Derry: A city of Digital Enterprise

North West-based journalist, author and researcher Paul Gosling discusses Derry’s transition away from relying on industry as an economic driver and the opportunities available as a city of digital excellence.

Derry was the UK’s first ever City of Culture in 2013. This triggered both an inflation rise in tourism and also, in advance of this, a surge in spending of about £100 million on visitor-related infrastructure. The city had never before looked so good, with renovated public buildings and spaces.

Yet the North West regional capital also received a boost of a different kind, which is perhaps even more important for its economy over the longer-term and in generating highly paid jobs. BT became the principal sponsor of the City of Culture year and, underpinning this, provided Derry with the first comprehensive street level, high speed broadband connectivity of any city in the UK or Ireland.

As BT Ireland’s director of corporate services Peter Morris said at the time: “Technology is helping Derry-Londonderry recognise its cultural and digital potential, and BT has pledged a multi-million pound investment and a five year commitment to this initiative. Thanks to BT, Derry-Londonderry is the only city in the UK and Ireland to have all street cabinets serving customers within the city upgraded with fibre broadband technology. It means almost 39,000 homes and businesses can experience download speeds of up to 40 Mbps, increasing to up to 80 Mbps this year.”

This was an important element of strengthening Derry’s position as a centre of digital excellence. It is built on an existing piece of key infrastructure, Project Kelvin, which was completed in 2010. Project Kelvin created Northern Ireland’s first direct telecoms link to North America, part financed by the European Union and the Republic of Ireland. Project Kelvin lands at Portrush, with one of its telehouses in Derry. This provides fast, broad bandwidth transatlantic telecoms connectivity, placing the city in a strongly competitive position through the quality of its telecoms infrastructure and high speed of online connections with North America.

A third important element of the digital offer from Derry is the provision of specialist expertise in the city’s Magee campus, part of the Ulster University. Magee’s Computer Science Research Institute is recognised as a world leader and has doubled in size in the last decade in terms of academic and research staff and in the number of PhD students who graduate, thereby providing a pipeline of relevant talent into the local labour market. The Institute specialises in research into artificial intelligence, intelligent systems, robotics, next generation networks and data analytics.

Data analytics also plays a central role in another initiative that the city expects will generate significant positive economic impacts, as well as improving health outcomes locally and globally. 
C-Tric, the Clinical Translational Research and Innovation Centre, is located at the city’s Altnagelvin Hospital and is the base for clinical research, including that related to personalised healthcare and stratified medicine. It is hoped that this will trigger a significant biotech industrial presence in and around the city, which is closely related to local digital expertise.

Taken together and supported by local entrepreneurs, a large digital cluster has been built in Derry. Seagate is the bedrock of the sector. It opened in 1993, as the result of lobbying by the then local MP and MEP, John Hume. Seagate today has a workforce in the city of about 1,400 people, making it the city’s largest private sector employer. The factory, located on ‘Disc Drive’, specialises in producing read-write heads for electronic equipment.

Cluster

Seagate was followed by other digitally-oriented inward investors, including US-based multinational Allstate, Indian-based multinational FirstSource, Japan’s Fujitsu, US company OneSource Virtual and another US-based firm, Metaverse Mod Squad. Between them, these six FDI companies employ around 3,000 people in the city. Belfast-based Kainos also has a presence in Derry.

As well as attracting inward investment, there have been local digital business start-ups, some of which have become large businesses. Learning Pool is an online training provider, which is based in Derry, operating internationally and employing 67 people in Derry as part of a UK-wide workforce of 150. The company is one of the city’s big success stories, having grown in just a few years, with accolades including being recognised by the Sunday Times as one of the top 100 small companies to work for, by Deloitte as one of the best managed companies and, for six years in succession, as one of its top 50 fast growth tech companies. Learning Pool recently obtained a very large venture capital injection to finance further expansion.

TV production companies Dog Ears, Alleycats and 360Production are all based in Derry, as is digital media agency Wurkhouse. 8Over8 was established in Derry 16 years ago as a university spin-out, providing software management systems to the energy sector. It was sold last year to US multinational Aveva Group, but continues to have an operating base in the city.

Singularity was another Derry start-up, which itself grew with subsidiary operations in Belfast, London and India, before being sold to US multinational Kofax, which has since been bought by Lexmark. The now Kofax-branded operation in Derry employs more than 150 people.
Singularity founder Padraig Canavan says that clustering is particularly important for digital businesses and with the right skills base, Derry could benefit strongly from this. “There is obviously a current opportunity in the digital sector, globally,” he says. “It is tremendously under-supplied by skills. That will persist for quite some time to come. With the properly skilled workforce, Derry has an opportunity to compete very effectively in that space.

“Magee and the North West College are central to this, Magee in particular because it can award degrees. Degree level education in software engineering is the right way to satisfy this demand. You can produce as many software engineers as you like at the moment and they will all get jobs and those are very well paid jobs.

“Clustering is very helpful to this because the skills shortages are so great, software companies naturally gravitate to where there are other companies because they know there is a labour supply. It is so much easier than creating that supply yourself. Belfast has almost too many big names, which are difficult to compete against.

“The other big benefit of clustering is that software product companies can share ideas with each other and spark off new ideas. That is especially important for indigenous companies which are writing their own software, not using existing software provided by the parent company. It helps a great deal to discuss with other people and learn from others who have done something similar. There is a give and take around helping other companies.

“Silicon Valley is always renewing itself: there are always good new ideas, because there are so many ideas. That is the Nirvana of clustering. This is why the Magee university campus and its research are such an important part of building Derry’s new economy.”

Derry’s industrial base was once shipbuilding, ship repair and shirt factories, before the city and its economy declined substantially during the Troubles. While tourism provides one positive route towards a more productive future, for a city in need of well paid jobs the digital sector clearly provides the strongest prospect.