Strategy needed to stop €21bn in online shopping going abroad

Online shopping — estimated to hit €21bn a year by 2017 — could result in “immense” loss to the economy if a national strategy is not put in place to stop most of the money going abroad.

Irish people spend around €4bn online every year, 75% of which goes to foreign outlets, including Britain, according to a report by the Government-initiated Digital Hub Development Agency.

Chairman Leonard Donnelly said a big challenge for coming years would be to get consumers to favour domestic online companies.

“If the trend for favouring overseas outlets for online purchases continues, the revenue loss to the domestic productive sectors will be immense,” he said.

The agency and the Department of Communications are working to develop such a national digital strategy, which will be rolled out over the coming years, according to Mr Donnelly.

Steps to ensure the success of this plan would be the re-education of society in skills needed to survive in a digital economy, as well as moving towards a high-class communications infrastructure, he said.

The Digital Hub, based in Dublin, is a cluster of digital content and technology enterprises. It was set up in 2003 to foster technological development.

It employs more than 800 people, with 70 tech companies located there. Eighteen companies joined the initiative in 2011, according to its annual report, which was released yesterday.

Since 2003, 160 firms have progressed through the Digital Hub, including Amazon and Daft.ie.

The report reveals a 10-year phased development plan for the Hub. Negotiations with two international investors are already under way, according to the report, which will potentially foster new developments within the campus.

Mr Donnelly said India and the UK are Ireland’s biggest competitors to digital innovation.

“Ireland must mirror and surpass what is happening in those countries to establish its position as a digital powerhouse,” he said.

“We have been groping around in the dark for the past decade about fashioning ourselves as an innovation island.”