The Creative Economy: Discussion (Resumed)

I remind members, visitors and people in the Visitors Gallery to ensure their mobile telephones are switched off for the duration of the meeting, as they interfere with the broadcasting equipment even when in silent mode.

We will now proceed to discuss the potential for job creation, innovation and balanced economic development in the creative economy. I welcome Mr. Patrick Walsh, managing director of Dogpatch Laboratories; Ms Maureen Conway, principal of Ballyfermot College of Further Education; Ms Anna-Marie O'Rourke, project co-ordinator of the Harnessing Creativity Project; Mr. Cathal Gaffney, chief executive officer of Animation Ireland; Mr. John Phelan, consultant with the Dublin Business Innovation Centre; and Ms Orlaith McBride, director of the Arts Council of Ireland.

Before we commence, in accordance with procedure I am required to point out that by virtue of section 17(2)(l) of the Defamation Act 2009 witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

The presentations from our guests should be of no more than five minutes duration. The presentations have been circulated to all of the members of the committee, and all of them will be considered in the context of the committee's report. I invite Mr. Patrick Walsh to make his presentation.

Mr. Patrick Walsh

The creation of co-working spaces is crucial for supporting the continued growth of early stage innovation and the creative economy in Ireland. The Irish technology landscape has now evolved to the point that the presence of more of this type of space, which offers flexible terms and a vibrant community of like-minded people, is an absolute requirement to meet the needs of this burgeoning industry.

The Government should view the development of this vital infrastructure as strategically important as it seeks to position itself as the leading digital economy in Europe.

The technology industry in Ireland is booming and the scale of the Government's ambition in job creation in this sector in particular is significant. The national policy statement on entrepreneurship was launched in late 2014, with the goal of creating 93,000 new jobs from domestic Irish start-ups. In February 2015, IDA Ireland set the goal of creating 80,000 new foreign direct investment jobs over the next five years. The Entrepreneurship in Ireland report highlighted the creation of co-working spaces as an important part of the equation in the new digital economy and job creation. Most recently the new international financial services 2020 strategy for the IFSC, launched by the Minister of State, Deputy Simon Harris, specifically calls for such a space which would serve to be the centre of the emerging fintech industry in Ireland which focuses on financial services. Therefore, it is important that the Government fully understands what these spaces are and what role the Government should play in ensuring an adequate supply of them exists as it seeks to achieve these ambitious goals of job creation in the sector.

Dogpatch is a co-working space in the historic chq Building in the Dublin docklands IFSC area. It relocated there earlier this year following an agreement with the chq Building's owner, Neville Isdell, the former chairman and CEO of the Coca-Cola company. In Neville Isdell, along with Mervyn Green, we were extremely fortunate to have found a visionary landlord who recognises the importance of type of space in our innovation economy.

Throughout its history Dogpatch has housed many of Ireland's fastest growing and most exciting technology companies. Today it has a mix of Enterprise Ireland-backed high potential start-ups and IDA-backed international companies which are scaling operations in Europe for the first time. As well as this, leading investors and others have access to the facility via our membership programme. It is a place that facilitates a wide range of players throughout the industry. From an FDI perspective, providing a clear and compelling landing zone that enables them to instantly set up in Ireland and plug into the tech ecosystem is an important part of the value proposition and helps to streamline the FDI process. This mix of indigenous companies and international teams sitting beside each other at Dogpatch has proven to be very synergistic. Irish start-ups are exposed to teams from places such as San Francisco and this open and social environment offered by the co-working space helps to accelerate the process by which these international teams strike up friendships and put down roots in Ireland.

Co-working spaces enable companies to rent on a very simple and flexible per desk per month rate. In addition, they offer a vibrant community that includes events and education. As part of its community outreach and social responsibility commitment we and the chq Building house CoderDojo, an Irish created volunteer-led and now global movement of free coding clubs for young people. These extra elements are important parts of what leads to a vibrant hotspot of innovation and jobs creation. With the price of real estate in Ireland increasing rapidly there is growing concern throughout the industry about the lack of supply of this type of office space in the market. This presents a significant challenge for Irish start-ups and has created concerns about Ireland's competitiveness in attracting foreign direct investment companies to Ireland. While developments are in the pipeline many of these are years away from completion and in the intervening time we face fierce competition from competitor cities in Europe, some of which either have an abundance of supply already or are launching large-scale initiatives to address this particular issue.

What can be done to tackle this important issue? In Dublin the commissioner for start-ups has called for the formation of a working group representing all sides of this discussion, from NAMA to Dublin City Council and members of the private sector. I have been asked to be one of the leaders of the group. One of the many objectives will be to explore the role the Government and local authorities can play in addressing this issue. Some details of the group were published for the first time today. While it has a Dublin focus we can share our learnings with various regions in Ireland so that together we can tackle this important challenge and continue to position ourselves as the leading digital economy in Europe.

Ms Maureen Conway

We forwarded a scrapbook on the college to the committee and provided some background material on the college. We think of Ballyfermot College of Further Education as a cultural dynamo. We are part of the City of Dublin Education and Training Board, which was the City of Dublin Vocational Education Committee. We have a number of partnerships with Trinity College, Dublin, the Irish Film Board, DCU, Tallaght IT, University of Dundee, Dublin Business Innovation Centre and Evelyn Hone College of Applied Arts and Commerce in Lusaka.

We have 1,450 students at the college. They come from all over Ireland but primarily from Dublin and the surrounding counties. Over 50 nationalities attend the college. We are known primarily for creative arts, media and music courses. What is the significance of this? Walking into any radio station or local newspaper office in Ireland, one will find a graduate of Ballyfermot. In any television studio, including in RTE, TV3, UTV Ireland, BBC and Oireachtas television, one will find a Ballyfermot graduate. This session is probably being recorded by a Ballyfermot graduate. Work done by Ballyfermot graduates is hanging on the wall in the Taoiseach's office.

In the rock school, one of the longest established programmes, graduates include well-known names like Wallis Bird, Damien Dempsey, Mundy and Mickey Hart. Our traditional music names include David Munnelly and Alan Doherty, names that people interested in traditional music know. We do cinematography in a live-action film course. Daniel Katz was the cinematographer on "Curfew", an Oscar-winning short film.

Animation Ireland and the Irish Film Board will make a presentation, so I will allow them to talk about animation. Some 70% of animation companies started in Ireland were started by former students of Ballyfermot College of Further Education. I am open to correction but there are approximately 1,500 people employed in Ireland in the animation industry and the figure is growing. There is huge potential for further development. The figures from the 2012 Animation Ireland report indicate the animation industry in Ireland is worth €110 million to the economy and I am sure it has grown since then. It is important to understand the animation work delivered in Ireland is not mediocre but world-class. There were five Oscar nominations and one win in the past five years. There were numerous BAFTAs, Emmys, IFTAs, Annie Awards and, most recently, a Peabody. I am referring to Mr. Cathal Gaffney. Graduates are working worldwide, from New York to Paris, Los Angeles, Kilkenny and Smithfield in Dublin.

With regard to new developments and the potential for job development, some 80% of what we do at Ballyfermot College of Further Education is tied to the creative industry and the cultural industry, which includes tourism. We deliver a travel and tourism programme in the college. The tourism industry in the past has been greatly driven by cultural attachment. Great work has been done by Fáilte Ireland with the development of the Wild Atlantic Way. Anyone from the west of Ireland can attest to that and we can see the great number of tourists viewing the west coast. As someone from the west of Ireland, I can see it. People in Kerry always did well in the tourism industry. Now other counties are joining in and the further developments just announced by Fáilte Ireland in Ireland's ancient east will improve the tourism industry in the rest of the country.

The visuals from the Oscar-nominated film "Song of the Sea" are taken from the physical landscape of Glencolumbkille, County Donegal. Tomm Moore showed it to me long before the film was done. When "Ballykissangel" commenced broadcasting in the UK, huge numbers of British tourists flocked to where it was shot on location in Avoca.

I predict that more people will flock to Glencolumbkille not only to view the physical landscape but to view the cultural landscape of County Donegal.

We Irish are a very creative people. People love to come here for the cultural experience and for the landscape. Music, both traditional and contemporary, is an authentic part of Irish culture. We deliver both traditional and contemporary music programmes in Ballyfermot College of Further Education. There is significant potential for development in traditional music area, including in instrument making. Those who play traditional music find it almost impossible to find somebody in Ireland who will repair or build traditional instruments such as uilleann pipes, flutes, fiddles or harps. It is crazy that people have to travel to the United States or to Germany for these instruments. It is time to bring this skill back home to Ireland. In Ballyfermot, we are currently developing a programme to include instrument making, which would create links between the local training centre and the college. It is time this happened.

The computer games industry is relatively new in Ireland, with great potential for development on the creative side, the area in which we work in Ballyfermot. I suggest support should be provided for units or hubs attached to a college or a number of colleges to try to support small business. Perhaps small amounts of funding should be made available to companies to "fail better", as Beckett said.

Almost all visual effects are currently delivered in the United States or in Soho in London. I know that local companies such as Brown Bag and Windmill Lane work in this area. We are currently developing a programme on visual effects and we hope to commence that course in the autumn. This is a sector with significant potential. Mr. Cathal Gaffney and the Film Board will address animation. In this regard, let me say there is a lot done and plenty more to do.

We are the best storytellers in the world. Everything broadcast, be it film, television, books, blogs, newspapers, is all a story. We are masters of our craft. There is huge potential for development. Many traditional Irish crafts which are part of the authentic Irish experience have died out. It is time to revive them.

Through innovation and taking a long-term view, Ballyfermot College of Further Education has pioneered creative courses and we continue to deliver these programmes regardless. With some support from policy makers we believe we can do better in the future.

Ms Anna-Marie O'Rourke

I thank the Chairman and members for the opportunity to speak about the harnessing creativity programme. The harnessing creativity programme was devised three years ago by the then Leitrim County Enterprise Board in collaboration with Leitrim County Council, the local enterprise office in County Leitrim, Fermanagh District Council, Irish Central Border Area Network, ICBAN, Ltd. based in Enniskillen, Omagh enterprise company and Tyrone Donegal Partnership. The project has a budget of over €799,000 spread over a three-year time span. The programme is run from the county enterprise office in Carrick-on-Shannon by myself and Ms Orla McGarry, who is present.

The project was an initiative devised by the enterprise office in Leitrim to look at new strategic opportunities for the creative sector in County Leitrim.

The programme is the largest creative enterprise the north west has ever experienced. It explores the culture and creative entrepreneurship as a strategy to find new ways to engage the strengths of the region and the businesses participating, allowing for improved economic activity in the Border region. Leitrim County Enterprise Board had organic connections with Omagh enterprise company and Fermanagh District Council and we had worked together on previous programmes. We have a centre in Carrick-on-Shannon, the Leitrim Design House, which was an opportunity to look at bringing in other areas of the creative sector which were becoming quite vibrant in County Leitrim, such as the IT sector, graphic design, industrial design, interior architecture, and this gives the capacity work with freelancers and sole traders based within the county and the wider region.

At the end of March an international creative economies conference took place in Carrick-on-Shannon at which a host of international speakers from UK and European organisations were present. These were Mr. Alex Milton, director of Irish Design, Dr. Jonathan Sapsed, Brighton Fuse project, Dr. Oonagh Murphy, Queen's University, Mr. Philip McAleese, founder of See.Sense, and Ms Ruth Morrow, director of Tactility Factory at Queen's University. We try to tailor make activities to bring people to the north west or County Leitrim for very specific events.

The harnessing creativity project was launched in Carrick-on-Shannon in March 2013. We were lucky enough to have Mr. Cathal Gaffney, who is accompanying me, to launch the project for us. The target was to bring together 200 creative sector participants and 120 wider sector business participants to participate in the programme over a two-year time span. To date, 1,030 participants have engaged in three strands of delivery, which includes capacity building, a tailored master class programme and a creative lab project that has been rolled out over the two years. More than 180 training days and master classes plus one-to-one mentoring and support for business promotion have taken place in the two years of delivery. Two regional showcase events, one per cycle, with 1,600 people attending took place. During the two-year roll-out 2,300 people attended the events. The exhibition went on tour to the Civic Offices in Dublin, the regional cultural centre in Letterkenny and recently to Catalyst Arts Gallery in Belfast.

Why harness creativity? The creative and cultural industries tend to buck recession according to the United Nations creative economy baseline reports. They increase interest in the possibilities in the culture economy, creative economy, arts in businesses and the creative state. However, there has been a lack of connection between the creative sector as a resource and the wider economy especially in a rural area such as County Leitrim. We are bringing together the business acumen of the local enterprise office, the supports it provides, the arts sector within the county and the Crafts Council of Ireland, which has been involved in previous programmes to ascertain whether we can use this as a tool for supporting small business within the county. I have worked in the craft and design sector.

The vision for the project is to complement knowledge transfer and traditional research and development with creativity transfer to drive a greater level of innovation and unlock new sources of added value, that is, delivering values as well as value, and helping the creative sector become better at business and the business sector to become better at creativity. That may sound basic.

However, in terms of the business development support for the projects we delivered, we brought organisations such as Madano Partnership and the UK Design Council, which are based in London and Belfast, to the north west to deliver a range of training initiatives for both mainstream businesses and those in the creative sector to look at design as a way of thinking forward within their own businesses. It was about bringing the local authorities and the enterprise agencies together to learn how to support and use creativity for regional development, to use its cross-Border capacity and to foster an internationally recognised creative region.

The project has four objectives. Two of them come under the heading of "strengthening creativity". The first is to strengthen the creative, innovative and competitive vitality of creative sector businesses themselves by looking at new thinking, new technologies and new market opportunities. It was in this area, through the master class programme, that we linked up with Visual Artists Ireland and South West College in Omagh. The idea centre there delivered a number of digital fabrication courses over the Easter and summer holidays. We also worked with the Image Centre in Enniskillen, which has a stop-motion studio. A number of participants on the programme were either starting to look at the area of animation or wanted the opportunity to use the equipment that is readily available at South West College in Enniskillen but which would not have been used except by the students. It opened another door to bring local businesses in the region in to use the facilities in both of those colleges. We have also linked up with the CREST centre, the new innovation and sustainable development building at South West College in Enniskillen, and several of the projects we have developed over the past six months are veering towards tourism, building capacity and collaborating together, so there is an opportunity for people to go on and study with the CREST centre.

I thank Ms O'Rourke.

Ms Anna-Marie O'Rourke

I have gone on.

I just want to give other people an opportunity to speak, but Ms O'Rourke will have an opportunity to speak again later if there is anything else she wants to get across. She should bear in mind that her full presentation will be taken into account when we are writing our report. I now invite Mr. Cathal Gaffney to make his presentation.

Mr. Cathal Gaffney

I want to talk a little about Animation Ireland and I have some recommendations that might help with today's theme. Animation Ireland is the voice of the Irish animation sector. Our core objective is to establish Ireland as a creative centre for content and technology by focusing on growth, developing an innovation culture and creating competitive advantage for members. We have three core mandates, namely, increasing jobs, exports, licensing and commercial investment; maintaining and increasing an international profile; and increasing funding for production and development.

Irish animation is well known internationally and Ireland is considered to be one of the top three countries in the world for producing animation. Our membership includes some companies with which committee members may be familiar. We have a wide variety of members and we meet frequently. Unless members have three or four year olds at home, they may not be familiar with the work we have produced, but last year over 100 million children around the world watched programmes that were made in Ireland. Many of these programmes are household names for four year olds but probably not familiar to those in this room.

Animation Ireland is a group of leading Irish animation companies working together to promote Ireland's world-class sector internationally. We work closely with Enterprise Ireland and the Irish Film Board. CEOs of animation and visual effects, VFX, studios collaborate in a structured way to scale the industry for the next stage of international growth. Animation and visual effects companies are market-driven, and exports account for 90% of turnover, with a 30% increase in exports from 2011 to 2012. Unfortunately, I do not have more up-to-date statistics than that, but anecdotal evidence suggests that the industry is experiencing great growth. Animation and VFX companies define the smart economy.

Our business is export sales and technology-driven. It exploits intellectual property and provides full-time careers in growing companies. The animation and visual effects sector has experienced substantial growth in the past five years, emerging as a central component of Ireland's digital and creative economy. Animation created in Ireland is viewed in more than 120 countries worldwide today. Last year over 100 million children throughout the world watched programmes made by Irish studios.

We work closely with VFX Association Ireland. Throughout the animation and visual effects sector there is a high level of technology research and development. It is a core competency of our members and gives us an international competitive advantage with technically sophisticated 2D and 3D pipelines. Visual effects include the smoke, explosions and so on that we see in films and high-end television.

The animation and visual effects industry represents 60% of worldwide box office takings in the past five years. It is the fastest-growing sector in the UK film production industry. Animation and visual effects companies employ young specialist graduates who are highly paid for high-technology and highly skilled work. We take many graduates from the college in Ballyfermot and various other colleges. Visual effects is a form of digital content production that shares the same technology, skill set and creative talents as animation and games. We use technology to tell stories. We talked about storytelling earlier. Visual effects is all about technology.

Animation in Ireland has considerable potential. The sector has shown leadership and growth. With some changes in policy, we firmly believe we can double employment numbers within the next three years. Ireland can become a global hub for animation and visual effects production. I will illustrate this with an anecdote. In the past 12 months we set up a studio in Manchester, where we employ 40 people. We did that because we could not get staff in Ireland. We have had to expand overseas. We also have a studio in America, but for different reasons. Animation studios are export-based and market-facing companies that demonstrate the ability to become international companies of scale.

Children's television shapes their view of the world. Irish children should have the same right to high-quality programmes as their parents. This could lead to a strong domestic business. Opportunities lie in the area of exploiting intellectual property across all screen platforms, provided support mechanisms are not biased towards any one particular channel to market.

I am keen to make several recommendations. The first relates to training. The whole presentation could be on training, because this is one of the largest areas that has an impact on our members in animation and visual effects. I mean no disrespect to the great work that the colleges are doing, but the industry has outstripped the demand. We are growing at too fast a pace for the colleges to possibly catch up. Therefore, we need to develop an industry growth plan with measurable and accountable targets. We need to develop structured training initiatives such as technology apprenticeships and graduate placements. We need to develop digital and media literacy programmes in schools. There is a great deal more we could do, but those are the headlines. Simple arrangements such as co-production treaties are free to arrange. We need to increase the amount of co-production treaties in as many countries as possible, just as we have tax treaties.

I circulated the Creative Capital report before the meeting and I recommend that people review it. It has a fantastic series of recommendations, although, unfortunately, they have not been acted upon, by and large. A review of the Creative Capital report would show how many of the recommendations could be helpful in increasing employment and delivering a stronger audiovisual industry.

There is potential in the area of broadcasting support. We are keen to see an amendment to the Broadcasting Act that requires RTE to spend a given minimum amount of its independent commissioning budget on programmes for children. We understand the figure is less than 3%, but 25% of our population are young people. This could deliver a stronger domestic market and give Irish children the opportunity to consume more Irish-themed content.

I am not finished yet. We need to build companies of scale. A rising tide lifts all boats. We are keen to see a formal strategic plan between Enterprise Ireland and the Irish Film Board to support export-based companies of scale.

We have one State agency giving funding to content, and another to content companies, with no formal strategic alignment. Broadcasters and agencies need to support slate development and production. Part of the problem with the overall audiovisual industry is that it is piecemeal - we start one project at a time. A greater emphasis on slate production and slate development would change that. We have a fantastic audiovisual tax credit through section 481, which is doing very well and providing a great return on investment. We need to look at extending the technology research and development tax credit to include content research and development. I suggest we should also support convergence between the audiovisual industry and the gaming industry. We need to measure and record. Many opinions are expressed when we are talking about this sector, but we should commission a report that will measure the actual value of the content industry.  More evidence is needed to illustrate the return on investment and the contribution to Irish GDP delivered by animation, visual effects and the wider audiovisual sector. On the question of agency support, we need to bear in mind that channels to market have evolved since 1980. The Irish Film Board Act 1980 established a dedicated agency with a mandate to support feature films. It is fair to say that the industry has changed significantly since then. It is a screen board. We should not have an agency that primarily supports one particular channel to market. I thank the committee.

If Mr. Gaffney wants to add anything further, we will bring him back in later. I invite Mr. John Phelan of the Dublin Business Innovation Centre to make his presentation to the committee.

Mr. John Phelan

I will preface everything I have to say by mentioning that my first career was in animation and games. I spent 15 years doing that before I went to the dark side of funding and financing technology start-ups. Six or eight months ago - this all comes back to Mr. Gaffney again - I was asked to consider taking the role of chair of Animation Ireland. I suppose I have a dual mandate while I am here. I represent the Dublin Business Innovation Centre. I have a number of hats in there. I will go through that in a moment. I am also the independent chair of Animation Ireland. I concur with everything that has been said by everyone here, particularly Ms Conway and Mr. Gaffney.

I will give the committee an overview of the context of the four core parts of what the Dublin Business Innovation Centre does. The first part of what we do is referred to as investor-ready business planning. While this is the softer side of our activity, it is actually the most difficult side. It is the real hardcore work because it involves getting really experienced consultants in with very early-stage start-ups. People with deep domain knowledge and international networking experience are needed to bring these start-ups to the next level and, ultimately, get them ready for investors so that they can get funding and thereby grow in scale and become sustainable international businesses.

The second part of what we do involves money, which is why people generally come to us. There are two parts to that. We run an early-stage seed fund - the AIB seed fund - which is a €53 million fund.

The third part of what we do involves managing the Halo Business Angel Network. Over the past seven years, we have used the network to bring €50 million of pure private capital into approximately 220 companies. The AIB seed fund has done approximately 40 deals in the past six years. Typically, we do a deal every two weeks throughout the year. A great deal of work and effort goes into that. An average deal size would be close to €500,000. We execute many good investment opportunities.

The fourth part of what we do involves running the Guinness Enterprise Centre, which is down by the Guinness Storehouse. It currently measures approximately 6000 sq. ft. and approximately 340 people are employed there. We are looking to double that. I will go into that in a moment.

I would like to address the question of what the Dublin Business Innovation Centre has achieved. I will read from the document in front of me, if the committee does not mind, because my eyesight is not that good. It is a private-public organisation. This means, in effect, that it tries to take in some public funds and to leverage what it can with the private organisations as well. It is one of the Irish business innovation centres, which are located in Galway, Cork, Waterford and Dublin. The centre in Dublin has been around for approximately 27 years. Over that time, it has created or helped to create approximately 570 businesses. Its involvement in the creation of a start-up does not merely involve meeting those involved. To us, a start-up is typically a company that has invoicing of approximately €50,000 per month and is sustainable.

We would be further along the line of a sustainable company we would call a start-up. Those 500 businesses would have more than 5,500 people employed directly and indirectly they would employ approximately 2,200. Over a 12-year period, we had an economic impact report carried out for us. It went down various different avenues and the result was that 80% of the companies we assisted are still in business five years later, which is a very high percentage for early stage start-ups. That is primarily because of the filtering process we have but also the inputs we have at the early stage such as one-to-one mentoring, which is very difficult to achieve. We also set up the AIB seed capital fund, AIBSCF, which is worth €53 million, and the Halo business angel network. The €50 million that has been invested has also leveraged about another €70 million, so about €120 million has gone into those 200 odd deals, which is significant.

My first career is part of the reason I am here, in terms of animation and games. I was involved in animation in Sullivan Bluth from 1987. Then I went to Warner Bros. in the UK and saw what happened there. Following that, I set up a studio in the UK. Strangely enough, when we had the studio in the UK we used to send work back to Brown Bag Films. From the UK I went to the United States to run a games company. I also used to send work back from there to the likes of Brown Bag Films as well. There is a whole diaspora of Irish creative industries that have come out of the likes of Sullivan Bluth and Murakami Wolf, which are spread all over the world. That network is still being tapped into by all of us and it is a great thing to have.

Part of what Dublin BIC does is that it has been engaged with Ms Conway and Ballyfermot College of Further Education over the years. Between us, a number of years ago, we created what was called The Bridge. Essentially, it took graduates from the colleges to work with the studios to give them a real life experience of the difference between education and business. The expectation is that when one is in an industry one has to have a certain mindset change. That was a very successful programme. I understand that about 30 of the graduates are now fully employed within the industry. What also came out of it was the Animation Skillnet, which we set up last year with the Irish Film Board, Ballyfermot College of Further Education and all the other colleges as well. We have 40 partner studios within that and we have trained over 400 employed and unemployed people with over 4,000 training days. The importance of that goes back to what Mr. Gaffney said, namely, that we have a great technology and creative business. The difference I see is that it is commercial creativity which is a very important difference. For commercial creativity, one must have people who are technically savvy and have the ability to execute on customers' demands. That is what we look for. Constant upskilling is required.

We see further potential. We have always said that we can double our impact with more resources. That is a very easy statement to make and on the basis of it, we have three asks. We would like to see continued support for the Guinness Enterprise Centre. We are currently engaged with the Minister, the Department, Dublin City Council, the LEOs, Diageo, Enterprise Ireland, the Guinness Workers Employment Fund and Trinity College, and have been for the past 12 months. They are the current partners that built the first stage of the Guinness Enterprise Centre which has those 340 people in it. We would like to double that space and we have been actively planning that for the past 12 months. We request assistance in that regard. Within that space we have considered, and are still considering, a media technology centre that would bring content and technology together and see how we can leverage that.

The second part of what we would like to do concerns the seed and venture capital fund. The first round of funding has closed for the €53 million seed fund that we currently have, so we are actively in the process of raising a second fund which will be early stage and growth. A number of years ago we looked at how we could create a real global pan-European fund that would be technically savvy and also with the broadcasters.

We did this with some of the studios around the table. We raised visibility of about 75% of a very significant fund with a digital partner and a broadcast partner. The idea was to bring the two together in order to gain access to a large global market with Irish brands. We may revisit that in times to come - I think now might be a good time to do it.

The ask, which is very straightforward, is continued support for the Guinness Enterprise Centre. We ask for help in doubling that space and doubling the employment from 340 to 680. There is potential for a media technology hub. We also ask for continued support for current and future investment funds such as the follow-on fund to the AIB seed fund and the potential pan-European media tech fund. Our third ask goes back to what Ms Conway and Mr. Gaffney have mentioned already, that is, upskilling, which we see as very important for the future. The Animation Skillnet is very important and a training programme has been developed between it and the Irish Film Board which we see as being very strong. We would also like to see the pipeline of talent through the colleges widened to allow more talent to filter into the companies and studios in the country.

Ms Orlaith McBride

I thank the Chairman and members of the committee for inviting the Arts Council to the meeting today. Most people would be aware that our role is to fund and develop the arts in Ireland and also to act as an expert body offering advice to the Government, the Oireachtas and other State organisations. I would like to start by dispelling the notion we so often hear, that the arts are some sort of luxury or add-on in a society and that they are only available to those who can afford them. We are all familiar with the argument of the arts versus hospital beds - some of us are exhausted trying to make that argument. Often, members of the Arts Council feel obliged to address this because the arts are often overlooked and not considered part of our daily lives. This is not true. The arts are completely embedded and integrated into the lives of all our citizens.

If I asked the members of the committee when was the last time they or someone in their families were involved in an arts experience, the default might be to say the last time they went to the theatre or an opera. However, all of us probably read a book last night. We probably all listened to music on our way to work this morning. Some of us may have dropped our children to piano lessons yesterday afternoon or to ballet or Irish dancing. Many of us might be involved in our local choir or drama group. The arts are completely embedded in all of our lives. It is not just about the Abbey Theatre or Gate Theatre. When there is a local arts festival in the committee members' communities, when there are street performances during the summer months, when the local drama group is putting on Sive yet again at the local arts centre, when an artist is working with children in schools or a memory project is carried out using music and song with older people in a local residential care home - these are all arts experiences.

The arts have an intrinsic value, a social and community benefit and also a very valid economic benefit as they contribute to our local economies. There is much research and data confirming that the arts contribute to job creation and to the local and national economy as well as playing a very powerful role in contributing to the international perception of Ireland as a creative and innovative place to locate in terms of foreign direct investment. The arts are part of our social and community benefit and are also a net contributor to our local and national economy.

We can prove this, and do so on an annual basis. In recent years we asked Indecon, headed up by Mr. Alan Gray, one of our most respected and rigorous economists, to assess the economic impact of the arts in Ireland. Here are some of the things he has proven, which we have also heard from all the other contributors.

The arts contribute significantly to direct and indirect employment. The Arts Council's annual funding from the Exchequer alone supports over 2,000 jobs, generating an annual turnover of more than €180 million with tax revenues to the Exchequer of €42 million. The wider arts sector supports more than 20,000 jobs, and contributes more than €0.33 billion in taxes. As we heard earlier, the arts also impact on the creative industries, including film and video, publishing, advertising, software, radio and television, contributing €4.7 billion to the economy and supporting 77,000 jobs. In terms of the economic impact studies that we in the Arts Council have conducted as a State agency, that is the national picture.

At local level, we can see the arts providing and sustaining jobs. The arts are part of every local community and local economy. The local arts centre, theatre, dance space, exhibition space, cinema or bookshop employ real people who come in and roll up the shutters every morning. They are going down the town for lunch, they are using the local post office, they are sending their children to the local school and they are buying homes.

The Arts Council invests millions in touring the arts so that people in different parts of the country can see the great work that is being done by our artists and arts organisations. When that happens we are not only creating jobs, but generating bed nights in the local bed and breakfast, pints are bought in the pub, etc. The arts are integrated into all of the local economies. They are not something that is divorced from the rest of society.

We work hard with local authorities and one of the recommendations I would make arising out of this meeting today would be that we need to look at strategic partnerships. All the other contributors have cited specific strategic partnerships where, if Government policy was at a much more integrated level, one could see that smarter investment would be made. We have had a strategic partnership with all the local authorities around the country since 1985 and our relationship with the local authorities has utterly transformed the arts in Ireland. Over the ten-year period from 2005 to 2014, we have invested a combined sum of €1 billion in the arts right across the country. There is not a town or community in this country that is unaffected by the arts. Local government reform places social, community and economic development as the key functions of all local authorities and enterprise is a critical part of that. Local authorities have recognised the role the arts can play in supporting them to deliver on these functions, but also in supporting the local economy.

In 2013, Wexford County Council commissioned a report by Dr. Richard Maloney from UCC entitled Creative Dividends: The Economic Impact of Wexford County Council's Support of the Arts Sector. For direct financial support by Wexford County Council of €0.86 million, the overall economic impact in County Wexford was €9.35 million. They supported 100.5 full-time equivalent jobs, €1.01 million in various taxes paid to the Exchequer and a further €0.34 million in indirect activity. For every €1 that Wexford County Council invested in artists and arts organisations, there was an associated impact of €7.83 in the local economy.

Festivals are the lifeblood of tourism the length and breadth of the country. The Arts Council invests over €3 million directly in festivals around the country. There are 160 small festivals that we support, as well as all of our larger festivals. Festivals are important to the local community, but they also mean jobs.

Some 80% overseas visitors state that culture and heritage are motivating factors for choosing to visit Ireland. Visitors come to Ireland in some significant measure because of our cultural reputation. Fáilte Ireland will say that visitors seek a differentiated experience in an increasingly globalised and homogenised world. Fáilte Ireland knows how vital festivals are to tourism and how they market Ireland abroad. The arts are at the heart of many of those festivals and they are at the heart of what makes Ireland distinctive. Certainly, it is not the climate that they are coming to Ireland for; they are coming here for something else.

We contend that differentiated experience of the arts and broader culture can contribute. For example, the Wexford Festival Opera generated a total of €6.6 million of gross domestic product, GDP, in Ireland in 2012. It contributes to 208 direct, indirect and induced jobs in Ireland, which represents 20 times the staff of the organisation.

We invest approximately €250,000 a year in Spraoi in Waterford, which Fáilte Ireland says is worth a minimum of €3 million to the local economy. We invest approximately €500,000 per year in the Galway Arts Festival. Last year its economic impact study demonstrated that €17.5 million was put back into the local economy. The Arts Council invests €235,000 in the West Cork Music Festival. It has 13,000 visitor bed nights during that period and the visitor spend is approximately €1.5 million. This shows how the arts and the broader culture sector contribute to economic development.

I thank all the witnesses, not just for their presentations but for the information they gave us beforehand, which was a bit of an eye-opener. I would never have thought Ireland was one of the top three countries for animation. I understand from all the witnesses that there is frustration at what I call Government’s silo mentality. I do not mean that as a political charge; I am referring to the permanent government. I picked that up at the end of Ms McBride’s contribution. Do all the witnesses notice that in their day-to-day work, or is there good integration of Government agencies working together on the ground?

What are Mr. Phelan’s investors looking for in terms of return? Apart from the obvious commercial return, are they a different kind of investor looking for a broader return?

Ballyfermot has a massive reputation, but I detect frustration from Ms Conway. Are we getting a bit complacent? Do we live off being good storytellers and are we allowing other countries steal our plots? Ms Conway mentioned instruments and pipers having to go abroad. Riverdance is 21 this year. What have we done in the meantime to re-imagine our culture, and what does Ms Conway want us to do in respect of Ballyfermot’s track record?

Can Mr. Gaffney tell me which are the two countries ahead of us in animation? What do we need to do to overtake them and be king?

Ms Orlaith McBride

We are beginning to consider how to support the creation of our own instruments here. Na Piobairí Uilleann have started making uilleann pipes here for the first time in 50 years. We fund that to a large extent.

Ms Orlaith McBride

Yes, but it takes many years to make one set of uilleann pipes.

I appreciate that.

Ms Orlaith McBride

We are both saying the same thing, but we do not talk outside a forum such as this. Integrated policy making is important. When I cited the relationship with local authorities, it was because after 30 years of partnership one can see how, through our work with the City and County Management Association, CCMA, with the local authorities and through a recent memorandum of understanding between the CCMA and the Arts Council as two parts of local government and national government, there is at least an integrated approach. The Arts Council and other industries and areas of government need to consider integrated policy. That could be this committee’s work. We hear again and again how creativity is essential to a global economy and we need to create an innovative workforce. That starts not at third level colleges such as Ballyfermot but with children aged between five and seven and continues throughout their education. How do we ensure creativity is embedded in the way teaching and learning happen in primary and secondary schools? We need much more integration among the creative industries, the arts, tourism and enterprise.

It involves IDA Ireland and Enterprise Ireland. When Merck Sharp & Dohme located to Carlow to develop its vaccine development facility, the county manager there is on record as stating very clearly that the creation of the visual arts centre and the George Bernard Shaw Theatre in Carlow was one of the reasons this company located in Carlow. The company said that if a local authority was that visionary, in terms of how it developed, encouraged and supported culture and the arts for local citizens, it was the kind of place the company wanted to locate to. It is really important for Government policy to be far more integrated across different sectors and that we are not peripheral to the national agenda. It is important that we are seen as being critical to the national agenda.

Mr. John Phelan

I have answers to two of Deputy Calleary's questions. I will let other speakers deal with the others. All Government agencies deliver on their mandates and do a good job so, therefore, the mandates may need to be looked at. As Mr. Gaffney said about the Irish Film Board, something like the Irish screen board might be more appropriate.

Content is typically treated differently to technology, particularly between Enterprise Ireland and the Irish Film Board, and probably quite correctly historically. I am increasingly seeing that it is more difficult to understand where the risk is different in content creation compared to technology creation. They are both high-risk so we may need more alignment between Enterprise Ireland-----

Could Mr. Phelan clarify the difference between content and technology?

Mr. John Phelan

To my mind, content is the creation of animated TV shows and animated feature films. It is the front-end of creation of intellectual property, which one owns and is the value, versus technology, which is the back-end software or the software to deliver.

Do Mr. Phelan and Mr. Gaffney wish to comment on our intellectual property laws? Are they strong enough to protect content and the kind of imaginations the speakers have or do they need to be strengthened?

Mr. Cathal Gaffney

Piracy is rife and I do not think there is much we can achieve today by getting into intellectual property. It is a very complex issue. I think our laws are reasonably robust. There is lots of good legislation but enforcement is a different thing altogether.

Does Mr. Phelan wish to continue?

Mr. John Phelan

Yes. The next point was to consider looking at the likes of RTE. Again, it does a great job but if one looks at the independent productions spend it has, which is about €30 million, less than 3% of that goes on creating new animated productions. We would like to see that increase throughout the island. Considering there is a 30% spend throughout Ireland, between animation, high-end TV and film, of the total spend in Ireland, 30% of that is through animation, we think the spend from RTE should be more reflective if possible. We understand the constraints within which RTE works and are quite happy to discuss how that could happen.

The question of investors is a bit more difficult. In respect of most of the investors we get through the seed fund, the fund is a technology fund, so the limited partners do not allow it to invest in content, which is fine.

It is very different with regard to the angel investors, which have a broader brief regarding what they can invest in. I have struggled to get private investors to invest in content and the creative industries. It is considered to be very high-risk, which is why the mandates of the Irish Film Board and the likes of RTE are really important and that they are able to develop early-stage funds for the likes of early-stage shows. The Irish Film Board will contribute towards and invest in the development of content, which is then developed into a much larger show with financing done overseas and the production done in Ireland, so one is bringing overseas investment into the country and employing people here.

Content is capital-intensive at the front-end so, again, it is more high-risk. The perception is that it is high-risk, which it is. On the technology side, much of the front-end, capital costs have come down but it is still a high-risk investment.

They are merging.

Ms Maureen Conway

I would say "resources, resources, resources", although it might be looked on as a whinge. We talked to the pipers club and explored working with them, but we could not get to it fast enough because we do not have the resources to deliver. We are working on it in a different way and are continuing to talk to them. Mr. Gaffney needs more graduates with animation skills. I could take more graduates if I had somewhere to put them and somebody to teach them. We are letting students go from the college every year. We do not have an ab initio animation degree. Given that it is complicated, I will not explain it in detail. We use a two plus two model and students start with us in their first year. It is not because they are not good enough. We do not have enough space to take more than a certain number of students to degree level. We could take more and provide more graduates to the industry. It is a frustration. We are very frustrated. Again, all I can say is "resources, resources, resources".

The presentations were most interesting and I enjoyed them. I know something about the chq building and Neville Isdell. Is there a possibility or a need to do more of what is happening in the chq building? Is there sufficient opportunity to do so? Dogpatch is just one example. Ms O'Rourke mentioned the arrangement she has made across the Border. Nobody else seems to be working across the Border in an all-Ireland capacity. How did it begin and come about? Mr. Gaffney's comment that one cannot get the staff in Ireland jolted me. This should not have happened, particularly given that Ms Conway said Ballyfermot College of Further Education could produce more graduates if we were able to invest more in it. There are opportunities and I am not sure how we go about capitalising on them.

Mr. Patrick Walsh

On the question of whether we are doing enough on our current scale, we have been open approximately 12 weeks and we are full. This reflects the fact that we are producing a large amount of these companies, IDA Ireland is doing a great job of getting them into the country and this is the kind of space they want. We need much more of this kind of space across Dublin and the regions. Advantages of facilities such as the chq include the integrated approach with food and other services. Ms McBride made a good point that companies come to this country because they can come into an area with great diversity in the arts and food. This follows into the point that there should be an integrated approach between what NAMA and the city councils are doing to work together in a very coherent and integrated policy. This is how we will succeed. One of the reasons Berlin is such a thriving digital economy is the fact that technology creators are sitting right beside content creators. This has produced some of the most exciting technology companies in the world, such as SoundCloud. We need much more of this space. We were fortunate that we found a visionary landlord. Other operators who are trying to bring on such facilities encounter much difficulty through issues of price or covenants. Although we seek to expand, it is challenging in the current commercial property market.

Ms Anna-Marie O'Rourke

I have worked in the creative sector in County Leitrim for just over 15 years. The Leitrim local enterprise office has connected with organisations in Omagh, Lisburn and across the north west in terms of working together on funding applications to build capacity around the creative sector.

Many of the people who supply the gallery in Carrick-on-Shannon, such as ceramicists and those in the linen sector, are based in Northern Ireland. We are interested in encouraging that cross-Border trade and in raising awareness of small businesses. We work on a very small scale. The population of Carrick-on-Shannon and the surrounding area is 4,000. In the context of the project to which I refer, our target was to engage up to 200 people in the training initiative through the programme. More than 3,500 people have been involved with the project over a two-year period. There is huge momentum in the context of pushing forward with this work. However, I reiterate the fact that funding for the project will cease at the end of June. At that time, resources and capacity will be lost. We need a strategic plan for the creative sector in County Leitrim in order that we might continue the good work we are doing with our counterparts in places such as Omagh, Fermanagh and Lisburn.

Many of the projects involve freelancers or sole traders. One example is a journalist who has just completed a masters degree at Letterkenny IT and who has linked up with a number of small business owners in the interests of creating an online business together. They are at the stage where they require a little additional support in order to proceed. What we can do - I reiterate that our operation is quite small-scale - is direct them towards their local enterprise office or Invest Northern Ireland. A number of the projects with which we have worked in recent months have been start-ups and they are now in a position to approach Enterprise Ireland in order that they might be considered for its New Frontiers programme. A couple of them have been accepted onto that programme as a result of their involvement with the initiative on which we are working.

I wish to refer to another project that is based in Manorhamilton. The individual involved works in the visual arts. His background is in sculpture and he has been involved with the Leitrim Sculpture Centre for a number of years. The man in question is very interested in socially engaged practice and his project, which is being supported by Harnessing Creativity, involved investigating how the old hydroelectric station in Manorhamilton, which was built in the 1920s, might be brought back into operation. He has carried out a feasibility study in collaboration with HydroNI in Omagh. This is a step-by-step project and it has only been in train for six months. The funding relating to it is less than €3,000. The individual to whom I refer has been invited to address a global conference on rural sustainability at the Centre Culturel Irlandais in Paris.

We are trying to give people the opportunity to take the next step, to collaborate with each other and to try to strengthen the small businesses in the region. We are based at The Hive in Carrick-on-Shannon, which is the first technology centre in County Leitrim. It has a hot desk facility and is home to the co-creation concept. We have been open for just one year. Graphic designers can come to the centre and use our broadband facility to connect and network with technologists who might be taking a space in the building. We have just reached the point, in conjunction with the local enterprise office, of setting up a Leitrim digital network. As already stated, I feel a bit out of my depth in the company of the other witnesses.

Harnessing Creativity operates very much on a step-by-step basis and the funding relating to it covers me, as co-ordinator, and Orla McGarry, who is administrator. We run the programme for the three counties involved. The budget for the programme is almost €800,000 for three years, which is a fantastic boost to the Leitrim region. Well over a third of this has gone directly to participants on the programme to assist them in evolving their product development processes further. The remainder of the money has been invested in trying to deliver specialist tailored training, which involves using mentors and facilitators from, for example, Visual Artists Ireland, Madano Partnership in the UK and a number of other organisations, within the three counties.

Mr. Cathal Gaffney

The position with regard to recruitment is frustrating. This is one of the biggest issues for all our animation and visual effects members. However, new industries tend to grow so fast that there is no way colleges can keep up in the context of delivery. In that context, fewer than 40 people with qualifications in the relevant disciplines graduate from Dún Laoghaire and Ballyfermot each year.

On average, 25% of the staff of most studios are international, which is a concern. Unless we scale up the training initiatives, we might plateau because we cannot get the people. That is one of the reasons I reluctantly set up another European office. It is one of those things that harps back to resources and training.

Mr. John Phelan

In the context of cross-Border initiatives, the Halo Business Angel Network is co-funded by EI and InterTradeIreland. We, therefore, have partners in the Northern Ireland Science Park in Belfast and we liaise with them quite a lot.

With regard to the Dublin BIC, we do many European projects. We have a couple of FP7 and Horizon 2020 projects. We had two last year, which were all about cross-Border investments and how to get investment into our companies from Europeans while having our investors look at European projects in order that they can have visibility of the quality of what the technology companies are doing.

I chair a strategic interest group in Europe for the European Business Network, EBN. Last week, we had a policy meeting in the Commission. Approximately 150 people were present along with many of the Commission policy makers. That was again about how we engage in cross-Border investment.

I thank the delegations. One of our main objectives is to listen to people and communicate that into policy at departmental and ministerial level. The Minister attends the committee to listen to sets of ideas that evolve over time and the witnesses are contributing to that process today. Much of the debate conducted by the committee relates to multinationals and that has overshadowed the debate on job creation. The committee is determined now to examine local and smaller industries, including the creative industries because they draw on many untapped indigenous strengths. I refer in particular to animation, the raw material for which is Irish stories and the great sagas and yarns of the past. These can be turned into a visual format and internationalised while creating employment.

I was involved in Ballyfermot college for a long time and I recall the first time the board debated animation, probably in the 1980s. Many people thought it was a daft idea but a group of people persisted with it and then when Mr. Walsh came in, everything changed. He took it by the scruff of the neck and he ran with it along with his staff. It has created a great sense of pride in the area. Signs have been put up reading, "From Ballyfermot to Hollywood" and "From Ballyfermot to the Oscars". One cannot imagine the sense of pride that local kids, teachers and schools have as a result of the great achievements that the college has worked so hard for.

The committee must examine indigenous industries, including the creative industries, as a counterbalance to the multinationals and FDI. While they are important, it is also important that this side of the debate is fostered and that people such as Mr. Walsh participate in the formation of ideas and opinions, which we can bring to the Minister and the Department, about funding and investment and outline what is happening on the ground to ensure our economy becomes balanced between the national and indigenous and the multinational rather than being lopsided one way or the other. From that point of view, the presence of the delegations is welcome and I am delighted that animation was one of the first categories to be debated.

While there will be lots more about other aspects to the creative economy, we have made a very good start here today with something local, Irish and of which so many people are proud. If the people who attend later meetings have as good a story, it will be a very good day's work.

I thank the Deputy. Would anybody like to make a comment?

Mr. Patrick Walsh

One thing we see in Dogpatch, because one has international firms right beside the Irish firms, is this is very synergistic because it serves to produce stronger Irish companies as well. This is because these companies that come over often have more advanced or more sophisticated knowledge of work practices, etc., or whatever it is, relating to their economy. One sees this on the ground all the time, especially as Irish companies seek to go out into these markets, where the Irish start-ups are leaning over to the San Francisco start-ups to ask to whom should they talk and who are some of the customers with which they can put them in touch. There is an interesting interaction between the two on how that foreign direct investment, FDI, piece can serve to produce stronger job creation on the domestic front. It is interesting to see this all the time and it is worth noting that this is a dynamic that can serve to our advantage.

I welcome all the contributors and apologise for stepping out during a couple of the contributions. There are just a few things I wish to raise, the first of which pertains to the Arts Council. I am familiar with the great work that is done in Galway and the really important funding for the arts festivals in Galway and Clifden and the knock-on effects that has. While I am sure Ms Orlaith McBride will say there never is enough money and would never refuse any amount, how many new demands are made that the Arts Council cannot fund to the level it would wish? I presume the number has not fallen during the recession because obviously the creative industry goes on regardless. I apologise to Mr. Cathal Gaffney for missing his presentation but on looking through the briefing, I note he mentioned the Broadcasting Act and so on. As for the 3% figure, presumably he will argue that were that budget to be increased, this would have a huge potential for exports to other countries. What sort of potential growth does he envisage in that area and, for example, what sort of increase in that budget would he like to see? While I am aware of the work being done in Ballyfermot College of Further Education, I also seek comments from whomsoever wishes to respond in respect of universities. Are the witnesses satisfied the universities are framing courses that are geared towards the sectors sought by the witnesses? Do the witnesses think there is better potential for creating structures in line with industry demands?

Ms Orlaith McBride

On the question of resources, as part of Ireland 2016, we announced recently a national commissions competition. We indicated to artists and arts organisations that we were putting €1 million into that and were seeking projects of up to €500,000. We received €28 million worth of applications for the available €1 million. That is the most recent round through which we are going at present. Approximately one in ten artists who apply to the Arts Council seeking a bursary, a commission or a small grant to pursue a piece of work are funded, particularly in the visual arts and literature. At present, we are going through theatre projects, which involve many of the pieces of theatre one will see at the Galway Arts Festival or that Mr. Brendan Flynn will bring to Clifden. We have approximately €500,000 in that round and have received €3.5 million worth of applications. It can be soul-destroying at times and I am sure that, as elected representatives, members then receive representations on the other side to the effect that funding was not forthcoming from the Arts Council. It is a very difficult scenario through which to manage one's way because the expectation is huge. There are more artists, third level colleges and visual artists as well as greater numbers of MFAs, creative writing graduates and so on. More people are coming into the sector and yet we cannot respond.

As I said earlier, the contribution last year of the Galway Arts Festival to the local economy was €17.5 million. In 2008, it contributed €24.5 million to the local economy. I would be of the view that the reduction in its Arts Council funding from €750,000 to less than €500,000 has had a disproportionate impact on the local economy. The more one invests, the greater the impact on the economy, disproportionately. The demand is huge, as is expectation. The more we create an ecology whereby third level colleges contribute to the creation of artists and creative entrepreneurs, the more the Arts Council should be better able to respond.

Thank you. Would Mr. Gaffney like to comment?

Mr. Cathal Gaffney

In regard to Deputy Kyne's question, as a parent and licence fee payer I am disappointed with RTE's mandate for public service broadcasting. As mentioned, in terms of children, it does not deliver. The question is framed around economics. RTE needs to spend more money on the domestic market. Currently, its spend in this regard is less than 3% at a time when 25% of our population are children or young people under 16 years of age. If spend on the domestic market was increased to 10% or 15%, the result would be a stronger domestic economy and growth in the number of organic studios we have producing work for the local market. This is what is happening in every other country.

On the question of why Ireland is not the number one producer in the world, Canadian, British and French broadcasters support a local animation industry but we do not have that in Ireland because we do not have enough home grown programmes. We import programmes, which, quite frankly, is not good enough. I would like to see spend in this area increased substantially. A strong domestic industry will be important to ongoing growth of this sector. If this is achieved in parallel with foreign direct investment, it will be akin to putting steroids into the animation sector and making it a global hub.

Thank you. Would Mr. Phelan like to comment?

Mr. John Phelan

We recognise that RTE is under constraints and also that it does a lot of good work. As such, it may be that the mandate needs to change. If we can assist, through Animation Ireland, we would be happy to do so.

I thank all of the contributors for giving us a real insight into the potential of the creative sector and acknowledge their message that further investment in this area has the potential to yield many benefits for the economy.

I have a question for Ms McBride, whom I also compliment in terms of how she manages to stretch the Arts Council budget so significantly. Ms McBride spoke at length about the potential of small festivals and their draw for overseas visitors and so on. What percentage of the Arts Council budget is allocated to small festivals and what type of relationship does the council have with the Association of Irish Festival Events, AOIFE, which is the umbrella body for the small festivals? It is headquartered in my home town of Ballinasloe, hence my interest in it.

In regard to the availability of space, obviously, because of increasing economic activity, Dublin is a real challenge. In parts of rural Ireland outside the greater Dublin area, there is much excess space which, unfortunately, became available as a result of the downturn in the economy. In Ms McBride's view, is there potential for the Arts Council to expand its activities outside Dublin?

Ballyfermot College of Further Education obviously has a great story to tell. If there was one particular thing that the witnesses would like the committee to do or to impress upon Government that it should do, what would it be?

Ms Orlaith McBride

We divide festivals into different categories. Multidisciplinary arts festivals with which we are all familiar, such as Kilkenny, Galway and Clifden arts festivals, Éigse in Carlow and Earagail Arts Festival in Donegal, see an investment by the Arts Council of over €3 million. We invest approximately €800,000 in the small festivals, which include the 150 or 160 tiny festivals around the country. Each may receive only €2,000 or €3,000 from us but that is very significant for a local community group trying to get a festival off the ground. There are other festivals that are more art-form specific. Examples are Wexford Festival Opera, in which we invest €1.2 million, and Dublin Dance Festival and Dublin Theatre Festival. The multidisciplinary arts festivals around the country see an investment of approximately €3 million, and €800,000 is invested in the smaller community-based festivals.

Would that be through an umbrella body?

Ms Orlaith McBride

No. We would not fund an umbrella body to fund the little festivals. The organisers apply directly to the Arts Council. We assess them all and bring in an independent panel that makes the decisions on them. We do not have a direct relationship with AOIFE per se. It represents all types of festivals, not just arts festivals.

Mr. Patrick Walsh

I wish to address the question about the regions. The chq building is interesting because it is at one of the main regional public transport hubs, which includes Busáras and Connolly Station. We get a lot of traffic from the regional start-up community coming through. Many people have started to ask us whether we can go to Cork, Galway or elsewhere in the country. We are thinking about that. Cork, for example, has produced two of the most exciting tech start-ups in the country. People are saying there needs to be more of these kinds of facilities, perhaps using vacant city council buildings or NAMA-controlled buildings. We have been open only since January so we are trying to catch our breath. We are certainly open to considering the regional option and believe there are very exciting developments regionally. They need the appropriate infrastructure.

What is on Ms Conway's wish list?

Ms Maureen Conway

I am sure every member of staff is looking for something completely different. We have been very badly hit by the allocation in respect of teachers. Ballyfermot College of Further Education is not a third level institution but a college of further education. It is a second level school. We do great things in this regard and run on a shoestring, as with many other further education colleges around the country. I would like to see a greater allocation for teachers.

I have a few questions before we move to the second session. Mr. Cathal Gaffney of Animation Ireland said he had to send some of his company's work overseas. What specific skills were lacking that he could not find here?

Mr. Cathal Gaffney

I refer to animation skills and graduates who come out of college who are able to work on a production. Animation graduates require some training before working on a production. We are prepared to invest in training in that regard to a certain extent, but there is still a significant shortfall. With fewer than 50, or around 40, graduates per year coming out of Ireland, there are not enough to meet the growth in the sector.

Some colleges, including University of Limerick, are running animation courses. Are the graduates not being funnelled into animation per se? I was at an event recently that was attended by a company called ICON, which develops a lot of training using Oculus Rift. It gets animators to do all the internal work for medical training. Is it the case that some animators are being diverted into this area rather than into the type of work Mr. Gaffney is doing?

Mr. Cathal Gaffney

I am not entirely sure. I can speak from my experience of recruitment and from anecdotal evidence from colleagues in visual effects and other animation studios.

I presume when the students finish they want to do various things, including travel or work in other jurisdictions. I do not know what percentage of graduates want jobs in Ireland. Many skills are needed for animation such as computer animation, hand-drawn animation, technical skills, lighting and production experience. A wide variety of jobs need to be filled in any production. It is very hard to nail it down and say we need more animators because we outsource quite a bit of animation to Asia as it is. It is not a simple question to answer.

Ms Maureen Conway

There is always tension between industry and the academic world. We do great work with the students when they are in the college as they are naturally talented. We just support and mentor them along the way. We produce generalists. It is very difficult for a college to produce specialists, which is often what industry wants. There will always be this tension and it is ongoing. It is very important that the college works with industry, which we do. We link very well with industry. Our graduates tell us what we do wrong. We appreciate what they say to us and we do our best to amend it and listen to what industry has to say. There will always be tension between education and industry.

It sounds very much as though a greater relationship needs to be built, or greater co-ordination is needed, in terms of what the industry needs and what education delivers.

Mr. Cathal Gaffney

There is a very good relationship with the colleges.

It needs to be greater, perhaps reaching out to the regional colleges rather being Dublin focused.

Mr. Cathal Gaffney

Possibly, but I would say there needs to be more graduates. We need to graduate 100 students a year and not 40.

Mr. John Phelan

With my Animation Ireland hat on we have a sub-committee on education. A number of our members engage with the education facilities. Institute of Technology Tralee is the latest college to bring on stream a new course. The regions are coming up.

I have a question on the interdepartmental committee. While Ms McBride was speaking, I was thinking that the Department of Arts, Heritage and the Gaeltacht, the Department of Jobs, Enterprise and Innovation, the Department of the Environment, Community and Local Government and the Department of Education and Skills all need to be involved in an interdepartmental committee to deal with all of the very valid points made today. Traditionally, people work within their Department and we probably need interdepartmental engagement to deal with some of the very important issues raised. Does Ms McBride agree?

Ms Orlaith McBride

Absolutely, but we have an opportunity in this regard. The Government has indicated it will develop a national cultural policy and this is where we can begin to look at these synergies and points of alignment. When we begin to understand the process of developing the national cultural policy the Government can, across Departments, begin to look at specific pieces which come together and make sense.

Ms Conway made a reference in her presentation to extending the innovation voucher system.

Ms Maureen Conway

Yes.

I ask her to expand on it. How does she see it being used?

Ms Maureen Conway

As it stands, a college of further education does not qualify for the innovation voucher system. We have made a number of approaches on this. If we were to qualify for it, it would enable us to establish little hubs around the college to bring the students from the academic world to the working world with real-life projects. We do some of this already, but we would be able to do more because we would be able to fund it.

To return to the point on linking industry and courses, who should drive this? Is it the educational institutions themselves or industry? Who reaches out?

Ms Maureen Conway

We certainly reach out to industry. We have to do so. Industry is represented on an advisory board in the college.

Mr. John Phelan

We are all responsible, to be fair. We probably need to do more on our side.

Ms Maureen Conway

It is difficult for companies as many of them are small and medium-sized enterprises. It is very expensive for them.

They were unable to put in the resources for working with individual colleges and that is a difficulty for them.

Senator Mullins referred to looking at the affordable spaces outside urban areas. Local authorities have a greater responsibility for the economic development of their own counties. Ms Conway referred to Cork but I am thinking of a more regional approach. I am from Offaly where there are spaces available. Could this type of co-working space be a policy that could be developed by the sector or by local authorities?

Mr. Patrick Walsh

We are certainly looking regionally all across Ireland and not just at Cork and Galway. There is great talent out there. The new working group has a Dublin focus and we are trying to get Dublin City Council, NAMA and other players around the table. At a minimum what we might try to do is share our learning if other regional and local county councils want to see what we have done here in Dublin. We could share what we have learned in order that they can begin to understand who are the stakeholders for bringing about this kind of infrastructure. As an organisation we will look at it through this Dublin start-up space initiative. We will focus on Dublin, and as part of that second organisation, we are very happy to share what we have learned - the learnings - with the regions because it is important the regions be developed. There are great talent pools out there.

They are also more affordable.

Mr. John Phelan

We are part of the Irish BICs, the Irish Business Innovation Centres, which have offices in Galway, Cork, Waterford and Dublin. We also have co-working spaces in the Guinness enterprise centre. We will be developing co-working spaces in Galway. Like Mr. Walsh, we are more than happy to share.

Space is obviously an issue. Has Ms O'Rourke looked at any of the new OPW-owned vacant spaces such as courthouses or Garda stations which have been closed? These spaces are available to communities or to creatives who want to think about something like that.

Ms Anna-Marie O'Rourke

Not personally. The Dock in Carrick-on-Shannon is the newly refurbished arts centre which used to be the old courthouse. The Dock has a number of spaces which are used by artists to develop their own practice.

Does the local authority drive that project?

Ms Anna-Marie O'Rourke

Yes, it is a local authority building. I referred earlier to The Hive, which is a local authority initiative under the local enterprise office and which is a co-working space. The problem in County Leitrim is the lack of broadband and the issues faced by rural-based small businesses in getting their content out there. We have one example of a person whose total contract work is with BBC UK. He has to come twice a week to Carrick-on-Shannon from Mohill to download his workload and send it out. This arrangement works really well for him because he wanted to relocate back to County Leitrim from the UK and to bring up his children in the Mohill area.

I refer to the divide between the north and south of the county in terms of the lack of public transport. An artist recently said to me at an opening event in the sculpture centre that it would take him 24 hours to get by public transport from Manorhamilton to Carrick-on-Shannon. He was working on a programme with Ballinamore community school and the lack of public transport was an issue for participants working at the sculpture centre. There are many spaces available around Carrick-on-Shannon, Ballinamore and any of the towns in County Leitrim but the resources are not there.

I thank everyone for attending today to engage with the committee and it is much appreciated. This meeting has been very enlightening. We will suspend for a few minutes to allow our next guests to take their places.

Sitting suspended at 3.35 p.m. and resumed at 3.45 p.m.

I remind members, visitors and people in the Visitors Gallery to ensure their mobile phones are switched off for the duration of the meeting, as they interfere with the broadcasting equipment even when in silent mode.

We are continuing our discussion on the potential for job creation, innovation and balanced economic development in the creative economy. I welcome Mr. Brian Dalton, who is the managing director of the corporate development unit of RTE; Mr. Niall Stokes, who is the founder and editor of Hot Press; Mr. Joe O'Connell, who is the owner of Ashford Studios; Professor Brian Singleton, who holds the Samuel Beckett Chair of Drama and Theatre Studies at Trinity College Dublin; and Mr. James Hickey, who is the chief executive of the Irish Film Board. They are all very welcome here this afternoon.

Before we commence, in accordance with procedure I am required to point out that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I remind our guests that their presentations should be of no more than five minutes' duration. The presentations submitted have been circulated to members. All the submissions will be considered in the context of the committee's report. I invite Mr. Brian Dalton to make his presentation.

Mr. Brian Dalton

I thank the Chairman for the invitation to appear before the joint committee this afternoon. We hope our submission is useful as the committee considers the potential for job creation, innovation and balanced economic development in the creative sector. RTE believes there is significant potential for more than 500 new jobs to be created if a greater level of financial stability can be restored. It envisages that the bulk of this job creation would take place in the independent production sector. Over the past five years, RTE has shed nearly 500 jobs and the independent sector has lost more than 300 jobs. RTE's total annual revenue has decreased by more than €100 million. It receives approximately €180 million in licence fee revenue each year. It currently commissions approximately €40 million of programming from the independent sector. This equates to approximately 45% of RTE's commissioning expenditure when news and sports are excluded. In the past, we spent more €70 million in the independent sector each year.

Ireland is a small open economy. The Irish media ecosystem is exceptionally open. Throughout the world, advertising is a key element in the funding of the creative economy. The estimated value of the advertising market in 2006 was €1 billion. Its value is now estimated to be just over €700 million. The Irish creative sector depends hugely on advertising to fund content, which in turn creates employment. Ireland has had a uniquely sharp contraction in advertising over the past six years. RTE advertising has dropped by 40% during this timeframe. This has led to a very significant contraction of approximately 20% in employment. Online advertising now accounts for just over 20% of the market. The equivalent figure for television is 25%, for print is just over 21% and for radio is 13%. Sponsorship accounts for 13% of the market, and other forms of advertising, such as outdoor and cinema, account for 8% of the market. The number of UK television channels selling Irish advertising increased steadily between 2004 and 2011. There was a marked increase in this activity in 2012. There are 36 UK channels operating in the Irish advertising market. As most of them produce little or no Irish programming, their employment benefit is minimal. Supporting Irish content production is central to creating jobs in the creative audiovisual sector.

RTE’s revenue is approximately €328 million. We are the single biggest producer and commissioner of Irish programming. I will put this in context by explaining how we support job creation. In any one year, RTE drama engages between 350 and 500 actors. While a number of Irish actors who are based in London come back regularly for work, the majority of actors who work on RTE productions are based in Ireland. As the Irish advertising market becomes more fragmented, RTE's share of that market will decline. Our reach is still very high, with over 94% of Irish people using one or more of our services in any given week. More than 4,380 hours of home-produced television programming were delivered by RTE in partnership with the independent sector in 2014. Drama had a particularly strong year with "Amber", "The Fall" and "Love/Hate". RTE broadcast all of the top 20 most watched programmes in Ireland in 2014. As the advertising market becomes more fragmented, it is imperative that Irish content is fully exploited commercially and valued economically. The market for the distribution of high-quality television content in Ireland is changing radically. New platform operators that are entering the market are bundling TV services with broadband and telephone services in an effort to own the home.

In the United States, the issue of retransmission fees was resolved over ten years ago following much debate and dispute. Television operators there now earn 15% of their income by charging pay TV platforms for their content. In recent years, ITV and Channel 4 have put retransmission fees firmly on the agenda in Britain. Perhaps some members do not know what the retransmission fee debate is about. It is about the flow of payments between broadcasters and TV platforms for their content.

In September last year, the ITV chief executive, Adam Crozier, said that the majority of viewing on pay TV platforms is public service broadcasting, PSB, programming - in Ireland it is approximately 30% to 40% of what is watched on pay TV channels - and whether it is the producer or broadcaster investing in creating that content, it does not receive any payment. He went on to say that the impact of this wholly outdated regime is that UK public service broadcasters are forced to subsidise major pay TV platforms. Later in September, the UK Culture Secretary told a Royal Television Society conference in London that the UK Government would shortly begin a review into whether TV platforms, such as satellite, cable and so forth, should pay for carrying the main free-to-air channels. David Abrahams of Channel 4, speaking at the Edinburgh Festival, said that distribution or re-transmission fees could be worth as much as £200 million a year to the main free-to-air channels, because they accounted for the bulk of TV viewing on pay TV platforms. In Ireland, we estimate that 30% to 40% of our public service broadcasting content is on Sky and upc.

RTE has been considering this issue in an Irish context for some time. Over the past year RTE has conducted detailed research to understand much more clearly who creates value for whom in the relationship between Irish terrestrial broadcasters and the major pay TV platforms operating in Ireland. Working with us, Mediatique, a UK-based consultancy firm, has completed a comprehensive report on the value to pay TV operators in Ireland of having access to Irish free-to-air services and their content. Much like in Britain, the analysis is telling us that the financial benefits of the relationship are currently completely imbalanced in favour of the pay TV operators. Unlike the US or the UK, in Ireland this imbalance causes a particular difficulty because it results in huge amounts of potential investment for Irish programming and content leaving the country. This is directly affecting potential job growth in the Irish audiovisual sector.

We believe it is absolutely in the interests of Irish broadcasters, the broader Irish television production sector and, most importantly, Irish audiences that the Government closely examines the legislation that underpins the current imbalance. We have been engaging with the Department of Communications, Energy and Natural Resources on this issue over the past number of months.

Given that RTE is set up as a dual-funded public service broadcaster with a range of statutory responsibilities, the level of public funding it receives to fulfil its role is crucial. That is a responsibility of the Government. It is clear from any analysis or international benchmarking that the current television licence fee system is no longer fit for purpose. Just last week, the Minister for Communications, Energy and Natural Resources said that he will shortly bring legislation to the Government to help tackle licence fee evasion, which is currently estimated to exceed 15%, with the loss of over €25 million to broadcasters each year. The cost of collection is approximately 7%. In the UK, which has the same system, the evasion level is 5% and its cost of collection is 2%. We welcome this move towards reform of the current system.

The Minister rightly said that this is a matter of fairness. The vast majority of Irish citizens are making their contribution to the costs of quality public service broadcasting by paying their licence fee, but a significant minority continues to enjoy the benefits while expecting others to pay their share. However, it is also depriving the audiovisual sector of much needed investment. Successful reform of the licence fee system has the potential to act as a significant stimulus to a sector that has suffered a collapse in investment over the past five years, crucially without increasing the burden on individuals or on households.

RTE’s contribution to the creative sector is, of course, far more than just television. Our radio services and orchestras also play a vital role in the creative economy. Large numbers are employed in these areas. Our orchestras employ more than 120 full-time musicians and, based on the performance, this number is increased. This makes RTE the biggest employer of musicians in the country. Through RTE’s Supporting the Arts scheme, each year RTE supports many local and national arts events throughout Ireland through media partnerships and widespread cultural content across RTE services. In addition, RTE supports events by offering promotional air-time on radio and television. This airtime has proven vital in allowing events to grow and develop from year to year. Equally, every year new and exciting arts projects are established and look to RTE to help with getting the word out.

RTE is committed to working in partnership with the independent sector and third level institutions to maximise the sum total of our collective creative possibilities by creating a campus without walls that becomes a hub for creative content generation and new start-ups that can develop scale to compete internationally.

We are currently working on proposals for our site in Donnybrook and we have begun to deepen our creative partnership so that this vision can be fulfilled. The creative sector is sizeable. However, its value is not adequately expressed in hard numbers alone. Irish creative expression in word, film and art has significantly enhanced the reputation of Ireland. Since the 1960s RTE has contributed to the growth of the wider sector. We compete with the best-funded broadcasters in the world and as a national broadcaster we strive for the highest standards in journalism and creative production. Our journalists, technical and creative staff have moved into new ventures, either supporting growth in the commercial sector or providing necessary skill and expertise in the international production and film industry that locates in Ireland.

It is important that Ireland protect and nurture its creative capacity in a digital world that is global. Our creative expression and output reinforces our identity as a people and captures the richness of Irish lives and voices from all communities living on this island. It also has a very valuable economic impact in terms of the indigenous economy and export potential. The Irish market has changed fundamentally since 2012 and policy support is required to ensure that the creative sector can thrive in a fiercely competitive and international ecosystem that is oblivious to the protection and nurturing of what is unique and precious.

Mr. Niall Stokes

I thank the committee for the invitation to speak at today's meeting. Hot Press was launched in 1977 which means that we have been observing the changes that have taken place in the whole creative space in Ireland over the intervening 38 years. One of the most striking aspects of our collective experience during that period has been to understand that Ireland’s artistic and cultural industries make a major contribution to the economic well-being of the country. The existence of the Arts Council is a body fit for purpose, notwithstanding, but historically, what was not reflected in public policy was the extent to which Ireland's cultural industries made that vital economic contribution. This has expanded and developed over the intervening years.

Ireland’s success in international and contemporary music was achieved with little or no input from the State. However, experience with film confirms that effective public policy-making can have a very important beneficial impact on the activities of practitioners in a given cultural space. In 1993, a series of very important changes were put in place by legislation. A requirement was imposed on RTE to fulfil a quota of independent productions. At the time RTE did not want this and it resisted it. There was significant misgiving within RTE about the effect of this requirement. Yet, it became one of the foundation stones of the change and improvement in the development of a film industry in Ireland. Also at that time the Irish Film Board was reconstituted. It has gone on to play a very important role in dealing with content issues by encouraging Irish film-makers to develop their art and their craft, by funding Irish movies and generally opening up the space for activities in the world of Irish cinema based in Ireland. The amendment of section 481 to introduce competitive tax incentives has proven to be a very important factor in attracting international productions to Ireland.

Those are the foundation stones for the modern Irish film industry. The numbers employed in the film industry have multiplied almost ten times in the meantime. Ireland is producing films of genuine international calibre, made by Irish directors and featuring Irish talent. The direct value of the industry to the Irish economy has significantly increased as a result.

The benefits are also felt in tourism, in industry generally and especially in foreign direct investment. The success of Irish music artists has been instrumental in making Ireland feel, look and smell like a very good place for people in the creative and technical industries to do business. If one thinks about the success of U2 and what it has meant to the Irish economy, one can count the benefits in billions of euro. They have been significant in attracting companies such as Facebook, Google and other multinationals to Ireland, based on an awareness that there is a real creative community, where one can sell the idea of Ireland as a hub for different forms of creative endeavour. In the music arena, one does not just have U2 but also Enya, the Cranberries, Bill Whelan's music for Riverdance and so on up to Hozier, who in the past year has become one of the breakthrough artists, selling a huge number of records, generating a phenomenal number of YouTube views and playing on all of the major shows in the States, the UK and elsewhere. This was inspired by a song "Take Me to Church" and a video made for €1,500 by a bunch of very good young Irish film makers. Hozier has gone on to major international success.

It is important for us to encourage the cross-fertilisation involved in the creative space. The remit of the Irish Film Board and Mr. James Hickey will talk about this in far greater detail and with a greater degree of knowledge than I can. The crucial elements are the development of Irish film making and also the making of films in Ireland, which are the two cornerstones of the remit. I was surprised when reading the Creative Capital report, a product of the interaction between various Departments and many of the agencies involved in the creative space, how little space was devoted to film studios. It occurred to me that when it comes to attracting international productions to Ireland - we all know about the success of series such as the "Vikings", "Penny Dreadful" or "Games of Thrones", which is being filmed in Northern Ireland - they generate a significant level of highly intensive activity as well as significant levels of employment and knock-on benefits for the economies of particular local areas. It seemed to me that the document Creative Capital missed that dimension. It dealt with the important issue of incentives. As we have seen in the past year, the refinement of section 481 of the Taxes Consolidation Act 1997 has actually worked.

There is a general feeling within the business that more studio space is needed to cater for the demand for making films in Ireland. The euro has been effectively devalued, making us even more competitive in that the American dollar and the pound sterling buys more. The British studios are more expensive than those in Ireland. That is subject to certain caveats. The international environment for incentives is competitive. Everybody is looking to find the extra twist, whether it is Northern Ireland, Britain or further afield. New Zealand, Australia and other English-speaking territories all have regimes in place where they are determined to attract big productions. Hollywood accounts for of the order of 70% of the screen time in Europe, not to mind the rest of the world. It is a powerful force but at the same time it means that if we can attract American production companies to make movies and television series here, that is an important opportunity. The Pinewood studios in Wales were built by the Welsh Government on their behalf.

People are uncertain about the way in which the studios in Northern Ireland have been funded and set up, but generally speaking it is understood that extraordinary value is being given to production companies to produce films in Northern Ireland. The opportunity is there for us to compete but we have to make the correct decisions which will ensure that the demand created by section 481 of the Taxes Consolidation Act 1997 can be met. That also requires competitive rates in the studio offer we have.

I see an opportunity for regional development. Let me give some examples. The mid-west may be a very good location in that aeroplanes come across the Atlantic and land in Shannon Airport, which opens up the possibility that Limerick could be a very good locus for an Irish studio operation. Mr. Joe O'Connell will sell members the vision of studios in Wicklow, and I will not argue with that point, but there is a very strong link involving production companies flying in from the US, landing in Shannon and being in the heart of Limerick very quickly, with all of the comforts and infrastructure of a city around them. This presents the opportunity for regional development.

We talk about the value of the film industry to Ireland and the numbers are impressive but it is fair to say the Deloitte report estimates a higher number of people are employed in music than is the case in the film industry. From memory, the Creative Capital document states there are about 6,000 people employed in film. It might be a little higher at this point but the Deloitte report states that 9,000 direct jobs have been created by the music industry in Ireland. If one adds the indirect jobs the number goes up to over 11,000. However, there is a brain drain. Some of the Irish artists who have been successful in recent years - I am thinking of the Script, the Coronas, Imelda May and others - are now living abroad. Why is this? First, there is virtually no support for Irish musicians in Ireland. There is no equivalent of section 481 of the Taxes Consolidation Act 1997 to encourage international production here. Given the fact that the scale of the music industry is at least comparable to the film industry, it is equally important that we put the kind of incentives in place which would encourage the creative people on the ground to maximise their potential and achieve success, both locally and internationally but also to encourage international production to be based in Ireland.

I believe there is scope for legislation and regulations similar to what happened in regard to the film industry in 1993. This would include the foundation of a body, which would be equivalent to the Irish Film Board; and a requirement on RTE and all radio stations, which would be similar to the introduction of the rules in regard to independent productions, that they would play a minimum percentage of Irish music during peak times. There is an issue under European legislation about this but it was dealt with back in 1997-98 and agreement was reached with Europe in respect of a formulation of how that might operate.

We need an incentive similar to section 481 for music producers to live and work in Ireland. The simplest way of doing that would be to extend the artists' exemption provision to producers and aim to have a clustering effect of producers working in Irish studios, using session musicians and networking with Irish songwriters. This has the potential to give an important boost to musicians in Ireland who are currently finding it much more difficult than years ago to earn a living.

Mr. Joe O'Connell

Ashford Studios is a new facility that has been in operation since May 2012. Since opening, we have had three seasons of the very successful "Vikings" production, and are currently filming the fourth. There are 450 employed by the "Vikings" production, excluding extras. The series is trying to attract up to 8,000 extras to be available during the period of the shooting.

Ireland is essentially providing a good incentive to encourage international film and television production to this country but we have not provided the infrastructure for them in which to operate. We have not built any large film studio infrastructure in the past 30 years and the reason for this is that such infrastructure in itself is not commercially viable. An issue is that these facilities lack the dedicated and appropriate classification when it comes to calculating the local authority contributions and rates. Large-scale studio infrastructure is incorrectly classified as commercial buildings and is therefore significantly overcharged. A legislative amendment that will help investment to take place is required.

Large-scale studio infrastructure should not be in the same classification as commercial buildings for the following reasons. Film production is cyclical and leaves the building empty for part of the year. Actors and crews move on to their next projects while awaiting the results of the ratings. During this waiting period sets are left standing in preparation for the following season. There is no guarantee of occupation or lease. There are no leases from production companies because success of the projects depends on ratings. The result from these ratings can be seen only weeks prior to the commencement of the next year of filming for the subsequent season. Due to incentives offered in other jurisdictions, film production companies have little loyalty or permanency in one jurisdiction and the nature of film production is transient and uncertain. The money paid to the studios for use of the facility is not a commercial return based on the cost of putting the infrastructure in place.

Despite the uncertain environment there is one fact of which we can be sure, that is, that film and television content is a permanent product and offers significant potential in terms of jobs, direct and indirect investment, and tourism. The recommendations that we suggest would be a considerable help include an amendment to the Valuation Act 2001 to include a dedicated classification for new large purpose-built studio infrastructure which would qualify this type of infrastructure for a more accurate rate of charges. Under the new classification of "studio infrastructure", an exemption or nominal percentage of commercial rates and local authority planning contributions should apply. Due to the limited studio space that currently exists, we have been unable to accommodate incoming inquiries from large international production companies. Despite our efforts to facilitate these productions in revamped warehouses, we have been unsuccessful. Film and television production companies have expressly stated on numerous occasions that these revamped facilities are not suitable for purpose.

The putting in place of a competitive section 481 incentive without the availability or provision of modern infrastructure in which to operate is not sound. There is a requirement for large studio infrastructure, which could cater for up to 10,000 jobs and significant inward investment. Persons using transferable skills in previous employment can fill many of these jobs. Large-scale purpose-built studio infrastructure requires large capital investment to be put in place and does not generate a commercial return and therefore should not incur a commercial level of rates and local planning contributions. For example, based on our first three years in operation, not only have we not paid back any of the capital on our loan, we have not paid back any of the interest.

In order to resolve this, we suggest that a new classification be added to the legislation for this specific type of infrastructure. Under the new classification of "studio infrastructure", an exemption or nominal percentage of commercial rates and local authority planning contributions should apply.

The suggestion is that the Valuation Act 2001 be adjusted appropriately. In Part 1, preliminary and general, the description should be that "studio infrastructure" means:

a) large scale new purpose-built studio infrastructure consisting of stage and office-workshop buildings solely used for the purpose of film and television production, and

b) "Office-workshop buildings" that hold departments needed for the production company using the stage facilities.

This eliminates the possibility that it would spread and be used by other sectors. It would not include buildings previously used for an alternative purpose other than film and television production.

Professor Brian Singleton

There has been an explosion of creative arts education in the country in the past ten years. Virtually all third-level educational providers have some kind of creative arts education, not least of which is my university which is the biggest provider of such education and training. I was the co-founder, with Ms Danielle Ryan, of The Lir, which is the National Academy of Dramatic Art, and I will talk largely about the theatre sector and the training for it, and how the training has shifted radically in the past number of years given the environment into which the students will emerge. In addition to the core artistic skills that each programme provides to students, there is a strong emphasis on professional development, pushing the creative sectors in new directions and helping them engage, not only with theatre but with other platforms. I should say that virtually all of that education is based in the sector with sectoral professional.

In addition, I head up a research theme in the college, called "Creative Arts Practice", that brings together all the researchers and artists in the core arts together with other disciplines in the pure sciences, health sciences, computer sciences and engineering that employ creative arts in their practices and products. This is an interface between the work of the sciences and the artists for public consumption. In all of this, we are training students not to wait for the telephone to ring. We are training them to create work for themselves in the absence of the telephone ringing.

The creative arts rely heavily on public subsidy. The theatre sector currently is funded at the high end of achievement in terms of a small number of theatre companies, service providers and schemes for the development of established practitioners, and this is right and proper for a country with such a strong reputation, particularly in theatre.

What concerns me is a large independent sector that applies for project funding on an annual basis, with an average output of one or two artistic productions per year. That sector is by and large underproductive in terms of the skills and potential of those who work in it on an ad hoc basis. While some of the independent productions break through to a wider public, few, if any, have the capacity for larger commercial development. Outside the theatre sector, there are drama-related activities in multiple formats, including the gaming sector, assistive technologies in the health sciences and multi-platform televisual content that others can speak to. To date, many of these activities have had no engagement with the independent creative arts sector, deriving, as they do, from the sciences and engineering, rather than the artistic, side. Essentially, I see the independent sector as underproductive and needing to move into what I call a "new creative economy".

In my written submission to the committee, I cited two examples. I will not go into them in depth. One is a theatre company funded by the Arts Council that runs an annual scheme, called "Show in a Bag". The scheme involves small-scale funding for a new idea that tests the market and is then able to expand once it has its own market.

The other is from another graduate of mine, Triona Campbell, who set up a company called beActive media. She wrote, devised and produced the first online Irish soap opera and that is the first Irish drama to move from online to television. It is not on Irish television, however; she sold it to a Brazilian TV company. She speaks fluent Portuguese, which helps. Her company is now producing multi-platform drama, which is not just for television. There is lots of online content, books, Apps, etc. One of her key principles is growing a fan base through interacting with the public and that is how an arts product can grow.

Creative arts practitioners working largely in the independent sector with small and very intermittent impact could benefit from contact with people working within business and enterprise in order to maximise the potential of the outputs - that can be seen in Show in a Bag, for instance - and also to diversify the energies and skills working in other media in interdisciplinary ways. That can be seen in beActive media. With my proposed collaboration, new ideas, schemes and outputs could be developed and supported through a system of what I call angel investors, one of which could be the State, to invest in these arts in a bag projects. Small artistic outputs can be used to test the market and grow a fan base and can develop further beyond that.

Resources exist within arts education in the colleges as they stand but there is no national co-ordination. We are all in competition with each other. There is no co-ordination in terms of bringing people from industry, sciences, engineering and arts together. The aim is to invigorate the highly creative though at times dormant independent arts sector to produce new work to rival the small number of publicly funded artistic outputs and to have the potential to be attractive to overseas markets. When beActive media could not find an outlet for their own drama within Ireland, they were able to move into another market very successfully and employ quite a number of people at home.

Mr. James Hickey

The Irish Film Board is the development agency for film and other forms of screen content in Ireland.

Somebody has their telephone turned on. I ask them to turn it off, please, as it interferes with the live broadcast.

Mr. James Hickey

The Irish Film Board has a dual role of encouraging the culture of film making - including supporting Irish creative talent such as writers, directors, actors, designers, editors, animators and visual effects supervisors in the making of feature films, TV drama and TV animation - and developing the industry for the production of film and all forms of screen content in Ireland. This is a dual role involving culture and industry. Production of film and screen content is an expression of culture and creativity on the one hand, and an industrial activity creating significant levels of economic activity and employment on the other. In the film and audiovisual content space, the Irish Film Board in effect is the equivalent of the Arts Council, Enterprise Ireland and the IDA.

In 2015, the Irish Film Board provided funding for 15 feature films with Irish writers and directors at the helm. These include "Brooklyn", based on the novel by Colm Tóibín, "Sing Street", directed by John Carney, who gave us the wonderful film "Once", now a stage play visiting Dublin, and "Glassland" directed by Gerard Barrett, which has received positive press reviews and public acclamation and stars Toni Collette and Jack Reynor. It is a wonderful film which I think is still on release - I recommend the committee members go to see it.

The Irish Film Board also provided funding for 11 creative co-productions, including "The Lobster", a film shot in the area of Kenmare and the Parknasilla hotel in County Kerry. The great news from our point of view is that this is in the competition in the Cannes Film Festival for 2015 and as such is one of 14 films on a world stage. This is great or the Irish film industry.

We also supported four animated TV series, four feature documentaries, two TV drama series and 11 short films as well as the cinema distribution of 18 films for which we had provided production funding - all of this on €9 million. We have made enormous efforts with the funding we have in order to make sure that as much production as possible takes place. I think 15 feature films and 11 creative co-productions is a significant level of production activity in itself.

In addition to funding films originating from Ireland, the Irish Film Board also has a role in respect of foreign direct investment and bringing production to Ireland. We want to encourage people to locate production here, including foreign direct investment in major feature films, TV drama series and TV animation. The main promotional tool incentivising inward investment is the section 481 tax incentive, which has been extended and improved with effect from 1 January, 2015. The Irish Film Board is working with the Department of Arts, Heritage and the Gaeltacht and the Department of Finance on a review of the regime to see what additional changes could best be made, including whether the €50 million cap currently in place should be increased to attract larger-budget feature films and TV drama series. It is worth mentioning that this cap has been affected by the dramatic shift in exchange rates - €50 million is a reduced figure from what it was a year ago in an economy that mostly deals in dollars and sterling.

We have been working over the past year to 18 months to encourage initiatives from the Government to develop film studios. There are challenging issues in respect of how best to do this but we are strongly supportive of the need for additional film studio space. It is a significant obstacle to the growth of film and TV drama production in Ireland and should at this stage be a major priority. The Irish Film Board is working with the Department of the Taoiseach's expert group under the Action Plan for Jobs. The Taoiseach himself has taken an interest in this matter and set up a committee made up of representatives from the Department of Enterprise, Jobs and Innovation, the Department of Communications, Energy and Natural Resources, the Department of Arts, Heritage and the Gaeltacht, the Irish Film Board, IDA Ireland and Enterprise Ireland. Existing studios and interested parties have already been referred to the Ireland Strategic Investment Fund, ISIF, the Government funding entity that has come out of the National Treasury Management Agency and which is doing very interesting work funding various projects across the Irish economy. It is also available for potential funding for film studios. We are also working on issues like local authority rates, liabilities, planning charges and other funding mechanisms.

In addition to our roles funding indigenous production and encouraging foreign direct investment and film studio development, we are also involved in training and education through Screen Training Ireland. The Irish Film Board took over the running of Screen Training Ireland in 2013 and is currently working at training initiatives across creativity, technical skills and entrepreneurship. Courses promoted include "screen leaders", which encourages screen entrepreneurs, and animation and visual effects training courses. It is working with the Broadcasting Authority of Ireland on a strategy for training over the next five years.

The Irish Film Board's total funding for last year and this year was €11.2 million plus administration costs. The difference between the €9 million and the €11 million is the costs of training and the €0.5 million contribution we have to make annually to a European co-production fund called Eurimages. This figure of €11.2 million is down from the €20 million we received in 2008. This funding is provided across development, production, distribution and training.

The Irish Film Board has just completed a widespread consultation with industry stakeholders, including Departments, State agencies, industry representative bodies, guilds and unions, regarding a proposed five-year strategy for the Irish Film Board. We must look to the next five years and consider where we see it all going. There is enormous potential in the Irish screen industries. In the earlier session, there was a suggestion about rebranding the Irish Film Board as "screen Ireland" which would chime with what has happened on the international stage. For example, the equivalent entity in Northern Ireland is called Northern Ireland Screen and Screen Australia is another example of an agency which is very similar to our own with the word "screen" in the title. The Government is considering this. Having undertaken the consultation process, we are continuing by developing a five-year strategy. As Mr. Stokes pointed out, the turnover of audiovisual production is approximately €500 million to €600 million. It could, and will, grow to €1 billion by 2019, increasing direct employment from at least 6,000 to 7,000 to at least 10,000.

Mr Stokes made a point about the number of people employed in music compared with film. I have an interest in that I am indirectly involved in the music business. The film business has calculated its job numbers by including everyone who works with musicians as opposed to the people directly involved in creating music. If the film business did likewise, it would include people who work in cinemas, DVD outlets and in the non-production sites, for example, television broadcasting. With this method, we would probably count 9,000 people working in film.

The opportunities are huge. We are part of the cultural and creative industries, in which Europe believes very strongly. There are European initiatives regarding the creative and cultural industries which hold that their growth potential, particularly for youth employment, is enormous over the next five years. The European Union believes it should be strongly supported and it should be commended to us all.

I thank witnesses for their informative contributions. In Mr. Stokes's written submission, he referred to the success of the music industry and the State assisting artists in this regard. He referred to the fact that there were few State supports. What is Mr Stokes's view on the artists' tax exemption? It has had a positive impact on those starting out in their music careers, although it might not benefit successful artists such as U2. Many artists have micro companies and Fine Gael is seeking to stand up for small businesses and exploring what we can do for self-employed people and how to eradicate the discrimination between the PAYE worker and the self-employed person. If a self-employed person's business fails, for whatever reason, there is a delay before he or she can claim social protection. I would like to know the witnesses' views on this regarding the creative industries. There are obvious benefits. Do the witnesses have anything to add?

Professor Singleton mentioned collaboration with businesses regarding the enterprise sector, which Mr. Hickey also mentioned. Does that include mentoring and advice? People come to me, no matter what their business, and the first issue is a business plan, mentoring, advice and how to get established. It is one thing to be creative and artistic. However one needs a business head and people need support. Enterprise Ireland has been referred to. How could the local enterprise offices, LEOs, feed into it or how would they need to be equipped regarding expertise, given that we need people with expertise to mentor these people regarding business plans? Could they play a role in the creative industries?

I agree that we need a regional spread and to have purpose-built film studios throughout the country in strategic locations. My reading of it is that it would be easier to send interested parties to the east coast, where many of our studios are. We need a regional spread, although it will be impossible to please everyone. I am from Galway, and Galway city and county council own the airport space, which includes more than 100 acres. Many people in the film industry have approached me and local city and county councillors regarding using it as a film studio and space. It would be an ideal location given its connection to Dublin via the M6 and to Shannon Airport, and we will soon have the Gort to Tuam bypass. The witnesses have outlined the benefits of the film industry regarding employment. What can we do to push for it? While we can talk here, say we want it and have lots of great ideas, everything seems to go towards the east coast because the infrastructure is already established there. What can we do to push this and help councils? The witnesses laid out some very good ideas regarding rates and what is working against the film industry coming here and setting up studios. We need to think and plan now and achieve the regional spread with all of us working together. Galway Airport would be an ideal location and now is the time to grasp the opportunity and get our ducks in a row so that we are ready. As the witnesses have outlined, the business is there if we can prepare ourselves for it.

Mr. Niall Stokes

The introduction of the artists' tax exemption was a critical moment in the development of Irish culture and it made a difference in one very important sense to begin with, namely, that artists were recognised as having a real importance. The effect of it was that, up to a certain point, there was a cluster of people here. People such as Joe Elliot and Elvis Costello came here to live and it made sense for Irish artists to continue to base themselves in Ireland. Unfortunately, this effect has been lost as a result of the imposition of what was, in the first instance, a relatively low cap on the exemption. The missed opportunity to include the work of producers in the exemption meant it did not make sense for producers to base themselves here. Given that producers are, to a very large extent, the engine that drives which songs and musicians are used and where albums are recorded, a major opportunity was missed.

There are always issues of equity and fairness, and I fully support the concept of equalisation to the greatest extent possible. However, in this area, as in other areas of industry, we must create competitive conditions in places such as Ireland to attract activity, and this applies to film and music. The removal of the cap would not cost the Exchequer an enormous amount, but would offer the opportunity of regaining the sense of the clustering of activities within the music space. This also extends to the film environment. If we got increased film-making activity, it would make sense for composers to come and base themselves here. I do not understand why there is no reference to music in the cultural test in section 481. In the UK, music is a factor that plays into it. It should be changed in order that factors such as where the music is recorded and the nationality of the composer are included as part of the cultural test in section 481. Across games, music, film and all the relevant areas of the creative industry, we want to try to create a level of international calibre people operating here all the time who then go on to educate the Irish guys as they come through.

We see the effect of big international TV productions being made here; Irish actors become big box office attractions and they can attract big budgets for local film productions. If international success can be achieved through global productions and then bring back the effect of this and apply it to local activity, we will have a much more viable model for the film, music and creative industries which works.

Mr. James Hickey

We rely very heavily on the entrepreneurship of very small companies. I mentioned 15 films and 11 creative co-productions. These were produced by individual companies with relatively small numbers involved. It is very important for us to try to encourage this entrepreneurship. Any initiatives the Government takes to encourage entrepreneurship from the point of view of the film and audiovisual production sector would be very much welcome as something which would help those individuals. It is a difficult and challenging existence. I speak to all of them on a daily basis and I admire Irish film and TV producers who work very hard. Mr. Dalton will say the independent television production sector has struggled significantly in recent years. Very often people work in very challenging economic circumstances and they have shown great entrepreneurship. Anything the Government can do to support them would certainly be welcome from the point of view of film production.

We are exploring all of the options with regard to the potential for film studios in Galway. The Irish Film Board sought expressions of interest from film studios and received suggestions from existing promoters and proposed new ones. We are all aware of the proposal for Limerick which was mentioned earlier. We are aware of the proposals for Galway, and I speak directly to people in Galway on the proposals for film studios there. There are also proposals for film studios in the midlands. It is a subject which has received recent considerable enthusiasm from many areas and the questions now are how we can best support it and how best to get it to happen.

Mr. Brian Dalton

I echo the comments made. We would welcome support for self-employed people such as what has been suggested. Our business has a high level of uncertainty, given the very nature of creative enterprise. We have been involved in structuring the business for some time. The success of "Love/Hate", which is beginning to have an international breakthrough, is based on an intensive plan where we develop skills, such as scriptwriting. We have worked on it for the past ten years. We can see significant potential for television and film if we develop the skills and put in place the resources to support export. The production values are crucial. While it is very important to support local business, we must also build up scale because ultimately our success will come from achieving standards such as those of "The Killing" which has had great success. If we can achieve the same level of standard whereby productions look like "Love/Hate", "Amber" or "The Fall", it will generate more significant and well-paid jobs in Ireland.

Mr. Joe O'Connell

My background is engineering and I know nothing about film. I started the Ashford Studios project after an introduction to Morgan O'Sullivan, when "Braveheart" was being made. At the time, one of our warehouses was used to store costumes and I went to see what was being done with the warehouse. One of our businesses is end of line packaging, whereby we advise on the lay out of factories.

Once the butter, chip or piece of equipment is made, we provide the conveyors and equipment to streamline the factory so it works really efficiently. With this hat on we looked at what was being done with "Braveheart" and it was madness. It was a mess. I got chatting with Mr. O'Sullivan and he told me that as I was successful in business, I should build a studio. I thought it sounded interesting and I looked at the figures for Ardmore Studios over the past 30 years. They did not make good reading. I went back to Mr. O'Sullivan and told him to keep taking the cocaine because I would not be building the studio as it did not make sense.

Studios are infrastructure and we should be clear about this. The ambition to have them all over the country is fantastic but it is not real because it costs an awful lot of money to put in infrastructure. Pinewood Studios in England are dated and very old but they are of scale and attract a huge amount of business. Putting in place scalable infrastructure would mean companies would come and spend €40 million to €80 million, as was the case with "Vikings", but these companies need scale and structure. Who will put down the money for this? In my submission I suggest stopping asking us for money. As it stands at present, we have customers waiting for the next six stages and we can provide them. We are not asking for any money; we are just asking local authorities to stop bleeding us and taking money from us.

Studios will not be built all over the country because nobody will put up the money unless money is received from the Government or somebody is got to build them. Mr. Hickey tells me this is not allowed under European law. The facility in Alicante which was built by the local government was closed. Would such a facility be allowed in Galway? Under current rules it cannot be done. We must build a studio somehow some way, but we cannot have the situation in Ireland at present, whereby we must pay rates even if it is unoccupied. This could break the entire business.

It would be fantastic if we had facilities in other parts of the country. We will definitely have locations used, as happened in the Skelligs. A total of 50% of a production is done in studio and 50% is done on location. We can definitely use all of the country for locations, but a studio such as Pinewood or those in LA must be located somewhere central whereby we can get the spin-off which goes with it. From an educational point of view, we have had great fun with schoolchildren coming through the studio. While we are not geared for tours, we have managed to squeeze in some. People are fascinated when they come in and can see it in operation. Part of the spin-off is people then want to get into the industry. The answer to how they can be trained and introduced is to build an industry and create a centre, which I call a Silicon Valley of film. We will then get the spin off. In the meantime we must deal with the rates issue. I cannot send in a planning application because the huge square footage means it carries huge charges.

Mr. O'Connell made reference to someone consuming illicit substances and I ask him to clarify it was totally in jest.

Mr. Joe O'Connell

Yes.

This is all on the record.

Professor Brian Singleton

In response to the question on mentoring, which is what I proposed initially, there is a major disconnect. There is no point in sending my graduates to the enterprise board because neither can speak to the other. We are very lucky because we set up a programme on cultural creative entrepreneurship. It has only been running two years but we have someone very special to lead it. She set up her own business in the creative arts and gaming industry and is able to mentor the students through it. I am calling for a much more national strategy. She is just one individual. I am sure many people who have been very successful in the creative arts businesses would be very willing to give back something. At present, it is very much on an ad hoc basis and it is about who one knows, and I do not believe this is a strategy for education.

Mr. James Hickey

Mr. O'Connor made a point on the Government not being able to fund film studios.

The technical point is that EU state aid rules apply to the funding of film studios. It is possible for the Government to fund film studios as long as they are done on a commercial basis. Through the expert group set up by the Taoiseach, we are referring people who want to access State funding for film studios to the Irish Strategic Investment Fund, which comes out of the NTMA and provides funding on a state aid cleared basis. This means loans and equity investment in projects rather than grants. Mr. Joe O'Connell was referring to the fact that it is not possible to give grants to construct film studios. It is possible to have public private partnerships that include lending arrangements.

With regard to Irish creative talent, particularly acting talent, we can take someone like Jack Reynor, who is now a major international star, but started out on Irish Film Board funded films like "Dollhouse" and a wonderful production of "What Richard Did". That is where Jack started and we are proud to have supported him and that he is now on the world stage.

I have a question for RTE. The scheme for supporting the arts is tremendous and gives people great national advertising for local initiatives. Is it measured regionally to see if everyone in the regions is getting an opportunity to be heard? Reference was made to the 3% independent commissioning budget on programmes for children. Is there any way for it to be increased?

At a previous hearing, we heard about music programming and the fact that our performers feel they do not get enough airtime on RTE. I met Phil Coulter last year and he said that if he was trying to get started now, he would not be able to have the success he enjoyed if he depended on radio stations to support him.

With regard to the Irish Film Board, it is interesting that it is open to the idea of Screen Ireland. It was raised earlier and I was not certain if the board's representatives were open to it.

Mr. James Hickey

I am very sympathetic.

Mr. Hickey also referred to regional space, which is something I have a particular interest in. In regional areas, there is great value for money if the locations are near motorways. It will be interesting to see how it evolves.

I was a great fan of Hot Press from the early days in the 1970s. The next point is related to what I asked RTE. Is there a big difference between now and when Hot Press started in the 1970s, particularly in how musicians are getting their starts? The Internet is a means of people reaching other audiences. Professor Singleton talked about science, engineering and the arts and pulling it all together. How does he see that happening?

Mr. Brian Dalton

With regard to RTE supporting the arts, we have a very deep regional footprint in the "Nationwide" news programme broadcast four nights a week. It gives wide coverage to what is happening across the regions. That is the essence of the programme. We support festivals all over the country, particularly during summertime, and they have a wide and varied regional footprint. In terms of performance, it depends what festival is taking place, whether it is the Galway Arts Festival or a film festival. That dictates the support we provide. That is something we will examine but we give fair representation to the various activities that take place in the regions. It is a good question.

In terms of independent commissioning spending, we spend 45% of what is available, which is a high level. A specific amount was mentioned for young people's programming but, relative to what we have, no other broadcaster is spending as much money on young people's programming. It is expensive because of the audience share. The cost per hour is relatively expensive but it is what we are asked to do as a public service broadcaster. We launched RTE Junior over two years ago and it is quite successful. We have a strong commitment in the area but we have been limited as our funds have dropped dramatically. We have taken out more than €130 million in costs. We have made recommendations on policy changes and said that if the changes were made we would invest in young people's programming and drama and it would create jobs.

With regard to music airtime and Irish music, representations have been made to us about country and western music and Irish music in general. We are mindful of it. We can demonstrate the amount of broadcasting of Irish music. We could be more mindful of it and we are conscious of that.

Mr. Niall Stokes

The benefits of such a successful active cultural sphere are being seen in tourism numbers. Fáilte Ireland's visitor attitude survey showed that 83% of visitors said they were interested in experiencing Ireland's traditional culture, which includes music, folk music, traditional music and songs. Some 48% highlighted an interest in Ireland's contemporary culture, meaning the music of modern contemporary bands, the films being made about Ireland and the work of Irish films directors and actors. There is a major pay-off for us if we can successfully develop our creative industries in the international sphere.

Every aspect of the creative industry suffers from the size of the market in Ireland. This is a small country with a small population, with 6 million people on the island and 4.6 million people in the Republic of Ireland. It is hard for people to earn a proper living from their work unless they become successful outside Ireland. With regard to musicians, it is more difficult for people to earn a living than it was 15 years ago because of the impact of the digital economy, which has also affected film and broadcasting. It is necessary at public policy level to try to find ways to address the problem and the impact it has had.

Record sales collapsed but there is now the beginning of a recovery through digital platforms that work and streaming services, which people are willing to pay for. It is only the beginning of a recovery and the same is true of movies and broadcasting. It is necessary to think about what we can do to ensure that, 15 years on, hugely talented young people with potentially the ability to make the same contribution as The Chieftains and The Dubliners in the 1960s and 1970s and the Boomtown Rats and U2 did in the 1970s and 1980s and Enya and Clannad did, can stick with their craft and earn a living. In that context, radio play becomes important.

I looked at the charts in Germany one particular week. I actually looked at the Irish charts first. I saw that in the week in question, nine Irish albums and six Irish artists were represented in the Irish top 100. When I checked the same week in Germany, I saw that 18 of the top 20 albums were German-language albums. In Spain, 17 of the albums were Spanish-language albums and in Sweden, 11 of the albums were Swedish-language albums. On the one hand, Ireland gains access to markets in the US and the UK through the lingua franca of popular music and movies, which is English. This enables us to benefit at the high end from the fact that we are an English-speaking country that produces most of our art in English. On the other hand, we suffer very badly at local level from a kind of imperialism, in effect, that allows American and British cultural products to dominate the market here. The week of my study was uncharacteristic to some extent. There were more Irish albums in the charts in later weeks after a bunch of very strong albums were released.

All of this is indicative of a regime that does not offer the level of support which enables artists from a local territory to achieve the maximum within their own place. For that reason, we need a better regime to be put in place. If one goes to France, Spain or Germany, one will find that most of the music on the radio or on the television is in the language of the country in which the broadcaster operates. We need something to counterbalance the dominance of US and UK material here. My clear understanding, having been involved in the former Independent Radio and Television Commission, which negotiated an agreement with Europe about a cultural exemption, is that something of this nature is possible. The problem at the time was that RTE did not fall within the remit of the commission; it was separate. Currently, it is within the remit of the Broadcasting Authority of Ireland. Therefore, it is possible for a regime that covers all of Ireland's broadcasters to be put in place.

Mr. James Hickey

I would like to reinforce what Mr. Stokes has said about the protection of intellectual property rights and in particular the protection of copyright. In this country, we do not speak about these issues often enough. I would say this is really important in terms of where we are going as a country. In the end, regardless of whether we are talking about music, films or television broadcasts, the real value is created through the value of copyright and the value of content which is protected by copyright. In a European context, this country is not necessarily seen as being as supportive as perhaps it should be in protecting and strengthening intellectual property rights. There is another perception.

We all face a classic challenge in trying to strike a balance in this regard. It is a balance between those who operate Internet service provider companies, who want to be able to use as much as content as possible as freely as possible, and those who create and generate that content, whom I believe should be properly rewarded for the work they do. There is a balance to be struck between the availability of copyright materials on a wide digital market basis and the full and proper remuneration of those who create the work. If those who create the work are not remunerated - it has already been mentioned that they are freelancers, by and large - we will not develop the content and the creativity that we are all here to try to support. The only way they can be remunerated is through copyright protection.

Professor Brian Singleton

The question was essentially about bringing people together. We have been trying to do that in the past 18 months. My university has been trying to match artists with people in the sciences.

We have just developed a project between a music composer and a social scientist who had conducted research about the secrets surrounding pregnancy. The first output of this was a musical installation. It was on the radio. There was a whole page in The Irish Times about it. On the strength of that, the composer has had three more commissions internationally rather than nationally. She would not have moved in that direction if we had not matched them together. It was done quite organically. We currently have an actor working in the school of nursing to develop apps for people with long-term illnesses who need coping strategies. There is a great deal of work for people in other industries, as well as in the pure arts disciplines.

The Arts Council currently funds the arts in a very discrete way by discipline. There is a drama panel, for example. There are panels for each discipline. Increasingly - certainly in the past ten years - very few of my graduates are working solely within one discipline. They are cutting across disciplines. The disciplines themselves are merging. We need to review all of that. We cannot train people now for one industry alone. They need to have multiple skills.

That is fascinating. Does Mr. Dalton want to come in again?

Mr. Brian Dalton

Intellectual property is crucial to the future of the Irish creative sector. I will put it in context. Sky, for example, takes over €600 million out of Ireland in subscriptions. I think it announced the other day that its profits between the UK and Ireland were over €1 billion. Between 30% and 40% of the content that Irish people are watching on the Sky platform is made by Irish broadcasters. Sky pays billions for sports rights. We are simply looking for fair play. The lion's share of this money would go back into the independent sector. It is a win-win because the more Irish content we create, the more the virtuous cycle is continued. The market is moving because it is so open as an economy. Advertising is so fragmented because there are so many players in it. We are giving away the economic value of content that is not protected in law, based on intellectual property. In turn, we are damaging the Irish creative economy.

Mr. James Hickey

Absolutely.

I thank all the witnesses for coming here today to engage with the joint committee and to help inform the development of our report. It has been absolutely fascinating and most helpful.

The joint committee adjourned at 5.07 p.m. until 1.30 p.m. on Tuesday, 12 May 2015.