How Enterprise Ireland companies are growing exports despite headwinds

18 Jul 2022

Enterprise Ireland CEO Leo Clancy. Image: Connor McKenna

Leo Clancy of Enterprise Ireland tells us about the record year of exports by client companies in 2021 and how things are looking so far this year.

A global pandemic and market disruptions caused by Brexit could not stop Enterprise Ireland companies from having a record year of exports in 2021.

But for Leo Clancy, CEO of the Government agency responsible for the performance of Irish companies abroad, 2021 is a great base to build upon for future growth in Irish products and services making their way beyond this island.

Last week, Enterprise Ireland revealed some highlights from its annual business review. This included the news that Irish companies backed by the body saw exports increase by 12pc last year to reach a record €27.3bn.

In an interview, Clancy told “To come in with record job growth and record export growth is just good validation that businesses have come through Covid-19 as well as Brexit and the other factors that are coming through very strong on the other side.

“For us, it’s a great result and a good base to build on as we come into a difficult economic period. It’s already challenging for business with inflation and supply chain issues leading to costs spiralling.”

Tech companies across most sectors have seen their exports rise, Clancy said. Sectors such as adtech, fintech, travel-tech and B2B software are well represented among the Irish companies that export their products.

However, consumer tech companies are not as common in Enterprise Ireland’s portfolio.

“We’ve been more B2B tech-focused in Ireland than consumer-focused. And some of that has to do with the nature of capital availability in the markets. It takes an awful lot of money to build a consumer brand at scale,” Clancy said.

Challenges ahead

Exports by Enterprise Ireland client companies have been growing annually for many years now according to Clancy, rising from just €13.9bn in 2010 to the €27.3bn figure last year. But can the impressive export growth rate be sustained?

At last week’s announcement, Tánaiste Leo Varadkar warned of “plenty of challenges still ahead” as Irish companies head into the second half of 2022.

“The global inflation crisis and Putin’s war on Ukraine are putting huge pressure on energy supplies, providing another impetus on business to reduce their reliance on fossil fuels and do what they can to become more efficient with their resources,” he said.

Clancy told that, even though it’s “too early to tell”, the sentiment among client companies has been largely optimistic so far despite the economic challenges.

Earlier this year, Enterprise Ireland asked client companies about their levels of optimism for the year ahead, as they emerge out of the pandemic. “We got answers during February, March and some as late as April – and people were pretty optimistic,” he said.

“But in that, we haven’t seen the full effects of inflation, of energy increases, of the financial regression of tech stocks that’s happened in recent months. What I don’t see, though, is exports going backwards, so I certainly don’t see a drop.”

Eyes on the Eurozone

While exports by client companies have grown in all major markets, there has been a particular rise in exports to the Eurozone. The Netherlands, Germany and France are the top three European countries that companies export to – accounting for €4.2bn of the €6.4bn total in the market.

A 10pc rise over 2020 figures, exports in the Eurozone account for 22pc of Enterprise Ireland portfolio companies’ overall exports – and this figure is rising steadily.

“I think for Irish firms over time, we probably haven’t had as much success in the Eurozone as we should have proportionally,” said Clancy, noting that there has been a shift of focus away from the UK and towards the Eurozone and North America to diversify export markets.

So now that the companies have entered the second half of the year, Clancy said many have been making adjustments to their business to adapt to changing market environments.

“What I’m hearing on the ground is that people are dealing with the challenges as best they can. And quite well, in most cases – they’re optimising their businesses to make sure they continue to trade,” he said.

“They’re looking at things like pricing strategies and other ways to make sure that they continue to have a viable model into the future.”

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Vish Gain is a journalist with Silicon Republic