However, while businesses continue to experience recovery across the island, it is at a slower pace than in recent quarters, where in the first quarter of 2015, 88% of businesses were stable or growing.
Over the last few quarters, businesses in Ireland were clearly outperforming Northern Ireland firms but figures from the Q2 report indicated more of a convergence between the two jurisdictions, with 40 per cent of firms in Ireland in growth mode compared to 36 per cent of businesses in Northern Ireland.
This quarter the InterTradeIreland Business Monitor specifically focussed on the characteristics that differentiate rapidly growing firms from the rest. Commenting on the Q2 all-island report, Aidan Gough, Strategy and Policy Director, InterTradeIreland said: “We took the opportunity with this quarter’s report to look at what type of firms are driving growth and what they are doing differently or better. Although moderate to rapid growth was found in businesses of all sizes, types and sectors, it was especially prevalent amongst larger firms. In particular, the report confirmed that those firms that are exporting and those who take a more strategic approach to growth, such as having a formal business plan in place, are more successful.”
It was also found that growth firms are much more likely to have innovated across all areas of the business in the past three years. For example, three-quarters of moderate to rapid growth firms introduced new or improved products or services and 62% implemented new processes, machinery, equipment or tools.
Aidan added: “This finding confirms results from other reports that we have carried out which show that businesses that are innovating and doing things differently are three times more likely to grow. Excellence in innovation processes, culture and skills is at the core of rapidly growing firms with these businesses more likely to have dedicated R&D staff and a more formal process in place for managing innovation than non-growth firms.”
The findings from the Q2 Business Monitor also show that:
Size and market orientation matter more than sector or location; 53% of growth firms engage with cross-border trade, whilst 41% export outside Ireland and the UK.
Skills and getting the right people are key characteristics of growth firms; 82% of the management team hold a third level qualification.
Ambition and a culture that seeks out and encourages success is crucial with 82% having ambitions to grown in the immediate future and 71% have plans in place to invest in staff training.
Aidan concluded: “53% of non growth firms share this ambition to grow but need the necessary support agencies, such as InterTradeIreland, to help them avail of cross border opportunities that will help them to overcome specific capability deficiencies in the areas the survey has identified and translate that ambition into a growth reality.”
InterTradeIreland’s quarterly Business Monitor survey is the largest and most comprehensive business survey on the island and is based on the views of more than 750 business managers across Ireland and Northern Ireland. It differs from other surveys in that it is seen to be the ‘voice of local businesses’ feeding directly from telephone interviews conducted with a robust sample of firms of all sizes across a range of sectors to track all-island economic indicators such as sales, employment, business outlook and other specific topical research areas on a quarter by quarter basis.
For more information on InterTradeIreland and their business support programmes, please visit www.intertradeireland.com . A video and copy of the 2015 Q2 InterTradeIreland Business Monitor Executive Summary can be viewed at: www.intertradeireland.com/researchandpublications/business_monitor/