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E-Work and New ‘Work’

In a previous blog post, E-Working – what are the trends? I examined the data available on e-work, also termed tele-working. Much of the data, especially the trend data available from the Census, only measures those workers who work ‘mainly at or from home’ and as discussed this only captures a small element of the workforce which we know, frequently work from home.

Capturing the extent to which people e-work is related to how the question is phrased; so for example if the Census question was changed, to ask whether a person worked on one or even a ½ day per week basis, it is likely to significantly increase the number reporting that they are e-workers.

Rural E-working

A recent report commissioned by Vodafone and conducted by Amárach Research, Connected Futures (3.8MB) examined the extent to which broadband has influenced those working in rural Ireland. The research found that nearly one in four broadband users in rural Ireland uses the internet at home in relation to their work (about 430,000 people). Among those remotely accessing work from home, most use the internet to check email and organise their work diary. Nearly half use the internet at home to work on reports and presentations. These e-workers report that with internet access, they can avoid commuting to work, which the research indicates typically occurs about two days a week.

Entirely Home-based E-work

The use of communications technology and more importantly its widespread availability at home has allowed new forms of work to emerge.

An early use of home-based working which is conditional on the availability of a minimum level of broadband speed has been the outsourcing of work where the employee is entirely home-based. For example Amazon and Apple were reported as requiring applicants to have a minimum 5Mbps download speed for home based customer support jobs. This and the need for universal high speed broadband is discussed in the WDC Report, Connecting the West, Next Generation Broadband in the Western Region (Low Res 1.5Mb).

Enforced Flexibility

A new report, published last week by TASC, Enforced Flexibility? Working in Ireland Today, (609kb) discusses an emerging practice where employees work entirely from home, though not by employee choice. For at least one of the high tech multinationals an emerging practice is to place some of their customer service workers in their own homes.  While traditionally the choice to work from home was perceived as a positive option, in this case the decision was made by the organisation rather than the individual: it was not an option as there was no possibility of working in an office. (p.62).

E-working has generally been considered in a positive light from the employee perspective, enabling more flexibility in working hours which can be more family friendly, reduced commuting time as well as fuel and carbon savings. However the TASC report notes that e-working which is wholly and entirely conducted from home, without the option of working in an office may not offer the same degree of flexibility. Constantly online during their shifts they were subject to the same tight supervision as those based in a traditional call centre environment. While it is difficult to establish what proportion of customer service workers now work in this way, there is evidence that the numbers are growing (p.62). In some instances these employees are self-employed contractors even though they are entirely contracted to the one employer.

The ‘Gig economy’

Measuring the extent of e-work is further complicated by the changing nature of work. The evolution of communications technology which has enabled the increased possibility of e-work, has evolved even further to allow new forms of ‘work’ to emerge.

Broadband and online platforms have allowed the development of new types of work and service delivery variously termed the ‘gig economy’, ‘sharing economy’, ‘crowd working’ and ‘uberisation’. Previously ‘gigs’ were how musicians earned a living, now the ‘gig economy’ includes all those who rent out their property, possessions or services for a fee, all of which is managed online!

The ‘gig economy’ is another form of e-work as it relies on electronic communication, though with the increasing use and availability of smartphones and mobile broadband this type of e-work is often less tied to a fixed location, whether this is at home or elsewhere. The ‘gig economy’ can also be seen as entrepreneurial, allowing individuals to initiate a process of selling goods or services and increasing the potential for self-employment.

Much of this type of work and service delivery is likely to be more developed in large urban centres, with significant critical mass. So far, within Ireland, Uber is just in Dublin and Cork – though the IDA announced a significant jobs announcement by Uber  in Limerick earlier this year.

However while parts of the ‘gig economy’ are urban driven, it is by no means exclusive to it. Airbnb can operate anywhere and maybe very popular in more rural areas with more limited supply, especially in high season.

As a type of employment, the ‘gig economy’ has raised questions about workers’ rights and protections such as guaranteed income, health care and pensions. Hillary Clinton, US Presidential candidate, when outlining her economic plan noted, This on-demand, or so called gig economy is creating exciting economies and unleashing innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future.

Evidence of the ‘Gig Economy’

To what extent the ‘gig economy’ is changing the nature of work is not clear. Some argue that while more are choosing to earn income from this ‘gig economy’, it is not clear whether this is in the absence of another job or to supplement existing paid employment?

Research undertaken by the University of Hertfordshire has tried to quantify the extent of the ‘gig economy’ in both the UK and Sweden.

The research found that in the UK around 5 million people are engaged in the ‘gig economy’. In the UK online survey 21% say they have tried to find work managed via so called ‘sharing economy’ platforms such as Upwork, Uber or Handy during the past year, equivalent to around 9 million people or almost one fifth of the adult population. Around 1 in 10 (11%) of respondents said they had succeeded in doing so, equivalent to around 4.9 million people.

Almost a quarter (24%) of UK women responding to the survey claim to have sought work via online platforms, and one third (33%) of 25-34 year olds.

3% of respondents claim to find paid work via online platforms at least once a week, equivalent to around 1.3 million adults, with 4%, or around 1.8 million finding work at least once a month.

Main source of income or a supplement?

A quarter of all those workers in the ‘gig economy’ say they rely on this income as their sole or main source of income.

Only 10% of those workers in the ‘gig economy’ were students, a proportion that dropped to 6% among those working in the ‘gig economy’ weekly. This is in line with the general proportion of students in the adult population of the UK (at around 8%).

The range of work is extremely broad, from high-skill professional work at one extreme to running errands at the other. The most common type of work, undertaken by more than two thirds is office work, short tasks and ‘click work’ done online. However a significant proportion are doing professional work, creative work, providing taxi services or a range of other services in people’s homes.

Where is the ‘Gig economy’?

From a geographic perspective, the largest numbers are in England with one in five based in London, just under a quarter each in the South, the Midlands and the North with 7% in Scotland and 3% in Wales. This reflects the general distribution of the UK population.

The Swedish online survey found a similar pattern to the UK survey. In Sweden 12% are working in the so-called ‘sharing economy’ for platforms such as Upwork, Uber or Skjutsgruppen, equivalent to around 737,000 people. Twice as many people (24%) used such sites in the hope of finding work – equivalent to almost a quarter of the working age population.

Conclusions

E-work can describe a variety of employment types ranging from ‘traditional work’ conducted at home or on the move, through to occasional engagement in online activity to generate additional income.

This can include a traditional employment relationship between an employee and an employer with the employee working from home possibly one or two days per week. It can also include the ‘new’ types of work and service delivery associated with the gig economy’, where people are often self-employed.

E-working of all types and the more recent growth in online platforms which has enabled new forms of income generation are all dependent on the widespread availability of broadband. The research to-date indicates that this type of employment and income generation is a very significant and growing element of the economy and labour market. The evidence cited from rural areas suggest that online participation for work is as prevalent, if not more so than in urban areas. This reinforces the need for the universal availability of quality broadband, another reason for the speedy rollout of the Government’s National Broadband Plan.

Deirdre Frost

Why Broadband is so Important – Insights on the Digital Economy

Insights from the Digital Economy Conference, May 2016

The Digital Economy Now

The WDC has consistently argued for improved broadband infrastructure and services for the Western Region and indeed all rural areas. The WDC believe that broadband is the single most important infrastructure priority and has advocated investment in next generation broadband over the last few years in various reports, submissions and blog posts.

A conference in Dublin earlier this month provided a useful reminder – beyond Netflix and Youtube – of why broadband services are so important and will become even more so. Organised by Eolas, the conference highlighted the potential of the Digital Economy both in terms of the applications that are and will be available, as well as other countries’ experiences.

Digital Engagement

Some notable highlights included a presentation by the chief digital adviser to the Irish Government, Dr. Stephen Brennan who outlined the Government’s National Digital Strategy. This is aimed at facilitating citizens to get online and he cited some interesting facts, for example;

  • While 75% of the population uses the internet daily, 65% are concerned about data privacy. This is one of the key challenges of the Digital Economy (and Society), where digital communications is so pervasive but there is also widespread concern about the uses to which data is put.
  • 45% of those over 50+ years of age are online daily, again demonstrating how pervasive digital communication is, but also how important it is as a method of communication and that the various barriers to access; lack of broadband, access to devices and lack of technical know-how/ skills, are overcome.
  • Another interesting finding is that 9% of adults run a business from home and close to 2 in 5, 39% of the population, do some work at home. This highlights the importance of adequate telecommunications infrastructure at home, so as to enable self-employment and home-working on a frequent basis. The WDC is examining eworking/ teleworking, the extent to which it is occurring and the policy implications (forthcoming).

Dr. Brennan also highlighted the benefits of the Government’s Trading on-Line scheme which has supported over 4,000 participants and issued over 2,000 Trading Online vouchers, supporting small businesses to develop their online presence. This has led to a 20%+ increase in sales.

Lessons from Norway

There was a particularly interesting presentation on Digital Government in Norway. Heather Broomfield, a Senior Adviser to the Norwegian Agency for Public Management and eGovernment (Difi) outlined the progress of the Digital Economy in the Norwegian public sector.

Norway is not dissimilar to Ireland in that it has a population of 5 million people, yet digital engagement by the average citizen is much more widespread than in Ireland. This is despite its geography which is not conducive to high speed fixed line broadband deployment. Norway has a very long coastline, extending into the Arctic circle and is very mountainous.  Norway has a very low population density, with 13 persons per km2, compared to Ireland’s 65 km2. It is also interesting that much economic activity is dispersed and located around the coastline, with oil and gas exploration important sectors as well as the fishing industry.

Another important difference between Norway and Ireland is the greater degree of decentralisation in Norway which devolves power to 19 counties composed of 422 Municipalities.

In Norway in 2014 there were 38.8 fixed broadband subscriptions (per 100 people), compared to Ireland’s 26.9%. Close to 90% of Norwegians access the internet daily and there is very extensive online engagement with public services. For example, over 80% of individuals interacted online with the public authorities in the last year, compared to a European average of just over 40%.

Digital Inclusion

The importance of good design in promoting online engagement was highlighted by Dónal Rice of the National Disability Authority. In a survey it was found that 42% do not use or have difficulties engaging with public sector websites. Key factors are age and disability with the survey showing that persons with disabilities are three times more likely to encounter difficulties using public sector websites. However if basic good design is used in creating websites it can help ensure more efficient service delivery with more citizens self-serving online compared to queries by phone.

Another example of online service delivery promoting inclusion are some of the services delivered by Local Government.  Ruth Buckley, Head of ICT and Business Services at Cork City Council highlighted some new developments including a new online service for those on the housing list, where they can search online themselves for appropriate properties. Another innovation is the operation of litter management services which are now done electronically. This has been more effective in identifying offenders as well as significantly reducing the administrative burden.

Of particular interest is the extent of innovation occuring at individual local authority level in online service delivery, but more importantly the extent of collaboration and sharing of ideas across Local Authorities.

Michael Bunyan, from the Department of Social Protection outlined some significant developments in the delivery of public services. The Department of Social Protection is one of the largest Government Departments, engaging with most citizens at one point or another. It is also widely located with 400 locations across the country. The rollout of a new smartcard, the Public Services Card was described as well as the development of MyGovID which is designed to provide safer, simpler and faster access to multiple government services. Both of these initiatives are in the early stages of rollout.

In Autumn 2015, the Department of Social Protection was tasked with administering delivery of the Water Conservation Grant to individual households on behalf of the Department of the Environment. There was a very short timeline and online communication was a key delivery channel. Of nearly 900,000 applications, 77% were made online, with the remaining 23% by phone. There were no ‘paper’ based applications. The grant payment was mostly paid electronically, with 85% of payment by electronic fund transfer, and the remaining 15% by cheque. The extent of online engagement illustrates that this is now the communication method of choice.

The potential for delivery of health care using online access was described by Prof. Neil O’Hare, of St James’s Hospital. The ability to access online health records can provide for more effective delivery of health care as well as giving individuals greater ownership of their records. This can reduce the administrative burden as well as reduced costs for filing space in cramped hospitals! There are various developments across the health sector developing more efficient delivery across Ireland but the need for improved rural broadband now was emphasised by Prof. O’ Hare.

Conclusions

The conference highlighted that there are huge potential savings and benefits to be realised via online engagement and service delivery. This will benefit all who have access. The widespread deployment of  next generation broadband as well as supports for those who find online engagement challenging are needed so as to ensure these savings and benefits can be realised by all. The Norwegian case study clearly demonstrates that very low population density and difficult geographic terrain are not significant barriers to effective high speed broadband deployment and large scale online citizen engagement.

Deirdre Frost

Transport 2016 – Issues and themes

Transport Ireland 2016, a conference organised by Eolas last week included a wide range of speakers on a range of transport issues, providing an update on public transport investment plans as well as technological developments, for example electric vehicles and alternative fuels.

The conference programme is available here.

A couple of the following presentations were of particular interest to the WDC and the Western Region.

Ethna Brogan from the Department of Transport outlined some of the transport commitments of the Capital Plan 2016-2021 Building on Recovery noting that unlike other elements of the Plan which cover a 6 year period, Transport covers a 7 year period to 2022.

The Department of Transport, Tourism and Sport received an allocation of €9.6 billion for transport investments comprising €6 billion for roads and €3.6 billion for public transport. The stated objectives of the transport investments are two fold

  1. Develop and maintain transport networks to the required standard to ensure the safe and efficient movement of people and freight
  2. Encourage modal shift to ensure transport makes a contribution to Irelands’ climate mitigation targets.

The objective of greater modal shift is welcome given the significance transport has in Ireland’s energy emissions. As noted in a recent WDC Insights publication (245kB) though Agriculture is the single largest contributor of emissions in Ireland (33.3%), it is followed by Transport (19.5%) and more importantly, in the last fifteen years (1990-2014), Transport has shown the greatest overall increase in emissions – by 120.9% over the period.

Therefore, the Transport sector represents a major contributor to energy emissions which is forecast to increase further in line with economic growth, for example emissions from transport have increased by 2.5% from 2013 to 2014. With this in mind, and along with the urgency to tackle climate change, the questions arises as to whether we have we got the balance right between conventional and alternative and more sustainable modes of transport?

That being said, the WDC Western Region is a largely rural region, requiring significant investment in maintenance and improvements in the roads network, national, regional and local roads, which support bus transport as well as car travel. For example the continued funding for the Gort-Tuam motorway and other roads projects is very welcome.

Edgar Morgenroth from the ESRI gave a presentation on The Regional Development Impact of Transport Infrastructure noting that ‘significant accessibility differences remain across Ireland’ and he noted that much of the North West along with West Kerry are the only regions were accessibility to a motorway junction is 120 minutes drivetime or more. There was also reference to the positive effect of transport infrastructure in national and regional economic development, with roads having the largest productivity effect in contrast to other transport modes.

Martin Nolan, CEO of Bus Éireann noted that Bus Éireann services are particularly important to regional and rural Ireland. There are three aspects to their business; public service obligation (PSO) routes, Commercial and School Transport services, which all combined delivered 79 million customer journeys in 2015. He noted that while lower fuel costs benefit the company’s operating costs, they also impact on some of their customer base, making it more attractive to travel by car!

One of the most interesting presentations and the only one to exclusively examine rural transport was by Carmel Walsh of Kerry Community Transport Ltd, soon to be renamed Local Link Kerry. She outlined the Rural Transport Programme and its work since 2002, the various changes it has undergone and its current status, managed by the National Transport Authority and now delivered nationally by 17 Transport Coordination Units (TCUs).

In 2015 there were 1.76 million passenger journeys delivered by 400 private operators who are mainly local businesses, with a strong knowledge of their community and their needs. There is a focus on ensuring accessibility but the service is for and is used all the community, young and old. There is recognition that further integration with Bus Éireann services will improve services for Rural Transport users.

Technological developments will be important in reducing transport emissions and many of the speakers focused on the ways in which technology can reduce urban congestion.

One technological development which will impact on regional and rural areas is the electric vehicle. According to Declan Meally of Sustainable Energy Authority of Ireland (SEAI), while the technology is now available, the price is somewhat prohibitive. This looks set to change in the next few years.

Finally, a study entitled Greening Transport is actually looking at a fairly logical option – lowering transport emissions by reducing transport use, through behavioural changes such as more telecommuting. The WDC is also examining this in forthcoming research on tele-working/e-working.

 

Deirdre Frost

 

 

Developments in Rural Policy: Charter for Rural Ireland

In January, the Taoiseach launched the Rural Charter, A statement of Government Commitment to support Rural Ireland’s regeneration and to underpin the future sustainable development of Ireland’s rural communities.
Maybe the attention was already focussed on the upcoming election, but given the recent focus on rural Ireland and the perceived two speed recovery; where the recovery in urban areas and especially Dublin is not being felt in rural Ireland, the launch of the Rural Charter received remarkably little attention.

The Charter for Rural Ireland January 2016 (pdf, 1,261 kb) is a short document (13 pages) containing 10 commitments and aims ‘to support and accelerate rural Ireland’s regeneration’ (p.3).

The commitments include

  • the development by the end of 2016 of a Rural Development Policy Framework, the preparation of which will include ‘full and comprehensive public consultations’, as well as the involvement of Government Departments and State Agencies. This framework will also feed into the development of the forthcoming National Planning Framework.
  • the Rural Development Policy Framework will include ’a mandatory system of assessment to ensure that future Government policies are designed with full and stated consideration of their impact on Rural Ireland’– a type of rural proofing.
  • the introduction of a robust reporting mechanism requiring each Government Department to report on actions as they relate to rural Ireland.

At the local level

  • Guidelines will be introduced for local community development committees (LCDCs) to support participation by rural dwellers in local economic development.
  • All stakeholders will collaborate and seek to eliminate barriers to rural enterprise development.

The Rural Development Policy Framework aims to create systems which will provide a basis for all stakeholders to work together to support enterprise development, job creation and a high quality of life. Government Departments will be required to ensure that impacts on rural Ireland are fully considered and policies and strategies will be amended if they are seen to be impacting negatively on rural areas.

The commitments in the Rural Charter recognise the need for action at national and local levels, they seek to include all stakeholders and actions are required within a short timeframe, all of which are welcome.

In this election campaign rural issues are an important theme, with the need to spread the recovery to all regions a constant refrain. It will be important that rural policy, whoever is returned, builds on the extensive work that has been done to-date.
There has been much analysis and research of what the problems are and what can be done for Rural Ireland. Most recently, the Commission for Economic Development of Rural Areas (CEDRA), chaired by Pat Spillane and supported by the WDC and Teagasc, has done extensive research on what are the problems and what are the solutions during 2012-2014. The associated publications and research is available at www.ruralireland.ie.

On various policy issues there has been a lot of work going on behind the scenes. Where policy improvements have been instigated, these should be supported.

For example, the most significant infrastructure barrier facing rural Ireland is quality broadband. There is the National Broadband Plan, currently at procurement phase, with rollout to commence towards the end of this year. This aims to deliver future proofed broadband to all. The planned rollout is often compared to rural electrification in its significance and while the timescale is not fast enough for many, its objective is to solve the rural broadband problem for a generation or more. This compares with previous interventions which only ‘fixed’ the problem for a couple of years at most. It will be important that this policy is continued and fully supported by the new Government.

There are other policy areas where more needs to be achieved. The publication of the Rural Charter and the commitments it contains is very welcome. Its continued implementation needs to be supported following the election to ensure that Rural Ireland can contribute to and benefit from continued economic recovery.

 

Deirdre Frost

WDC Insights- Christmas Quiz!

We hope you have been following and reading the WDC Insights blog in the last year. Take our Christmas Quiz (9 questions) and see how well you score on regional development and Western Region issues. The answers are below with links to more information and the relevant posts.

Good Luck!

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1      The WDC published its report on ‘Trends in Agency Assisted Employment in the Western Region’ in January. This included an analysis of data for each of the seven western counties. In 2013 what proportion of the total jobs in Sligo were agency assisted?

  1. 63.2%
  2. 27.6%
  3. 15.3%

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2      Agriculture in the Western Region of Ireland is characterised by smaller farm size, poorer land quality and a higher dependence on off farm income than in many other parts of Ireland. Nonetheless agriculture remains a significant employer and makes an important contribution to the regional economy.

What is the average farm size in the Western Region?

  1. 43.7 ha
  2. 15.2 ha
  3. 26.3 ha

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3      In the latest CSO data on Income and Living Conditions (released 26th November) poverty and at risk of poverty rates are given. What is the difference between the at risk of poverty rates between the BMW and S&E regions?

  1. 5.7%
  2. 15.2%
  3. 1.3%

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4      In a recent a creative momentum project survey what proportion of creative entrepreneurs were exporting?

  1. 8%
  2. 48%
  3. 68%

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5      Examining regional indicators can help us to understand the growth and development taking place in our regions, to highlight changes and assess issues of efficiency and equity among regions.

Looking at the data since 2003 are regional disparities

  1. Widening?
  2. Narrowing?
  3. Staying the same?

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6      Understanding the sectoral pattern of jobs in the region and patterns of sectoral growth and decline is particularly important to the development of job creation, skills and enterprise policy for the region.

What is the largest employment sector in the Western region?

  1. Industry
  2. Wholesale and Retail
  3. Public Administration and Defence

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7      The WDC has been highlighting rural broadband needs for more than a decade. It recently submitted its views to the consultation on the rollout of the National Broadband Plan.

What is the minimum download speed set down under the National Broadband Plan (in Mega bits per second (Mbps))?

  1. 30 Mbps
  2. 100 Mbps
  3. 12 Mbps

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8      In February 2015 the IDA published a new 5-year strategy which put considerable focus on the regional balance of future FDI investments. The strategy includes a target to increase the number of investments in every region, outside of Dublin. By how much are the investments in the regions targeted to increase?

  1. By 10-20% over the 5 years of the strategy?
  2. By 30-40% over the 5 years of the strategy?
  3. By 80-90% over the 5 years of the strategy?.

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9      With The Paris Agreement at COP21 marking a turning point in the response to climate change, it is time to consider how we will meet those targets in Ireland so we examine some of the issues for climate change mitigation in the Western Region in this post.

What percentage of households in the Western Region use oil to heat their homes?

  1. 63.1%
  2. 84.2%
  3. 38.8%

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Answers:

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  1. Assisted jobs

Answer:3) 15.3%

The WDC published a report on ‘Trends in Agency Assisted Employment in the Western Region’ in January 2015.week. This included an analysis of data for each of the seven western counties. Taking Sligo as an example in 2013, there were 3,880 people working in agency assisted jobs there. 15.3% of total jobs in the county were agency assisted, which is below the state average (19.3%). Some 55.6% of assisted jobs in Sligo are in foreign owned companies; lower than a decade earlier. Irish owned assisted employment has grown steadily since 2011 and was up 4.8% in 2013. Sligo’s second largest assisted sector – Traditional Manufacturing – has had the strongest recent growth, up a fifth (21.5%) between 2010 and 2013.

For more about agency assisted jobs in the other Western Region counties see this post

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  1. Farm size

Answer: 3) 26.3 ha

Agriculture in the Western Region of Ireland is characterised by smaller farm size, poorer land quality and a higher dependence on off farm income than in many other parts of Ireland. Nonetheless agriculture remains a significant employer and makes an important contribution to the regional economy.

The average farm size in the Western Region (counties Clare, Donegal, Galway, Leitrim, Mayo, Roscommon and Sligo) was 26.3 ha in 2010. Farm sizes are significantly smaller than in the rest of Ireland where the average farm in 2010 was 36.9 ha. Nonetheless farm size in the Western region has grown by a third since 1991 when the Western Region average was 19.8 ha with most of the growth occurring in the 1990s (almost 27% of the growth occurred between 1991 and 2000). For more information, read this post.

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  1. Poverty data

Answer: 1) 5.7%

The CSO released the latest data on Income and Living Conditions on 26th November 2015. The headline figures indicate a rise in incomes – increasing by 3.5% between 2013 and 2014, which in turn was higher than the figure in 2012. The release also provided data on poverty rates at a regional level.   Analysis of consistent poverty rates by region, which will be influenced by rural-urban patterns, shows that the rate for the Border, Midlands and Western region was 10.8% compared with 7.0% for the Southern and Eastern region in 2014. The at-risk of poverty-rate was also higher in the Border, Midlands and Western region compared to the Southern and Eastern region, 20.5% and 14.8% respectively. The difference was 5.7%.

For more on poverty and at-risk of poverty rates see this post.

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  1. a creative momentum project survey

Answer: 3) 68%.

In order to inform the development a creative momentum project activities, an online survey was circulated to creative entrepreneurs based in the participating regions. The survey ran from 28 September to 18 October and there were a total of 170 responses.

68% reported that they made some sales outside of their own country, which was higher than indicated in previous surveys. Cross-border business between Ireland and Northern Ireland seemed to be a strong element in these export sales. Of those businesses who did not export currently (44), 70% indicated a desire to export.

For more on the survey see this post

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  1. Regional Disparities

Answer: 1) Widening

There has been a significant widening of the gap between the BMW and the S&E regions since 2008, the difference in 2012 was 48.3 points and in 2008 was 40.6 points (in 2003 it was 42.6).

Disparities in regional GVA have been increasing in recent years and have been particularly significant since 2008 while, in contrast, disparities in disposable income reduced between 2003 and 2010, but have increased since then. For more see this post

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  1. Employment sectors

Answer: 2) Wholesale and Retail.

The largest employment sector is Wholesale and Retail and the two largest employment sectors in the Western Region are Wholesale and Retail, and Industry which together account for about 30% of jobs.  Of the region’s top seven sectors, all (except Health) account for a greater share of jobs in the region than the rest of the state.  Agriculture and Industry (manufacturing) are considerably more important in the region.  Among the region’s smaller sectors the share working in them in the region is considerably below that in the rest of the state.

In general the Western Region’s jobs profile relies more heavily than the rest of the state on the traditional sectors (Industry, Agriculture and Construction) and local services (Wholesale and Retail, and Accommodation and Food Service) which depend on domestic spending and tourism.  The region’s sectoral jobs pattern is influenced by its largely rural nature. For more information see this post

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  1. Broadband

Answer: 1) 30Mbps

The WDC in its submission to the consultation on the rollout of the National Broadband Plan suggests that one option would be to review the basic minimum standard, for both up and download speeds, every 5 years (or more frequently depending on technological change and demand requirements) and raise the minimum standard accordingly. For more from the WDC on broadband see here and here

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  1. IDA Strategy

Answer: 2) 30-40% over the 5 years of the strategy

The strategy includes a target to increase the number of investments in every region, outside of Dublin, by 30-40% over the lifetime years of the strategy. With Dublin maintaining a similar level to currently. For example for the West, which received 71 investments over the 2010-2014 period, the target is to achieve 92-99 investments over 2015-2019. For the Border region the target is 61-66 investments (it received 47 in the past five years). These targets do not just refer to new name investments, but include expansions by existing FDI companies and R&D investments.

Read more about it here.

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  1. Climate change

Answer: 1) 63.1% of homes use oil as their main heating fuel

The pattern of fuel usage in central heating is very different in the Western Region and the rest of the state. This is primarily due to the lack of access to natural gas across most of the region. Less than 5% of households in the Western Region use natural gas to heat their home compared with 40% in the rest of the state. Lack of access to natural gas makes the Western Region far more reliant on other fuels, many which have higher carbon emissions. Oil is used by 63.1% of households in the region compared to 38.8% in the rest of the state. Wood fuels and other biomass are slightly more important in the Western Region 1.4% compared to 1.3% in the rest of the state but there needs to be a significant policy focus using renewable energies for domestic heating. These include solid biomass (wood chips, pellets and logs). In many rural situations users have more space and fuel can be sourced locally with less transport required, so these options may be more suitable than for urban dwellers. Uptake could be improved with appropriate, targeted incentives.

For more on rural urban differences, western region statistics and the need for climate change mitigation to focus on rural areas see this post.

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How well did you do?

You got 8 or 9 answers correct

CONGRATULATIONS! You really know a lot about regional development, the Western Region and the Western Development Commission’s work.

 

You got between 4 and 7 answers correct

WELL DONE, a good score but some deficiencies in your knowledge. Perhaps you should read the WDC Insights posts more carefully in 2016!

 

You got between 0 and 3 answers correct

OH DEAR! Time to pay more attention to regional development and Western Region Issues. You’ll have to do some extra study over the holiday! Reread the WDC Insights blog and check out the WDC publications page and re-take the quiz in the New Year!

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Helen McHenry

Public Policy Priorities in 2016 and Beyond

A seminar entitled Ireland’s Policy Priorities after the next General Election, on November 2nd provided a welcome break from the recent talk of Budget giveaways and election promises. Organised by the Policy Institute, Trinity College Dublin, in association with the Public Policy Advisors Network, the aim was to discuss what are and what should be the policy priorities of the next Government.

Some interesting contributions included that from Dan O’Brien, in which he examined medium term policy challenges, noting the ageing demographics generally as well as a sharp decline, over the last five years, in the number of those aged in their twenties. This is attributed to the birth rate as well as emigration and the ageing of that cohort of East European migrants that came here before the crash.

Another key policy theme which is likely to become a policy priority is Ireland’s response to the EU’s 2030 energy and climate change targets. The recent recession, which gave rise to a reduction in emissions (purely because of a contraction in economic activity), relegated the urgency of this policy priority. The return to economic growth will ensure that this is likely to become a more important policy priority. It was proposed that the next Government should appoint a senior Minister with responsibility for the low carbon agenda.

Considering the economics of the next programme for Government, Stephen Kinsella and Ronan Lyons examined the patterns of national economic growth since 2002 – characterised initially from 2002-2007 by a rapidly growing economy, followed by the economic crisis of 2007-2011 which in turn was followed by a period of readjusting public spending and restoring economic confidence in 2011-2016.

It is suggested that the period from 2016 could be that of ‘coming full circle’, with a rapidly growing economy and a need to manage expectations. In learning from our past mistakes, fiscal policy is key and the authors advocate the use of the concept of the Social Return on Investment (SROI). This differs from the current cost based accounting approach to public spending to a more holistic economic approach where the wider costs and benefits of a proposal would be measured. In doing, so the full implications of a cut are captured e.g. €100 cut to caregivers allowance, which then drives people into the public health system thereby negating any ‘savings’. This is arguably a more useful way of evaluating public policy instruments, allowing a more holistic measure of the effects of policies.

Examining Local Government and Spatial Planning, Seán Ó’Riordáin and John Martin point to the need for a new  long-term spatial plan for Ireland (the National Planning Framework) and the need to learn lessons from the National Spatial Strategy. The role of local government in supporting long term development of both rural and urban areas needs to be addressed.

Bringing the concept of Social Return on Investment to the debate on spatial planning, regional, rural and urban development might help advance this debate and the policy choices which arise. In considering investment decisions to support development of the regions, both urban and rural, measuring the Social Return on Investment might lead to different outcomes when considering cuts to or additional investment in various services in regional and rural locations.

For example, decisions on the closure of public services offices in regional and rural locations such as post offices, government outreach offices, garda stations etc. are usually based on cutting operational expenditure, including staff costs or economies of scale.  These cuts can deliver immediate financial savings for the organisation but this narrow view does not take account of the accumulated long term impact on the local economy, the overall needs of society and the disabling impact on local communities.

Taking account of the social rate of return allows for a more holistic economic and societal perspective, rather than solely on the efficiencies and financial savings generated for the individual organisation.  In doing so, the wider impacts beyond a particular locality can be captured, for example, unemployment and migration from rural areas and other regional centres can add to already significant pressures on housing and transport services in the capital. This in turn requires additional investment in infrastructure and services, which is often more expensive to deliver in congested urban areas. Examining all costs and benefits and the social rate of return could help us to make better, more informed choices.

 

The presentations are available at the PPAN website http://www.ppan.ie/latest-news/

Deirdre Frost

High Speed Broadband Deployment: Capital Investment, Rural Areas and the Minimum Standard

One of the most significant commitments for regional and rural areas in the Capital Investment Plan (Building on Recovery, Infrastructure and Capital Investment 2016-2021) was the allocation of €275 million for the National Broadband Plan. This is the Government Plan which aims to rollout high speed broadband to every resident in the country. The €275 million is ‘an initial stimulus’ and the Government plan is also to benefit from the private sector funding as well as some EU funding.

 

The WDC welcomes this investment allocation and the steady (if belated) progress towards the rollout of the National Broadband Plan.

 

Recently, the Department of Communications issued a Consultation seeking views on the planned rollout. One of the most positive aspects is the second principle of the proposed Strategy (p12) ‘to conclusively address connectivity deficits across Ireland’.

 

For those of us in rural and regional Ireland, the prospect of ‘conclusively’ addressing our broadband needs, rather than constantly playing ‘catch-up’ with inadequate services is to be welcomed.

 

Conclusively addressing our broadband needs is to be achieved ‘by setting down minimum speeds and delivering an infrastructure that is capable of meeting current and future demands for bandwidth’. Setting down a minimum speed is a marked improvement on the previous practice of using ‘up to’ headline speeds, which in many cases were not achievable, as the speeds are compromised by the number of users (contention) at any one time.

 

So far, so good. The minimum download speed is set at 30Mbps download which currently or maybe even in five years’ time seems more than adequate. But the contract for delivery of high speed services will be for twenty years and the infrastructure being deployed is set to deliver broadband services for potentially 30 to 50 years! The broadband rollout is often compared to rural electrification and this infrastructure is still serving its original purpose over 60 years later!

 

If we are to have learned anything from the development of Information and Communications Technology and the expansion of the Internet, it should be that the minimum acceptable speed is changing all the time and the demand for bandwidth is growing all the time. Therefore to choose a minimum speed which would apply now and also in 20 years’ time seems like a big mistake.

 

What was deemed a minimum standard ten years ago would not be considered acceptable now. There is a general trend of raising the threshold of the broadband definition as higher data rate services become available, so for example in 2002 the communications regulator defined the minimum threshold for broadband as 512kbit/s (ODTR Report 02/79). In 2010 the U.S. Federal Communications Commission (FCC) defined ‘Basic Broadband’ as data transmission speeds of at least 4Mbps downstream. The issue of multiple users in the same premises and unforeseen applications compounds this issue even more.

 

With this in mind the WDC considers that 6Mbps upload and 30 Mbps download seems low as a minimum standard to apply for the next 20 years. Of course it is not reasonable to define a minimum acceptable speed which would apply now and in 20 years’ time (though this is planned as part of the Strategy).

 

We should build in a mechanism in the contract that the minimum standard be reviewed and revised as necessary. In order to ensure that minimum speeds are acceptable, there needs to be a recognition that the minimum acceptable speed will change over the contract period.

 

The WDC in its Submission to the Consultation suggests that one option would be to review the basic minimum standard, for both up and download speeds, every 5 years (or more frequently depending on technological change and demand requirements) and raise the minimum standard accordingly. How this would be done and by whom is another question. However if we can benchmark prices to ensure that broadband services in rural areas are affordable, it should be possible to benchmark minimum acceptable speeds.

 

‘Delivering an infrastructure that is capable of meeting current and future demands for bandwidth’ is one element which can help ensure ‘that we conclusively address our broadband needs’. The other key element required is having ongoing acceptable minimum speeds. While minimum speeds will rarely be a concern for the urban user or in areas served by several operators, previous experience of broadband service delivery in rural areas, especially where there is limited competition, suggests that operators need to be obliged to deliver services to a certain standard. Therefore an acceptable minimum standard is hugely critical and will remain so for rural citizens living in areas with limited competition.

 

Deirdre Frost

 

Unemployment declining in Western Region at a slower pace

A few interesting trends are emerging from our initial analysis of a special run of data received from the CSO’s Quarterly National Household Survey for Quarter 1 2015. This data covers the seven county Western Region and compares data for the region with the rest of the state (all other counties combined).

Following the general trend, the Western Region’s unemployment rate is declining but this is happening at a slower pace than elsewhere. The region’s unemployment rate is now 10.4%, above the 9.8% rate in the rest of the state (Fig. 1). This compare with 11.4% and 12.1% respectively a year previously (Q1 2014). The unemployment situation seems to be improving more rapidly in the rest of the state.

Fig. 1: Unemployment rate in Western Region and rest of the state, Q1 2006 - Q1 2015. Source: CSO, QNHS Q1 2015. Special run.

Fig. 1: Unemployment rate in Western Region and rest of the state, Q1 2006 – Q1 2015. Source: CSO, QNHS Q1 2015. Special run.

Part of the reason for this is that the numbers in employment in the region have grown by less than elsewhere. Over the past year the numbers at work increased by 1.4% in the Western Region compared with 2.3% growth in the rest of the state.

The slower decline in the region’s unemployment rate also carries through to long-term unemployment which fell from 7.0% to 6.4% in the Western Region compared with a far greater drop (7.3% to 5.8%) in the rest of the state.

But it is among young people that the region’s poorer unemployment record really stands out. The unemployment rate among young people (15-24 years) in the Western Region is 30.8% (Fig. 2). This is a full 10 percentage points higher than in the rest of the state (20%). And unlike the general trend, the youth unemployment rate in the region is continuing to climb, up from 29.2% in the past year. This is in stark contrast to the rest of the country where youth unemployment declined strongly (from 24.6% to 20%) widening the regional gap even more.

Fig. 1: Unemployment rate in Western Region and rest of the state, Q1 2006 - Q1 2015. Source: CSO, QNHS Q1 2015. Special run.

Fig. 1: Unemployment rate in Western Region and rest of the state, Q1 2006 – Q1 2015. Source: CSO, QNHS Q1 2015. Special run.

Earlier this week the Irish National Organisation of the Unemployed (INOU) highlighted the fact that jobseekers in rural areas are finding it harder to get a job and that the recovery is not being felt in all parts of the country.  Our initial analysis of the Q1 2015 data for the Western Region, where two-thirds of the population live in rural areas, supports this assertion and in particular for younger jobseekers.

The need for a more even spatial pattern of job creation has been highlighted in a number of recent strategies such as the IDA’s, and the upcoming Action Plan for Jobs for the West and Border regions will also focus on this, but it remains to be seen how effective these strategies will be.

The WDC will be releasing further analysis of the region’s labour market over the coming months.

Pauline White

Regional & Rural Development at the National Economic Dialogue

A background paper on ‘Regional and Rural Development – Economic recovery for the whole country’ was prepared for a breakout session at last week’s National Economic Dialogue (16-17 July, Dublin Castle).

It set out a few key questions:

  • What can be done to ensure that the benefits of recovery are fairly distributed throughout the country – urban and rural and throughout all the regions?
  • How can we maximise the contribution of both regional and rural development to both a strong economy and a fair society?
  • What are the key environmental and sustainable development challenges?

It will be interesting to see the priority given to regional and rural development given the competing economic and social priorities discussed over the two days. The summary of the discussions is due to be published later this week here.

The background papers for all the breakout sessions are available here.

Breakout 1 Competing Economic and Social Priorities (PDF)

Breakout 2 Economic Growth and Equity in Tax Policy (PDF)

Breakout 3 Putting People First – Economic and Fiscal Policy for our Demographic Outlook (PDF)

Breakout 4 Structural and Labour Market Reform – Opportunities for Economic Growth (PDF)

Breakout 5 Productivity and Skills (PDF)

Breakout 6 Regional and Rural Development Economic recovery for the whole country (PDF)

Breakout 7 Working for the best preparing for the worst (PDF)

Breakout 8 Being a Small Open Economy (PDF)

Pauline White

Next Generation Broadband Deployment – Lessons from Australia

As the Department for Communications, Marine and Natural Resources in Ireland prepares the National Broadband Plan Intervention Strategy, it is useful to consider some lessons which can be learned from elsewhere. The experience of Australia is instructive, in part illustrating some of the pitfalls.

  1. Ambitious targets with ambitious deadlines

In 2009 the Australian Government announced an ambitious programme to deliver fibre to the premises (FTTP) to 93% of Australian premises (residential and commercial). This was a very ambitious target given the country’s very low population density (3% compared to Ireland’s 67%). The remaining 7% of the population, in the very remote parts of Australia, were to be served by satellite and wireless technologies.

The original deadline for completion was within six years (2015). By the end of 2013 just 3% of premises were connected.

Following an extensive review in late 2013, a change in direction and new targets were announced[1].

  • Instead of 93% FTTP, it is more likely to be 22% FTTP, the exact technology (and therefore the actual %) will be determined on area basis.
  • Fibre to the node (FTTN) to 71% approximately of premises, with the remaining 4% and 3% fixed wireless and satellite respectively.
  • Lower speeds (50Mbps rather than 100+ Mbps download) resulting from the higher rate of FTTN connection rather than FTTP.
  1. Increasing costs – to the exchequer

The original plan in 2009, was forecast to cost AUD $44 billion (Australian dollars). In 2013, the estimated cost increased to AUD $73 billion – 65% greater than the original forecast.

  1. Higher costs – to the consumer

There is concern that the retail costs will be much higher than the cost of services currently available, estimated at an extra AUD $43 per month[2]. This will influence the take-up of next generation services. Broadband is now accepted as a basic utility and access to it is considered necessary for participation in society and the economy. However as the recent water protests in Ireland demonstrate, basic utilities should not be expensive. The concept of ‘Willingness to Pay’ is a key element of the pricing structure.

From an Irish perspective, it will be interesting to see from the trials of next generation broadband (in Cavan and Mayo for example), to what extent consumers will revert to a basic service at a cheaper price rather than paying extra for a premium product. It is also likely that the consumers in the pilot areas will be more receptive to paying for a premium service which they currently access, compared to those yet to experience the benefits of the premium next generation service.

  1. What are consumers looking for?

There is a declining value to additional broadband speeds. Part of the Australian review included an assessment of the growth in demand for faster broadband speeds. A key finding is that while the Willingness to Pay for speed may grow rapidly at low speeds (less than  40 Mbps download), for most people the Willingness to Pay is not expected to grow at all for high speeds (greater than 50 Mbps)[3].

A related finding is that consumers would prefer an increase to their current speeds quickly, rather than to wait longer to gain a higher level of speed. The Australian Government are now looking at prioritising delivery to those areas which are poorly served and this is consistent with the findings of the Independent Review. http://www.nbnco.com.au/content/dam/nbnco2/documents/soe-shareholder-minister-letter.pdf.

In an Irish context an increase in speed for example from 5Mbps to 10 Mbps is worth more to consumers than an increase from 20Mbps to 25Mbps. The Australian experience also suggests it would be preferable to rollout delivery to those areas with poor and inadequate broadband first.

  1. Don’t play politics with important infrastructure

In Australia, the different ruling parties have taken different policy positions on the rollout of next generation broadband. A change of Government can (and has in Australia) led to a change in policy on delivery and this can create huge uncertainly for investors as well as consumers. Given the scale of investment, the deployment of next generation broadband will generally take many years and beyond the lifetime of one Government. It is therefore important that Government policy is well considered and implemented consistently and not compromised by the electoral cycle.

Deirdre Frost

[1] https://www.communications.gov.au/sites/g/files/net301/f/Cost-Benefit_Analysis_-_FINAL_-_For_Publication.pdf, http://spectrum.ieee.org/telecom/internet/the-rise-and-fall-of-australias-44-billion-broadband-project/

[2] https://www.communications.gov.au/sites/g/files/net301/f/Final_Ministerial_Statement.pdf

[3]  p. 16 https://www.communications.gov.au/sites/g/files/net301/f/Cost-Benefit_Analysis_-_FINAL_-_For_Publication.pdf