I am the chief executive of the agency. I have a very short presentation which will provide members with a structural overview of the agency, its current activities and the point it is at in its development.
We are a statutory agency, established in July 2003. The Act charges us with three major statutory objectives. The first is the creation of an enterprise cluster which is focused on digital media and specifically, that the cluster be located in the Liberties in Dublin. The Act also requires us to publish a development plan in consultation with the local community and specifies that the plan - which was published in November 2006 - should address community development issues. When we engaged in a consultation process at the very beginning of the project, it will not surprise members to know that the major points raised by the community related to education and employment. They wanted to see educational and employment benefits for the community as a consequence of the location of the agency in their midst. It is a strong passion of the executive team involved in the project that we leave a legacy of significant benefit to the local community in which we operate. The Act also charges us with the responsibility, viajoint venture concessions or other means, to create the property and infrastructure requirements of a successful digital media hub. Our job, quite simply, is to create an environment that will entice digital media people and companies to locate in the Liberties and to supply the necessary infrastructure.
Mr. Bill Gates, who has recently retired from his day job, coined the expression "the digital decade". Digital media has many definitions but in general, what we are about is the provision of digital products and services to a digitally connected global market. Such products and services come in many shapes and forms. There has been enormous growth in the sector during this decade. The Internet was established in 1991 and now has 1.5 billion users worldwide. That figure is projected to grow by 250 million every year for the next five or six years. Most of us here will have had experience of using the Internet to book airline tickets and holidays as well as for conducting research. Even within our own homes and families we can see the increasing use being made of the Internet. In order for the digital products and services to be provided on the Internet, an array of technologies, products and services are being developed by companies. The mobile phone is another major advance as the Internet goes mobile.
There are quite a number of companies in the digital hub working in animation and the creation and development of computer games, both for leisure and educational purposes. We also have quite an array of mobile technology companies located in the hub. It is, at its core, a technology cluster with a very significant creative element. We published a survey of our tenants relatively recently. We are delighted to be at a scale whereby we could actually conduct a meaningful survey, with 100 companies now operating in the hub. Approximately 30% of the cluster would describe themselves as being creative, with 45% to 50% describing themselves as technological. A key goal of ours is to bring about a fusion of creative and technology companies because we see that as being the real opportunity for Ireland Inc. in the future. It is an area in which we now have technology competence, built up over a few decades, beginning in the 1970s with the foreign direct investment of computer multinationals. We now have a very strong indigenous software sector and the next wave is where creative content will be introduced in combination with that technology competence. Members will agree that there is a creative bent in this country. In the context of digital media, that is the future or the upper end of the value chain, as it has been described.
We have provided members with a map to give them some indication of our location. Dublin-based members will be very familiar with the Liberties and those visiting will know that it is on the west side of the city, next door to St. James' Gate. We were provided, via the Office of Public Works, with six acres of property upon which to create the hub. That property was transferred to us on establishment day in July 2003. Effectively, we have two sites, one each on either side of Thomas Street.
When we started in 2003, there were no tenant companies. I had the pleasure of addressing a previous incarnation of this committee in 2005, when we had approximately 48 companies in place. Since then we have continued to move forward and as of last week we have 100 companies in the hub, with 750 employees.
The major focus for the executive and board now is to move to the point where we are totally self-financing. Our aim is to become a stand-alone organisation which does not require Exchequer support from January 2010 onwards. That has always been a goal of the agency and the project. We were 100% Exchequer funded at the beginning but have been reducing that gradually during the years. As of last year, Exchequer funding represented 36% of our total income.
Our goal, articulated in the development plan, is to have 250 to 300 companies in the hub and 2,500 to 3,000 employees by 2012. We cannot be any more definite than that because it will depend on available space and numbers of employees. At that point, we will not alone be self-funding but will generate surpluses. We intend that such surpluses will be returned as a dividend to the Exchequer, to be invested in community and learning programmes. Final decisions can be made when we have reached that point in our development.
We currently manage ten buildings in all, which are fully occupied at this point. We are at a stage where we have some future development plans in the planning process, anxiously waiting for approval. We received approval in two cases from Dublin City Council but both were appealed, by a single objector in each case, to An Bord Pleanála. We are expecting a final decision in September. A favourable decision will allow us to move forward from this point and build out the full 250,000 to 300,000 sq. ft. of office space needed to satisfy the strong demand. We have 160,000 sq. ft., of which 80,000 sq. ft. is owned by the agency or the OPW. A further 80,000 sq. ft. is leased from local landlords. The buildings for the centre are owned by us, while those at the outer rim, with the exception of the Digital Depot, are under lease arrangements. I hope members will agree that significant progress has been made.
The hub has attracted 100 companies and 750 employees. We released our survey last Monday to a positive reception. I was delighted to see Deputy McManus in attendance at the launch. The optimism and confidence of the CEOs of these companies are evident from the survey. Approximately 80% of these companies are at an early stage in their development, so it is a very entrepreneurial and creative environment. Based on their anticipation of future work, the CEOs forecast growth projections of 35% in revenue and head count growth. That is an interesting tonic in these times of difficulty. The Minister for Communications, Energy and Natural Resources described us as a green shoot which heralds the future for enterprise growth in Ireland.
The Digital Hub has a positive 9:1 ratio of permanent to temporary employees and 85% of employees are at level six, post-leaving certificate level, or higher. Our export profile is also significant, with export revenues of greater than 50% in more than 50% of companies. Levels of innovation and collaboration are also high. The data provided to us indicate 80% to 90% innovation levels in products and technologies and in processes and business practices. Significant collaboration is taking place within companies and between companies and their suppliers and other partners. It is a hive of exciting and new entrepreneurial activity and I hope members of the committee will have an opportunity to see this at first hand. Some 20% of the companies have a turnover of more than €1 million and, according to our estimates, spending has increased by €45 million in the past six years. The equivalent value of revenues emerging from the cluster is of the order of €300 million to €400 million.
Our target by 2012 is to have 250 to 300 companies with 2,500 to 3,000 knowledge jobs. We estimate a real economic impact to the Liberties from a payroll of €150 million and revenues of €500 million per annum. This will predominantly be earned from exports because the confidence level of these companies is high in terms of growing exports and they have a track record in this regard. We also want to reverse the balance of 30% indigenous firms and 70% FDI. We are trying to demonstrate a visionary showcase project for Ireland Inc.
Professor O'Connor mentioned the importance of learning and community engagement. The bulk of our community engagement is through the learning programmes we deliver to people of all ages in community centres and the 16 schools in the area. We have initiated a very interesting project, Digital Hub FM, which is a local radio station. Some of the senior citizens who have come through the programme previously had difficulties with video recorders, yet they now feel comfortable presenting radio programmes. The consultation process we adopted won an Eircom innovation in government award and there has been strong demand for participation in our courses. Last year, 3,282 people attended courses, although a number attended several courses. We have developed a learning studio which, at a few thousand square feet in size, is relatively modest but has high occupancy rates. It acts as an access point for the local community. Part of our plan is to develop a fully fledged learning studio by 2012 as a legacy for the community.
In regard to property and infrastructure, the hub comprises two sites to the north and the south of James Street. We are in contract with two developers, P. Elliot and Company and Manor Park Homebuilders. These contracts, which were signed in November 2005, commit the developers to providing us 140,000 sq. ft. of digital media buildings and €45.7 million in cash payments. When the tender was constructed, minimum figures were set for space and cash and the developers opted to bid the minimum in space and provide the balance in cash. The Government decision which established the agency allows us to use that cash for the purchase of further properties and offices for the project as required. It is a contractual stipulation that planning permission must be achieved by 2009 or else the contracts are void. The hub buildings must be delivered within three years of the grant of planning permission, so if we are successful with An Bord Pleanála by September 2008, the buildings must be delivered by September 2011. In the meantime, we are pursuing an interim strategy by leasing buildings and we will take more if the commercial rationale is strong enough to maintain the momentum of the project until the buildings are delivered. Our major challenge is to transition to the point at which the buildings are delivered. A significant asset value will be retained by the Government on completion of the project.
I will now give a short summary of the returns on investment and quantify the assets. The slide before members contains two columns, one of which shows the nominal figures, that is, the actual moneys received, while the other shows the net present value, which converts to a current comparable value the flows of cash between 2000, when the first money was received, and 2012. The Government outlaid €56.5 million on properties and has given €18 million to the agency in the past eight years. The total investment has been €74.6 million. The figure of €18.1 million includes commitments we have received from the Department of Communications, Energy and Natural Resources for 2008 and 2009. When the project is complete and the buildings delivered, aside from those currently in our ownership which we will retain, we will have a net asset value of €146 million in 2012. There is a nominal return of €70 million, which is 100% of the moneys outlaid, but in net present value terms the return will be 42%, or €37.4 million. I think members will agree that is a significant figure and it is a pleasure to look at such numbers.
This project is unlike other PPP models in which the asset is transferred in return for some form of service commitment. This is one where the actual asset is retained. We have the opportunity to add value to it to the point where the Government will have flexibility in determining how to use it. We will continue to add value while we are there, up to 2012 and beyond.
The final slide gives an overall summary. The vision is to create a centre for digital media innovation, creativity and learning that will affect and drive economic and social regeneration. The fundamental premise of the project is that a focus on enterprise development in an area like the Liberties, which has been disadvantaged for some time, will add significant thrust to the development of the community and to urban and socio-economic regeneration.
