Responding to a changing global economy: Informing Ireland’s national digital strategy

A Cambridge Industrial Innovation Policy study to look at the implications of digital technologies has directly fed into Ireland’s national industry 4.0 strategy 2020-2025; and has played a pivotal role in supporting the Government’s pathway to ensure that Ireland is well-placed to prosper in a rapidly changing global economy.

The challenge

In Ireland, manufacturing plays a vital role in the economy, particularly in sectors like Pharmaceuticals, Chemicals, Food and Drink, Medical Devices, Computers, Electronics, and Engineering. The industry is undergoing significant transformation due to advanced digital technologies that are radically changing the ways firms manufacture products, the business models they adopt, and even how they innovate.

Ireland stands particularly well-equipped to seize digital manufacturing opportunities. It has built important industrial capabilities over decades and hosts a disproportionate share of top global firms in a few manufacturing sectors. The international makeup of Irish manufacturing and a relatively high export orientation has allowed the country to develop strong expertise in global supply chain management, and the country has a relatively highly skilled workforce,

However, a key policy concern is the effect that digitalisation may have on employment. Digitalisation is expected to reshape the skills that will be required from the workers of the future, driving significant disruptions in the labour market. Digitalisation also brings with it significant concerns about the cyber security of industrial systems and utilities and about the ownership of vast amounts of data being generated by firms and consumers.

With these opportunities and challenges arising from digitalisation, the Government of Ireland’s Department of Business, Enterprise and Innovation (DBEI) commissioned Cambridge Industrial Innovation Policy (CIIP) to examine the impact of digital technologies on Ireland’s manufacturing sector and identify policies that could support the country’s ongoing digitalisation journey.

The vision underpinning their strategy was that “by 2025 Ireland will be a competitive, innovation-driven manufacturing hub at the frontier of the fourth industrial revolution and at the forefront of Industry 4.0 development and adoption.”

The approach

After extensive consultations involving more than 50 stakeholders from the public and private sectors, along with a comprehensive review of international policy approaches, CIIP generated a report outlining key policy themes for the DBEI to prioritise in support of Ireland’s digitalisation efforts.

The report highlighted that digitalisation holds the potential to drive value creation through a number of avenues: the creation of new and enhanced products and services (including innovative business models), streamlined and adaptable production processes, integrated and optimised supply chains, as well as customer-centric product development and delivery.

“The study went beyond analysing basic technologies and really delved into the industrial structures and technological systems that drive the digitalisation of manufacturing. By developing a framework to identify challenges and opportunities in this realm, the study offers significant implications for value creation and capture across Ireland’s manufacturing sectors.” Dr Carlos López-Gómez, Cambridge Industrial Innovation Policy

The study proposed several priority policy themes for Ireland while also pinpointing overarching enablers for implementation that would address emerging challenges and opportunities.

The thematic priorities encompassed i) raising awareness and identifying user application needs, ii) demonstrating the value of applications, iii) building consortia and fostering application development, iv) providing technical advisory services for application deployment, and v) enhancing skills for deploying digital applications (including training for factory technicians, production and ICT engineers, operations managers, and company directors).

The impact

The insights gleaned from the report have played a pivotal role in shaping the blueprint for Ireland’s Industry 4.0 Strategy – a key output of Future Jobs Ireland, the Government’s economic pathway to ensure that Ireland is well placed to prosper in a rapidly changing global economy.

The study by IfM forms a valuable evidence base which is now being used to inform the development of an Industry 4.0 strategy for Ireland.”

Senior Policy Analyst, Department of Business, Enterprise and Innovation

The report identified several priority policy themes that the DBEI and its agencies could focus on to support Ireland’s digitalisation efforts. For each of the priority themes, the report presents some practical policy approaches that could be adopted based on relevant stakeholder inputs and international experience.

“The report’s findings provided guidance for Ireland’s proactive adaptation to the digital age; and is a testament to Ireland’s commitment to fostering innovation, embracing change, and cultivating an ecosystem that thrives on forward-thinking policies.” Dr David Leal-Ayala, Cambridge Industrial Innovation Policy

Further reading

• Study on digitalisation of the manufacturing sector and the policy implications for Ireland – A Study for Ireland’s Department of Business, Enterprise and Innovation, Policy Links and IFM Education & Consultancy, University of Cambridge, 2018.
• Ireland’s Industry 4.0 Strategy 2020-2025: Supporting the digital transformation of the manufacturing sector and its supply chain