The United Kingdom and Ireland have a special set of historical, geographical, economic, social and cultural ties. This is no doubt a unique relationship, which has evolved in an unprecedented degree of friendship over the years.
With the UK noted as the largest export market for Irish owned companies, 35 percent of all exports by Enterprise Ireland client companies come to the UK. Supporting over 200,000 jobs in each market, UK / Ireland trade is currently valued at over €1 billion per week and aims to continue growing as relations strengthen and skills are pooled.
Of course, Brexit gives rise to a series of complex and interconnected questions. What will be the consequences for cross-border trade and economic activity? Can the current soft border arrangements be retained? What can businesses do to prepare ahead of Brexit?
Recent political events needn’t affect the strong trading relationship built over decades. We now need to nurture this ever-growing ‘isle’ bond and make it never falter. One of the key challenges which will affect businesses is exchange rate volatility. A sharp depreciation in sterling could impact exports, and requires businesses to be even more competitive. But with increased competition comes increased innovation, pushing industries forward. Businesses need to be prepared for this change and ensure they have the structure to support it.
One way of achieving this is for exporters to respond to exchange rate movements by adjusting their profit margins and assessing their supplier/partner arrangements to improve competitiveness. Research on issues such as reducing supply chain costs, accessing additional funding, and staying abreast of new regulation will help drive businesses forward, ensuring success.
A resource which may be useful is the ‘Brexit SME Scorecard’, an interactive online platform which can be used by companies to self-assess their exposure to Brexit under six business pillars. Based on answers supplied by the user, the Scorecard generates an immediate report which contains suggested actions and resources, and information on events for companies to attend, to prepare for Brexit.
With preparation and research, there are a number of opportunities for the UK and Ireland to work in tandem more than ever before. For instance, Ireland has built itself up as one of the world’s leading fund hubs as well as a centre for servicing investment banks and hedge funds. It is rapidly establishing itself as a FinTech hub. Furthermore Ireland’s Financial Services credentials for the UK are clear-cut, with the UK being the largest market for Irish financial services, representing 33 percent of export.
Similarly, there are a number of opportunities to collaborate with Irish companies in the construction sector, which is the largest sector and highest market value of exports to the UK. The UK will require over 300,000 new workers to meet predicted demand for the government-led National Infrastructure Development programme. With ambitions to complete major projects such as HS2, Crossrail and an ambitious residential development programme, collaboration between the UK and Ireland is key and we are already working with clients to support these initiatives. .
Taking advantage of opportunities in these sectors is key to ensure success. Despite current uncertainty, the UK continues to be Ireland’s main trading partner and Ireland’s third largest investor. Similarly, with Ireland’s globalised economy, strong infrastructure, and a young, innovative workforce at close proximity, it’s a perfect fit for UK companies looking to drive competitive edge at this time.
Marina Donohoe is the Director for UK and Northern Europe, Enterprise Ireland