Blessed by cultural similarities and helped by change in Northern Ireland, trade and investment between Ireland and the UK has been quietly revolutionised in recent years
TODAY, A WALK down Dublin’s Grafton Street differs little from its UK counterparts. For some, the changes signal cultural and commercial homogenisation. For others, it is a reflection of the increasing ties that bind both countries together.
Last year, Ireland sold €13.8 billion of goods to Britain and Northern Ireland, up 2 per cent on the previous year despite the economic difficulties – making the UK Ireland’s third most important export market, behind the US and, surprisingly, Belgium. Trade in services is even larger.
In reality, the statistics do not do justice to the relationship.
The US leads the export list, but the bulk of those sales are transactions between Irish-based subsidiaries of multinationals and their headquarters.
Belgium occupies second position because it is the hub for much of the world’s trade in pharmaceuticals – of which Irish-based “Big Pharma”, such as Pfizer, GlaxoSmithKline and a host of others exported nearly €2 billion worth of product in February alone.
As Conservative prime minister David Cameron never tires of saying, Ireland remains Britain’s fifth biggest export market, larger in 2010 than Brazil, Russia, India and China, the so-called BRIC countries, but also, though this is not usually mentioned, Japan.
The ties between the Republic and Northern Ireland are no less important – €1.3 billion worth of goods went north last year, while the Republic is home for 9.5 per cent of Northern Ireland’s total sales, but 75 per cent of all exports by its small and medium-sized firms.
Exports from the Republic were up 2 per cent on the year before, despite losses in previous years and continuing economic woes, while imports from the UK were up by 6 per cent to €13.6 billion, though the trade in services was sharply down in both directions.
FOR GILES O’NEILL, Enterprise Ireland director for UK and Northern Europe, the relationship is symbiotic: “For some companies in each country, it is their best export market. For many others, it is their export market, full stop.”
“Many companies are increasingly seeing the other country as being part of their home market. You can get on a ‘red-eye’ flight and be at an 8.30 meeting in Dublin or London and still get home that night,” says O’Neill.
Denis Harrington of PwC is the British-born son of Irish emigrants, but he has now lived in Ireland for more than a decade, and agrees with O’Neill: “British companies coming to Ireland don’t have to change much. So much is familiar. I hear few complaints. I am struggling to think of one, maybe nit-picking things like VAT classifications. In any event, a lot of the companies, retailers, for example, put in local management, while area management may be part of the Irish diaspora,” he says.
Traditionally, Ireland exported food and drink. Today, it is still the UK’s third largest supplier – behind the Netherlands and France – of food, selling €3.2 billion worth of product last year, 43 per cent of all such exports from the Republic.
Equally, the Republic is the UK’s top export market for its food and drink, while British supermarkets, such as Tesco, but also other non-food British retailers, have taken an increasingly large share of the Irish retail market.
The Republic is a profitable market. “You do hear anecdotally that the Irish market remains profitable. Price differentials between Ireland and their home market can be very significant,” says Harrington.
The two-way trade is worth €51 billion annually. Half of all tourists coming to the Republic come from Britain – often, but far from exclusively, one-time emigrants or their offspring – while one-third of all foreign investment into the Republic emanates from there.
The beef trade remains “the old reliable”, with 232,000 tonnes to be sold this year, making Ireland the UK’s leading supplier, with a 60 per cent market share – but accounting for half of all such sales from Ireland this year.
However, small Irish companies such as Glenilen Farm in Drimoleague in west Cork are also winning contracts to supply processed foods into the British market, on the back of securing smaller deals initially with Tesco in Ireland.
Having earned its spurs with the UK multiple supplying yoghurts, cheesecakes and desserts since 2008, Glenilen Farm recently won a contract to supply 100 of Tesco’s British stores with €500,000 worth of cheesecakes, employing five staff.
Dublin company Kooky Dough (a company that once rejected an investment offer on Dragons’ Den) that makes cookie dough for home-baking, has agreed a €550,000 deal to supply two new products for Tesco’s own-brand range, creating 10 jobs.
Construction, too, has its opportunities. Four years ago, Enterprise Ireland started to work with firms that had gained experience coping with major infrastructural contracts in Ireland to help them take those skills abroad.
Helped by major projects such as the Olympics and Crossrail in London, some have made significant progress. Last year, £750 million (€860 million) worth of such business was done, up 4 per cent on 2009. “In a market that was largely down, that is quite incredible,” says Giles O’Neill.
Aidan Gough of InterTradeIreland, which encourages North-South business, says the lessons in winning cross-border business are the same ones that will, if learned properly, serve them well in Britain.
Such companies are run by people who “have a million other things to do, like human resources, and they need help that is not bureaucratic, they want people to come in who have been there, who have done it”, he says.
THE LESS-VISIBLE TRADE in services is worth even more than the trade in goods, though the Republic’s figures have fallen back significantly from the 2007 peak of €15.75 billion, dropping by three percentage points in 2008 and even more sharply, by 12 points, a year later.
Nearly €4 billion of the 2009 trade comprised computer software and services, from firms such as Druid Software in Wicklow, which offers telecommunications software, to Daon, which combats identity fraud. Equally, Ireland is increasingly hosting the servers needed for “cloud computing”.
Meanwhile, €164 million worth of legal services were supplied to UK clients, with more than €20 million of that coming from Arthur Cox’s offices in London, while media companies such as Harmonia and Windmill Lane in Dublin are already doing business there.
Renewable energy could be one of the biggest export hopes, believes Enterprise Ireland’s Giles O’Neill on foot of the UK’s need to cut its carbon dioxide emissions by 34 per cent on 1990 levels and to generate 15 per cent of its energy needs from green sources.
Energy regulator Ofgem predicts that up to £200 billion (€230 billion) will have to be spent over the next 10 to 15 years on power plants and other energy infrastructure to ensure that the UK both meets its climate-change commitments and avoids shortages.
Enterprise Ireland already has a team in Glasgow, seeking to carve out opportunities for Irish firms from first minister Alex Salmond’s ambitions to make Scotland the “Saudi Arabia of green energy”, using its wind and tides.
“A huge infrastructure has to be built: for every £1 million spent offshore you have to spend £10 million on land. We are looking to partner Irish companies with Scottish ones. Culturally, we like doing business with them and they like doing it with us,” he told The Irish Times.
THE ESB ALREADY has major UK interests. Having opened a 350MW gas-powered plant in Corby in Northamptonshire in 1993, it now controls Northern Ireland Electricity, runs a gas-powered station in Derry, wind turbines in Co Tyrone and a Southampton power plant.
Meanwhile, a subsidiary, ESB Novusmodus, has invested in Airvolution Energy, a new venture that will develop, construct and operate small onshore wind projects, while it has done the same in Bioflame, a developer of small-scale 2.5MW generation plants. Irish companies, pressed to find exports because of a sluggish climate at home, must have “something to offer” if they are going to break into the UK, says Giles O’Neill: “ ‘Me, too’ products won’t do it for them.”
“Sure, there are differences,” says O’Neill. “We tend to be a bit more relaxed. But Irish companies tend to sharpen up when they start looking abroad. Britain is not Germany or France, but firms do need to be aware that it is different. In my experience, companies pick it up very quickly.”
The issue now is not just Irish firms’ ability, but, also the state of the British economy in the years ahead, facing as it does the impact of billions worth of public spending cuts. “The British economy is still quite fragile,” O’Neill cautions.
Ireland’s own difficulties have made exporters’ jobs harder, says Neil Gibson, economic adviser at Ernst and Young: “There is a perception that Ireland has lost credibility, a belief that Ireland bluffed its success. The reality is that it didn’t, but it has to convince people again.”
TODAY, A WALK down Dublin’s Grafton Street differs little from its UK counterparts. For some, the changes signal cultural and commercial homogenisation. For others, it is a reflection of the increasing ties that bind both countries together.
Last year, Ireland sold €13.8 billion of goods to Britain and Northern Ireland, up 2 per cent on the previous year despite the economic difficulties – making the UK Ireland’s third most important export market, behind the US and, surprisingly, Belgium. Trade in services is even larger.
In reality, the statistics do not do justice to the relationship.
The US leads the export list, but the bulk of those sales are transactions between Irish-based subsidiaries of multinationals and their headquarters.
Belgium occupies second position because it is the hub for much of the world’s trade in pharmaceuticals – of which Irish-based “Big Pharma”, such as Pfizer, GlaxoSmithKline and a host of others exported nearly €2 billion worth of product in February alone.
As Conservative prime minister David Cameron never tires of saying, Ireland remains Britain’s fifth biggest export market, larger in 2010 than Brazil, Russia, India and China, the so-called BRIC countries, but also, though this is not usually mentioned, Japan.
The ties between the Republic and Northern Ireland are no less important – €1.3 billion worth of goods went north last year, while the Republic is home for 9.5 per cent of Northern Ireland’s total sales, but 75 per cent of all exports by its small and medium-sized firms.
Exports from the Republic were up 2 per cent on the year before, despite losses in previous years and continuing economic woes, while imports from the UK were up by 6 per cent to €13.6 billion, though the trade in services was sharply down in both directions.
FOR GILES O’NEILL, Enterprise Ireland director for UK and Northern Europe, the relationship is symbiotic: “For some companies in each country, it is their best export market. For many others, it is their export market, full stop.”
“Many companies are increasingly seeing the other country as being part of their home market. You can get on a ‘red-eye’ flight and be at an 8.30 meeting in Dublin or London and still get home that night,” says O’Neill.
Denis Harrington of PwC is the British-born son of Irish emigrants, but he has now lived in Ireland for more than a decade, and agrees with O’Neill: “British companies coming to Ireland don’t have to change much. So much is familiar. I hear few complaints. I am struggling to think of one, maybe nit-picking things like VAT classifications. In any event, a lot of the companies, retailers, for example, put in local management, while area management may be part of the Irish diaspora,” he says.
Traditionally, Ireland exported food and drink. Today, it is still the UK’s third largest supplier – behind the Netherlands and France – of food, selling €3.2 billion worth of product last year, 43 per cent of all such exports from the Republic.
Equally, the Republic is the UK’s top export market for its food and drink, while British supermarkets, such as Tesco, but also other non-food British retailers, have taken an increasingly large share of the Irish retail market.
The Republic is a profitable market. “You do hear anecdotally that the Irish market remains profitable. Price differentials between Ireland and their home market can be very significant,” says Harrington.
The two-way trade is worth €51 billion annually. Half of all tourists coming to the Republic come from Britain – often, but far from exclusively, one-time emigrants or their offspring – while one-third of all foreign investment into the Republic emanates from there.
The beef trade remains “the old reliable”, with 232,000 tonnes to be sold this year, making Ireland the UK’s leading supplier, with a 60 per cent market share – but accounting for half of all such sales from Ireland this year.
However, small Irish companies such as Glenilen Farm in Drimoleague in west Cork are also winning contracts to supply processed foods into the British market, on the back of securing smaller deals initially with Tesco in Ireland.
Having earned its spurs with the UK multiple supplying yoghurts, cheesecakes and desserts since 2008, Glenilen Farm recently won a contract to supply 100 of Tesco’s British stores with €500,000 worth of cheesecakes, employing five staff.
Dublin company Kooky Dough (a company that once rejected an investment offer on Dragons’ Den) that makes cookie dough for home-baking, has agreed a €550,000 deal to supply two new products for Tesco’s own-brand range, creating 10 jobs.
Construction, too, has its opportunities. Four years ago, Enterprise Ireland started to work with firms that had gained experience coping with major infrastructural contracts in Ireland to help them take those skills abroad.
Helped by major projects such as the Olympics and Crossrail in London, some have made significant progress. Last year, £750 million (€860 million) worth of such business was done, up 4 per cent on 2009. “In a market that was largely down, that is quite incredible,” says Giles O’Neill.
Aidan Gough of InterTradeIreland, which encourages North-South business, says the lessons in winning cross-border business are the same ones that will, if learned properly, serve them well in Britain.
Such companies are run by people who “have a million other things to do, like human resources, and they need help that is not bureaucratic, they want people to come in who have been there, who have done it”, he says.
THE LESS-VISIBLE TRADE in services is worth even more than the trade in goods, though the Republic’s figures have fallen back significantly from the 2007 peak of €15.75 billion, dropping by three percentage points in 2008 and even more sharply, by 12 points, a year later.
Nearly €4 billion of the 2009 trade comprised computer software and services, from firms such as Druid Software in Wicklow, which offers telecommunications software, to Daon, which combats identity fraud. Equally, Ireland is increasingly hosting the servers needed for “cloud computing”.
Meanwhile, €164 million worth of legal services were supplied to UK clients, with more than €20 million of that coming from Arthur Cox’s offices in London, while media companies such as Harmonia and Windmill Lane in Dublin are already doing business there.
Renewable energy could be one of the biggest export hopes, believes Enterprise Ireland’s Giles O’Neill on foot of the UK’s need to cut its carbon dioxide emissions by 34 per cent on 1990 levels and to generate 15 per cent of its energy needs from green sources.
Energy regulator Ofgem predicts that up to £200 billion (€230 billion) will have to be spent over the next 10 to 15 years on power plants and other energy infrastructure to ensure that the UK both meets its climate-change commitments and avoids shortages.
Enterprise Ireland already has a team in Glasgow, seeking to carve out opportunities for Irish firms from first minister Alex Salmond’s ambitions to make Scotland the “Saudi Arabia of green energy”, using its wind and tides.
“A huge infrastructure has to be built: for every £1 million spent offshore you have to spend £10 million on land. We are looking to partner Irish companies with Scottish ones. Culturally, we like doing business with them and they like doing it with us,” he told The Irish Times.
THE ESB ALREADY has major UK interests. Having opened a 350MW gas-powered plant in Corby in Northamptonshire in 1993, it now controls Northern Ireland Electricity, runs a gas-powered station in Derry, wind turbines in Co Tyrone and a Southampton power plant.
Meanwhile, a subsidiary, ESB Novusmodus, has invested in Airvolution Energy, a new venture that will develop, construct and operate small onshore wind projects, while it has done the same in Bioflame, a developer of small-scale 2.5MW generation plants. Irish companies, pressed to find exports because of a sluggish climate at home, must have “something to offer” if they are going to break into the UK, says Giles O’Neill: “ ‘Me, too’ products won’t do it for them.”
Culturally, we like doing business with them and they like doing
Only a fraction of the companies who make opening approaches to Enterprise Ireland go further, but the preparations necessary should not deter.“Sure, there are differences,” says O’Neill. “We tend to be a bit more relaxed. But Irish companies tend to sharpen up when they start looking abroad. Britain is not Germany or France, but firms do need to be aware that it is different. In my experience, companies pick it up very quickly.”
The issue now is not just Irish firms’ ability, but, also the state of the British economy in the years ahead, facing as it does the impact of billions worth of public spending cuts. “The British economy is still quite fragile,” O’Neill cautions.
Ireland’s own difficulties have made exporters’ jobs harder, says Neil Gibson, economic adviser at Ernst and Young: “There is a perception that Ireland has lost credibility, a belief that Ireland bluffed its success. The reality is that it didn’t, but it has to convince people again.”
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