The latest Brexit deadline is looming alarmingly close, bringing with it as yet unknown consequences for Irish companies operating in the UK market.
But although uncertainty still lingers, it’s not all doom and gloom for Irish exporters. Rather than adopting a wait-and-see approach, Irish companies are getting proactive and seeking out new markets to help offset any potential negative effect of the UK leaving the European Union.
Given the ease with which business can be done in the EU thanks to the common market, it makes sense that small and medium-sized companies are now recognising that potential. The common currency eliminates potential negative exchange rate movements; common regulations makes it easier for companies to do business.
While the familiarity and convenience of the UK have made it an important market for Irish exporters, companies are now increasingly looking towards the euro zone for potential customers, with Germany, France, the Netherlands, Belgium, Spain and Italy topping the list. All they need is a little help and guidance.
That is where Enterprise Ireland is putting its focus, explained its regional director for the euro zone, Anne Lanigan.
“What we do best really is put clients in touch with buyers, and that’s the kind of support that they require,” Lanigan says. “But there is an awful lot of work to be done before a client is ready to be put in front of the buyer. A lot of the work that we’re doing with clients at the moment is helping them to get to that point so that they are ready to pitch to buyers.”
Market research
Key to a successful entrance into a new market is always research – selecting the market, validating the markets, preparing the plan around where the value proposition is today.
There are issues to be overcome. One of the chief ones is the language barrier. While the UK market is English-speaking, companies expanding into euro-zone markets have a variety of languages to deal with.
Enterprise Ireland has put in place a number of support programmes for its client companies eyeing the euro zone for expansion. A new programme is beginning in October, called Enter the Euro zone. Lanigan explains the purpose of the programme is to prepare companies for entering new markets in Europe, starting from scratch.
“This is designed to bring a client from absolutely no expertise, no knowledge of the market to selecting the market, validating the market, doing their research in terms of where the opportunities are in the market, developing a resources plan in terms of skills they’ll need – languages and marketing skills – and the finance they will require behind that.”
October may seem very close to the latest Brexit date to be considering new markets but Lanigan explains that it’s not just companies trying to diversify due to Brexit that are looking to the euro zone.
Small firms that have never considered expansion are now being given a path to build their business in the euro zone, thanks to programmes such as this.
“Brexit is obviously a driver in terms of diversification. But quite honestly, our clients need to be diversifying into new markets anyway,” says Lanigan. “Realistically, it can take two to three years for a company to get traction in the market.”
Brexit has brought some addition impetus to need for diversification, but it has also put the focus on Ireland, something that companies should capitalise on.
“Irish companies have a great reputation in the euro zone,” she says. “This is not just a Brexit agenda. diversification was part of our Brexit strategy session, but it is also part of our overall strategy.”
That’s not to say that Irish companies will be abandoning the British market; it’s just about becoming less dependent on it overall.
Regardless of what happens with the UK market though, Lanigan is keen to highlight the opportunity provided by the euro-zone markets, which currently accounts for about €4.8 billion in exports for client companies. That has the potential to increase significantly, and the numbers make a compelling argument.
“If Enterprise Ireland client companies were to export the same per head of population as they do to the UK market, our exports would be €38 billion,” she says. “That’s the opportunity, that €38 billion minus €1.8 billion. That’s an untapped opportunity. And that opportunity is there Brexit or no Brexit.”
