Spinning its web: Ireland in RI

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Spinning its web: Ireland in RI
Shirley Christie | May 09, 2011

With Ireland’s banking sector reeling from the financial crisis, the country is focusing on high growth markets and new technology. That’s where internet-loving Indonesia comes in.

With the fourth-largest population in the world, Indonesia represents a huge potential market. It’s one of the reasons why countries such as Ireland have been watching the nation. Markets in developed nations such as the US are already saturated, while a plethora of untapped opportunities await in the developing world.

Business headlines are dominated by the rise of Asian giants China and India. Indonesia - Southeast Asia’s largest economy - is also proving itself to be both vibrant and resilient. “Indonesia’s young generation is so optimistic. They graduate from college and are ready to hold the world in their hands.

They don’t have to worry about not getting a job. I rarely see this optimism in other countries,” Irish embassy official Patrick O’Riordan tells GlobeAsia during a recent visit to Dublin. The age group alone accounts for about a half of Indonesia’s population of 239 million and is both tech savvy and avid internet users.

Sometimes referred as “Gen Y” or “netizens,” the group has taken to social networking with a vengeance. That’s no exaggeration – Indonesians are among the top-five users of Facebook and Twitter worldwide. A report released by global digital measurement firm comScore in March showed there were 30 million new internet users in the Asia-Pacific region last year, 6.7% of them from Indonesia.

“Indonesia showed the highest percentage growth over the past year, adding 2 million web users since December 2009,” notes the report. Also worth nothing, a large swathe of the population has leapfrogged from landlines straight to cell phones.

These are all positive signs seen from Ireland’s beleaguered economy. At a press briefing in Dublin this March, newly appointed Irish Enterprise Minister Richard Bruton admitted that Ireland needed to build “a stronger export position”. Also at the meeting, local wireless network provider Altobridge Limited announced that Intel Capital and IFC would together invest $12 million in the company.

The funding will provide the Irish company with additional capital to accelerate the pace of roll-outs in emerging markets, including Indonesia. Richard Lord, Altobridge’s chief technical officer, told GlobeAsia the company is focusing on its partnership with Indosat to create more mobile connections in remote areas such as Sulawesi and Kalimantan.

The Irish government agency Enterprise Ireland has been scoping Indonesia for the past three years and has identified Indonesia’s technology sector as an area of promising growth, says O’Riordan. He met with the founders of Indonesia’s web start-up community StartupLokal in Jakarta last January and immediately invited them to meet with venture capitalists in Dublin.

“These guys are the equivalent of the founders of Dublin Web Summit,” says O’Riordan, referring to two young Irish guys who founded Ireland’s largest web and technology event that brings world-renowned entrepreneurs and business leaders together each year.

Natali Ardianto, Nuniek Tirta Ardianto, Aulia Halimatussadiah and Sanny Gaddafi, the founders of StartupLokal, say they plan to start the first “Indonesian Tech Summit” this April when their company celebrates its first anniversary.

“It will be the biggest tech event in Indonesia because we will combine several web and mobile communities,” says Natali, adding that more than 40 speakers will take part in the week-long event. They say the trip to Ireland inspired them to share their knowledge with the tech-savvy community.

StartupLokal’s meetings already draw regular crowds of between 150 and 300 start-up entrepreneurs every month.

Growing role

A year ago web start-ups were mostly unknown in Indonesia, but today it is estimated there are more than 500 across the country. In the US and Europe their creative industry counterparts are worth trillions of dollars.

“Web start-ups represent $1.5 trillion,” comments Dr. Stephen Brennan, a former physician and digital entrepreneur in Ireland, who met with the Indonesian delegates.

“The internet business will affect all businesses in the future,” says Brennan, a keen supporter of the trend. “We need to have the knowledge and know how to apply it to small industries and development systems.”

Brennan suggests that internet businesses are similar worldwide in that they are typically started by a small number of people, although each country has different ways of embracing the business, depending on population and infrastructure and a multitude of other factors.

“Ireland is very different to Silicon Valley, Singapore, Beijing, or any other country,” he explains, adding that internet businesses in the US are subject to few governmental controls while in Europe start-ups receive comprehensive government support.

“Europe is more organized and the government continuously supports online companies,” he says. European companies would not survive in a tough environment like Palo Alto, where million-dollar deals are made in a day but the failure rate stands at 40%, he laughs.

At least five Irish companies that met with Indonesian delegations in Dublin recently expressed interest in exploring partnerships with Indonesian technology companies. “Indonesian internet usage is totally different to ours,” O’Riordan told the gathering before the StartupLokal founders gave a presentation on mobile and internet trends in Indonesia.

“For example, we don’t commute as much as people in Jakarta,” says O’Riordan. “In Dublin we can get home within half an hour so we tend to use the internet on desktops and fixed lines.”

Career Decisions Ireland, a company focusing on career assessment programs, is one of the companies looking for a potential partner in Asia.

“We’re interested in doing business with the government sector and private companies that understand the market in Indonesia,” explains Miriam Magner Flynn, the managing director and co-founder. The company was established as a start-up in 1994 and was mentored by Enterprise Ireland before becoming highly profitable.

Today it has a turnover of 1.6 million euro.   At its high potential start-up department, Enterprise Ireland selects 70 out of 1,200 candidates for equity funding packages worth up to 500,000 euro ($697,000). John Convery, a senior development adviser for the department, tells GlobeAsia that Enterprise Ireland has a dedicated start-up team that provides guidance in technology, finance, human resource development and marketing strategy.

About 76% of start-ups mentored by Enterprise Ireland are still operating, while 4% have been acquired by bigger companies.   StartupLokal’s founders say the Indonesian government should emulate Ireland’s efforts to support online developments.

For Brennan, whether the government chooses to play an active role or not, foreign businesses will always require a third party to help with the particulars on the ground and a meeting center. Pat McLaughlin, president of Institute of Technology Tallaght (ITT Dublin), one of the universities to receive funding from Enterprise Ireland, is also keen to nurture the next generation of budding web entrepreneurs.

McLaughlin visited Indonesia earlier this year to meet with several top universities and discuss collaborative opportunities and the creation of a high-tech incubation center in Indonesia. The center would provide a “hot desk” – a place for someone developing an idea to have an individual office space, laboratory and relaxed meet-up point.

McLaughlin says she will visit the country again to follow up on the opportunity. If it goes ahead, Ireland will make Indonesia’s budding web entrepreneurs very happy. “It is everything that we have always needed,” says a smiling Natali after the meeting in Dublin. GA