Strong employment and revenue growth in the year ahead as Irish businesses go digital - Virgin Media Business Insights Report
Vast majority of businesses say they have good growth prospects and 75% say they will create jobs
Businesses expect revenues to grow by 19%
Broadband and digital technology essential for growth and profitability
Wednesday 22nd February 2017: In spite of all the ups and downs in global business markets, confidence is still very high among the vast majority of Irish companies, according to the Virgin Media Business Insights Report, researched for Virgin by Amárach.
Virgin Media asked a panel of Irish business decision makers how they rate their growth prospects for 2017-18 and 86% said growth would be either good or very good.
This shows a trend of gradually rising confidence since the 2012 Virgin Media Business survey. Then, 80% of Irish SMEs and corporates said they had a positive outlook for growth.
74% of business decision makers said their growth into 2018 will be due to digital technology and the majority also plan to invest in digital to fuel that growth.
On average, bosses believe revenues will grow by 19% this year. With the addition of the right digital and online strategy, they say revenues could grow by 26%.
It also looks like new jobs will be created as three-quarters (75%) of businesses said they expect to hire additional staff. That’s a big increase on the 59% who said they intended to hire new staff in the 2014 Virgin Media Business survey.
This optimistic outlook for jobs correlates well with the downward rate in unemployment now at 7.1% (down from 10.6% in December 2014 at the time of the last study.)
When it comes to hiring, the importance of digital skills has increased with 88% of businesses stating IT capability is an important precondition for considering potential candidates (up from 75% in 2014). Of these, the skills businesses think important are analytics 70%, programming 60%, digital marketing 51% and social media 49%.
Nearly 90% of respondents said their business wouldn’t exist, or would be a lot smaller, if they didn’t have broadband, with over a third saying their business would be less profitable. Consumers having broadband was also rated important by 77% of businesses surveyed.
The survey revealed an encouraging trend around online sales where businesses expect the online channel to account for 40% of sales in 2017, up from 33% in 2015.
Interestingly, Brexit wasn’t seen as a major threat to growth by the majority of businesses surveyed. Cybersecurity breaches were cited as a significant risk by 61% of respondents, 52% were concerned about data protection infringements, while only 20% said increased competition from the UK, as a result of Brexit, represented a real risk to their businesses.
Paul Farrell, Commercial Vice-President of Virgin Media said:
“The results of the latest Virgin Media Business Insights Survey are good news for Ireland and the economy. The most significant findings are those around business and employment growth enabled by digital technologies.
“The fact that so many businesses are confident about growth and will create new jobs over the next two years shows the strength of the economic recovery and long may it last.
“Businesses are also telling us that the delivery of better customer experiences is becoming more and more dependent on digital. The availability of high speed broadband is also central to the relationship between businesses and customers.
“It’s important that businesses are encouraged to trade online and to maximise the opportunities of the digital economy. The overall picture revealed by the Virgin Media Business Insights Report shows a confident business community growing sales at home and abroad, increasing employment, developing new products and services, and investing in digital technologies and online strategies to drive their potential That’s really great news for Irish businesses and for the country,“ said Farrell.
There are opportunities for digitally Irish SMEs and start-ups to capture a share of the fastest-growing sector in the economy, but they have to act fast.
As noted in the separate Virgin Media Digital Insights Report 2016, the digital economy is now worth around 6% of Ireland’s GDP. The projected forecast is for online consumer spending to grow from €7.5 billion now to €14.1 billion in 2021.
About 60% (€4.5bn) of Irish online shopping currently goes abroad - a significant potential loss of trade to the Irish economy and Irish businesses. If consumer spending continues on the current trajectory, that could rise to €8.5bn by 2021
About the Virgin Media Business Insights Survey
Amárach surveyed 200 senior decision makers in 200 businesses throughout Ireland in late 2016. The survey replicated similar studies for Virgin Media in 2014 and 2012.