Socio Economic Impact Study of Dundalk Institute of ... - … impact of DkIT... · Socio-Economic Impact Study of Dundalk Institute of Technology A report to 19th February 2013 BiGGAR

Socio-Economic Impact Study of Dundalk Institute of Technology

A report to

19th February 2013

BiGGAR Economics

BiGGAR Economics Midlothian Innovation Centre Pentlandfield Roslin, Midlothian, EH25 9RE Scotland +44 (0)131 440 9032 [email protected] www.biggareconomics.co.uk

CONTENTS Page 1 EXECUTIVE SUMMARY ....................................................................................... 1 2 INTRODUCTION ................................................................................................... 4 3 ECONOMIC IMPACT METHODOLOGY ............................................................... 8 4 CORE IMPACTS ................................................................................................. 11 5 STUDENT IMPACTS ........................................................................................... 18 6 TOURISM ............................................................................................................ 25 7 REGIONAL DEVELOPMENT CENTRE .............................................................. 30 8 RESEARCH ......................................................................................................... 41 9 FOREIGN DIRECT INVESTMENT ...................................................................... 49 10 WORKFORCE PRODUCTIVITY ....................................................................... 55 11 WIDER ENGAGEMENT .................................................................................... 60 12 SUMMARY OF IMPACTS ................................................................................. 65 13 BENCHMARKS AND CONCLUSIONS ............................................................. 68 14 APPENDIX A – CONSULTEES ........................................................................ 72

Abbreviations

Centre for Affective Solutions for Ambient Living Awareness Dundalk Institute of Technology Foreign Direct Investment Full time equivalent Gross Value Added Higher Education Institutions Institute of Technology Regional Development Centre

CASALA DkIT FDI FTE GVA HEIs IoT RDC

Note on definitions: Gross Domestic Product (GDP) and Gross National Product (GNP) are closely related measures. GDP measures the total output of the economy in a period i.e. the value of work done by employees, companies and self-employed persons. This work generates incomes but not all of the incomes earned in the economy remain the property of residents (and residents may earn some income abroad). The total income remaining with Irish residents is the GNP and it differs from GDP by the net amount of incomes sent to or received from abroad. In this report, GVA is comparable to GNP.

Socio-economic Impact Study of the Dundalk Institute of Technology

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1 EXECUTIVE SUMMARY This report presents the results of a socio-economic impact assessment of Dundalk Institute of Technology (DkIT) undertaken by BiGGAR Economics in Autumn 2012. The study considered the annual economic impact of DkIT, based on the year for which the latest data was available1.

The study found that DkIT delivered a substantial annual economic return for the Irish economy, in return for the state funding received. In 2010/11, DkIT received €37.3 million in state funding and generated €281.5 million in Gross Value Added (GVA) for the economy of the Republic of Ireland and supported 2,110 jobs.

This means that for every €1 DkIT received in state funding, it generated €7.54 in economic impact.

DkIT also delivers a substantial quantifiable economic impact at the local, regional and cross border level. In total the quantifiable economic impacts described in this report amount to:

• €164.6 million GVA and 1,290 jobs in Louth;

• €232.2 million GVA and 1,559 jobs in the North East; and

• €243.6 million GVA and 1,797 jobs in the cross border region.

This scale of impact makes DkIT comparable to organisations such as Bus Eireann, who employ more than 2,600 people or Fyffes, who employ almost 1,890. It also means that DkIT supports significantly more employment than other regional employers such as Heinz (which employs around 280 people), Xerox (which employs around 650 people) or Vodafone (which employs around 1,200).

DkIT delivered a wide range of social impacts and economic impacts that contribute to social cohesion, sustainability and long-term competitiveness that are detailed in the following sections:

1.1 Quantifiable Economic Impacts

The quantifiable impacts considered in this report include:

• core impacts associated with DkIT’s day-to-day activity, expenditure on supplies and capital projects and the expenditure of staff. These impacts contribute €60.3 million GVA to the Irish economy each year and support 789 jobs;

• student impacts generated by economic activity supported by student expenditure, part-time student employment and student work placements. Taken together these impacts contribute €28.4 million GVA to the Irish economy each year and support 599 jobs;

• tourism impacts as a result of people visiting students and staff and events that attract people who would not otherwise visit the local area. These contribute €1.5 million GVA to the Irish economy each year and support 43 jobs;

1 The main impacts have been calculated using the latest available financial information for 2010/11. For some impacts data for 2011/12 is available and where this has been used, it is highlighted in the text.


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• impacts generated by the activities of the Regional Development Centre amounting to €37.9 million GVA per year and supporting 616 jobs;

• impacts associated with research undertaken by DkIT, the direct impact of which is included in the core impacts above;

• impacts associated with inward investment attracted to the region over the past three years. The proportion of this that can be attributed to DkIT amounts to €3.9 million and 63 jobs for the Irish economy; or €16.3 million and 264 jobs for the economy of the North East2; and

• workforce productivity impacts as measured by the earnings premium experienced by DkIT students and cost savings generated by enabling people to return to the labour market. These impacts amount to €149.2 million to the Irish economy each year.

Other notable quantitative findings from the analysis include:

• since it was founded the Regional Development Centre has supported more than 800 entrepreneurs, incubated 87 knowledge based start-up enterprises and conducted 169 applied research projects for industry;

• in 2011/12 there were 4,734 students enrolled at DkIT and these students spent a total of €24.1 million during the year;

• for each student enrolled, DkIT generated a GVA economic impact for the Irish economy of €61,872;

• DkIT currently has approximately 500 international students and each additional international student who enrols at the Institute will contribute €7,225 to the Irish economy each year;

• in 2011/12 1,036 students from DkIT spent a total of 15,821 weeks on work placements applying their knowledge and learning skills relevant to Irish businesses;

• seven major events hosted by DkIT during 2011/12 were attended by more than 2,600 people and generated more than 9,000 overnight stays by visitors who would not have otherwise visited the region;

• over the past decade research activity at DkIT has increased significantly. Research income increased tenfold from less than €0.5 million in 2001 to €6.6 million in 2012 and research citations increased more than thirtyfold.

1.2 Qualitative Social and Economic Impacts

DkIT also generates a range of wider benefits that help to enhance the competitiveness of the local, regional and national economies and improve quality of life for local residents. These include:

• improving the competitiveness of the regional economy by providing relevant skills to local industry, improving the image and reputation of the area,

2 The contribution of DkIT to the regional impacts of inward investment has been higher than to the national impacts because DkIT has played some role in helping to attract companies to Ireland but a far more significant role in attracting companies to the North East that had already decided to invest in Ireland.


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providing customised industrial training for local businesses, promoting the development of the Dublin Belfast Corridor and increasing entrepreneurialism by promoting entrepreneurial attitudes amongst students and staff;

• improving the competitiveness of the Irish economy by helping to make Irish graduates more entrepreneurial;

• making Dundalk a more vibrant and attractive place to live by improving quality of life for local residents. This is achieved in a variety of ways including hosting of events that attract local visitors (e.g. Taste of Louth), encouraging students and staff to participate in volunteering activities, improvement of the quality of life for a variety of groups in the community such as elderly people (e.g. through the work of Netwell and CASALA), children (e.g. Parent and Toddler groups) and people with Intellectual Disabilities (e.g. students with intellectual disabilities registered on DkIT programmes);

• promoting cross-border reconciliation, by providing educational opportunities for students from the cross-border counties and working with companies from the North East region and Northern Ireland;

• enhancing the distinctiveness of region by supporting local culture and heritage;

• supporting sustainable development in developing world communities through a range of voluntary and research activities; and

• enhancing social inclusion in the local area by raising awareness of career and education options amongst local young people and enabling people from communities with traditionally low participation in higher education to gain third level qualifications3.

3 80% of DkIT students are the first in their family to attend a third level institution.


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2 INTRODUCTION This report presents the results of a socio-economic impact study of Dundalk Institute of Technology (DkIT) undertaken by BiGGAR Economics in Autumn 2012.

2.1 Study Objectives

This study was commissioned by DkIT to provide a better understanding of the Institute’s economic and social contributions and impact to the region. The objectives of the study were to:

• measure the economic impact of DkIT;

• quantify, as much as can be practicable, the social impact of DkIT;

• provide a report that will give verifiable evidence of the impact of DkIT in the development of its region; and

• consider the economic and social impact of the RDC.

2.2 BiGGAR Economics

BiGGAR Economics is a leading economic consultancy based near Edinburgh in Scotland, established in 2002. The consultancy has undertaken a wide range of studies for higher educational institutions including feasibility studies, business plans and economic appraisals of proposed investments, evaluations of innovation and commercialisation programmes and economic impact studies.

Previous higher education economic impact studies undertaken by BiGGAR Economics include the University of Edinburgh, the University of St Andrews, Leiden University, Leiden University Medical Centre, Glasgow Caledonian University, the University of the Highlands and Islands and its network of academic partners, the University of Aberdeen, Robert Gordon University, the Moredun Group, the Roslin Institute and De Montfort University.

BiGGAR Economics also worked with Universities Scotland on the economic contribution of the higher education sector to the Scottish economy, work that provided the evidence base on which higher education funding has been prioritised by the Scottish Government and for the identification of the universities sector as one of seven priority sectors in the Government Economic Strategy.

BiGGAR Economics has previous experience of working in Ireland, completing projects for national agencies (including Enterprise Ireland and IDA Ireland), regional and local agencies (including the Western Development Commission and South Dublin County Enterprise Board) and higher education institutions (including University College Dublin).


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2.3 Profile of DkIT

Located mid-way between Belfast and Dublin, DkIT is a major provider of third level education in the North East of Ireland and one of Ireland’s leading Institutes of Technology (IoT). The Institute was established in 1970 as part of a network of Regional Technical Colleges and today enjoys a strong reputation. In 2012 DkIT was named runner up for IoT of the Year in the Sunday Times University Guide 2013, having jumped six places from 19th to 13th in the Irish league table.

Figure 2-1: Location of DkIT

2.3.1 Student Population

In 2011 DkIT had a total student population of 4,734, making it mid-sized in comparison to other Irish IoTs. DkIT has a particularly strong access record, with around 80% of students the first member of their family to study at degree level. Around 11% of students are mature students (i.e. aged over 23) and around 10% of the total student body are international students (including those from other EU countries and from outside the EU).

2.3.2 Academic Provision

There are four schools at DkIT: the School of Business & Humanities; the School of Engineering; the School of Informatics & Creative Arts; and the School of Health & Science. Additionally, the School of Engineering provides apprenticeship programmes and the Lifelong Learning Centre offers many part-time study options.

Each of these schools offers a variety of programmes from Level 6 to 104. A breakdown of full-time undergraduate enrolments by each of the HEA coding groups is provided in Table 2-1.

4 NQAI Level 6 – 10: Higher Certificate – PhD.


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Table 2-1: Full-time enrolments by field of study

Field of study Proportion of total full time enrolments

Broad Programmes 0.1%

Humanities & Arts 9.6%

Social Science, Business & Law (includes social sciences and business and administration)

30.3%

Science (includes life sciences, physical sciences, mathematics and computer science)

14.2%

Engineering, Manufacturing & Construction (includes mechanical, electrical and civil engineering)

15.3%

Agriculture & Veterinary 4.8%

Health & Welfare (includes nursing and caring and therapy, rehabilitation and counselling)

18.8%

Services 6.9% Source: HEA Key Facts and Figures 2010/11

The vast majority of enrolments at DkIT are on undergraduate degree programmes. A breakdown of enrolments is provided in Table 2-2. It should be noted that postgraduate research student numbers have increased significantly in recent years with almost 60 students currently registered at Masters or PhD by research programmes.

Table 2-2: Full-time enrolments by level of award

Level Proportion Number

Total Undergraduate 97.8% 1,846

Honours Degree 42.5% 2,233

Ordinary Degree 51.4% 933

Diploma or Certificate 3.9% 35

Postgraduate 2.2% 97

PhD 0.2% 8

Masters by Research 0.5% 23

Taught Masters 1.5% 66 Source: HEA Key Facts and Figures 2010/11

2.3.3 Research at DkIT

Research activity at DkIT has increased significantly over the last decade, with funding increasing from €0.5 million in 2001 to €6.6 million in 2012. Research activity at DkIT is undertaken within the Institute’s 4 research groups, 7 research centres and two applied research enhancement centres5.

5 Applied Research Enhancement Centres are funded by Enterprise Ireland to


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The four research groups cover Creative Media, Enterprise & Innovation, Regulated Software and Electrochemistry. The seven research centres undertake research in Ageing, Health, Software Engineering, Energy, the Environment, Music and Humanities & Social Sciences and the two applied research enhancement centres operate within the fields of Health and Ambient Assisted Living.

The impacts associated with this research activity are described in further detail in section 8 of this report.

2.3.4 Enterprise Support

In 1989 DkIT established the Regional Development Centre (RDC) as the Institute’s Innovation Support and Technology Transfer organisation. The RDC provides a commercially oriented interface between DkIT and the industrial, commercial and business life of the region by making the expertise, facilities and resources of DkIT available for the wider benefit of the regional economy. The RDC fulfils this remit through the following range of programmes and activities:

• business development support services aimed at innovative graduate led start-up enterprise;

• knowledge transfer services aimed at established enterprises and external organisations;

• support for the commercialisation of intellectual property (IP), aimed at identifying, protecting and exploiting IP developed through the Institute’s research activities; and

• special development projects of a strategic nature undertaken on behalf of the Institute and in partnership with external partners and agencies.

Incubation facilities at the RDC provide campus-based accommodation for new or start up technology or knowledge based businesses in their early developmental phases. As a result of repeated expansion and upgrading, the RDC now has 41 incubation units in Dundalk as well as 8 self-contained incubation units at the Millmount Development Centre in Drogheda.

The impacts associated with the RDC are described in further detail in section 7 of this report.

develop next generation technology platforms for the benefit of Irish industry and to provide expert knowledge and research capabilities for Irish based companies in search of innovative solutions.


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3 ECONOMIC IMPACT METHODOLOGY This section describes the methodology that has been used to quantify the economic impacts of DkIT described in the following sections.

3.1 Sources of Impact

The sources of economic impact considered in this report include:

• core economic impacts – including the direct employment and gross value added generated by DkIT, the impact of DkIT’s expenditure on supplies, the impact of staff spending their wages and the impact of capital projects;

• student impacts – including the impact of student spending, the impact of student part-time employment and the impact of placements students undertake as part of their course;

• tourism impacts – including the impact of family and friends visiting students and staff and delegates attending conferences and other events at DkIT;

• Regional Development Centre impacts – including the impact of business development support for graduate businesses, new business incubation and innovation support, enterprise support for established enterprises and applied research undertaken at DkIT;

• research – the role of DkIT’s research in providing a basis for future regional and national economic development;

• FDI impacts – the role of DkIT in helping to attract foreign direct investment to the region;

• workforce productivity – the value of the additional life-time earnings of graduates from DkIT, savings in the public sector made through the increased employability and productivity associated with continued professional development programmes; and

• wider engagement – the social impacts associated with DkIT’s business, international, community, public sector and cultural engagement.

3.2 Study Areas

The impacts are measured at four geographic levels;

• Louth – the County Louth;

• North East – the counties of Louth, Meath, Westmeath, Cavan and Monaghan and North County Dublin;

• the Republic of Ireland (including the North East); and

• the cross border region – the North East and Northern Ireland.

3.3 Estimating Economic Impact

Economic impact is reported using two measures:


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• Gross Value Added (GVA) – a measure of economic output, the monetary contribution that an organisation or an activity contributes to the economy. This measure is used rather than turnover or income to avoid double counting of impacts (for example, to avoid counting bought in supplies as part of DkIT’s costs and as part of the impact on suppliers); and

• Employment (jobs) – measured in full time equivalent (fte) jobs created or supported.

The types of quantifiable impacts that are considered in this report are categorised into three types:

• Direct effects – the economic activity directly supported by an organisation or activity (e.g.. staff employed by DkIT);

• Supplier multiplier effects – purchases of supplies and services associated with the direct impact and all the resulting purchases of supplies and services down the supply chain that has occurred because of the original purchase. These multipliers are also referred to as Type 1 multipliers and are calculated using the Input-Output Tables for Ireland6; and

• Income multiplier effects – the expenditure of employees supported by the direct effect and the supplier effect.

The combination of the income multiplier effects and the supplier multiplier effects is referred to as Type 2 multipliers and are calculated using the Input-Output Tables for Ireland.

3.3.1 Calculating Gross Economic Impact

The details of how each impact has been calculated are explained in the subsequent chapters of this report.

The impacts were calculated based on the latest data available from DkIT at the time of writing. In most cases this was for the academic financial year 2010/11.

The starting point for the estimates of impact in this report are turnover, income or spending figures. Employment figures are used where available and derived from turnover figures when not, using turnover per employee ratios. Similarly, GVA is derived from turnover using GVA to turnover ratios. In many cases, these figures have been obtained from the Central Statistics Office Yearbook 2011, for broad industrial groups.

3.3.2 Calculating Net Economic Impact

After the gross economic impact has been calculated, in GVA and employment terms, other factors need to be considered to calculate net impact:

• Leakage – for each of the four study areas, account is taken of economic activity that leaks out of the area;

• Additionality – only impacts that are additional and attributable to DkIT have been included; impacts that would have occurred regardless of the presence and actions of DkIT have been excluded; and

6 CSO 2005 Supply and Use and Input-Output Tables for Ireland, 2009


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• Multipliers – applying the appropriate multipliers to the gross impacts captures the subsequent spending rounds.

The multipliers used in this report are for the Republic of Ireland and are calculated using the input-output tables for Ireland, for the appropriate sectors of the economy. In order to use these multipliers for different study areas they need to be adjusted to reflect the relative size and population of the area concerned. The assumption for the Island of Ireland is larger than the multipliers for the Republic of Ireland and this takes into account cross border trade in the supply chains. The assumptions are presented in Table 3-1.

Table 3-1: Multiplier assumptions for the study areas

Louth North East

Republic of Ireland

Northern Ireland

Island of Ireland

% of ROI multiplier 25% 33% 100% 66% 113% Source: BiGGAR Economics Assumption


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4 CORE IMPACTS This section describes the core economic impacts of DkIT. The core impacts included in this section include:

• direct impact – associated with the turnover and direct employment of DkIT;

• supplier impact – generated by DkIT’s expenditure on goods and services;

• income impact – generated by DkIT staff spending their wages in the economy; and

• impact of capital project spend.

4.1 Direct Impact

The direct impact of DkIT is the value added to the economy as a result of day-to-day operations and the number of people directly employed by the Institute.

The direct GVA of an organisation can be calculated by subtracting the total amount spent on goods and services from total income. In 2010/11 the total income of DkIT was €50.8 million and €9.1 million was spent on non-staff costs. Therefore the direct GVA of DkIT was €41.7 million.

DkIT directly employs 588 members of staff, 506 full-time equivalents (FTEs).

Table 4-1: Direct Impact – Assumptions &Total Impact

Source Value

Income of DkIT DkIT Draft Financial Statement 2010/11

€50.8m

Amount spent on supplies €9.1m

GVA (€) – All Areas Income, less Supplies €41.7m

Employees (FTEs) – All Employees DkIT HR department 506 Figures may not sum due to rounding

4.2 Supplier Impact

The supplier impact measures the DkIT’s effect on the economy as a result of its expenditure on goods and services. This effect occurs because when DkIT purchases supplies, it increases the turnover and helps to support employment within supplier businesses.

In 2010/11 DkIT spent €9.1 million on supplies. The first step in calculating the supplier impact was to analyse this expenditure to find out how much additional turnover it generated in different sectors of the Irish economy. The GVA impact of this additional turnover was then calculated by dividing the amount spent in each sector by the turnover/GVA ratio for that sector. The total number of jobs supported was then calculated by dividing the additional turnover by the turnover/employee ratio within each sector. In this way it can be estimated that the supplier impact of DkIT in 2010/11 was €3.3 million GVA and 82 jobs.

The next step was to estimate how much of this impact occurred in each of the study areas. This was done by multiplying the total impact by the proportion of suppliers based in each area, using data provided by DkIT (Table 4-2).


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Table 4-2: Location of suppliers by study area

Louth North East Republic of Ireland

Cross Border

% of supply expenditure 25% 36% 47% 20% Source: DkIT Procurement Office

The effect of subsequent spending rounds was then captured by applying appropriate multipliers for each sector to the direct impact as described in section 3.3.2. This results in a supplier impact of €3.2 million GVA and 81 jobs to the Irish economy. A breakdown of this impact is given for each of the study areas in Table 4-3.

Table 4-3: Supplier Impact & Assumptions

Louth North East

Republic of Ireland

Cross Border

Expenditure on supplies 2010/11 €9.1 million

Total GVA (€m) 1.0 1.5 3.2 3.1

Total Employment (FTE jobs) 24 37 81 79 Source: BiGGAR Economics

4.3 Income Impact

The income impact measures the effect of DkIT staff spending their wages in the economy. In 2012 DkIT employed 588 people. Of these around two thirds live in County Louth and a further 15% live elsewhere in the North East. A breakdown of staff by location is provided in Figure 4-1.

Figure 4-1: Residence of DkIT staff

In 2010/11 DkIT paid €33.8 million in salaries. Of this €21.0 million was paid to staff in Louth, €26.4 million to staff in the North East, €30.4 million to staff in Ireland and €29.8 million in the cross border region.


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Table 4-4: Staff salaries by study area

Louth North East

Republic of Ireland

Cross Border

Staff salaries by location (€m) 21.0 26.4 30.4 29.8 Source: DkIT Human Resources Department

In order to calculate the impact of this expenditure, it is first of all necessary to make assumptions about where staff spend their income. Such assumptions can be made based on a survey of staff spending; however, such a survey was beyond the scope of this study and would not have been a good use of resources, since previous research is available on which assumptions can be based7.

The assumptions take account of this previous research on household spending and factors such as the size of the economy in each study area (because this influences the opportunities people have to spend their income) and where staff live (because this may make it more convenient for people to spend their income in one area compared to another). It is for example assumed that staff who live in Louth will spend a higher proportion of their income in Louth than staff who live in Dublin or elsewhere in Ireland because they will spend longer in the area and have more opportunities to spend money there. The assumptions on staff spending are given in Table 4-5, which shows, for example, that staff who live in the rest of the North East spend 15% of their salaries in Louth.

Not all expenditure made by staff will be retained in Ireland because some will be spent on foreign holidays or goods and services imported from overseas. In order to account for this, it is assumed that 25% of income is spent overseas8. This is a conservative assumption so if the actual amount of income retained in the Irish economy is higher than this, then the impact described in this section could be somewhat higher than estimated.

Table 4-5: Staff expenditure by area

Louth Rest of NE Rest of ROI

NI Overseas Total

Louth Residents 35% 10% 20% 10% 25% 100%

Rest of NE Residents 15% 20% 30% 10% 25% 100%

Rest of ROI Residents 10% 0% 60% 5% 25% 100%

NI Residents 0% 0% 10% 65% 25% 100% Source: BiGGAR Economics assumption

By applying the assumptions in Table 4-5 to the salaries of staff living in each area it is possible to calculate how much additional expenditure occurs in each of the study areas. This additional spending is equivalent to increased turnover in businesses in these areas.

7 Including, for example, staff surveys undertaken of Irish Government Departments that had relocated outside Dublin, as reported in “Moving West: An Exploratory Study of the Social and Economic Effects of the Relocation of Public Sector Offices to Towns in the Western Region”, Western Development Commission, December 2008. 8 In 2011 CSO figures for imports gives a total of €15.9 billion for ready to use consumption goods, equivalent to 20% of total personal consumption in the economy of €81.3 billion. An assumption of 25% has been adopted to allow for the consumption of imported services, including holidays.


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The additional turnover in businesses in each study area can be converted into GVA by dividing it by a turnover to GVA ratio for the whole economy. The employment impact of this expenditure can then be calculated by dividing the GVA of the expenditure by the average GVA per employee for the Irish economy. Multipliers have then been applied to GVA and employment effects, for each of the study areas.

In this way it has been estimated that DkIT staff salaries generated €13.6 million GVA in the Irish economy and supported 221 jobs. A breakdown of this impact for the study areas is given in Table 4-6.

Table 4-6: Income impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 3.1 4.5 13.6 7.0


4.4 Capital Project Spend

The expenditure of DkIT on capital projects such as new buildings supports economic activity in the construction sector. The increased turnover in the construction companies that work on these projects generates jobs and GVA in the economy.

In 2010/11 DkIT spent €1.1 million on capital projects relating to refurbishment of its buildings and facilities during that period9. The value of these projects is equivalent to expenditure in the Irish construction sector so the GVA impact of the spending can be calculated by dividing total expenditure by the turnover/GVA ratio for the construction sector. The employment impact of the expenditure can be calculated by dividing the additional turnover by the turnover/employee ratio for the construction sector and multiplier effects have been calculated by applying the appropriate multipliers.

In order to estimate the impact that occurs in each of the study areas it is necessary to make assumptions about where capital expenditure occurs. It has been assumed that one third of the suppliers for these capital projects were based in Louth, one third are based in the rest of the north east and one third are based in Northern Ireland.

By applying these assumptions it can be estimated that the capital spend of DkIT generated €1.0 million GVA in the Irish economy and supported 7 jobs. A breakdown of this impact for the study areas is given in Table 4-7.

Capital spending in 2010/11 was considerably lower than has been the case over the last 15 years. Over the period 1995 to 2010 DkIT’s capital investment programme amounted to €150 million, an average of €8.3 million per year. This level of expenditure would have generated €9.1 million GVA for the Irish economy and supported 61 jobs, around nine times the impact in 2010/11.

9 DkIT draft financial statement 2010/11 (total additions to land and buildings)


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Table 4-7: Capital project spend impact

Louth North East

Republic of Ireland

Cross Border

Total Capital Spend 2010/11 €1.1 million

Total GVA (€m) 0.2 0.5 1.0 0.8


4.4.1 Catalytic Impact

The impact described above is generated by project financed directly by DkIT. One of the wider impacts of this expenditure however is to help leverage additional investment from other organisations.

An example of this is the Creative Spark building that has recently been constructed next to the DkIT campus. Creative Spark cost €1.5 million and opened in September 2012. The building was created to provide dedicated creative training and workspace for the creative enterprise sector.

Although the Creative Spark project was not funded by DkIT, consultations undertaken as part of this study confirmed that it is expected that graduates from the School of Informatics and Creative Arts will become an important source of future tenants for the building as follow-up to the support and incubation in their early stage development in the Regional Development Centre. Without DkIT then this supply of potential tenants would be limited, which would make it much more difficult for the Creative Spark building to succeed. While it is difficult to attribute the future impact of Creative Spark to DkIT, partners such as the Louth County Enterprise Board and Louth County Council recognise that DkIT will contribute to the success of the project.

4.5 Summary of Core Impacts

The total core economic impact of DkIT, adding together the direct, supplier, income and capital spending effects, has been estimated as €46.0 million GVA and 410 jobs in Louth, €48.3 million GVA and 522 jobs in the North East (including Louth), €60.3 million GVA and 789 jobs in the Republic of Ireland (Including the North East) and €53.0 million GVA and 659 jobs in the cross border region. These impacts are summarised in Table 4-8 and Table 4-9.

Table 4-8: Summary of core impacts, GVA

Impact Louth North East

Republic of Ireland

Cross Border

Direct GVA (€m) 41.6 41.6 41.6 41.6

Supplier GVA (€m) 1.0 1.6 4.0 3.5

Staff Spending GVA (€m) 3.1 4.5 13.6 7.0

Capital Spend GVA (€m) 0.2 0.5 1.0 0.8

Total GVA (€m) 46.0 48.3 60.3 53.0


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Table 4-9: Summary of core impacts, Jobs

Impact Louth North East

Republic of Ireland

Cross Border

Direct Jobs 332 405 459 453

Supplier Jobs 26 40 103 88

Staff Spending Jobs 50 73 221 113

Capital Spend Jobs 2 3 7 5

Total Employment 410 522 789 659 Source: BiGGAR Economics

4.6 Commentary

The summary tables above illustrate that the impact of capital projects undertaken by DkIT is relatively small; however this is not typical of previous years. In common with most Irish higher education institutions, the level of capital expenditure undertaken by DkIT in the past couple of years has declined dramatically. The impact calculated above does not for example include the €28 million refurbishment of the PJ Carroll Building that was completed in 2010.

Over the period 1995 to 2010 DkIT’s capital investment programme amounted to €150 million, an average of €8.3 million per year. As discussed above, this level of expenditure would have generated €9.1 million GVA for the Irish economy and supported 61 jobs, around nine times the impact described above. It is hoped that as funds become available DkIT will be able to increase capital investment and that this impact will start to return to its previous level.

4.6.1 Future Opportunities

DkIT’s future capital investment plans are outlined in the draft Campus Development Plan for 2011-2021. This document sets out the infrastructure and facilities that DkIT will require in order to accommodate expected growth in student numbers and to deliver the range of educational, research, developmental and community support services required. It is based on three phases of development, the first of which covers the period 2012-2015 and is expected to cost around €23 million if the work proceeds.

The current economic climate and pressures on public finances mean that funding this programme of development will require a degree of innovation, flexibility and an ability to take advantage of funding opportunities and developmental alternatives as they arise. If DkIT can achieve this then the plan will result in annual capital expenditure of around €7.7 million per year over the next three years. Using the same calculation described in section Table 4-7, it can be estimated that this level of expenditure would generate €6.9 million GVA for the Irish economy per year and support 47 jobs.

The current, historic and potential future impact of capital projects undertaken by DkIT is summarised in Table 4-10. Based on these figures it can be calculated that each €1 invested in capital projects can be expected to generate €1.21 of GVA for the economy of the Island of Ireland.


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Table 4-10: Capital project spend impact, historic, current & potential future

Louth North East

Republic of Ireland

Cross Border

Current Impact

Total GVA (€m) 0.2 0.5 1.0 0.8

Total Employment (FTE jobs) 2 3 7 5

Historic Impact

Total GVA (€m) 2.1 4.6 9.1 7.6

Total Employment (FTE jobs) 14 31 61 51

Potential Future Impact

Total GVA (€m) 1.6 3.5 6.9 5.9



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5 STUDENT IMPACTS There are three main ways in which DkIT students generate economic impact by:

• spending money on things such as accommodation, food and socialising;;

• working part-time while studying; and

• undertaking a work placement as part of their course.

This section describes and quantifies each of these impacts.

5.1 Student Spending

The students of DkIT have an impact on the economy because they spend money in local businesses. This expenditure increases the turnover of the business, which in turn supports jobs in these businesses and generates GVA.

The starting point for estimating this impact is to understand where DkIT students choose to live during term time, because this directly affects how much money they will spend in the local economy. DkIT students can choose between four different types of accommodation. They can continue to live at home, they can live in digs in Dundalk, they can live in the purpose built student village on campus or they can rent a flat. DkIT does not have details about where all students live during term-time, however it is possible to estimate the number of students living in each study area by making assumptions based on the students’ home addresses.

In 2011/12 4,734 students were enrolled at DkIT. Of these, 37% came from Louth, 34% came from elsewhere in the North East, 13% came from the rest of Ireland, 1% came from Northern Ireland and 14% came from overseas10. Assumptions about where students will live during term time are provided in Table 5-1 and informed by consideration of factors such as:

• the geography of the area and ease of commuting to Dundalk;

• availability (e.g. the capacity of the student village); and

• cost efficiency for the students (i.e. it is assumed that all students from Louth continue to live at home while studying).

Table 5-1: Student accommodation choices assumptions

Louth Rest of North East

Rest of ROI

NI Overseas

At home 100% 50% 10% 10% 0%

In digs 0% 5% 5% 5% 5%

Student village 0% 0% 3% 10% 30%

Private flat 0% 45% 82% 75% 65% Source: BiGGAR Economics assumptions

10 DkIT Registry, 2011/12 student enrollments.


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These assumptions were then applied to the total number of students enrolled at DkIT in order to estimate how many students choose each type of accommodation.

The next step was to estimate how much students spent on accommodation. Information from the 2012/13 DkIT student accommodation list suggests that the average cost of student digs in Dundalk was around €95 per week and the average cost of a student flat was around €62 per week. The weekly cost of accommodation in the Dundalk Student Village in 2011/12 was €85 and it was assumed that students who live at home do not pay for their accommodation.

The next step was to estimate how much students in different types of accommodation spent on other things such as socialising, food and travel. This was done by using information from the survey of new students and from the DkIT website.

The type of accommodation that the students resided in also had an impact on the type of expenditures that the students incurred so it was necessary to make slightly different assumptions based on where students lived during term-time. For example, as student digs generally include some or all meals, students living in this type of accommodation will spend less on food than students who live in a private flat. A breakdown of the amount of money spent by each type of student on different items is provided in Table 5-2. By applying these assumptions to the number of students living in each type of accommodation it can be estimated that the total expenditure of the students of DkIT was €24.1 million per year.

Table 5-2: Student expenditure by accommodation type- weekly (€)

At home In digs Student Village

Private flat

Accommodation* 0 95 85 62

Socialising** 33 33 33 33

Food*** 20 20 50 50

Travel*** 13 13 13 13

Books/equipment*** 15 15 15 15

Bills* 0 0 0 15

Total 80 175 195 187 Source:* DkIT SU Accommodation List 2012/13, **Survey of new students 2010/11, *** DkIT website

The GVA of this expenditure was calculated by dividing total expenditure on each item of expenditure by an appropriate turnover to GVA ratio. The number of jobs supported by this spending was then calculated by dividing the GVA impact by the GVA/employee in the relevant sector. Multipliers were then applied to capture the effects of subsequent spending rounds in each study area.

In this way it has been estimated that the students of DkIT contributed €13.1 million GVA to the Irish economy and support 373 jobs through their spending. The breakdown of this impact is given in Table 5-3.


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Table 5-3: Student spending impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 4.6 6.7 13.1 8.0

Total Employment (jobs) 114 182 373 222 Source: BiGGAR Economics

5.2 Student Part-time Employment

Many DkIT students work part-time while studying and this has an economic impact because it contributes to the GVA of the businesses that employ them.

In order to calculate this impact it is necessary to know how many students work while studying and how many hours they work for. The 2010/11 survey of new students found that almost 56% of new students intended to work part-time while studying. The same study found that just over 35% of new students already had a part-time job.

Anecdotal evidence from consultations with DkIT staff suggests that the recession has made it more difficult for students to secure part-time work so it is likely that not all of the new students who intended to find part-time work found a job. For this reason, it is assumed that half of the students who intended to find a job when they enrolled in DkIT did not manage to do so (i.e. 45% of all students work part-time).

Evidence from the 2010/11 survey of new students also shows that students who work part-time worked an average of 12 hours per week. It was assumed that a full-time employee worked an average of 40 hours per week.

The final assumption that must be made before estimating the impact of this activity is how much of this employment is additional – i.e. how much of it would not have occurred without DkIT students being available for employment. The assumption made was that 25% of this employment was additional; that is, that employers would have failed to fill 25% of these posts if DkIT students were not available. To put this in context, the student FTE employment is equivalent to only 12.5% of the employment in sales and customer services positions in County Louth11. At times of lower unemployment in the economy, this assumption on the additionality of student employment would be higher.

By applying all these assumptions to the total number of students who worked part-time, it can be estimated that part-time work undertaken by students was equivalent to 191 additional FTE jobs in the economy.

Consultations12 undertaken to inform this study suggested that the majority of students who work part-time are employed in jobs such as supermarkets and bars. The GVA impact of these jobs has therefore been calculated using the average GVA per employee in the retail, wholesale and restaurant sectors. This generated €5.8 million GVA across the Irish economy.

The impact of student expenditure has already been considered in section 5.1 so, in order to avoid double counting, Type I multipliers (which only include supplier

11 From CSO Sapmap 2011 summary for County Louth. 12 A list of consultees is provided at Appendix 1. Student employment was discussed with President Denis Cummins and Ronan Dennedy of the Louth County Enterprise Board.


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effects) have been used to calculate the multiplier effects rather than the Type II multipliers used elsewhere in this report.

On this basis, student part-time employment contributed €6.9 million GVA to the Irish economy and supported 226 FTE jobs. A breakdown of this impact for the different study areas is given in Table 5-4.

Table 5-4: Student part-time employment impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 4.3 5.4 6.9 5.7

Total Employment (jobs) 142 177 226 187 Source: BiGGAR Economics

5.3 Student Placements

By producing new graduates DkIT can help to improve the productivity of businesses and have a direct positive impact on the local and national economy.

The extent to which DkIT is able to improve the productivity of businesses depends on both the relevance and applicability of graduate skills and the degree of interaction between graduates and businesses. A graduate who secures a job but then finds that the skills they have learned are not relevant to their employers work for example is unlikely to improve the productivity of the company. Similarly, a graduate with very relevant and useful skills who fails to secure a job in a relevant industry will also not be in a position to improve economic productivity.

DkIT is committed to forging mutually beneficial relationships with industry and to this end has compulsory structured placements on 17 of its programmes across nine different departments and subject areas. The partnership forged between DkIT and industry through the placement process influences the culture of practice of both the academic and industry working environments. Students inform the working practices of industry with fresh eyes and ideas from learning and return to DkIT with informed and up-to-date knowledge of industry practices that influence the curriculum.

During 2011/12 a total of 1,036 DkIT students participated in a student placement. Almost 40% of these placements were in Louth and about three quarters were in the North East region. Placements varied in duration from 6 weeks (year three placement for students studying toward the BA Early Childhood Studies) to 42 weeks (for final year nursing and midwifery students). The total number of weeks spent by DkIT students on placement amounted to 15,821. This information is summarised in Table 5-5.


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Table 5-5: Student placements by subject area and duration

Department/Subject Area Placements Duration Weeks/

year

Dept. of Humanities 160 12 weeks 1,920

Dept. of Management & Financial Studies 25 18 weeks 450

Dept. of Nursing, Midwifery & Health Studies 519 6-42 weeks 8,833

Dept. of Applied Sciences 171 8-12 weeks 1,640

Dept. of Music & Creative Media 20 6 weeks 120

Dept. of Computing & Maths 11 18 weeks 198

Dept. of Hospitality Studies 130 14-26 weeks 2,660

Total 1,036 15,821 Source: DkIT Student Placement Office and other Departments.

By giving students practical experience of their chosen industry, placements enable students to apply what that they have learned to a real life situation. This helps to ensure that DkIT graduates possess skills that are relevant to real companies, which increases their productivity and makes them more attractive as potential employees in the future.

The economic impacts associated with student placements include:

• impacts arising from the work done by the student during the placement;

• any productivity gain captured by host companies who offer permanent, post-graduation employment to placement students; and

• any training and recruitment cost savings accruing to host companies who offer permanent, post-graduation employment to placement students.

These impacts can be quantified based on the number of weeks students spend on placement and the value they can be expected to add to their host employer during that period. The starting point for estimating this value is the GVA of an average employee in the Irish economy. Average GVA per employee however includes all employees, many of whom will have years of experience. As students will have relatively little, if any, relevant work experience before undertaking a placement, it is reasonable to assume that their productivity will usually be below the average.

An indicator of the productivity difference that employers expect between placement students and trained employees is the difference between the average salaries paid to graduates and the average salaries paid to trained employees. A survey by Gradireland13 found that the average starting salary for Irish graduates in 2011 was €25,000. In comparison, data published by the Central Statistics Office14 (CSO), shows that the average annual earnings of Irish employees amounted to €35,768. This implies that the productivity difference between the average graduate and the average employee was around 30%.

Facilitating student placements will also involve some cost to the firm in terms of supervision and support provided by other employees. The effect of this will be to

13 Gradireland Graduate Salary & Graduate Recruitment Trends Survey 2011 14 CSO, Labour Market and Earnings Statistics, Q2 2012


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reduce the productivity of the employees involved in training and supporting the student. The effect of this will be to further reduce the total GVA of the placement. The magnitude of this effect will vary from student to student depending on ability and the nature of work undertaken so an indicative estimate of 20% has been applied in order to capture the effect.

On average, Irish employees contribute €1,185 GVA per week to the Irish economy. Applying the assumptions described above to this implies that students undertaking work placements will contribute an average of €592 per week. By applying this to the total number of placement weeks undertaken by DkIT students, it can be estimated that student placements contribute €8.5 million to the Irish economy. A breakdown of this impact is provided in Table 5-6.

Table 5-6: Student placement impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 3.6 7.0 8.5 7.2 Source: BiGGAR Economics

5.4 Summary of Student Impact

The total economic impact associated with the students of DkIT has been estimated as €12.5 million GVA and 256 jobs in Louth, €19.0 million GVA and 359 jobs in the North East, €28.4 million GVA and 599 jobs in the Republic of Ireland and €20.9 million GVA and 409 jobs in the cross border region. This is summarised in Table 5-7.

Table 5-7 – Summary of student impacts

Louth North East

Republic of

Ireland

Cross Border

Student Spending GVA (€m) 4.6 6.7 13.1 8.0

Student P-T Employment GVA (€m) 4.3 5.4 6.9 5.7

Student Placements GVA (€m) 3.6 7.0 8.5 7.2

Total GVA (€m) 12.5 19.0 28.4 20.9

Student Spending Jobs (FTE Jobs) 114 182 373 222

Student P-T Employment Jobs (FTE Jobs) 142 177 226 187

Student Placements Jobs (FTE Jobs) - - - -

Total Employment (FTE Jobs) 256 359 599 409 Source: BiGGAR Economics

5.5 Commentary

The primary driver for all of the impacts described in this section is the number of students who attend DkIT so the magnitude of the impacts would increase as student numbers grow.


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In 2010/11 DkIT earned €1.3 million in tuition fees from 302 international students (i.e. those from outside the EU). By 2011/12, the number of international students had increased to 316 and there were a further 200 students from other EU countries. This represented around 3% of DkIT’s total income for the year. In section 4.1, it was estimated that the direct impact of DkIT was €41.6 million. As direct impact is driven by income, this implies that the international students studying at DkIT generated a direct impact of €1.1 million in 2010/11, which equates to almost €3,592 per student.

In addition to the direct impact generated by the tuition fees paid by these students, there will be further impacts associated with their spending and any visits they receive from friends and family while studying. In section 5.1 it was estimated that the impact of spending by DkIT students amounts to €14.4 million per year and in section 6.1 it will be shown that the total impact of friends and family visiting students amounts to €0.7 million GVA per year. This equates to an additional impact of almost €3,389 per international student.

Taken together, this implies that each international student who studies at DkIT contributes around €6,981 GVA per year or a total of €21,674 for each full time undergraduate (based on a three year degree course).

Every additional international student recruited by DkIT would therefore generate an impact of €7,225 GVA, for each year that they study at DkIT.


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6 TOURISM This section describes the economic impact that DkIT has on the economy through tourism impacts, as a result of:

• visits to staff and students from friends and family; and

• attendees at conferences and other events.

6.1 Visiting Friends and Families

DkIT staff and students will be visited by friends and relatives, bringing additional tourism revenue to the regional economy.

There were 2.7 million visits to friends and relatives (VFR) trips within Ireland in 2009 and 2.3 million VFR trips from overseas15. Applying these figures to the Irish population gives an average of 0.59 domestic VFR trips and 0.51 overseas VFR trips per person per year. These figures have been multiplied by the total number of staff and students at DkIT who reside in the different study areas to estimate the number of VFR trips.

The average domestic VFR tourist will spend €63 on their trip and the overseas VRF tourist will spend €37316, providing a basis for calculating the total increase in turnover in the tourism sector that is attributable to DkIT associated VFR.

GVA has been calculated by applying GVA to turnover ratios for the tourism sector and employment supported has been estimated by applying turnover per employee figures, also for the tourism sector. Suitable multipliers have then been applied.

Based on these assumptions, VFR visits to staff and students of DkIT contribute £0.6 million GVA to the Irish economy and support 27 jobs. A breakdown of this impact for each of the study areas is given in Table 6-1.

Table 6-1: Visiting friends and families impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 0.4 0.5 0.6 0.5


6.2 Conferences and Other Events

In the academic year 2011-2012 DkIT hosted seven major events, which attracted a total of over 2,600 visitors. A breakdown of these events is provided in Table 6-2. The first three of these events catered primarily to local people and as such did not generate any economic impact because the people who attended would probably have been in the area anyway. It is however important to note that, although these events may not have generated any economic impact, they will have generated social impacts by providing opportunities for social engagement.

15 Tourism Statistics from the Central Statistics Office Yearbook, 2011. 16 Tourism Statistics from the Central Statistics Office Yearbook, 2011.


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Such opportunities can considerably enhance the quality of life available in an area, which contributes to overall economic competitiveness.

The next two events listed in Table 6-2 did attract some visitors from outside the North East; however, as these events lasted one day it is assumed that none of the delegates stayed overnight and did not spend any money in Dundalk.

The final two events attracted significant numbers of overseas visitors. The Italian Summer School for example involved three groups of 150 students who each stayed in Dundalk for two weeks between 29th June and 10th August. The students were accompanied by 20 staff. The FACE conference lasted for four days and attracted delegates from 10 European countries, all of whom stayed overnight in Dundalk.

Table 6-2: Events and visitor numbers

Institute of Technology (IoT) Number

A Taste of Louth (Food, Art & Craft exhibitions & demonstrations) 450

St. Vincents Secondary School Annual Concert 750

Sports Summer School 25

Youth Council of Northern Ireland Meeting 13

National Youth Council Annual Conference 150

Italian Summer School 470

FACE – a Red Cross European Conference & Competition 800

Total 2,658 Source: BiGGAR Economics

In order to estimate the economic impact of these events, it was necessary to calculate how many nights accommodation the events generated in Dundalk. The starting point for doing this was to calculate how many nights accommodation could have been required by people attending the events by multiplying the duration of the event by the number of delegates (i.e. the FACE conference was held over four days so delegates would have required three nights accommodation. There were 800 delegates at this event so the potential accommodation requirement was 2,400 bed-nights).

The next step was to estimate how many of these delegates actually stayed overnight in Dundalk. This was done by first of all estimating how many visitors attended each event from each of the study areas, using information provided by the events office at DkIT. Assumptions were then made about the proportion of visitors from each study area who chose to stay overnight.

It was assumed that all overseas delegates attending DkIT events stayed overnight in Dundalk for the duration of the event but that only 25% of visitors from elsewhere in Ireland stayed overnight. It was assumed that visitors from the North East did not stay overnight. By applying these assumptions to the number of potential accommodation requirement, it can be estimated that these two events generated 8,100 overnight stays by overseas visitors and 962 overnight stays by Irish visitors.


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Irish tourism statistics show that, on average overseas business visitors spend €70 per night while Irish business visitors spend €9517. While overseas students may not be considered typical business visitors, these type of events are included in the calculation of tourism statistics so this methodology is appropriate. Furthermore, as the cost of international summer schools is typically between €500 and €1,000 per week, i.e. €70 to €140 per day, the assumption used is also reasonable.

By applying this to the total number of overnight stays it can be estimated that these two events generated almost €0.7 million of additional expenditure in the Irish tourism sector. The GVA impact of this was calculated by dividing this additional turnover by a GVA to turnover ratio for the tourism sector and the employment impact was calculated by dividing turnover by turnover/employee in the sector. Multipliers for the tourism sector were then applied to calculate total economic impact.

In this way it can be estimated that in 2011/12 DkIT events contributed €0.9 million GVA for the Irish economy and supported 16 jobs. The breakdown of this impact is given for each of the study areas in Table 6-3.

Table 6-3: Conferences & events impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 0.3 0.6 0.9 0.6

Total Employment (FTEs) 12 13 16 13 Source: BiGGAR Economics

6.3 Tourism Assets

One of Dundalk’s main tourist accommodation providers is the Crowne Plaza Hotel next to the DkIT campus. The hotel is a 14-storey building that has 129 bedrooms, a restaurant and a conference centre. The convenience of the hotel to the campus means that visitors to DkIT from outside the county will often stay there overnight, providing the hotel operator with a reliable stream of guests.

Reliable demand is an important consideration for hotel developers considering potential sites so, while the geographic location of Dundalk in the Belfast-Dublin corridor is likely to have been the main driver for the investment decision, it seems likely that the presence of DkIT would have been a factor in the decision to build the hotel. If DkIT did not exist and the area occupied by the campus was instead occupied for example by an industrial estate, it is difficult to imagine that the hotel developer would have chosen the site to build a hotel.

6.4 Summary of Tourism Impact

The combined tourism impacts associated with DkIT contribute €0.7 million GVA and 29 jobs to Louth, €1.0 million GVA and 34 jobs in the North East, €1.5 million GVA and 43 jobs in Ireland and €1.1 million GVA and 35 jobs in the Cross Border region.

17 Tourism Statistics from the Central Statistics Office Yearbook, 2011.


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Table 6-4: Summary of tourism Impacts

Louth North East

Republic of Ireland

Cross Border

VFR GVA (€m) 0.4 0.5 0.6 0.5

Conference & Events GVA (€m) 0.3 0.6 0.9 0.6

Total GVA (€m) 0.7 1.0 1.5 1.1

VFR Jobs (FTE Jobs) 17 21 27 23

Conference & Events Jobs (FTE Jobs) 12 13 16 13


6.5 Commentary

The two impacts considered in this section are driven by staff and student numbers and by the number of events hosted per year. Growth in student numbers is expected to occur over the coming years so the value of visits to staff and students should also increase accordingly. This means that any proactive efforts to increase tourism impact will need to focus on increasing the number of events hosted each year.

As described above, economic impact from events is generated by visitors who stay overnight and is associated with events lasting more than one day. By implication this means that the longer the event, the greater the impact. This means that if DkIT wishes to increase its tourism impact, it should focus on attracting events that cater to overseas visitors and that last more than one day.

It is worth highlighting that between 2010/11 and 2011/12 the number of events hosted by DkIT increased and more importantly, this increase was mainly due to an increase in international visitors. (All of the events hosted during 2010/11 catered mainly to a local audience). This suggests that if DkIT wishes to increase its impact in this area it is already moving in the right direction.


If DkIT takes a decision to try and increase the value of its tourism impact, an obvious way of doing this would be by attracting more international summer schools like the one hosted in 2011/12. The contacts established in order to organise this event should provide a starting point for achieving this.

6.5.2 Benchmarking

It would be unfair to directly compare the impact generated by events hosted by DkIT with that of other institutions because of differences in the size of the institutions but it is possible to compare institutions by calculating the value of impact generated per student. Three Scottish institutions provide useful comparators in this area. These are Robert Gordon University in Aberdeen, Heriot-Watt University near Edinburgh and Glasgow Caledonian University. These Universities have been chosen because they are similar to DkIT in that they are all are modern universities with particular strengths in either technical disciplines and/or health related subjects. Studies similar to this one have also been undertaken for all three institutions by BiGGAR Economics, which means that comparable data is available.


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Dividing the value of impact generated by events hosted by DkIT by the total student headcount gives an impact/student of €160. Performing the same calculation for Robert Gordon University and Glasgow Caledonian University gives an impact/student figure of less than €50 while the figure for Heriot Watt University is almost €500. This shows that although DkIT’s current performance in this area is higher than might be expected from an institution of its size, there is considerable potential to further increase this impact.

It should be noted that Heriot-Watt University has the advantage of an on-campus conference centre and student accommodation that is used to accommodate delegates. Although DkIT does not have an on-site conference centre, it is adjacent to the Crown Plaza, which does have these facilities. The Institute also has on-campus student accommodation. The fact that (unlike Heriot-Watt) DkIT does not own these facilities is not necessarily a barrier to realising these opportunities.


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7 REGIONAL DEVELOPMENT CENTRE The Regional Development Centre (RDC) was established in 1989 by DkIT as the Institute’s innovation support and technology transfer organisation. The RDC is the commercially oriented interface between DkIT and the industrial, commercial and business life of the region. It exists to make the expertise, facilities and resources of the Institute available for the benefit of the regional economy.

Since it was founded the RDC has supported more than 800 entrepreneurs, incubated 87 knowledge based start-up enterprises and conducted 169 applied research projects. Since 2001 it has also managed €23.7 million of externally funded projects. This section explores the activity of the RDC and the economic impacts, where they can be quantified.

7.1 RDC Activity

When it was first established the main focus of the RDC was on providing incubation facilities for new companies. Over the years the support provided has expanded on either side of this to promote entrepreneurship and to meet the needs of established businesses through innovation support and applied research.

Figure 7-1: Growth in RDC activity

Source: BiGGAR Economics

The main projects currently delivered by the RDC in each of these areas are described below.


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7.2 Entrepreneurship

There is a strong focus within the RDC on supporting entrepreneurship amongst DkIT students, the academic community and amongst graduates from DkIT and other HEIs. This activity is delivered through three current projects: the New Frontiers Entrepreneur Development Programme, the Student Enterprise Intern Programme and Accelerating Campus Entrepreneurship (ACE). Each of these projects is described below.

7.2.1 Accelerating Campus Entrepreneurship

The ACE initiative was established as a collaborative project led by DkIT and involving four other Irish IoTs and Universities. The overall aim of the project is to create more entrepreneurial graduates by enabling students from non-business programmes take enterprise related modules.

The rationale behind this project is based on the recognition that the future competitiveness and prosperity of the Irish economy will depend on the application of knowledge, innovation and entrepreneurship. The need to develop entrepreneurial talent amongst graduates has been continually reiterated by the Irish Government. The ACE project is designed to address this need by embedding entrepreneurship education into higher education.

To date the project has been highly successful and has exceeded all of its target outputs. This is illustrated in Table 7-1.

Table 7-1: ACE achievements

Output Target Achieved

Staff involved in working on programme development and delivery 40 158

Science and Technology students engaged in entrepreneurship accredited training 100 318

Other students involved in related activities over the ACE programme’s lifetime 500 11,838

Academics and non-academics involved in entrepreneurship staff development programmes 60 123

Student internships 5 17

Entrepreneurs in Residence* (* not a funder requirement) 0* 4

Student business projects exploring commercialisation opportunities through Incubation Centres/TTOs 20 349

New ventures established in the last three years based on technology transfer 10 66

Conference papers developed and presented based on data emanating from the ACE initiative 5 13

Source: Regional Development Centre

Although funding for the ACE project finished in June 2012, the RDC was able to secure a further €200,000 funding to extend the project. This involved working with four new partner institutions with the aim of incorporating the lessons learned from the project into the national entrepreneurship agenda. The fact that DkIT is now contributing to how entrepreneurship is taught across Ireland provides evidence that the expertise of the Institute in this area has been recognised at the


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national level. The impact of this activity on entrepreneurs based at DkIT is considered in detail below.

7.2.2 Student Enterprise Intern Programme

One of the key features of this effort was the launch of the Student Enterprise Intern Programme. The programme involved recruiting graduate interns to promote entrepreneurship throughout the campus. Interns are required to work for 18 hours per week on the programme while studying for a Master’s degree, which is funded through a scholarship provided by DkIT.

There are currently five interns working at DkIT, one in the School of Engineering, one in the School of Health and Science, one in the School of Informatics and Creative Arts and two who work across all schools. The interns manage a variety of initiatives throughout the academic year including enterprise orientated competitions and guest speakers.

Since April 2009, the Programme has also managed the Student Innovation Fund (SIF). The fund, which is and is sponsored by Dundalk Credit Union, is aimed at providing seed capital of up to €1,000 for prototyping, market research, etc. for individual student projects. The programme also manages the Bright Ideas Lab, which is reserved workspace in the RDC for students to run their business.

To date, there have been 47 applications to the SIF of which 31 have been approved. This has resulted in the formation of 12 new enterprises, which now employ a total of 22 people. Prior to 2007, DkIT did not have any graduate start-ups so all of this impact can be attributed directly to the RDC.

The GVA impact of these businesses has been calculated by multiplying direct employment by GVA per employee in the Irish economy and the wider impacts have been estimated by applying appropriate multipliers. In this way it can be estimated that the impact of the RDC’s support for entrepreneurs generated €1.8 million GVA for the Irish economy and supported 29 jobs. A breakdown of this for each of the study areas is provided in Table 7-2.

Table 7-2: Entrepreneurship impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 1.2 1.4 1.8 1.4


7.2.3 New Frontiers Entrepreneur Development Programme

This programme supports start-up and early stage technology entrepreneurs to establish, grow and develop their business. The project is funded by Enterprise Ireland and in its first year, supported 28 start-ups in Cavan, Louth, Meath, Monaghan and Dublin North. The programme is delivered in collaboration with Dublin City University (DCU).

The New Frontiers programme is a successor and delivers similar support to an earlier programme called the Novation Enterprise Platform Programme (NEEP).


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7.3 Incubation

When the RDC was first established one of its core functions was to provide incubation space for small start-up businesses and businesses looking to start operations in Ireland. Since it was established in 1989, with eight incubator units, the RDC has been undergone four separate development phases and now has 41 incubator units as well as modern networking space for companies and researchers. In May 2005 a further eight units were opened at the Millmount Development Centre in Drogheda.

Over the years more than 70 enterprises have been incubated at the RDC and a further 10 have taken up space at Millmount. Incubation space is made available to enterprises for periods of up to 3 years after which tenants are expected to graduate to mainstream business space elsewhere.

All enterprises incubated at the RDC are encouraged to participate in a variety of business support initiatives. Since 2001 these initiatives have been delivered as part of the Novation Enterprise Platform Programme (NEPP) which has since replaced by the New Frontiers Programme. The major focus of the NEPP is the support and development of the entrepreneur as well as the business idea. It does this through the delivery of a variety of specialist training programmes combined with structured business coaching and mentoring. The programme lasts for nine months and is aimed at entrepreneurs who commit full-time to starting businesses in the high tech, ICT and knowledge based fields.

Since 2001 more than 100 entrepreneurs have participated in the programme and some of these have since grown into major employers. For example Digiweb, one of Ireland’s leading broadband and web hosting companies originated in the RDC and now employs approximately 100 people in Dundalk, Dublin, Limerick and Waterford.

A survey of participants undertaken in 2011 found that of the 117 participants who took part in the programmes between 2001 and 2010, 70 were still in business. The survey also showed that of those who participated in the programme between 2001 and 2005, 47% remained in business. Although various state agencies (Enterprise Ireland and IDA Ireland for example) have undoubtedly contributed to these outputs, they relate to a programme that was delivered by the RDC therefore it is reasonable to attribute the vast majority of the impact realised to the RDC.

The businesses that participated in the NEPP currently employ 399 people. The GVA impact of this employment has been calculated by multiplying the number of jobs by the average GVA per employee in the Irish economy. Analysis of the location of current and former residents of the RDC suggests that 69% of these jobs are based in Louth, 71% are based in the North East, 96% are based in Ireland and 4% are based in Northern Ireland. These proportions have been used to calculate how much of the impact occurs in each study area. The effects of subsequent spending rounds have been captured by applying appropriate multipliers.

In this way it can be calculated that the incubation and innovation support provided through the RDC contributed around €31 million to the Irish economy and supported 499 jobs. A breakdown of this impact for each of the study areas is provided in Table 7-3.


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Table 7-3: Business incubation & innovation support impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 18.3 19.2 30.7 21.4


7.4 Support for Established Businesses

Support for established businesses is currently delivered through two projects, Innovation for Competitive Enterprise (ICE) and Success through Succession (STS). These projects are described below.

7.4.1 Innovation for Competitive Enterprise Programme

ICE is a €2.5 million project supported by the European Regional Development Fund to help increase productivity within supported businesses. ICE is a collaborative project led by DkIT and involving the University of Glasgow, Glasgow Caledonian University and the University of Ulster. The project is scheduled for completion in 2013 and by this time will have supported 270 managers and key staff in 90 businesses.

The support provided by the project involves offering participants access to up to 12 half-days of tailored, in-house support from innovation experts. At the same time the project team works with participating companies to help them:

• access additional specialist expertise and knowledge, for example from universities;

• access technology transfer & licensing opportunities, where appropriate;

• network with other participating companies; and

• attend training opportunities designed by the programme team to support innovation implementation.

A recent impact study of the ICE project suggests that during 2011/12 the project increased the turnover of assisted businesses by €17.0 million and that 33% of this impact will be generated in Ireland. The same review projects that the project will be responsible for supporting 103 additional jobs across the three participating areas. By assuming that the distribution of jobs corresponds to the distribution of turnover, it can be estimated that 34 of these jobs are located in Ireland (i.e. 33% of 103).

The GVA impact of these jobs has been calculated by multiplying employment by average GVA per employee in the Irish economy.

Analysis of the location of the businesses that participated in the ICE programme suggests that 20% are based in Louth, 67% are based in the North East and the rest are based elsewhere in Ireland. These proportions have been used to calculate how much of the impact occurs in each study area. The effects of subsequent spending rounds have been captured by applying appropriate multipliers.


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In this way it can be calculated that the support the RDC provides to established enterprises through the ICE programme contributed €2.7 million to the Irish economy and supported 45 jobs. A breakdown of this impact for each of the study areas is provided in Table 7-4.

Table 7-4: ICE project impact

Louth North East

Republic of Ireland

Cross Border

Total GVA (€m) 0.5 1.6 2.7 1.6


The impact calculated above is based only on the additional turnover generated by the ICE project in the Republic of Ireland but in 2011/12 the project also generated an equivalent amount of additional turnover in Scotland and in Northern Ireland. These impacts have not been included above because it has been assumed that they are attributable to the efforts of DkIT’s partners. As the ICE project was initiated and led by the RDC there is however some justification for attributing these impacts to the RDC because without DkIT the project would not exist so none of the impact would have occurred. For this reason, the impact presented in Table 7-4 can be considered a conservative estimate.

7.4.2 Success Through Succession

The Success Through Succession (STS) project was a €1.74 million project that started in 2009 and finished in June 2012. It was a collaborative project, led by the University of Ulster and also involved Glasgow Caledonian University. The aim of the project was to help second and third generation family owned businesses to prepare for and move through the challenges of succession planning. The rationale for the project was that, although family businesses contribute 9% of the GDP of the EU, around 70% do not survive the transition from the founder to the second generation and far fewer (between 3% and 10%) survive the transition to the third generation18.

The STS programme in Ireland assisted 22 businesses across the six southern border counties, which were helped them to develop family business succession plans that provide a framework and action plan to help them to realise their succession goals. The support provided included:

• one-to-one mentoring - covering finance, legal/tax, general business issues and psychology;

• group training events - covering finance, leadership, sales and marketing, and life beyond succession; and

• interactive group workshops - covering family business values, wealth management, business development, developing the family business constitution, governance and accountability.

18 Various from RDC research on succession of family businesses - BDO and Queens University Management School (2012), The Contribution of Family Businesses in Northern Ireland: European Commission (2009), Final Report of the Expert Group Overview of Family–Business–Relevant Issues: Research, Networks, Policy Measures and Existing Studies Neil Glynn (Deloitte), (2011), Planning for Family Business Succession


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The 22 businesses supported by the STS project employ 390 people and have a combined turnover of €40.7 million. Without the support provided through the project it is reasonable to expect that, as has been observed elsewhere in Europe, at least 70% of these businesses would not survive the transition to the next generation. This equates to a loss of €28.5 million to the Irish economy and more than 270 jobs. As yet it is too early to assess the extent to which the STS project has helped to improve the survival chances of the businesses assisted but these numbers demonstrate that even a small improvement could generate a substantial impact for the Irish economy.

7.4.3 Discovery Zone

The Discovery Zone is a 12-week programme designed to meet the particular needs of recently unemployed professionals providing business training, personal coaching, business mentoring, facilitation and access to hot-desking facilities. The programme ran three times between October 2010 and November 2011. A total of 35 participants benefited from the programme. The programme was funded through the Louth County Council and the Louth County Enterprise Board.

7.5 Applied Research

The RDC also generates economic impact is by enabling businesses within the region to access research expertise and academic expertise from within DkIT. This knowledge exchange is achieved through a variety of national initiatives including:

• the FUSION Programme;

• Innovation Partnerships; and

• Innovation Vouchers.

Each of these programmes has been established for a number of years so some of the projects supported by DkIT under these programmes were delivered several years ago. Although these projects will have contributed to the success of the businesses involved, the scale of the contribution is likely to diminish over time – i.e. the impact of a project undertaken 10 years ago will be less than the impact of a project undertaken three years ago. For this reason it is assumed that the benefits of applied research persist for three years19 after completion of the project and only impacts generated during that period are included.

7.5.1 FUSION

The FUSION Programme is an innovation support initiative for small companies funded by InterTradeIreland. It aims to help companies to:

• develop new and innovative products;

• improve existing products;

• streamline production processes;

• improve environmental performance;

19 Three years is a realistic time frame that has been adopted by various evaluations of knowledge exchange programmes across the UK and Ireland – e.g. InterTradeIreland’s evaluation of the FUSION project.


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• enhance design capabilities; and

• develop and implement IT solutions.

The FUSION Programme provides businesses with financial support up to the value of €52,800 to undertake a 12-18 month project in collaboration with a third-level institution. Businesses participating in a FUSION project are partnered with a third-level institution with specialist expertise in a relevant area and a science, engineering or technology graduate. The graduate is then employed by the company and remains based in the company throughout the project.

According to InterTradeIreland, on average, each company that takes part in the FUSION programme benefits from over £1 million worth of sales or efficiency savings in the three years following the project20. For ease of computation it is assumed that these sales/savings accrue evenly over the three years so that each company experiences increases of £333,333 per year for three years after completion of a project.

Since 2001 the RDC has been involved with 36 FUSION projects, an average of two or three projects each year. Fusion projects are cross-border project and as such all of these companies are based in Northern Ireland. The annual turnover increase (or efficiency savings) associated with these projects therefore amounts to around €1.0 million in Northern Ireland.

The economic impact of these projects has been calculated by dividing the additional turnover generated in each study area by a GVA to turnover ratio and employment impacts have been calculated by dividing GVA by average GVA per employee. The effects of subsequent spending rounds have been captured by applying appropriate multipliers.

In this way it can be calculated that FUSION projects supported by the RDC contributed more than €0.3 million to the economy of the cross border region each year and supported 6 jobs. A breakdown of this impact by study area is provided in Table 7-5.

Table 7-5: Applied research impacts, FUSION

Cross Border

Total GVA (€) €339,612

Total Employment (FTE Jobs) 6 Source: BiGGAR Economics

7.5.2 Innovation Partnerships

The Innovation Partnerships programme is another national programme, run by Enterprise Ireland. Innovation Partnerships can provide up to 80% of the cost of research work undertaken by third level institutions to develop new and improved products, processes or services or to generate new knowledge and know-how for companies.

According to Enterprise Ireland, each €1 of funding invested in Innovation Partnerships delivers a net increase of €7.71 in the turnover of the company assisted. For the sake of consistency, it is assumed that the duration of these impacts occur over a similar timescale to FUSION Projects. This implies that the

20 InterTradeIreland website as at 10th October 2012.


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annual turnover increase associated with an Innovation Partnerships is equivalent to €2.57 for each €1 of funding for three years after the project has been completed (i.e. €7.71 ÷ 3).

Since 2001 the RDC has attracted more than €2.8 million of applied research funding (including €1.3 million of Innovation Partnerships). For the purposes of this exercise, only projects that were completed less than three years ago are included. There are two projects that fit into this category, the combined value of which projects is almost €0.3 million. By applying Enterprise Ireland’s funding multiplier to this it can be calculated that the additional turnover/efficiency savings generated by these companies as a result of their participation in the Innovation Partnership projects amounts to almost €0.6 million per year.

The economic impact of these projects has been calculated by dividing the additional turnover generated in each study area by a turnover to GVA ratio for the Irish economy. Employment impacts have been calculated by dividing GVA by average GVA per employee in the Irish economy. The effects of subsequent spending rounds have been captured by applying appropriate multipliers.

In this way it can be calculated that Innovation Partnerships supported by the RDC in the last three years contributed almost €0.2 million to the Irish economy each year and supported 3 jobs. A breakdown of this impact for each study area is provided in Table 7-6.

Table 7-6: Applied research impacts, Innovation Partnerships


Cross Border

Total GVA (€) €0 €0 €157,256 €59,960


7.5.3 Innovation Vouchers

The Innovation Vouchers programme is run by Enterprise Ireland with the objective of helping to build links between Ireland's public knowledge providers and businesses. Under the programme, businesses can apply for vouchers worth up to €5,000, which they are able to use to purchase support from a knowledge provider to solve a technical problem or challenge or to explore a business opportunity.

The RDC has supported more than 80 Innovation Voucher projects since the programme was launched in 2007, seven of which were completed more than three years ago and have been excluded from this analysis. A further 15 projects were undertaken with companies that were either incubated at the RDC or participated in the NEPP programme. As the impact of these businesses has already included, they are excluded here to avoid double counting.

Of the remaining 63 vouchers, 37% were awarded to businesses in Louth, 60% were awarded to businesses in the North East region, 98% were awarded to Irish businesses and 2% were awarded to businesses in Northern Ireland.

There is no economic impact evaluation evidence available for the Irish Innovation Vouchers programme so it is necessary to draw on international experience in order to calculate the impact of these projects. Evaluation evidence is available


39

for similar Innovation Voucher programmes from Scotland, from the English West Midlands and the North West of England.

These evaluations found that the economic impact associated with the vouchers was usually generated by a relatively small number of projects. On average however, each innovation voucher created between 0.3 and 0.7 new jobs. In practice this meant that most companies did not create any new jobs but some created several. It seems likely that an evaluation of the Irish Innovation Vouchers programme would have similar results (indeed the three programmes for which evaluation evidence is available are based on the Irish programme) so it is assumed that vouchers will generate an average of around 0.5 new jobs.

The number of jobs directly supported by Innovation Vouchers managed by the RDC can therefore be calculated by multiplying the number of vouchers in the past three years by 0.5. The GVA impact of this has been calculated by multiplying the GVA impact by average GVA per employee in the Irish economy. Multiplier effects have been calculated by applying appropriate multipliers.

In this way it can be calculated that Innovation Vouchers managed by the RDC contribute around €2.5 million to the Irish economy each year and support 40 jobs. A breakdown of these impacts for each study is provided in Table 7-7.

Table 7-7: Applied research impacts, Innovation Vouchers


Cross Border

Total GVA (€) €794,743 €1,286,437 €2,482,802 €1,445,385


Evaluation evidence from Scotland and England also shows that, while Innovation Vouchers can be an effective way of stimulating innovation, it can often take a significant amount of time for such innovation to lead to a tangible economic impact. This means that a year or more may elapse between a company receiving a voucher and reporting increases in employment or turnover. For this reason, both evaluations concluded that the impacts from innovation voucher projects are likely to grow over time, although estimates of the scale of this growth varied considerably.

The impact calculated above is based on the current impact of innovation vouchers. Based on experience elsewhere, it is reasonable to expect that this impact will grow over time as the knowledge generated by the projects becomes embedded in the businesses assisted.

7.6 Wider Impacts

In addition to the economic impacts described above, the RDC also makes an important contribution to cross-border relationships. It does this by participating in initiatives that involve collaboration with institutions in Northern Ireland (e.g. Fusion). These initiatives help to build trust, which supports reconciliation between Northern Ireland and the Republic of Ireland. Although this impact cannot be quantified, it has important economic implications because it helps to improve the image and reputation of the area, which is important to investor confidence.


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7.7 Summary of Regional Development Centre Impacts

Taken together the impacts described in this section contributed €37.9 million GVA to the Irish economy each year and support 617 jobs. A breakdown of these impacts for each study area is provided in Table 7-8.

Table 7-8, Summary of RDC impacts


Cross Border

Entrepreneurship (€m) 1.2 1.4 1.8 1.4

Incubation & Innovation (€m) 18.3 19.2 30.7 21.4

Enterprise Support (€m) 0.5 1.6 2.7 1.6

Applied Research (€m) 0.8 1.3 2.6 1.8

Total GVA (€m) 20.7 23.4 37.9 26.3

Entrepreneurship (FTE Jobs) 19 22 29 23

Incubation & Innovation (FTE Jobs) 297 312 499 348

Enterprise Support (FTE Jobs) 7 25 45 27

Applied Research (FTE Jobs) 13 21 44 30

Total Jobs (FTE Jobs) 337 380 616 427 Source: BiGGAR Economics

7.8 Commentary

The Dundalk RDC was one of the first to be established in Ireland and for this reason the range of activity undertaken by the RDC is very well developed. The RDC provides a comprehensive range of support in each of the areas described in this section: promoting entrepreneurship; providing incubation support for new enterprises; supporting established enterprises; and encouraging industry to engage in applied research.

The economic impact of RDC activities might be expected to increase over time, as new projects and initiatives are launched, informed by the lessons learned over almost quarter of a century on how innovation support and technology transfer can deliver regional social and economic development.


One of the RDC’s current roles is to support the commercialisation of intellectual property held by DkIT. As discussed in the next chapter, DkIT’s research income has increased significantly over the last decade. DkIT’s developing intellectual property portfolio, associated with this growth, is likely to provide increased commercialisation opportunities in the future.


41

8 RESEARCH Over the past decade DkIT has sought to position itself as one of Ireland’s leading IoTs in terms of research performance. DkIT’s research vision for 2011-2016 is that by the end of 2016 DkIT “will be ranked as the leading Irish Institute of Technology in our research areas”. This section explores how this might be achieved and what impacts could be generated as a result.

8.1 Research Strengths

In order to achieve its research Aspirations, DkIT has identified three key thematic areas in which it possesses real strength. These areas are:

• ICT, Health and Ageing;

• Energy and the Environment; and

• Creative Arts.

Each of these areas has the potential to generate real impact in the region in the years to come. Activity within each of these areas is undertaken within DkIT’s four research groups, seven research centres and two applied research enhancement centres. These groupings are summarised in Table 8-1.

Table 8-1: DkIT Research Groupings

Research Centres Research Groups Applied Research Enhancement Centres

Netwell Centre Centre for Renewable Energy at Dundalk IT Centre for Music Research Smooth Muscle Research Centre Humanities and Social Science Research Centre Centre for Freshwater Studies Software Technology Research Centre

Enterprise and Innovation Research Group Creative Media Research Group Electrochemistry Research Group Regulated Software Research Group

Centre for Affective Solutions for Ambient Living Awareness Ion Channel Biotechnology Centre

Source: DkIT website

8.2 ICT, Ageing and Health

The Groupings taking forward research related to DkIT’s ICT, Ageing and Health theme include Software Technology Research Centre (STORC), Regulated Software Research Group (RSRG), the Netwell (Social Networks, Environments and Technologies for Wellness and Ageing-in-place) Centre, Centre for Affective Solutions for Ambient Living Awareness (CASALA), the Smooth Muscle Research Centre (SMRC) and the Ion Channel Biotechnology Centre (ICBC).

8.2.1 ICT Research

ICT research within DkIT focuses mainly on software engineering, which is led by STORC and its associated research group, RSRG both of which are part of the


42

School of Informatics and Creative Arts. The main research focus for these two groupings are:

• Medical Device Software Process Improvement (SPI) - the development of an international SPI framework for the medical device industry as a key enabler of best practice for the sector. This encompasses the activity of the RSRG, which was established in 2008. The medical device sector is a key growth area for the Irish economy but at present the sector is focused mainly on the manufacture of devices. Software plays a pivotal role in the global medical device sector but at present, despite Ireland being internationally recognised for the strength of its software sector, the Irish medical device software sector is limited. This research activity could help to develop this sector.

• Ambient Assisted Living – the Centre for Affective Software for Ambient Living Awareness (CASALA) is run through the Netwell research centre within the theme of ageing. CASALA works with Irish industry to achieve product innovation, business competitiveness and market leadership in the emerging ambient assisted living sector. The Centre’s work focuses on the development of non-intrusive “context aware” software services, which engage with and adapt to older people living at home with the aim of helping them to enhance their quality of life;

• End User Computing – this is the use of programming tools in areas other than software development. Such users include financial analysts, multimedia designers and office users. DkIT is currently building Europe’s largest research team in spreadsheet engineering, the most popular form of end-user computing. This research also led to the formation of CUSPA Technologies in 2010, DkIT’s first spinout company.

8.2.2 Ageing Research

Ageing research at DkIT is led by the Netwell (Social Networks, Environments and Technologies for Wellness and Ageing-in-place) Centre and CASALA, both of which are part of the School of Health and Science. Both centres are working with partners to develop new ideas that enhance the quality of life and well-being for older people and those who care for them. This is achieved through more integrated community-orientated services, more sustainable home and neighbourhood design and more age-friendly technologies.

Netwell was established in 2006 with the objective of promoting innovative service models and technologies to help older people to remain in their own homes for longer. CASALA was established in October 2009 using seed funding from Enterprise Ireland. CASALA’s mission is to work with industry to help achieve product innovation and bring products to market and to act as Netwell’s commercialisation arm.

8.2.3 Health Research

Health Research at DkIT is mainly led by the Smooth Muscle Research Centre (SMRC) and the Ion Channel Biotechnology Centre (ICBC) also based in the School of Health & Science. The SMRC investigates the control of smooth muscle function. Primary areas of interest are in urinary incontinence and urethral physiology, erectile dysfunction, lymphoedema, lymphoedema, arthritis and diseases of the vascular system. Although still at an early stage of development, the Centre has developed an approach that is expected to provide the basis for


43

new treatments for a range of debilitating diseases that severely affect people’s lives.

The ICBC was established in 2008 as the commercial arm of the SMRC. It is engaged with industry in the development of tools for measuring and analysing biological function in smooth muscle. Through the use of patent applications, the Centre intends to develop a portfolio of high value compounds that will enable these treatments to be developed commercially.

8.3 Energy and the Environment

The Groupings taking forward research related to DkIT’s Energy and the Environment theme include the Centre for Renewable Energy (CREDIT), the Electrochemistry Research Group (ERG) and Centre for Freshwater and Environmental Studies (CFES).

8.3.1 Energy Research

Energy Research within DkIT is undertaken by staff within the School of Engineering, CREDIT and the ERG. CREDIT was established in 2002 with the objective of “assisting Ireland’s transition to a renewable energy based economy”. In 2005, CREDIT led the installation of DkIT’s wind turbine, a €1.2 million project that received grant assistance from Sustainable Energy Ireland. CREDIT is focused mainly on research that has the potential to be applied within industry including:

• development of proprietary knowledge in small wind technologies;

• operation of a 500 kWh electricity storage facility;

• use of marine biomass for renewable energy (including operation of DkIT’s biodiesel testing equipment); and

• monitoring renewable energy installations to report on efficiency and cost effectiveness.

CREDIT has developed a number of technologies including small wind turbine overspeed devices and novel generator designs, which are currently in the patenting stage of development. These offer some potential for future commercialisation but at present market demand is insufficient to enable this to occur.

8.3.2 Environment Research

Environment research at DkIT is led by the CFES and the ERG within the School of Health & Science. These groups are also involved in interdisciplinary collaborations with CREDIT. The CFES was established in 2005 to lead the National Source Protection Pilot Project, Ireland’s first source protection project. The Centre’s research activities include:

• protection and restoration of ground and surface water;

• microbiological and molecular components of water, soil and sediments;

• water sourcing, distribution and sanitation;

• alternative waste management systems; and


44

• remediation of disturbed ecosystems.

The ERG was established in 2008. It combines aspects of fundamental physical chemistry, surface chemistry and synthetic inorganic/organic chemistry for the development of novel nanostructured materials. Technological applications being explored by the group include:

• environmental gas sensing for volatile and toxic gases;

• sensor arrays for environmental water monitoring;

• nanostructured surfaces for fuel cell technology; and

• fabrication of photovoltaic devices.

8.4 Creative Arts

Research within the Creative Arts theme is led by the Centre for Music Research, Ionad Taighde Ceoil (ITC) and the Creative Media Research Group (CMRG), both of which are embedded within the School of Informatics and Creative Arts.

The ITC contributes to research in a wide range of disciplines including composition, traditional Irish music, musicology, ethnomusicology, music education, music technology and community and performance practice. Several of the personnel at the ITC are leading figures in their fields nationally, and their association with DkIT places the Institute in the mainstream of music in Ireland. The Centre places a strong emphasis on community involvement and uses community music as a way of extending formal music education. This activity not only helps to enhance the quality of life in the communities involved but also helps to create job opportunities in cultural sectors.

The CMRG use multidisciplinary skills to research creative media artefacts that enrich human experience aesthetically, emotionally or functionally. The group’s research includes both pure and applied research. Applied research is based on practical skills (e.g. film production, drawing, graphic design, etc.) and to date the group has created short films, fine-art productions, alternative-reality games, mobile technologies, tangible interfaces and multimedia applications. These are used to solve practical problems and to test concepts and design principles.

8.5 Research Performance

Over the past decade DkIT has recorded consistent growth in key research performance metrics. Research expenditure by DkIT has, for example, increased from less than €0.5 million in 2001 to more than €5 million in 2011 and in the past year alone, research funding secured has increased from €2.15 million to €6.6 million. Growth in research expenditure is illustrated in Figure 8-1.


45

Figure 8-1 – DkIT Research Expenditure 2001 - 2011

Source: DkIT Submission to HEA on Future Landscape in Higher Education

As research income has grown, so too has the number and breadth of DkIT’s internationally peer reviewed research publications (i.e. journal articles, conference papers and reviews). Research citations measure of how much other researchers use a particular piece of work and are therefore an indication of how influential the research is in the wider scientific community – i.e. they are an indicator of research impact. As illustrated by Figure 8-2, the impact of research undertaken at DkIT has increased significantly over the past decade, growing from fewer than 5 citations per year in 2001 to more than 160 in 2011.

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46

Figure 8-2 – DkIT Citations 2001 - 2011

Source: DkIT Submission to HEA on Future Landscape in Higher Education

DkIT has also invested significantly in Masters and PhD research programmes in recent years. There are currently 53 postgraduate researchers registered at the Institute, which represents a 250% increase since 2005. By 2012/13 it is expected that the number of postgraduate research students will have increased to 65 and over the coming five years, this is expected to reach 90-95 students.

8.6 Economic Impacts of Research Activity

Although there are numerous potential economic impacts from the research undertaken at DkIT, because much of the research undertaken is still at a relatively early stage, commercialisation has been limited to date. Although DkIT has recorded between 20 and 30 research agreements in each of the last three years, commercialisation activity has so far been limited so it is too early to quantify the commercial impacts from these agreements.

One area where commercialisation outputs are expected in the near future is the age related research led by the Netwell research centre and CASALA. Discussions are currently underway to create a spin-out company that will act as a broker for intellectual property generated by this research. At present, the economic significance of the research undertaken at Netwell is related mainly to cost savings generated by a collaborative demonstration project called the Great Northern Haven, which is designed to enable older people to continue to live independently in their own homes for longer. A case study of this project, which quantifies the savings made to date, is presented in Figure 8-3.

Other areas where industry interaction is strong, and therefore future commercialisation outputs might be expected include ICBC, STORC and RSRG.

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47

Figure 8-3 – Research Impact Case Study – Great Northern Haven

Great Northern Haven is a purpose-built development of 16 smart apartments constructed specifically for Ambient Assisted Living applications. Each apartment has 100+ sensors, connected TVs and touch-screen devices. Data from the sensors is used as part of a “living lab” that can be used to test and evaluate the performance of net technologies and inform national policy. The cost of providing care varies greatly according to the needs of the individual concerned. Consultation with staff at the Netwell Research Centre suggests that the cost of providing long-term residential care for individuals with high support needs is currently around €800 per week. For individuals with lower support needs, the cost of delivering non-institutional intermediate care package, perhaps involving regular home visits, would typically amount to around €400 per week. Twenty people currently live in the Great Northern Haven. Weekly rent and energy costs at the development amount to around €60 per week for each unit. In addition it is understood from consultations with staff at the Netwell Research Centre that each resident has a care package in place that costs between €100 and €200 per week. Using these figures, it can be calculated that the weekly cost of providing care to the 20 residents of the Great Northern Haven amounts to almost €4,000. In order to calculate the cost savings generated by this project it is necessary to estimate what it might cost to provide the same level of care for residents if the Great Northern Haven did not exist. Due to the technologies embedded in the Great Northern Haven development, the support needs of residents are lower than they otherwise would be. Based on consultation with Netwell staff, it is assumed that 50% of the residents of the Great Northern Haven would otherwise have required a high level of support and the other 50% would have required an intermediate level of support. By applying these assumptions to the costs described above, it can be estimated that the cost of providing care to the residents of the Great Northern Haven would otherwise have cost around €12,000 per week. The cost savings associated with the Great Northern Haven therefore amount to €8,000 per week, or over €0.4 million per year. The technologies utilised in the Great Northern Haven project could be used in other developments across the country, helping other public sector agencies to deliver similar cost savings. The project has for example already attracted interest from Fingal County Council, which is now considering developing a similar facility. If other local authorities decide to invest in similar developments then the cost savings to the Irish economy could be significantly higher than those delivered by the Great Northern Haven directly.

Source: BiGGAR Economics consultation with Netwell Research Centre

8.7 Commentary

The research performance of DkIT has improved significantly over the past decade and the Institute has identified a number of distinctive strengths upon which it should be able to continue to build in the future. Commercialising the intellectual property generated by the research base represents a new opportunity for DkIT to generate economic impact for the regional and national economies.

As the growing research base delivers increased commercialisation opportunities, the economic benefits of this intellectual property will only be realised if DkIT has the resources in place, in particular staff time and expertise, to realise these opportunities.

8.7.1 Benchmarking

In 2010 the Irish IoT sector as a whole held 52 licence agreements, options and assignments and was responsible for creating five spin-out companies. This equates to an average of four agreements and less than one spin-out per


48

institute. An initial aspiration for DkIT may be to match average performance for the sector as a whole.

Although increasing commercialisation is likely to be an important objective for DkIT over the next few years it will be important to bear in mind that the ultimate objective of this is to generate economic impact. Simply increasing commercialisation metrics will not necessarily achieve this since setting up a spin-out company or signing a licensing agreement will not automatically deliver economic impacts; rather it is the successful exploitation of the intellectual property by industry that will deliver employment and economic output.

It may be possible for DkIT to draw useful lessons from the recent experience of Heriot-Watt University in Scotland, which has invested significantly in industry engagement activity in recent years. Although Heriot-Watt has a much larger research base than DkIT, its experience is similar in that the decision to invest in industry engagement followed a period during which the University had significantly increased its research activity.

What is distinctive about the approach taken by Heriot-Watt is that it is based on developing long-term relationships and providing customised support designed specifically to address the needs of individual industrial partners. It differs from the approach adopted by many other UK universities in being less target-driven and more adaptive to individual company needs and for these reasons has been particularly well received by industry.

As a result of the activity undertaken by the RDC and of its efforts to attract inward investment to the region and the existing industry interactions of the research centres, DkIT already has strong relationship with the regional business base. This means that DkIT is well positioned to develop a similar approach should it so wish.


49

9 FOREIGN DIRECT INVESTMENT Foreign direct investment (FDI) has been an important component of the Irish economy for many years. It is estimated that overseas companies account for more than 140,000 direct jobs in Ireland and make up around 30% of the GVA of the economy21. In the past, the focus of much of this investment has been in and around major population centres such as Dublin and Cork so an important challenge for policy makers in recent years has been to try to encourage a wider distribution of investment throughout Ireland.

DkIT has a regional remit, and IDA Ireland promotional material on the North East highlights the role of DkIT as the main third level institution in the region. DkIT works with partners across the region to secure foreign direct investment.

However, at the State level, the National Spatial Strategy for Ireland 2002-20 designated Dundalk as a national gateway. This chapter discusses how DkIT has supported the national policy priority, helping to attract foreign direct investment to the region and to the Dundalk national gateway.

9.1 Dundalk’s Value Proposition

Dundalk is a potentially attractive location to potential investors for a variety of different reasons. One of the main reasons is the town’s strategic location next to Ireland’s motorway network, between the Island of Ireland’s two main population centres. It is estimated22 that more than three quarters of a million people live within an hours commute from Dundalk, providing a large potential workforce for any new investor. Importantly, this population base is growing, with the overall population of Louth and its hinterland set to increase to almost 190,000 by 2015.

Dundalk is also located just 45 minutes from Dublin Airport and only a little further from Dublin Port, the main shipping location in Ireland. This makes it easy for investors to access international markets from the town. Dundalk can also offer potential investors a variety of business space. This includes the incubation facilities at the RDC, which have been used on a number of occasions by new investors seeking to set up operations in the town.

Another key selling point for Dundalk is that it can offer a large untapped pool of skilled labour for business in the county to draw on. At present it is believed that around 15,000 Louth residents work outside the county and that almost 60% of Louth residents who work in Dublin are educated to third level degree standard or higher.

9.2 Collaborative Approach

Louth’s approach to attracting inward investment over the past 10-12 years has been based on strong collaboration between local, regional and national agencies. This collaborative approach is represented by the Louth Economic Forum, which was established in 2009. The Forum is comprised of local business, local authorities and representatives from relevant state agencies and is designed to provide a “one stop shop” for potential investors. The Forum has published a 10 point plan that identifies the areas that it intends to address.

21 IDA Ireland (2010), Horizon 2020, IDA Ireland Strategy. 22 Louth Economic Forum, Foreign Direct Investment Action Plan.


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FDI is one of the areas identified and the Forum has set a target of helping to attract 3,000 new direct jobs over the next decade. A task group has been established to try and achieve this target. The group includes representatives from around 15 different organisations, including IDA Ireland, Enterprise Ireland, Louth County Council, a variety of business groups and DkIT. The Institute us also engaged in other partnerships and committees elsewhere in the region. .

To date the Louth Economic Forum has been extremely successful in helping to attract foreign investors to the area. In September 2012 an external review23 of the work undertaken by the Forum reported that FDI in Louth has more than doubled its percentage share of all FDI in Ireland from 4.1% to 8.8% over the past three years, faster than any other Irish region. The review concluded that the work of the Forum has been instrumental in securing investment in Louth from PayPal, Prometric, Warner Chilcott and Coca Cola and that Louth is on course to achieve the 3,000 job creation target referred to above.

A breakdown of recent FDI in Louth is provided in Table 9-1. Together these businesses now employ more than 600 people in the region.

Table 9-1: Inward Investment jobs

Company Jobs

Paypal 300

Prometric 52

Warner Chilcott 53

Diaceutics 20

Radiosystems Corporation 56

Total 629 Source: Consultations with Louth Economic Forum, IDA Ireland, Warner Chilcott and Prometric

9.2.1 Economic Impact of FDI

The impact of this investment has been calculated by multiplying the number of jobs created by average GVA per employee in the Irish economy. The effects of subsequent spending rounds have been captured by applying appropriate multipliers.

In this way it can be estimated that the FDI attracted to Dundalk in the past few years contributes €32.6 million GVA to the economy of the North East each year and supports 707 jobs. A breakdown of this impact for each of the study areas is provided below.

Table 9-2: Inward investment impacts (Total economic impact)


Cross Border

Total GVA (€m) 31.9 32.6 38.5 33.8


23 PMCA Economic Consulting (September 2012), Review of Louth Economic Forum.


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In order to calculate how much of this impact can be attributed to DkIT it is necessary to consider the role DkIT has played in attracting this FDI.

9.3 Role of DkIT

Although DkIT is only one of a number of different partners that have helped to increase FDI performance in recent years, consultation with companies and economic development agencies in the region confirm that its contribution has been important.

When considering alternative investment locations in Ireland, an important consideration for companies is the availability of appropriately skilled staff. The presence of DkIT helps to give potential investors confidence that they will be able to recruit the staff they require in the region. Over the years DkIT has also demonstrated that it is willing to engage with new investors and customise course content to meet individual company requirements. This willingness to engage has been well received by businesses, some of which have gone on to develop long-term relationships with the Institute.

DkIT’s contribution has also involved providing business space for companies seeking to establish operations in the region. This has been delivered by hosting inward investors at the RDC for short periods while they establish permanent facilities elsewhere in the region.

As well as providing tangible incentives like appropriately qualified labour and temporary office accommodation, DkIT also plays an active role in helping to persuade investors to locate in the region. This role involves working alongside other agencies to ensure that companies considering locating in the region are presented with the best possible investment proposition.

DkIT has, for example, been involved in several fact-finding visits by potential investors. Consultation with IDA Ireland confirms that such visits often occur before an investor has made a firm decision to locate in Ireland. It is therefore reasonable to conclude that as well as helping to attracting companies to the region, DkIT also plays a small role in helping to attract some companies to the region. The following quote from Xerox (Europe), which came to Dundalk in 1999 and now has 300 employees, provides additional confirmation this:

"DkIT played a small part in terms of selecting Ireland as an investment location but once the decision to locate in Ireland had been made, DkIT

became an important factor in selecting which region in Ireland to invest in and co-location with DkIT became quite important. We visited DkIT before a

decision was made to locate in Dundalk and were impressed by their openness to working with business. It was quite an entrepreneurial

organisation and was very open to tailoring courses to meet our requirements."

Tony McQuillan, Xerox (Europe) Ltd

The role that DkIT plays in helping to attract inward investment to the region can perhaps best be illustrated using a case study of a recent FDI.


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Figure 9-1 – Inward Investment Case Study - Prometric

Prometric is an ICT services company that specialises in delivering tests on behalf of clients in the academic, financial, government, healthcare, professional, corporate and information technology markets. The company delivers more than 10 million tests per year on-line and through a network of more than 8,000 test centres in around 160 countries. In 2011, Prometric decided to establish its new global test development operations centre in Dundalk. By late 2012, Prometric employed 52 people in Dundalk and had invested more than €3.5 million in talent and construction in the town. It is expected that the new centre will ultimately employ more than 100 people, in high quality IT and support roles. DkIT has supported Prometric’s investment in Dundalk in a number of ways. Most notably, by providing temporary accommodation for the company in the RDC while new facilities were developed close to the campus. DkIT has also hosted fact-finding visits by company officials keen to learn about the type of training provided by the Institute and how this might help to deliver a supply of potential recruits. Since Prometric started operations in Dundalk, the company’s relationship with DkIT has continued to develop. A strategic relationship has been established through which DkIT has already placed two student interns into Prometric’s software development team. In the next year, Prometric plans to provide a student scholarship to promote STEM learning in Dundalk, and expects DkIT to be a valuable partner in developing this. The main benefit to Prometric from its proximity to DkIT is the stream of potential recruits emerging from the Institute. Feedback from the company about the quality of graduates from DkIT is very high, particularly in relation to their understanding of information technology concepts and applications. More generally Prometric highlights the “aptitude for learning and applying emerging technologies” that “routinely exists” amongst DkIT graduates. Prometric’s decision to invest in Dundalk was influenced by several different factors and various national and regional agencies were involved in the process. In particular, Prometric acknowledge the “significant” contribution made by the Irish Government and IDA Ireland. The company also believes that it would not have been able to establish its test development operation “so quickly and successfully without the embrace of IDA Ireland, the Irish Government and our local and regional partners.” As one of these regional partners, DkIT can therefore claim some credit for helping to secure the investment.

9.4 Quantifying DkIT’s Contribution

As has been highlighted in this section, efforts to attract inward investment to the region have been extremely collaborative and have involved numerous different national, regional and local agencies. Although there is strong evidence that the cumulative efforts of these agencies have been very successful (e.g. the recent external review cited above), the collaborative nature of the activity makes it very difficult to attribute this success between the various partners. Any effort to do this must therefore involve judgements about the relative importance of the contribution made by each partner.

As described above, the main contributions made by DkIT relate to the provision of an appropriately skilled labour supply and (in some cases) temporary business accommodation. At a national level a large number of institutions are involved in providing workforce skills so it is reasonable to conclude that DkIT’s role in attracting FDI to Ireland is small. For the purposes of this report, it has been assumed that this equates to 10% - i.e. 90% of FDI in Dundalk would have come to Ireland anyway, even if DkIT did not exist.


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At the regional level however, the role of DkIT is likely to be much more significant because it is the main provider of third level skills in the area. Consultations with existing FDI investors and IDA Ireland confirm that DkIT has a greater influence on investors decision about which region to invest in than on the initial decision to invest in Ireland. The scale of the role played by DkIT at the regional level can be estimated based on evidence from surveys of businesses with global operations.

One such survey was published by Hughes Blake24, a firm of chartered accountants, and reports similar findings. This survey was based on research undertaken amongst members of Integra International, the global association of independent accounting and financial consulting firms, which advise up to 40,000 businesses around the globe. It found that workforce quality was the third most important factor when advising clients on locations for investment.

A similar study is the annual European Cities Monitor published by international real estate company, Cushman and Wakefield. This report, which was first published in 1990, ranks cities across Europe according to their relative attractiveness to international investors. The 201125 edition of the report is based on the perceptions of executives working in more than 500 major European businesses. It finds that the most important factor for firms in deciding where to locate is ‘easy access to markets, customers or clients’ with 60% stating that this is absolutely essential. The second most important factors, both cited by more than 50% of respondents are the ‘availability of quality staff’ and ‘quality of telecommunications’. For this reason, it is assumed that at the regional level, 50% of FDI attracted to Dundalk can be attributed to DkIT.

By applying these proportions to the impact calculated in section 9.2.1, it is possible to estimate how much of the impact from FDI can be attributed to DkIT. In this way it can be estimated that DkIT’s contribution amounted to €16.3 million GVA across the North East and 264 jobs. This impact is summarised in Table 9-3.

Table 9-3: Inward Investment impacts (Attributable to DkIT)


Cross Border

Total GVA (€m) 15.9 16.3 3.9 16.4


9.5 Perceptions of the Region

In addition to the economic impacts described above, the activity described in this section has played an important part in helping to improve external perceptions of the region. Such perceptions can have an important influence on investment decisions so improving the image of Dundalk and the region should have a real impact on the area’s ability to attract further investment.

The FDI attracted over the past few years has also helped to promote growth within the strategically important Dublin-Belfast Corridor. The concept of the Dublin-Belfast corridor is based on the idea that while neither city is large enough

24 Hughes Blake (October 2010), “Hughes Blake Research Shows Positive Sentiment to Investment in Ireland…”, press release on Hughes Blake website. 25 European Cities Monitor (2011), Cushman & Wakefield


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to compete effectively on a global scale, together the cities possess sufficient economic assets to be globally competitive. Encouraging economic development along the M1/N1 corridor between the two cities will be key to realising this opportunity and this section illustrates how DkIT is supporting this.

9.6 Commentary

The FDI job creation figures for Louth over the past three years are better than any other region in Ireland. To a large extent this can be attributed to the collaborative approach taken by all the partners, including DkIT. Consultations undertaken to support this study confirm that partners hold positive opinions about the approach taken by DkIT and attribute some of the Institute’s success to the attitudes and personalities of the senior figures involved. In particular consultees highlighted the willingness of key individuals to work collaboratively with other partners in the region.


As a result of the proactive approach DkIT has taken toward FDI, the Institute has been able to develop strong relationships with some of the companies that have recently located in the region. As these companies operations expand, these relationships have the potential to generate future opportunities for DkIT, particularly in relation to collaborative research and knowledge exchange.

The nature of such opportunities is likely to vary from company to company and could involve joint projects, collaborative research opportunities, student placements, contract research, consultancy or a mixture of all of these. In order to exploit such opportunities it will be important that DkIT maintains close relationships with each of the companies so that opportunities can be identified at an early stage.


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10 WORKFORCE PRODUCTIVITY As well as attracting new businesses to the region and supporting the existing business base, DkIT also enhances the productivity of the local workforce by:

• producing graduates with the skills required by local businesses;

• helping people who have been made redundant update their skills in order to return to work;

• through the support delivered by the RDC to existing SMEs in the region (discussed in section 7) and

• providing opportunities for professionals within the region to continue to develop their skills after graduating.

10.1 Graduates

One of the main ways in which DkIT contributes to the economy is through the long-term impacts of its teaching activity, which equips students with the knowledge and skills they require to contribute to the economy after they graduate. By enhancing the potential of graduates to contribute to the economy, DkIT helps to increase the productivity of the economy as a whole.

One method of measuring this productivity increase is to consider the additional income that someone with a degree can expect to earn over their lifetime compared to someone with school level qualifications (at a level that would secure third-level education entry). This is known as the graduate earning premium.

10.1.1 Quantifying the Graduate Premium

Evidence to quantify the graduate premium of DkIT can be based on a 2007 study undertaken by Price Waterhouse Coopers26 in the UK, which found that over a working lifetime a typical graduate earns around £160,000 more than an individual with two or more A-levels. This study also provides estimates of the additional lifetime earnings of graduates in particular subject areas. The additional lifetime earnings of graduates from DkIT can be calculated by multiplying these estimates to the number of graduates in each subject area each year.

The PWC study is based on UK qualifications. For the purposes of the calculation, Irish level 7 and 8 courses are treated as equivalent to UK undergraduate degrees while level 9 courses are treated as equivalent to a masters postgraduate degrees in the UK. Level 6 courses have not been included.

The high graduate premium relative to the comparators is consistent with the findings of other research. The OECD Education at a Glance publication for 2011, found that Ireland was 7th out of 32 countries ranked for the average earnings premium for 25-64 year-olds with tertiary education (compared to people with upper secondary education), a similar measure to the graduate premium. The average earnings premium for Ireland was 6% higher than in the UK.

26 PWC (2007), The Economic Benefits of a Degree.


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Table 10-1: Graduate premium, assumptions by subject

Subject Annual graduates by subject area

Undergraduate additional Lifetime Earnings per

graduate (£) *

Engineering 175 €179,747

Math/Comp. Sciences 141 €170,195

Business & Finance 368 €147,151

Subjects Allied to Medicine 280 €232,728

BioSciences 38 €82,960

Creative Arts and Design 72 €20,206

Agriculture 37 €91,186

Veterinary Sciences 10 €207,522

Other 159 €134,999

Post-graduate degrees 34 €87,402

Total 1,314 €1,354,095 Source: *calculated using figures from 2007 PWC report and exchange rate of €1=£0.80.

In order to calculate where this impact will occur it is necessary to consider where graduates go after they graduate. Data gathered by DkIT suggests that in 2010/11 1% of graduates went to Northern Ireland and another 4% went overseas after graduating, meaning that 95% of the additional earnings of DkIT graduates is retained in the Irish economy. In addition to the 4% of graduates who leave Ireland after immediately after graduating, it is to be expected that others will leave at some later date.

Ireland has a long history of emigration and this tends to increase during times of economic stress. The current economic climate means that higher than average levels of emigration are to be expected and this has been confirmed by a recent study27 that found that 27% of Irish graduates expect to leave the country in order to secure a job in their chosen field.

Combining these two figures implies that the additional earnings of 69% of graduates from DkIT will be retained in Ireland each year. Applying these figures to the graduate premium assumptions described in Table 10-1 suggests that the total graduate premium associated with one year of graduates from DkIT amounts to €145.2 million in Ireland. A breakdown of this impact by study area is provided in Table 10-2.

Table 10-2: Graduate premium, impact by area

Louth North East Republic of Ireland Cross Border

€65,231,216 €120,034,312 €145,217,111 €121,587,436

27 Trendence European Graduate Barometer (2012) - reported on GradIreland on 12th April 2012.


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10.2 Unemployment Benefit Savings

DkIT also contributes to local labour force productivity by unemployed people to re-enter the labour market. It does this by providing training opportunities to help people to upgrade and improve their skills through a programme called Springboard.

The Springboard Programme is a nationwide initiative designed to support recently unemployed people to return to employment or set up their own business. During 2011/12 119 students were enrolled on DkIT Springboard courses. Surveys conducted after the courses shows that 46% these students went on to either employment or self-employment28.

Without the support provided by DkIT it is reasonable to assume that some of these students would not otherwise have been able to secure employment. An evaluation of the Programme29 suggests that 60% of participants in the scheme had been unemployed for at least a year prior to becoming involved. On this basis, it is assumed that, without the support provided by DkIT, 60% of participants would have remained unemployed.

The Springboard programme is specifically targeted at unemployed people so it is reasonable to assume that participants will be in receipt of state unemployment benefits. When participants secure a job, they will no longer be entitled to unemployment benefits and this represents a saving to the national economy.

10.2.1 Quantifying the Impact of Employability Training

Although the exact amount of benefits received will vary according to individual circumstances, it is possible to estimate the scale of the savings realised through this programme using the standard weekly Jobseeker’s Benefit rate of €18830. Annual savings to the economy can therefore be calculated by multiplying the number of people who secure employment by weekly Jobseeker’s Benefit payments. The amount of savings that can be attributed to DkIT are then calculated by multiplying the total savings by 60%. The location of this impact is assumed to correspond to where participants reside.

In this way it can be calculated that DkIT helps to save the Irish economy €0.3 million each year in unemployment benefits.

Table 10-3: Springboard impacts, annual savings


Cross Border

Total savings (€m) 0.2 0.3 0.3 0.3 Source: BiGGAR Economics

10.3 Continued Professional Development

DkIT also contributes to local labour force productivity by providing courses for professionals who want to improve their skills. Accredited courses are offered in

28 The survey is based on a sample of 39 participants. 29 Springboard Stage One Evaluation (February 2012), Higher Education Authority. 30 This is the rate that applies to anyone who previously earned more than €300 per week. This is reasonable since eligibility for Springboard requires participants to hold existing qualifications and have a history of previous employment.


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the areas of Business, Law, Humanities, Health and Science, Engineering and Computing. In 2011/12, 378 people participated in accredited/professional courses at DkIT.

10.3.1 Quantifying the Impact of CPD

The impact of professional qualifications provided by DkIT can be assessed using research undertaken by the UK based consultancy, London Economics31. This research suggests that individuals who hold professional qualifications experience substantial lifetime benefits in terms of both higher earnings and reduced risk of unemployment.

Overall the research finds that the life-time earnings premium of a professionally qualified person amounts to £81,000 (approximately €100,000). This provides a starting point for estimating the economic impact of professional courses provided by DkIT but it would be unreasonable to attribute all of the additional income earned by students to DkIT.

Although many of the programmes provided by DkIT do lead directly to a professional qualification, in other programmes students need to undergo additional programmes of study in order to gain a professional qualification. Although the requirements of different professional bodies differ, candidates training to become “professionally qualified” are generally required to undertake training in a number of different areas and may also be required to meet experience criteria - i.e. to have practiced for a minimum length of time. In order to avoid overestimating this impact, it is therefore necessary to account for such courses.

The amount of additional training a student will require to become “professionally qualified” will generally depend on how qualified they are to start with. Students who are already qualified to degree level for example will require fewer additional courses than students who only have Leaving Certificate level qualifications. On average however it is assumed that students will require 10 additional courses in order to become professionally qualified. This implies that the average life-time earnings associated with each course delivered by DkIT could be around €10,000. For courses that enable students to achieve professional qualification outright, this will be a conservative assumption. This means that the full value of this impact could be higher than estimated.

By applying this estimate to the total number of people who undertake professional qualifications in DkIT, it can be estimated that the life-time earnings premium associated with one year’s cohort of students amounts to €3.6 million across Ireland. A breakdown of this impact is provided in Table 10-4.

Table 10-4: CPD impact

Louth North East Republic of Ireland Cross Border

Total GVA (€m) 2.9 3.4 3.6 3.6 Source: BiGGAR Economics

31 Chapman, Conlon & Muller (December 2008), An Economic Impact of the CCPMO, London Economics.


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10.4 Summary of Workforce Productivity

Taken together the impacts described in this chapter amount to €149.2 million per year in the Irish economy. A breakdown of this impact by study area is provided in Table 10-5.

Table 10-5: Total workforce productivity enhancement (€m)

Louth North East

Republic of Ireland

Cross Border

Annual graduate premium 65.2 120.0 145.2 121.6

Annual unemployment benefit savings 0.2 0.3 0.3 0.3

Annual CPD earnings premium 2.9 3.4 3.6 3.6

Total (€m) 68.3 123.7 149.2 125.5 Source: BiGGAR Economics

10.5 Commentary

One of the features of DkIT that distinguishes it from some of the other institutions for which studies such as this have been undertaken is the relatively high proportion of graduates (95%) who remain in Ireland after graduating. This is broadly comparable to Glasgow Caledonian University in Scotland where 90% of graduates remain in Scotland after graduation. As a post-1992 University, Glasgow Caledonian University is one of the Scottish institutions that is most similar to DkIT. Like DkIT, the University has a strong focus on health related disciplines and applied research.

By way of comparison, two of the universities in Scotland that export the highest proportion of graduates are Heriot-Watt University, where 51% of graduates remain in Scotland after graduating and St Andrews University, where the proportion is 30%. The effect of DkIT’s high graduate retention rate is to increase the value of the graduate premium associated with the Institute.

The second source of impact considered in this section was the Springboard initiative that assists people to return to the labour market. As this is a reactive initiative funded by Government, the scale of this activity will depend on economic circumstances.


Consultation with staff at DkIT suggests that the amount of training delivered to local businesses has declined dramatically since the start of the recession. Although this is not surprising, it does not necessarily mean that opportunities to deliver professional training have disappeared. Section 9 of this report described the large amount of inward investment that has occurred in Dundalk over the past few years. DkIT’s role in helping to secure this investment means that it should be well positioned to provide customised CPD programmes for these companies.


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11 WIDER ENGAGEMENT DkIT engages with numerous different groups in society in a wide variety of different ways. This engagement helps to generate a range of wider impacts that it is not possible to quantify. Although these impacts cannot be quantified, they represent an important component of the overall impact of DkIT. The types of social engagement undertaken by DkIT include:

• business engagement;

• international engagement;

• community engagement; and

• heritage and cultural engagement.

This section considers each of these types of engagement and the impacts it generates for the Irish economy.

11.1 Business Engagement

DkIT is actively engaged with the local business community in a wide variety of different ways. Much of this engagement is as a result of the work undertaken by the RDC, which was described in detail in Section 7. The economic impacts of this activity have already been described but this activity also helps to enhance the overall competitiveness of the regional economy and this cannot be quantified.

One area that it is not possible to fully quantify is the impact of DkIT’s efforts to promote entrepreneurship on campus. Although the short-term economic impact of this can be quantified in terms of the number of new businesses established, the long-term impact is likely to be much more significant. Activity to promote entrepreneurship amongst the student community is not just designed to encourage students to start their own business but also to provide them with a useful set of skills that will benefit them throughout their life. Although the majority of DkIT students will probably not start their own business they have been encouraged to think in an entrepreneurial manner. This should have benefits for future employers since it would be reasonable to expect companies that are staffed by entrepreneurial people to be more innovative and successful.

DkIT also contributes to the competitiveness of the regional economy by equipping students with skills that are relevant to the needs of businesses. DkIT achieves this by engaging with businesses on a strategic level through various industry advisory fora, which inform the development of course content in each of the Schools.

DkIT’s role in attracting foreign direct investment to the region was described in detail in section 9, which quantified the economic impact of the new jobs created. What this section did not capture is the wider impact that DkIT has had (and continues to have) on external perceptions of Dundalk and the North East. The image and reputation of an area are often an important determinant of investment decisions so this has important economic consequences for the region.

DkIT is also involved in a number of initiatives that help to support the development of particular sectors. For example, the CREDIT research group


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within the School of Engineering delivers various training programmes for local industry in association with the Irish Wind Energy Association.

11.2 International Engagement

Although the majority of the activity undertaken by DkIT is focused on the domestic economy, the Institute is increasingly engaging with communities outside Ireland and this engagement is beginning to generate international impacts. DkIT engages with the international community in three main ways; through international exchange programmes, the volunteering activities of students and through work in the developing world (e.g. Water is Life project).

11.2.1 International Exchange Programmes

DkIT participates in student exchange programmes, including Erasmus, the EU exchange student programme. In September 2012, almost 150 Erasmus students came to DkIT from partner institutions in France, Germany, Spain, Portugal, Sweden, Finland, The Netherlands, Denmark, Estonia and Bulgaria. In the first semester of 2012/13 DkIT also hosted exchange students from the University of Zheijiang in Chinaand from Nanyang Polytechnic in Singapore.

DkIT students also study at Erasmus partner institutions elsewhere in the EU and at international college partners as part of bilateral exchange programmes. In 2012/13 DkIT students going to study abroad include students from business, creative media, engineering, community sports leadership, nursing and video and film.

International exchange opportunities are also available for staff. For example, DkIT was awarded 10 teaching and three non-teaching mobility grants under the 2012/2013 Erasmus programme.

11.2.2 Student Volunteering

The DkIT Volunteer Society was created in March 2011. The Society was launched on World Water Day (22nd March) and its first assignment involved six volunteers spending three weeks in Tanzania. The volunteers took part in a range of activities such as organising sport events for young people, renovating a local health clinic and helping to conduct workshops to raise awareness about drugs, alcohol abuse and HIV/Aids.

The Department of Nursing, Midwifery and Health Studies also runs a volunteer project that involves students accompanying staff to health care facilities in East Africa. This exposes volunteers to health care challenges that they may not otherwise experience and by doing this helps them to increase their knowledge and develop their concept of caring.

DkIT also operates the DkIT Cares programme. This is a volunteering programme for staff and students that provides a bridge between non-profit organisations and potential volunteers within DkIT. The programme enables these organisations to enlist the help of groups of volunteers from DkIT Cares for various ad hoc activities during the academic year.

11.2.3 International Student Work

Students also have the opportunity to complete the formal work placements in international settings, building the profile of DkIT globally. DkIT has developed


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strong industry linkages with globally recognised companies in the UK, US and China.

11.2.4 Water is Life

The Water is Life project (http://waterislife.ie) is a collaborative project led by DkIT aimed at building research capacity to support sustainable water resource management as a catalyst for sustainable economic and social development in rural Uganda.

All of this activity contributes to the development of the local communities that host volunteers but also to the personal development of the volunteers. By helping students to become more active and engaged citizens, this also contributes to the wider development of Irish society. In addition it supports capacity building in the African partner University of Makerere in Uganda by providing PhD opportunities to a number of their students.

11.3 Community Engagement

DkIT engages with the wider community in which it operates in a wide variety of different ways. This engagement helps to generate wider economic impacts that make an important contribution to the local area but which it is not possible to quantify. These impacts are highlighted below.

11.3.1 Quality of Life and Social Cohesion

Of particular importance is the contribution that DkIT makes to enhancing quality of life and social cohesion in the local area. This is important from an economic perspective because it helps to make Dundalk a more vibrant and attractive place to live, which makes the town more attractive to potential investors. DkIT contributes to quality of life and social cohesion in the local area in a variety of ways including:

• DkIT Cares – a volunteering initiative established to enable students and staff at DkIT to support local charities and not for profit organisations. Volunteers take part in a range of one-off volunteering opportunities such as gardening, painting, handiwork, bag-packing, etc.;

• intellectual disability services – the Department of Nursing, Midwifery and Health Studies deliver programmes in collaboration with local disability services designed to provide opportunities to people with intellectual disabilities to experience a third level education;

• engagement with the early childhood sector – each year final year students from the School of Health and Science invite parents and toddlers from the local community to a semester long play based parent and toddler group. This group provides an opportunity for parents and students to share play skills and also enables local parents to meet up with others from the community in a relaxed environment; and

• Men’s Sheds – the Louth Men’s Sheds project was started by the Netwell Research Centre and targets men at risk of isolation or experiencing major life changes. The “shed” environment encourages men to share skills and learn new ones e.g. wood turning, mechanical work and horticulture. The project places a strong emphasis on socialising and providing the opportunity for the development of new friendships.


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11.3.2 Cross Border Reconciliation

DkIT’s engagement with the community also involves a number of initiatives that are designed to improve cross-border relationships and promote reconciliation in the border counties. Although this impact cannot be quantified, it has important economic implications because it helps to improve the image and reputation of the area, which is important to investor confidence. This activity includes a variety of initiatives including:

• Border Arts Centre – this Centre engages with communities in the border region that have been affected by conflict using the arts. The Centre develops workshops in areas such as dance, film, literature, music and the visual arts; and

• Communities Connect – this is a cross border community development and peace-building project that assists people to participate in access courses that lead to more advanced education programmes.

11.3.3 Opportunities for Local Young People

DkIT also plays an important role in the local economic development of Dundalk and the wider North East region. One of the main ways it does this is by providing educational opportunities for communities that have traditionally low levels of participation in higher education. Data gathered by DkIT suggests that around 80% of students at the Institute are the first in their family to attend a third level educational institution. Part of the reason DkIT has been able to achieve this is because it takes a proactive approach to engaging local young people when they are making decisions about their future education and career. This activity includes:

• school engagement – the school liaison office in DkIT is involved with a range of activities such as school visits, career guidance, careers exhibitions and fairs, employer and employee talks, campus taster days and information sessions. These activities are designed to assist local young people make decisions about their future education and career; and

• Science promotion – Scifest is a national initiative that involves a series of one-day science fairs designed to encourage a love of science and maths among students. Scifest events are hosted at DkIT each year by the Department of Applied Sciences.

The long-term economic benefits to the individual of participation in higher education have long been recognised and include enhanced earnings potential, lower risk of unemployment and (according to some studies) better health and emotional well being. Importantly, because children are more likely to go into higher education if their parents did, the advantages gained by these students are also likely to be passed on to their children.

11.4 Heritage & Culture

DkIT also plays an active role in supporting heritage and culture within the local community. This type of activity helps to make Dundalk a more distinctive place and there is an increasing amount of research to suggest that this matters in terms of achieving sustainable economic development. Research undertaken by the New Economics think-tank suggests that people are increasingly looking to live, work and invest in places they feel are distinctive in some way and defines


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distinctiveness as places that “have identity and character because of heritage, art, history, culture, community, vernacular.”

One way that DkIT helps to enhance Dundalk’s distinctiveness is by supporting local cultural groups. For example, the Dundalk Youth Theatre, the Dundalk writers group and a local orchestra all use DkIT facilities. Although none of these groups are offshoots of DkIT, all are supported by the Institute. DkIT facilities, such as the Mac Anna Theatre, are also available for cultural events such as music performances and plays.

DkIT also offers a range of degree courses that help to promote and support local culture. For example, the Department of Music and Creative Media currently offers a Master of Arts in Traditional Music while the Department of Humanities has offered a Bachelor of Arts degree in Cultural Studies. These types of course are help to support cultural distinctiveness by producing graduates with the knowledge and skills to support and promote Irish culture after they leave the Institute.

DkIT also supports cultural distinctiveness by hosting a variety of student societies dedicated to traditional Irish sports and activities. Examples of current societies include Irish dancing, Gaelic football, hurling/camogie and traditional music. These societies all help to reinforce Dundalk’s cultural distinctiveness.


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12 SUMMARY OF IMPACTS

12.1 Quantitative Impacts

The quantifiable economic impacts described in this report amount to:

• €164.6 million GVA and 1,290 jobs in Louth;

• €232.2 million GVA and 1,559 jobs in the North East;

• €281.5 million GVA and 2,110 jobs in the Republic of Ireland; and

• €243.6 million GVA and 1,797 jobs in the cross border region.

These impacts are summarised in Table 12-1 and Table 12-2.

Table 12-1 – Summary of Quantitative Job Impacts (FTE Jobs)

Louth North East

Republic of Ireland

Cross Border

Core Impacts

Direct 332 405 459 453

Supplier 26 40 103 88

Staff Spending 50 73 221 113

Capital Spend 2 3 7 5

Total Core Impacts 410 522 789 659

Student Impacts

Student Spending 114 182 373 222

Student Employment 142 177 226 187

Total Student Impacts 256 359 599 409

Tourism Impacts

Visits from friends and relatives 17 21 27 23

Conference and Events 12 13 16 13

Total Tourism Impacts 29 34 43 35

RDC Impacts

Entrepreneurship 19 22 29 23

Incubation/Innovation Support 297 312 499 348

Enterprise Support 7 25 45 27

Applied Research 13 21 44 30

Total RDC 337 380 616 427

FDI Impacts

Total FDI 259 264 63 266

TOTAL JOBS 1,290 1,559 2,110 1,797 Source: BiGGAR Economics


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Table 12-2 – Summary of Quantitative GVA Impacts (€m)


Cross Border

Core Impacts

Direct 41.6 41.6 41.6 41.6

Supplier 1.0 1.6 4.0 3.5

Staff Spending 3.1 4.5 13.6 7.0

Capital Spend 0.2 0.5 1.0 0.8

Total Core Impacts 46.0 48.3 60.3 53.0

Student Impacts

Student Spending 4.6 6.7 13.1 8.0

Student Employment 4.3 5.4 6.9 5.7

Student Placement 3.6 7.0 8.5 7.2

Total Student Impacts 12.5 19.0 28.4 20.9

Tourism Impacts

Visits from friends and relatives 0.4 0.5 0.6 0.5

Conference and Events 0.3 0.6 0.9 0.6

Total Tourism Impacts 0.7 1.0 1.5 1.1

RDC Impacts

Entrepreneurship 1.2 1.4 1.8 1.4

Incubation/Innovation Support 18.3 19.2 30.7 21.4

Enterprise Support 0.5 1.6 2.7 1.6

Applied Research 0.8 1.3 2.6 1.8

Total RDC Impacts 20.7 23.4 37.9 26.3

Research Impact Case Study

Research Impact Case Study 0.4 0.4 0.4 0.4

FDI impacts

Total FDI Impact 15.9 16.3 3.9 16.4

TOTAL (EX PRODUCTIVITY GAINS) 96.2 108.5 132.4 118.1

Workforce productivity impacts

Graduate Premium 65.2 120.0 145.2 121.6

Employability 0.2 0.3 0.3 0.3

Professional training 2.9 3.4 3.6 3.6

Total workforce productivity impacts 68.3 123.8 149.2 125.5

TOTAL GVA 164.6 232.2 281.5 243.6 Source: BiGGAR Economics


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12.2 Qualitative Impacts

This report has also highlighted a wide range of wider but unquantifiable socio-economic impacts that DkIT has on Dundalk and the wider region. These impacts include:

• improving the competitiveness of the regional economy by:

o providing relevant skills to local industry;

o improving the image and reputation of the area;

o providing customised industrial training for local businesses;

o promoting the development of the Dublin Belfast Corridor; and

o increasing entrepreneurialism by promoting entrepreneurial attitudes amongst students and staff.

• improving the competitiveness of the Irish economy by:

o helping to make Irish graduates more entrepreneurial by helping to embed entrepreneurial education in other Irish third level institutions;

o producing socially engaged graduates equipped with skills that are relevant to emerging and established sectors of the Irish economy; and

o contributing to the development of emerging sectors (e.g. medical device software and renewables) and established sectors (e.g. tourism).

• making Dundalk a more vibrant and attractive place to live by improving quality of life for local residents. This is achieved in a variety of ways including:

o hosting events that attract local visitors – e.g. Taste of Louth;

o encouraging students and staff to participate in voluntary activities;

o improving the quality of life for vulnerable groups in the community such as:

o elderly people (e.g. through the work of Netwell and CASALA); and

o people suffering from a conditions being addressed by the ICBC.

• promoting cross-border reconciliation;

• enhancing the distinctiveness of region by supporting local culture and heritage;

• supporting sustainable economic development in the developing world through a range of voluntary activity;

• enhancing social inclusion in the local area by:

o raising awareness of career and education options amongst local young people; and

o enabling people from communities with traditionally low participation in higher education to gain third level qualifications.


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13 BENCHMARKS AND CONCLUSIONS This section presents the conclusions of this report. It also draws on evidence presented elsewhere to compare the impact of DkIT with other institutions and suggest how DkIT might increase its impact in the years to come.

13.1 Benchmarking

13.1.1 Comparisons with Institutes of Technology

In September 2012, DkIT was ranked as the second highest Institute of Technology (IoT) in Ireland in the Sunday Times 2013 University Guide. Each year, the list assesses third level institutions across Ireland and the UK using key indicators such as Leaving Certificate points for entry, top degrees awarded, graduate job prospects and income generated from research. This year DkIT climbed six places in the Irish league table to 13th place, putting it above all of Ireland’s other IoTs except Limerick.

One reason for DkIT’s strong performance was its access record, which shows that 80% of the student population are the first in their family to undertake a degree course. DkIT’s ranking is also attributed to particularly strong performance in research funding secured, which increased by €4 million in the past year to €6.6 million.

Comparison of staffing levels32 at DkIT and in other Irish IoTs helps to confirm DkIT’s relatively strong research performance. In 2010/11, research posts accounted for 16% of staff at DkIT compared to 11% for the IoT sector as a whole. Significantly, two thirds of the research positions at DkIT were not funded by the exchequer and the proportion of non-exchequer funded research posts at DkIT was double the average for the IoT sector as a whole (and similar to the proportion recorded for the Limerick Institute of Technology).

These indicators suggest that DkIT performs strongly when compared with other institutions in the IoT sector; however, DkIT’s focus on research activity means that it may increasingly share more in common with institutions in the university sector. DkIT is also working toward attaining the Technological University level metrics outlined by the Higher Education Authority that would enable it to maintain its University level activity and this aspiration means that comparisons with the university sector may be more helpful.

13.1.2 Comparisons with Universities

To our knowledge, DkIT is the first third level institution in Ireland to undertake an economic impact study of this type and so no Irish comparators are available against which the socio-economic impact of DkIT can be benchmarked. For this reason, it is necessary to look beyond Ireland for appropriate comparators.

Previous chapters of this report have identified a number of institutions that may offer lessons for DkIT in particular areas. These are Institutions with whom BiGGAR Economics have previously worked with. These institutions are therefore considered the most appropriate comparators available for DkIT. The institutions identified include:

32 HEA Key Facts & Figures 2010/11.


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• Heriot-Watt University – based near Edinburgh, Heriot-Watt University has around 8,300 students and income of €187.9 million. Like DkIT, Heriot-Watt University has traditional strengths in areas such as science, engineering and business. Heriot-Watt also has particularly strong links with industry and is engaged in a variety of knowledge exchange activity. Heriot-Watt University was highlighted in sections 6.5.2 and 8.7.1 to illustrate approaches that DkIT may wish to consider in order to increase its tourism and research commercialisation impacts;

• Robert Gordon University – based in Aberdeen, the Robert Gordon University has almost 9,000 students and income of €108.2 million. Robert Gordon University was originally founded as a technical college and retains a strong focus on practical experience, with most undergraduate programmes including a period of work-experience. As a result, the University has a particularly high graduate employability record.

• Glasgow Caledonian University – has almost 18,000 students and income of €139.2 million. Glasgow Caledonian is one of the largest providers of health care and life sciences education in Scotland and in 2009 founded the Institute of Applied Health Research. Like DkIT, Glasgow Caledonian University also has a high proportion of students from families with little previous experience of higher education; and

• De Montfort University – in Leicester has almost 16,000 students and an annual income of €187.4 million. De Montfort University was awarded University status in 1992 and has established strengths in engineering, computing and health care. De Montfort University was highlighted because it provides an example of how a higher education institution can help to regenerate the local area in which it is based.

13.2 Performance Benchmarks

In order to benchmark DkIT’s performance with other institutions it is first of all necessary to identify appropriate benchmark indicators. One such indicator can be calculated by comparing the impact of DkIT to the total amount of funding the Institute receives from the Irish state each year.

In 2010/11, DkIT received €37.3 million in funding from the state. Using this funding, DkIT was able to generate €132.4 million GVA for the Irish economy (excluding productivity gains). This represents a funding multiplier of €3.55; i.e. for every €1 received in state funding, DkIT generates €3.55 GVA of economic impact.

If the productivity gains described in section 10 are included (which seems reasonable, given that the productivity gains measured by the graduate premium is the main objective of state support for the higher education sector), DkIT had a total quantitative impact of €281.5 million in the Irish economy. This gives a funding multiplier of €7.54, that is for every €1 in state funding received, DkIT will generate a total economic impact of €7.54.

Another measure that can be used for benchmarking purposes is economic impact per student. The GVA economic impact per student for DkIT has been estimated at €29,993 (excluding productivity gains) or €61,872 (including productivity gains). Similar calculations can be undertaken for each of the four institutions identified in above. The indicators produced by these calculations are presented in Table 13-1.


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Table 13-1: Benchmarks

Institution GVA

impact per €1 state funding

GVA (inc. Graduate

Premium/productivity)

per €1 state funding

GVA impact per

student

GVA (inc. Graduate Premium)

per student

DkIT €3.55 €7.54 €29,993 €61,872

Heriot-Watt University €3.97 €6.34 €33,497 €53,492

Glasgow Caledonian University €5.48 €10.23 €28,703 €53,570

Robert Gordon University €7.29 €15.16 €42,369 €88,066

De Montfort University €4.67 €11.46 €28,561 €70,023 Source: Economic Impact Studies for Institutions and exchange rate of €1=£0.80.

When interpreting these results it is important to bear in mind that all four of these institutions are not only considerably larger than DkIT but are also established universities with well developed approaches to research commercialisation. In addition, although each of the institutions shares some characteristics with DkIT, each also has distinctive features that it does not share with DkIT but that make an important contribution to overall economic impact. These factors include:

• DkIT’s economic impact is lower than Heriot-Watt University (excluding graduate premium effects), which has a significant economic impact associated with its international activities (it has a campus in Dubai and is opening a campus in Malaysia) and the Heriot-Watt Research Park, a major science park which was established in the 1970s. However, including the graduate premium/productivity effects, the impact of DkIT per €1 of state funding is higher than Heriot-Watt (since a large proportion of Heriot-Watt graduates are international students, with graduate premium’s benefiting the countries in which they work);

• Robert Gordon University has a very high economic impact relative to its scale which can be explained by its high level of commercial income (including from the North Sea oil and gas sector, which is very important to the economy of the North East of Scotland, where the University is based) and it is regularly in the top 3 UK universities for graduate employability (associated with a high proportion of courses that involve student placements, since many of the students are subsequently recruited by the same employer);

• in terms of GVA per student, DkIT is similar to both Glasgow Caledonian and De Montfort Universities. However, when graduate premium/productivity impacts are included, the impact of both are higher than DkIT, reflecting the high proportion of graduates retained in the Scottish (in the case of Glasgow Caledonian) and UK (in the case of De Montfort) economies.

Given that these comparators are larger than DkIT and have more established research and commercialisation operations, DkIT does well to deliver returns to the economy per €1 and per student that are of a similar order of magnitude. These comparators also highlight a range of areas where there could be potential for DkIT to increase its economic impact. These areas have been highlighted throughout this report and are summarised below.


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13.3 Future Opportunities

This report has identified a number of ways in which DkIT could seek to increase its future economic impact. These include:

• international students – section 5.5.1 suggested that an effective strategy for increasing student impacts would be for DkIT to attract more international students. This section found that each additional international student would contribute €7,225 to the Irish economy each year (i.e. €21,674 over a 3 year degree course);

• events – section 6.5 considered the impact generated by events hosted at DkIT and suggested that one way of increasing this impact would be to increase the number of international events such as summer schools hosted;

• commercialisation – section 7.8.1 of this report highlighted that research commercialisation is likely to be an important source of future economic impact for DkIT and section 8.7 described how some other institutions had achieved this;

• FDI – section 9.6.1 highlighted the relationships that DkIT has developed with businesses that have recently invested in Dundalk and suggested that these relationships could provide the basis for wider and deeper institute-industry interactions;

• CPD programmes– section 10.5.1 suggested that an effective strategy for increasing the impact that DkIT has on workforce productivity in Ireland would be to increase the amount of CPD programmes that it delivers to local businesses; and

• capital projects – section 4.6.1 of this report considered the future impact that could be generated by future campus development. It found that the next phase of DkIT’s campus development plans could, subject to funding, contribute €8.6 million GVA per year to the Irish economy between 2012 and 2015.

13.4 Conclusions

The overall conclusion of this report is that DkIT delivers a substantial social and economic impact at the local, regional and national level. DkIT also generates a range of wider benefits that help to enhance the competitiveness of the local, regional and national economies and improve quality of life for local residents.

This report has also identified a number of distinctive strengths associated with DkIT that help to distinguish the Institute from other higher education institutions, both in Ireland and overseas. Of particular note is DkIT’s focus on fostering an entrepreneurial spirit on campus, which makes a significant contribution to the competitiveness and resilience of the local economy and has also been recognised as a model for good practice elsewhere in Ireland. Also worth highlighting is the contribution that DkIT makes to the development of the regional economy, both directly through the activity of the RDC and indirectly through it’s support of efforts to attract FDI to the region. The collaborative approach demonstrated by DkIT is particularly important to this. The wider contribution that DkIT makes to community in which it operates by supporting a wide range of social engagement activity and providing opportunities for people to access higher education is also significant.


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14 APPENDIX A – CONSULTEES BiGGAR Economics is grateful to the following individuals for participating in the consultation programme that informed this study.

Table 14-1: List of consultees

Name Organisation

Anton Barrett DkIT

Anne Caldwell Enterprise Ireland

Arleen Folan Water is Life Project

Brian Harten Louth County Arts Officer

Costin Cammarasu Ion Channel Biotechnology Centre, DkIT

Declan Meally Sustainable Energy Authority of Ireland

Deirdre Craven IDA Ireland

Denis Cummins President DkIT

Donnan Hurst Warner Chilcott

Eddie Friel University of Ulster

Edel Healy Head of Strategic Projects, DkIT

Irene McCausland External Services Manager, DkIT

Joan Martin Louth County Council

Kevin Kane Prometric

Padraig White Louth Economic Forum

PJ Howell Fingal County Council

Rodd Bond Netwell Research Centre

Ronan Dennedy Louth County Enterprise Board

Tim McCormac Head of Research, DkIT

Tony McQuillan Xerox Ireland Ltd.

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