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This article was first published in the September Ireland edition of Accounting and Business magazine.

The Irish economy is fuelled by the internet and information and communication technology (ICT). Already digitally driven, it is part of a forerunner group (Denmark, Belgium, the Netherlands, Sweden, Estonia, Finland, Norway and Luxembourg,) that could capture a larger share of the added economic value of an open and fully digital Europe.

Estimates by management consultancy Boston Consulting Group suggest that a European single digital market would add €415bn a year to the GDP of the EU. Ireland’s share of that would be €27bn, and the bloc as a whole could see its annual GDP growth rate increasing by 40% until 2020.

The Google-commissioned report does warn of a complacency gap.

Europe’s competitors – notably, Hong Kong, mainland China, Taiwan and South Korea – are undergoing rapid digitisation. Europe could end up as a digital backwater, with capital, talent and growth going elsewhere.

The scenario painted by BCG isn’t a million miles away from that of business lobby group Ibec. It has suggested an action list on education, skills and infrastructure to build on Ireland’s high-tech leadership position. It reckons Ireland’s digital economy grew from €4.3bn to €12.3bn between 2009 and 2015. If sustained, that would hit €21.4bn, just under 8% of GDP, by 2020 and create 56,000 extra jobs. Not quite as upbeat as BCG’s €27bn, but not bad.

But it won’t happen without some effort. In particular, government and business need to work closely to identify opportunities and respond collectively. Private sector investment is needed in secure digital infrastructure, products and services. And as this is a global fight for talent, so the work permit system, income tax and even housing might need reform. Ireland’s online voucher schemes for smaller business has been an initiative that has worked, but uninterrupted progress can’t be taken for granted.

The real point is that digital changes the way we do, well, everything. For those old enough to remember computers first arriving in the workplace and home, early technology was all about transliteration. We were doing what we did in the analogue age but were now using a computer to do it. Today we live in an era of change as profound as the first industrial revolution: technology is fundamentally changing the way we live, work and communicate. The internet of things, augmented reality, robotics, 3D computing, big data, ubiquitous connectivity and simulation are reshaping Irish industries and society. If you run a business and have little idea how they could be used by your sector, you should probably do some research. Because you can bet some of your competitors, or soon to be competitors, do know.

Ireland has some massive advantages including the collaborative nature of its society, the high density of knowledge-based industries, its relative size and place within Europe. But there are risks. Ireland has to press the EU to complete the single digital market and ensure its regulations are fit for purpose in supporting digital innovations. Nationally, the digital infrastructure capacity has to be spot on – Ireland is a disappointing 22nd in the EU for digital skills, which means demand for ICT professionals is outstripping supply. There is also a digital divide opening up in Irish business: online sales make up 50% of total sales in 53% of large companies, but only 16% of total sales in 28% of small businesses. Ireland has done well to embrace digital, but to keep up it has to hold tight.