With InterTradeIreland set to mark 20 years of assisting small firms to explore cross-border business on the island of Ireland, we look at how the cross-border market has evolved during this time and the risks and opportunities it brings for SMEs across the island.
Since its creation, InterTradeIreland, which primarily assists small businesses in Ireland and Northern Ireland to explore cross-border markets, develop new products, processes and services and to become investor ready, has overseen an average annual 4 per cent increase in cross-border trade and recent figures show a record high all-Ireland trading market in excess of €7 billion for 2017.
Over the past two decades, InterTradeIreland has engaged with 42,000 businesses across the island and directly supported around 9,000. Those businesses have generated over €1.2 billion in business development value through additional cross-border sales, investments or efficiency savings and have created close to 16,000 jobs in the small business sector across the island.
The wider trade flows across the island have progressed and cross-border trade has more than doubled over the last 20 years, benefitting the over 90 per cent of small businesses that make up the cross-border market. InterTradeIreland’s research suggests that those businesses that trade across the border on the island receive an average 9 per cent productivity uplift, increase the likelihood of job creation and have a doubling of turnover.
“Our supports facilitate small businesses to get on to the export ladder. We know from our research that 75 per cent of businesses that have gone on to sell off the island took their first steps on the export ladder through entrance into the other market on the island.” says Aidan Gough, InterTradeIreland's Designated Officer and Director of Strategy and Policy.
Supports
InterTradeIreland operates two pillars of support - trade and innovation. Under trade, the Acumen programme assists businesses to develop new markets, new customers and new sustainable sources of income on the island, while Elevate offers funding for specialist sales and marketing support to grow micro enterprises.
Under innovation, InterTradeIreland has a number of support programmes in place for business innovation and growth, including the FUSION and Challenge Programmes. InterTradeIreland's Funding for Growth team helps growing businesses access the finance required to achieve their ambitious plans.
Valuable Research
Such supports are tailored to and underpinned by a strong evidence base. InterTradeIreland places a high value on its research which informs their understanding of the all-island market and programme development. InterTradeIreland’s All-Island Quarterly Business Monitor ensures that the organisation remains “on the pulse” of small business sentiment across the island.
While the value of trade has changed dramatically, so too have the intricacies of the market. Highlighting the major shift in cross-border trading on the island in the last two decades and also a significant change in the complexities and interconnectedness of supply and export chains, Gough points to research which shows an increase in cross-border goods trade alone of €1.6 billion in 1995 to €3.7 billion in 2017.
The 2018 Cross-Border Trade and Supply Chain Linkages report by InterTradeIreland outlined that Northern Ireland accounts for 10-12 per cent of total exports from Ireland to the UK as whole and accounted for 7-8 per cent of imports. The report also found that a significant share of cross-border trade is accounted for by businesses that trade in both directions, with two-way traders making up around 18 per cent of firms but accounting for over 60 per cent of exports and 70 per cent of imports.
Given their understanding of the closeness and importance of the economic ties linking Ireland, Northern Ireland and Great Britain, InterTradeIreland’s role is even more important since the UK’s decision to leave the EU.
Brexit
“We recognised early on that businesses were not getting ready despite the fact that Brexit could pose a considerable threat to their existing business model. We found that businesses were not preparing and weren’t factoring in the risk,” says Gough.
InterTradeIreland has recently released research which examines the capacity of firms to absorb shocks. The research outlines that just over half of Ireland’s goods firms have at best a mediocre ability to absorb shock and that more than 7 per cent are extremely vulnerable to any post-Brexit fall out.
Recognition of the overwhelming nature of Brexit for small firms and the opportunity to still identify exposure and mitigate risk is the basis for InterTradeIreland’s enhancement of its Brexit supports. Through InterTradeIreland's enhanced Brexit Advisory Service, businesses can secure up to €5,625 of funding and benefit from a new free bespoke online learning tool (Bitesize Brexit) which breaks down practical steps to prepare for Brexit into bitesize chunks which can be readily understood and actioned.
Opportunity
InterTradeIreland’s recent work has not solely focussed on helping small businesses to mitigate risk but also to identify opportunities going forward.
“We are in a very different place than we were 20 years ago and those relationships that didn’t exist across all spheres of business and research activity now do exist. Whatever new trading relationship emerges post-Brexit, businesses will continue trading across the border and we will continue partnering with these businesses to deliver mutual value to both Ireland and Northern Ireland.
Find out more about how InterTradeIreland can help your business at intertradeireland.com