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.