Are We Doing Enough To Foster New Irish Cleantech Businesses?

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Published on Friday, May 28, 2010

CLEAN TECHNOLOGY: There are many Irish companies in the burgeoning green technology sector, but are we doing enough to foster them? asks JOHN REYNOLDS 

CLEAN TECHNOLOGY – or cleantech – isn’t just about wind farms, electric cars and solar panels.

In New Zealand, researchers have developed a spray for putting on cowpats that prevents the nitrogen they contain turning into the greenhouse gas nitrous oxide, which is 296 times more environmentally harmful than CO2. It qualifies as a cleantech and demonstrates that there is plenty of potential for innovation in all kinds of ways that might not have yet been imagined.

An emerging business sector with no standard definition, cleantech is a catch-all phrase encompassing a wide range of businesses and technologies that are at different stages of their evolution, all of which have different routes to market.

Specialist US research firm Clean Edge defines cleantech (or greentech) as: “An emerging sector that comprises a diverse range of products, services and processes that harnesses renewable materials and energy sources, dramatically reduces the use of natural resources, and cuts or eliminates pollution and toxic wastes. “These include such innovative and expanding technologies as solar photovoltaics, wind power, hybrid electric vehicles, fuel cells, biobased materials, and advanced water filtration.”

Many of these technologies also overlap with IT and software applications. Smart meters enabling household appliances to avail of cheap electricity rates will produce data that will need to be managed and analysed. Wind, marine and solar energy also requires specialist software to ensure it operates efficiently.

Cleantech’s sheer diversity and the size of the market means that it represents a huge opportunity for SMEs and start-ups. It is estimated that China’s cleantech sector alone will be worth €800 billion by 2013. It will take up to €1.2 trillion to green the UK economy between now and 2030 and another €1 trillion of investment in Europe’s power network. That is before you factor in other parts of the world and numerous other industries.

It remains to be seen how big a stake in this Ireland can lay claim to. Eddie O’Connor’s Airtricity may have created the largest number of millionaires in our corporate history when it was sold for €2.2 billion in 2008. But many doubt whether we can foster the sheer number of start-ups here that might result in a few more Airtricities.

We have a dozen or so very promising smaller cleantech firms and it is hoped that we’ll be very successful in wave and tidal energy. “But there are not enough coming through in this space and we don’t have enough entrepreneurship in Ireland,” says Bartley O’Connor, manager of PricewaterhouseCoopers’ sustainability practice. “It might take 1,000 start-ups to get a few big successes, perhaps only one.”

The Ecology Foundation’s founder Declan Murphy agrees. “Big energy and infrastructure are being tackled very well in Ireland when you look at what the ESB, Bord na Móna and Bord Gáis are doing. What we haven’t done is create the right environment for smaller projects and individuals to succeed.”

Government policy is that a number of cleantech clusters that are at various stages of their development will lead to a flurry of new products and services. Among them are the Shannon Energy Valley, Galway’s SmartBay project, the Irish Energy Research Centre at UCC, and competence centres in bioenergy, energy efficiency, manufacturing productivity and composite materials.

One of the few private-sector initiatives is in Mayo, where the Biospark – a futuristic green business park powered by renewable energy, and where the outputs of one business are the inputs of another – is being built.

But a closer look at the facts reveals we compare very poorly to a country such as Sweden, which is home to more than 4,000 cleantech companies. It was granted 1,245 patents last year, and 15 to 25 per cent of their patents are cleantech ones with commercial potential, according to Nutek, the Swedish development agency.

In stark contrast, last year Ireland was granted 145 patents – how many were cleantech isn’t specified. Just 114 cleantech firms exist here, six of which were high-potential startups, according to Enterprise Ireland figures, plus a further 60 with some activities in the sector.

One informal forum in which cleantech entrepreneurs have the opportunity to meet potential investors is the Cleantech Ireland network, which was formed last year.

Co-founded by serial entrepreneur Peter Daly, managing director of SmartBuilder Software – a developer of mobile software for the construction industry – there are a number of business angels and venture capitalists among its 50 core members and the 80 members who attend its meetings less regularly.

Someone who should be able to reveal to members the secrets of getting funding is committee member Tad Crowley, whose wind-farm operation software firm Servusnet recently raised €500,000 from Enterprise Ireland and a private investor.

“Our vision is that a young graduate might find an investor here who might be willing to put €25,000 to €50,000 behind a good idea. Or they might find team members. Often a young techie needs to find someone with a business brain to work with them who could be a co-founder, for example,” says Daly.

While the merits of networking, making informal pitches and learning from others’ experiences cannot be underestimated, a frequent criticism, particularly in the wake of the mixed success of the First Tuesday network that was spawned during the dotcom boom, is that they are just talking shops. Their informal nature means that it can be difficult to measure the investment results they generate.

A slightly more innovative organisation is CMyPitch, where entrepreneurs can pitch for investment both in person and in online videos. Despite having launched in Ireland last year, however, only three of the 38 reported “done deals” have involved Irish companies. The only cleantech firm that won an investment was UK-based.

At a more formal level, Enterprise Ireland’s annual investor forum in London saw 16 Irish cleantech firms and 15 software companies make formal pitches last year to more than 100 VCs from across the globe.

But there is only one Irish venture capital firm specialising in cleantech at the moment and that is the ESB’s Novus Modus. On a mathematical basis then, Enterprise Ireland’s annual event offers the best chance of finding an investor.

So despite Cleantech Ireland’s merits and its admirable efforts, quite simply we need more funding sources. “There’s an urgent need for imaginative thinking about how we fund innovative green business projects. We recently proposed an idea to Shell that would see them allocate €1 billion from the revenue streams from the Corrib Gas field over the next 15 years to such a fund,” says Ecology Foundation’s Declan Murphy.

“The Government would have to guarantee a return from this and then match it so you could have €2 billion in total. Shell would put something back into the country as well as the tax they’ll be paying and hopefully they’ll earn a reasonable return from it.”

Labour finance spokeswoman Joan Burton has also proposed to create a €2 billion strategic innovation bank, so evidently the thinking on this issue is moving in the right direction. But returning to the question of how we come up with more good cleantech ideas in the first place, for their part Murphy and his team at the Ecology Foundation are transforming the organisation into a project incubator.

It will train 100 new recruits with a wide range of skills who will then form small teams to work on 20 green business projects. With corporate backers providing some seed funding, the aim will be to generate cash flow as quickly as possible in the hope of taking the ventures to the next level.

Another sign of how Irish firms are mobilising in their own ways was when a group of Irish businesses, including Siemens Ireland, recently campaigned for the implementation of a green public-procurement policy. By giving them a greater share of €17 billion in annual State procurement spending, boosting green businesses here, the Government could support existing clean tech jobs and create new ones.

The need to instil a greater sense of urgency in these ways means we are likely to see more action like this, which will hopefully lead to more imaginative thinking about how we come up with new inventions, perhaps through cleantech innovation challenges and overseas innovation missions, for example.

Of course, only time will tell whether any of this involves an Irish cowpat-related innovation.

Casting Light On Another O’Leary Empire

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Published on Sunday 4 April 2010. By John Reynolds

The high-flying Ryanair boss keeps quiet about his other financial interest — commercial property. We uncover the details of his vast portfolio

RYANAIR chief Michael O’Leary is seeking to rent out an office block he owns in the City of London, according to details that have recently emerged and thrown new light on his property interests.  

Located in the heart of the city’s insurance district EC3, 50 Mark Lane is a 27,000 sq ft office building that spans six upper floors plus a ground floor and lower ground floor, according to the agents.

With an annual rent of £37.50 (€42) per square foot for the upper floors and slightly less for the others, it would bring in about £875,000 a year.

Although currently unoccupied, renovation works on the property were due to be completed in March last year, and included the installation of a new air conditioning system, a new reception and basement showers.

His office may be empty for now, but having issued a report earlier this week saying that profits at the low-fares airline have soared for the year to the end of March, he shouldn’t lose too much sleep seeing that the value of his stake in the company is up by €16m.

Also in the news this week for the grovelling apology he had to make to transport minister Noel Dempsey about an untrue allegation he had made, Mullingar’s most famous resident keeps his cards close to his chest where his other wealth is concerned.

While it is known that he owns two houses beside each other on Raglan Road in Ballsbridge, Dublin — he paid €9.4m for one of these in 2006 and bought the one last year from corporate financier Angela Cavendish for up to €5.9m — very little is known about his other property investments.

We did, however, get a peek at how these are managed when he took out a number of national newspaper ads in September 2007 when, in anticipation of the departure of the previous one, he sought to hire a new assistant to manage his private investments.

The Sunday Independent has now unearthed some intriguing details about a number of British properties owned by the airline mogul. Unlike Stelios Haji-Ioannou, the founder of rival airline easyjet who has a division of his Easy group that rents out flexible office space around London, Mr O’Leary’s properties are anything but no-frills and appear to be let on longer leases to a much better class of tenant.

Next door to a massive modern office block that houses the world’s biggest dedicated business court, the Ryanair boss owns an office and retail block at Fetter Lane in EC4 in the English capital. tenants include Beachcroft, a law firm that has roots back as far as 1762 and which also has an office in Dublin; and The White Swan, an enticing city gastropub.

At one of London’s most sought-after office addresses, St James’s Street in SW1, a 13,565 sq ft-listed office block called Gam House is also believed to have been part of Mr O’Leary’s portfolio some years ago.

Close to Buckingham Palace, the Houses of Parliament and with the offices of global firms such as BP nearby, it was on the market in 2004 for £12.75m and commanded an annual rent of £675,000.

Elsewhere is Spectrum House in Edmund Street in Birmingham. Originally built in the 1970s, this eight-storey, 60,000 sq ft office block was refurbished in 2001 and would command an annual rent of about £1.5m, according to recent figures quoted in the Birmingham Post.

With law and accountancy firms based in neighbouring offices, it is currently let to HM Customs and Excise — better known as the taxman — according to the developer Frontier Estates.

The fifth property that has been part of Mr O’Leary’s portfolio is in Altrincham, a wealthy suburb of Manchester, not far from where many Manchester United players own stunning mansions.

Having paid £4.85m for it some years ago, the Ryanair chief is thought to have sold Aspect House, a 20,580 sq ft office building to a firm called Styles and Wood, which is in the property game itself — it specialises in managing and developing new stores for major retailers.

Offsetting my ‘08 and ‘09 carbon footprints

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Having not offset my carbon emissions in the past few years. I’ve offset 260 tonnes of CO2 by protecting an acre of rainforest through Cool Earth and also helped to protect 1,000 trees through the Sky Rainforest Project.

My carbon footprint last year included a small number of flights to the UK and Ireland, and the same in 2008 with one additional return flight to Copenhagen.

The rest is made up of my share of home and office electricity and heating, plus other means of travel – mainly by taxi, bus and train – plus the carbon embedded in the goods and services I’ve purchased during that time.

Ireland’s average per capita emissions are about 16 tonnes per person, so I’m hoping that my offsetting covers this several times over.

While I am conscious that no offsetting project is perfect and their overall impact is perhaps very small, I believe they are among those that are the most worthy of my support.

 

Oscars put spotlight on Irish film

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Published on Sunday 7 February 2010. By John Reynolds 

Despite recent successes in animation, film makers here need more support if the industry is to continue to punch above its weight, says John Reynolds

WHILE an Oscar nomination may have so far eluded Carlow-born actress Saoirse Ronan, Irish film makers and animators who work on the other side of the camera did succeed in winning international recognition this week, receiving five Oscar nominations.

There was a further flow of national pride when last September’s Toronto International Film Festival saw a record seven Irish films officially selected for screening, one of which was independent director Margaret Corkery’s debut dark comedy Eamon, made with a budget of just €275,000 and filmed in Wicklow’s Brittas Bay.

On this basis — and despite economist Colm McCarthy’s proposal that the Irish Film Board’s (IFB) functions be brought under the control of Enterprise Ireland — we might claim that there’s a thriving niche of creative talent here, one that also helps to nurture areas of the digital economy such as the computer game industry, for example.

The industry supports 7,000 jobs here and contributes about €570m to the economy, according to IFB figures. It also has an important spin-off effect. Eighteen per cent of tourists visit our shores as a result of seeing Ireland on TV or in a film, Tourism Ireland claims.

As Steven Soderbergh’s Knockout prepares to start filming in Dublin, and in light of recent productions filmed here such as comedy thrillers Perrier’s Bounty and The Guard, both of which star Brendan Gleeson, the same trickle-down effect is also evident in the production sector itself. For every euro the IFB spent between 1993 and 2008, €10 was generated from other sources, of which €6 was international investment, meaning it is cost positive.

While the work of the IFB is fundamental to the success of the industry, another arm of the State, RTE, is far less supportive, explains Cathal Gaffney, MD of Brown Bag Films, which received its second Academy Award nomination for its short animated film, Granny O’Grimm’s Sleeping Beauty.

“As a public service broadcaster, RTE’s remit is to produce children’s programmes just as they commission drama and documentaries. Irish children have as much right to quality home produced TV as their parents do.

“However, its schedule is almost entirely full of imported animation from the US and Europe. Unless there is a change in policy, Irish children will learn to speak with American accents.

“Who knows what success the animation sector could achieve if RTE were to commit just 5 per cent of its programming budget towards animation?”

In stark contrast, overseas broadcasters such as Nickelodeon and the BBC have both recently commissioned animated series from firms here; most recently Olivia from Gaffney’s company, and Roy from Jam Media, who are currently working on Tilly and Friends and who produced the successful Funky Fables series.

Gerard O’Rourke, producer at Monster Animation, says that RTE is largely unsupportive because it can earn so little ad revenue from children’s programmes. “Its lack of support for animation would indicate its policy is more about chasing commercial revenues than its public service remit,” he says.

The fact that Irish broadcasters have slashed their homegrown production spending in the wake of plummeting ad revenues has also hurt the sector.

Film makers have to hope that success abroad will reap benefits at home and continue to attract Irish and foreign film makers to make movies here.

In the meantime, given that the now state-owned Ardmore Studios — where the high-budget TV series The Tudors has been filmed — is now 50 years old, perhaps the industry might benefit from a landmark scheme of some kind, perhaps involving a new studio or other means of specialisation, which would add another reason for movie makers to come here.

But when Morgan O’Sullivan, managing director of production company World 2000, sought planning permission to build a special effects studio in Ashford in Co Wicklow, it caused ructions among county councillors, who feared it would threaten the viability of nearby Ardmore Studios. O’Sullivan declined to comment on this or any future projects, however.

Local political battles aside, Minister for Arts Martin Cullen provided vital support to the sector by ensuring that the Section 481 tax incentive was safe until 2012.

With that in mind, a bit more support on a more practical level might provide further ammunition to the industry, which now has to fight locations like Eastern Europe, where the costs of doing business are much lower, when bidding for new projects.

The likes of rising star director Ken Wardrop — whose feature documentary film His ‘n’ Hers won an award at the Sundance Film Festival last month — along with our skilled animators are proof that we already have the talent.

But whether we can build on these strengths to get through what Sean Stokes, chief executive of industry group Screen Producers Ireland, calls “very difficult times”, remains to be seen.

Even your boss just can’t get enough of the ‘Crackberry’

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Published on Sunday 25 October, 2009. 

Top execs are just as addicted as their employees when it comes to the BlackBerry’s ease of use, says John Reynolds

MORE than half of employees with a company BlackBerry or smartphone check and respond to their emails before they go to bed and first thing in the morning — clocking up an average of 15 extra hours of work a week, according to a recent survey by employment law firm Peninsula Ireland.

Perhaps it’ll be some consolation to employees that their boss is in the same boat — they too are inseparable from their BlackBerries or their mobiles (with the exception of Ryanair boss Michael O’Leary, who has neither a BlackBerry nor a computer, according to his spokesman).

Despite the advantage of having scores of personal assistants, secretaries and teams of employees, the Sunday Independent discovered that many of our well-known business chiefs admit that they’ve succumbed to what has become known as the ‘Crackberry’ phenomenon.

Aidan Heavey, CEO, Tullow Oil

“I travel a lot so when I’m on holiday I like to stay at home, but it’s very difficult. It’s all work. I don’t relax. I can’t turn off. I look at my BlackBerry every 10 seconds. I check it when I’m going up in ski lifts and drive my playing partners mad by answering emails on the golf course.

“They’re the best and worst invention ever. They mean that you work 24 hours a day and you don’t get holidays.”

David Horgan, MD, Petrel Resources

“For me it’s addictive enough to be a ‘Crackberry’, although the internet is awkward and slow on it. I’m on my third BlackBerry at this stage, and I have it by the bed, usually in silent mode, but sometimes in ‘calls only’ mode.

“I sometimes have to use an older phone, as long as I have a SIM card for it, particularly if I’m going into a mine, skiing or sailing, as the BlackBerry doesn’t agree with altitude, dampness or harsh weather.

“In a week I’d notch up about 12 hours on the BlackBerry, including emails, calls and texts. The advantage is that nobody knows where you are, but then the the disadvantage is that you never, or else very rarely, get a chance to switch off completely.”

Patrick Coveney, CEO, Greencore

“I use an older Nokia mobile for calls and a BlackBerry for emails and appointments; I have them both by the bed at night and I’d probably clock up 10 to 15 hours a week on the phone and between five and 10 hours emailing.

“My holidays this summer were spent in Spain and Cork, from where I’d check my emails at least three times a day. It’s less stressful to deal with issues as they arise rather than having to deal with a vast logjam on my return to the office.”

Robert Finnegan, CEO, 3 Mobile

“At the moment I am using our new Sony Ericsson W995. I try as much as possible to ‘test drive’ our latest mobiles.

“I spend most of my time on my mobile phone as it allows me to keep in touch with our teams across the business and receive sales figures and new customer numbers by email. Recently, to wind down, I was able to watch live streaming on it of Padraig Harrington playing in the cliffhanger final at the US PGA.

“Our parent company, Hutchison Whampoa, is based in Hong Kong and with a seven-hour time difference a call may come at any time, so I sometimes use the phone in bed at night.

“My most recent holiday was here in Ireland and yes, I had my mobile with me. It’s like my wallet and I bring it everywhere with me. I like to stay in touch with our teams and up to date on all the happenings across our business, and what’s taking place in the wider world.”

Gerry McCaughey, Founder, Century Homes

“I have an iPhone and a Nokia E51 — one is for US calls and the other is for Europe.

“I’d probably spend three or four hours a day, up to 20 hours a week, calling and emailing on them. My phones are close at all times and, yes, beside the bed at night, especially as I live 6,000 miles away from family.

“My last holiday was in Santa Barbara, California, and I have to confess that I used both phones to do a bit of work. Whenever I travel, I find that I have to take a small carry-on bag with all my electronics, phones, computer, camera, backup hard drive and chargers.”

Sean Gallagher, Co-founder, Smarthomes

“At the moment I think it’s a Nokia I’ve got, but I’m signing up for a new iPhone next month. Time to join the really cool and up-to-date brigade. I like the size of text and its screen and the ease-of-use aspect of it.

“I find that one phone is more than enough for any human to contend with. My phone’s always with me and really it’s more about staying connected than anything. I sleep with it beside the bed and, as I’m now newly single, I realise how sad that sounds.

“My last holiday was on a fitness and health week in St Lucia and it took some serious restraint to stop me checking my phone.

“I nearly always forget to take phone chargers with me when I go abroad and end up sweet talking some hotel receptionist to come to my aid. Not the most exciting of chat-up lines, I know.”

Imagining a better education

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It’s unlikely that many secondary school students will read an article in today’s Observer on the importance of critical, creative, imaginative and analytical thinking.

If they did, they might demand a better education from their teachers rather than reluctantly being spoonfed what their teachers hope will come up in the exams.

There are many good teachers out there, but probably alot of mundane or poor ones.

They too bear a share of the responsibility for standing idly by as the numbers of students taking higher level maths and science decreases even further. By doing so, they betray their role as educators.

If they allowed themselves a little critical thinking, they’d realise that spoonfeeding students leaves them with a sour taste in their mouth about the act of learning.

Is it any wonder that more and more youngsters want a media career or to become a celebrity?

This is at a time when the ability to think critically, creatively, imaginatively and analytically will arguably, more than anything else, determine their futures and their ability to earn a living in a rapidly changing world that is becoming ever more competitive.

These are the two key sentences in the article that stand out:

much of a child’s education is spent on low-level thinking. The result is, sadly, that the imagination and potential of too many children are dulled.

That message is all-important.

As the beginning of another school year approaches, I would encourage those students who are increasingly aware that they’re receiving a bad education to organise themselves and to do something about it.

Your teachers, the majority of whom are members of a teaching union, aren’t afraid to go on strike when they think it’s absolutely necessary.

Perhaps you should do the same.

Come to think of it, if your teachers cared enough about education, they’d join you.

I wouldn’t hold your breath, though.

Update:

This issue is one of several that will be discussed in October at a talk entitled: ‘What’s Smart About Ireland’s Smart Economy’ the Royal Irish Academy as part of Innovation Dublin Week 2009.

Do we need to fundamentally rethink our approach to the teaching of critical thinking and the arts in our schools to create the basis for a genuine ‘smart economy’?

More details here.

Does consumerism impact our inventiveness?

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BBC Panorama reporter John Ware’s programme The Death of Respect was particularly thought-provoking earlier this week in how he scrutinised the rise of individualism over the idea of personal responsibility and obligations to one’s community and wider society.

Many of the issues he raised are as relevant to Ireland as they are to Britain, and one or two perhaps have a broader significance.

He looked at how disenfranchised we are as citizens and how unlikely it is that we might personally know a local councillor or political representative.

 The programme also examined how consumerism has polluted our political system so that we are seen as customers that make consumer choices rather than citizens who need public services.

Consumerism is also affecting how we relate to the world around us he argues, which distorts our view of reality. We look to the police or politicians to solve social problems, for example.

This was contrasted to an example of a group of fire fighters in Moss Side in Manchester whose fire station doubles as a boxing club helping to keep local youths off the streets and setting them on the straight and narrow.

Interestingly, a similar scenario was featured in the cult US TV drama The Wire, where a former prisoner set up a boxing club in an attempt to steer youngsters away from crime and drug dealing.

Like The Wire, Ware’s programme also looked at the education system, focusing on a school whose headmistress threw away the National Curriculum guidelines to tailor her school to the needs of its pupils, with resounding success that has provided a model that others hope to replicate.

Again, we should bear this in mind in Ireland, not only in light of the cuts proposed by An Bord Snip, but also as we attempt to reskill or upskill the workforce and encourage greater numbers of people to start their own businesses.

However, another aspect of consumerism that may be significant relates to our business enterprise culture.

If we increasingly see ourselves as consumers seeking to satisfy our material needs in a world of an overwhelming number of choices, then how does this affect our inventiveness?

If we encounter a problem, does our consumerist mindset mean we look to someone else to solve it, or look for a solution that we can purchase, rather than setting about inventing a solution ourselves?

Of course, our increasing desire for instant gratification arguably is a factor in this as well. It may take time to think up and develop a solution, time which we may be unwilling to invest for an unknown result or reward. So we revert to thinking someone else will do so, or we pay someone who already has.