the investments made by Enterprise Ireland companies 27
The IDA is responsible for the attraction and development of foreign investment in Ireland. One of their key roles is to build links between international businesses and third level education
SFI is the national foundation for investment in scientific and engineering research. SFI invests in
investment too thinly across several frontier technology fields risks limiting the impact in any one area
specialisation focuses investment and supports on identified regional strengths thus ensuring value for money in times
focus investment in the coming years Based upon a) The Forfã¡s Regional Competitiveness Agenda 2009
specialisation policies and investment in the Midwest 38 5. 1. 4 Actions Required to Progress Smart Specialisation
and investment the following actions are recommended •To carry out further detailed analysis of the identified industries to establish their research
•To monitor the impact of analysis and investment, particularly in the areas of employment
industries, in order to establish the impacts of the investments made 5. 2 Cluster Development 5. 2. 1 What is a Cluster
which investment and development should be focused. Clustering is the next stage in the process, identifying the Region†s core competences and
investment can be demonstrated. Company investment in the cluster is one of the key indicators of the success of any cluster initiative.
Also, in order to be considered successful there must be benefi ts for the wider region and not just for the companies directly involved in the cluster
Investment Forums †Investment forums make a valuable contribution to innovation and business growth by providing an opportunity for entrepreneurs
attracting private sector investment to a region but there are currently limited opportunities for businesses and individuals to present their initiatives to potential investors in the Midwest Region
and a formal investment forum is required Start-up and Commercialisation Support †there are a wide range of agencies in the region
enhancement of local innovation capacity, including investment in research and development capacity technology transfer, up-skilling and re-skilling.
investments made and allow for the identification of areas that are underperforming relative to their potential and
capabilities and where further focus and investment of resources are required 54 Appendix 1 †Stakeholder Engagement
•Secure investment in emerging sectors New Enterprise Growth •Low Carbon Sector •New Enterprise Growth
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