GOING GLOBAL EXPORTING TO THE UK A guide for clients #GlobalAmbition
Capital London Population 65m GDP 2.36tn GDP Growth 1.6% forecast for 2018 Unemployment 4.5% Trade In the 3 months ending May 2017, imports grew 2.1% and exports 0.8% Size 5th largest national economy
WHY EXPORT TO THE UK? The UK is a natural first market for Enterprise Ireland client companies. Thanks to a unique mixture of proximity, language, legal and business practice, cultural and historic links, it is the single largest export market for Enterprise Ireland clients. It is also an economic powerhouse, currently the world s fifth largest national economy valued at Euro 2.36 trillion, after the USA, China, Japan and Germany. At more than 65 million people, it has a population 14 times that of Ireland. Unemployment, at 4.5%, is at its lowest since 1975. Some of its secondary cities have economies equivalent to, or larger than, Ireland. Trade between the two islands has strong roots and Ireland has traditionally enjoyed a very large trade surplus with its neighbour. Economic indicators show a slowdown in growth in the UK economy. While GDP growth for 2017 may fall short of the 2.2% predicted possibly to less than 2% - the UK economy is still growing. Despite the uncertainty surrounding Brexit, economic growth of 1.6% is forecast for 2018. More than 2,000 Irish companies are selling into the UK, so why aren t you? The UK has always been the most important export market for EI clients and that is likely to continue despite the implications of Brexit. The dominance of the UK as an export market for Irish owned companies has however lessened over the past 10 years. Some 45% of exports by EI clients were to the UK in 2005. In 2016 that figure was 35%. This reflects the success and growth of exports to other markets further afield, which have grown at a faster rate than growth of exports to the UK. Enterprise Ireland s latest strategy forecasts that the UK will represent 33% of exports by EI client companies by 2020. As such, the UK will continue to be a major trading partner. The World Bank describes the UK as one of the most successful nations in terms of the application of the rule of law, control of corruption, government effectiveness, and regulatory quality, placing it 7th on its Ease of Doing Business rankings for 2016 (Ireland is 18th). The UK is one of the five permanent members of the UN Security Council, one of the founding members of the North Atlantic Treaty Organization, a member of the G8, and until at least March 2019, a member of the EU, where it constitutes the second largest economy and one of the strongest in terms of social welfare, standards of living, unemployment, interest rates, inflation, and both inward and outward foreign investment. The UK is a market that Enterprise Ireland has been present and active in for many decades. EI s staff is fully plugged into UK market opportunities, is knowledgeable about the UK s business environment and is fully engaged with EI clients to support their scaled and sustained growth there. While there are many uncertainties surrounding the ultimate outcome of a Brexit, one thing is clear: Enterprise Ireland client companies will continue to invest, partner, acquire and employ in the UK. 3
IRELAND TO UK TRADE Sectoral success Opportunities exist across a variety of sectors, including cleantech, healthcare, financial services, engineering, digital content, construction, enterprise software and retail. Exports by EI client companies to the UK were up 2% in 2016 and represented 35% of total worldwide export sales or Euro 7.55 billion Exports to the UK by non-food clients accounted for Euro 3.905 billion in 2016 a 6% increase on 2015 Exports to Scotland grew by 11% during 2016 with strong wins by Irish construction companies underpinning this growth The UK is the largest export market for Enterprise Ireland s client companies in all sectors except life sciences, software, education and business and consumer services. Regional variations The UK is the second largest economy in the European Union (EU) and is one of the strongest in terms of social welfare, standards of living, unemployment, interest rates, inflation, and inward and outward foreign investment. The UK is one of the five permanent members of the UN Security Council, one of the founding members of the North Atlantic Treaty Organization, a member of the G8, and until at least March 2019, a member of the EU. London has led the UK s recovery in the aftermath of the global financial crisis. However regional locations are now expected to see growth, with strong government support underpinning this; the ongoing HS2 project is an example of this. Devolved administrations in Wales and Scotland are, at the time of going to print, led by separate political parties to the main Westminster Government and operate with many devolved powers, including healthcare. Scotland confirmed a commitment to remaining part of the UK following a referendum in autumn 2014. 7.55bn value of EI client exports to UK in 2016 2% growth of Irish exports to UK in 2016 35% share EI clients worldwide export sales that went to UK in 2016 11% growth in exports to Scotland in 2016 200,000 number of jobs in Ireland directly related to UK-Ireland trading relationship 200,000 number of jobs in the UK directly related to the UK-Ireland trading relationship 1.2bn the weekly value of trade between the two islands 4
GET READY TO DO BUSINESS IN THE UK Just because it is familiar doesn t mean the UK is an extension of the home market. Familiarity can breed mistakes. Approach it as you would any other new foreign market. In a business context, there are crucial differences: Formality and conservatism are the two of the hallmarks of British business culture. Many UK organisations are risk averse and take time to evaluate potential new suppliers. A formal, process-based approach to managing in-bound sales enquiries is common, and is often a sign of how congested and competitive the market is. Networking is highly valued in obtaining introductions to decision makers in UK businesses. Contacts are often initiated through a well-connected third party. Senior executives prefer to deal with counterparts of similar rank don t send in a junior to meet a CEO. Communications style tends to be diplomatic and avoids confrontation; but there is still greater directness and clarity than you can expect in Ireland. Common pitfalls Thanks to the large number of multinationals operating in Ireland, and the proximity of the two islands, it is possible that some business opportunities in the UK may emerge with minimal sales effort on your part. These windfalls do not constitute a market entry strategy. Enter the UK systematically and strategically, as you would any new foreign market. Unlike in Ireland, where it s common to approach the head of a company directly, the sales process in the UK often involves working up through a series of decision makers you need to research who these are in your target organisation. Use your networks Identifying a champion in your prospective organisation helps, someone who knows the background and has had informal contacts with you. Where you already have relevant Irish links, use them. Equally, tap into one of the many well established Irish business networks in the UK. Be niche. In Ireland it s not uncommon for many companies to provide a broad range of related services. To stand out in the more crowded UK market, focus on a particular niche and differentiate yourself from the competition on that basis. Get the memo on meetings In meetings and presentations, you need to make a compelling case why it s worth a buyer s time talking to you. Expect to get less time to present than you would in Ireland and fine tune your presentation to suit. Punctuality is extremely important. If you ve a meeting at 9am, turn up early to make sure you re signed in and at the right location. Personal presentation is very important so dress appropriately. Expect to get down to business after just a few moments of polite conversation. Don t overdo the banter. In general, British people prefer to take time building a relationship first, with formality only removing after contracts have been signed. Take your cue in relation to humour from your host. Swearing is unacceptable. Exaggerated claims and aggressive self promotion is not appreciated. Be short and to the point, seven slides max is a good rule of thumb. 5
Focus strongly on your understanding of your customer s issue, your solution and how it compares to the competition. A product demo should never last more than 10 minutes. Never arrive at a meeting with a suitcase case in tow. You need to look committed to the market. Giving your company a UK identity will help reassure potential clients of this. Get to grips with the geography Britain is a mature market with well entrenched domestic and international suppliers. Research it thoroughly to find a niche. Assess your competitors. Look for processes that can be improved on with scope for innovation. Don t automatically think London its scale is enormous and working and living there is much more expensive than other cities. To justify it, your prospects must be there too. Otherwise, consider other areas. The Midlands and the North is England s main location for manufacturing. Liverpool, Birmingham and Glasgow all have life sciences activity too. London is strong in digital media but so too are Manchester, Bristol and Brighton. There are 24 designated enterprise zones throughout England offering incentives to support new and expanding businesses, including business rate relief and industry-specific clustering. Both Wales and Scotland have Enterprise Areas too. Marketing materials Have a business card with UK contact information at the very least, a UK phone number that diverts to an Irish mobile or office landline. Update your website to accommodate UK enquiries and purchases. Set up a UK landing page, with customised information for a UK audience. Have a presence on social media. Attend trade shows and accept the need to do so for a couple of years to establish commitment. Don t expect people to attend a breakfast briefing if you are not yet known, people won t come. Partner up with a locally established business presence for events instead. Routes to market Direct sales customers must feel as though you are in the market permanently, so allocate appropriate resources. Commercial agents if your business has a solid lead generation system and sales process in place, locally based agents can be useful to close deals. Partners a good way of gaining scale and building sales opportunities in sectors that might be difficult to crack as a newbie Remember, when using any third party ensure there is enough margin in your pricing to make it worth your and their while. Distributors have pre existing lists of leads and potential clients. They assume the risk, but you can lose control of the relationship. Choose one that doesn t have competing products. UK subsidiary it can be a good idea to set up a UK subsidiary in order to get you through the early stages. In the beginning, consider a virtual office, ideally staffed by someone senior in your company. Joint venture - a new entity set up in the UK with the Irish and UK partner each having equity shares. Typically one might bring local market knowledge and the other technology. 6
HELPING YOU WIN IN THE UK UK to remain a key market for Enterprise Ireland clients While strategies to offset whatever consequences arise from the Brexit vote are important, the UK market still presents a significant opportunity for Irish businesses. Enterprise Ireland will continue to actively help companies deepen and strengthen their UK presence. To this end our London office is systematically identifying new areas of opportunity across the UK, including in infrastructural development, healthcare and fintech, among others, says Marina Donohoe, Enterprise Ireland s UK and Northern Europe Director. Enterprise Ireland has identified a number of opportunities for Irish companies based on UK government initiatives and evidence of sectoral growth: The National Infrastructure Delivery Plan envisages GBP 503 billion of investment in infrastructure projects in all sectors across the UK, to 2021 and beyond. This includes over 600 major UK projects; ranging from nuclear power plants to high speed rail lines and school building. The Northern Powerhouse should see the UK government spend GBP 134 billion over the coming years, much of it in Northern England, as well as possibly in other places left behind compared to London. This bid to rebalance the UK s economy presents opportunities for Irish businesses to participate in initiatives in road, rail, freight, aerospace and skills development With a total budget of GBP 107 billion, the National Health Service (NHS) offers opportunities for suppliers who can help to close the projected GBP 30 billion gap it faces by 2021. GBP 22 billion efficiency savings are required by to offset this figure, with much of this driven by a focus on digitisation and going paperless by 2020. The UK is a financial services - and, increasingly a financial technology (fintech) - powerhouse. With over 250 foreign banks based here, it is a global centre of expertise and one in which Enterprise Ireland has deep and extensive connections with key decision makers. Its aerospace industry captures 17% of the global market and is considered the largest player in Europe and the second largest globally after the US. In recent years aerospace has vastly outperformed the general UK market and through the Aerospace Growth Partnership (AGP) both industry and government are working to sustain this. The Scottish Government s Investment Plan highlights strategic, large scale investments over the coming decade, giving rise to opportunities in sectors such as energy, water and housing. UK water utilities earmarked a total expenditure of GBP 41 billion in the five years leading to 2020. The size of the UK s Internet of Things market in the next three years is predicted to grow to GBP 17.5 billion in the UK, on the back of a growth rate of 20% a year, driven by artificial intelligence, big data, smart cities, connected home, transportation, health, manufacturing and smart grid for electricity. The Private Healthcare sector, currently valued at GBP 6.05 billion is generally open to innovation with less bureaucracy and quicker decision making for the right products and services. 7
Construction Irish construction exports to the UK increased by 68% in just five years to a record Euro 1.29 billion. Engineering The UK is the main market for Irish engineering exports. In 2015 exports totalled Euro 560 million to the UK, or 42% of all engineering exports that year. Cleantech UK government policy and social leadership strategies are driving robust growth in this sector. Consumer retail The UK is the largest online retail market in Europe, and the main market for Irish consumer retail exports; accounting for 57% of total worldwide exports in 2015. UK online retail is forecast to grow to GBP 62.76 billion by 2020, representing 17% of total retail sales and presenting a huge market opportunity for Irish consumer companies. Software and services The UK is the second largest export market for Irish software and services companies, after the USA. In 2016, exports to the UK totalled Euro 988 million, or 23% of total exports. Before you go... The Market Landscape - What is the size of your target market? Is it dominated by a few strong players or fragmented with many small competitors? Market Trends - How does your target market make buying decisions? Who are the relevant decision makers - what are their job title and responsibilities? Target Market - How does your target market make buying decisions? Who are the relevant decision-makers - what are their job titles and responsibilities? Market Segmentation - Who are your most likely customers, where they are located, how and what else do they currently buy, who are their influencers and what need are you fulfilling? Market Competition - Who are your rivals in the market and how do their offerings compare with mand differ from yours? Market Research Resources - taying abreast of local market trends, especially in your sector, will help enormously when it comes to building your knowledge about the UK market. Enterprise Ireland s Market Research Centre offers client companies access to market intelligence in the form of company, sector, market, and country information to explore opportunities and compete in international markets. See www.enterprise-ireland.com/en/export- Assistance/Market-Research-Centre/ for more information on the market research facilities available. Talent management solutions A recent survey revealed that 75% of UK HR professionals reported difficulties in hiring since the Brexit referendum. This is particularly relevant for Irish businesses whose solutions centre on the attraction & retention of staff. 8
Helping you succeed in the UK Enterprise Ireland assists clients entering new markets with Pre Visit Support Sector overview Validation of the opportunity for your product or service Evaluation of your market entry strategy Suggested channels to market Competitor analysis Relevant contacts/suggested itinerary Want a hot tip? Book a hot desk Enterprise Ireland s offices at Shaftesbury House, in the heart of London, offer hot desk facilities to client companies. To book, log on to uk.bookingbug.com/ home/33936-enterprise-ireland. It also has a range of meeting rooms, subject to availability, capable of holding between four and 18 people. Contact EI to find out more. Keen to accelerate your market entry? For a comprehensive list of business accelerators, incubators and co-working spaces in London check out Capitalenterprise.org. In Market Support Introductions to buyers and decision makers Identification of potential partners Facilitating buyer visits to Ireland Assistance with product launches and workshops Securing reference sites International Trade Events Inward buyers missions to Ireland Group stands at international trade fairs Overseas trade missions Market study visits Client knowledge seminars Networking events with market contacts Additional supports Introductions to specialists in all areas, including legal, recruitment, PR and taxation Access to mentors Enterprise Ireland has built up an excellent network of individuals in the UK who are available to work with Irish client companies looking to develop their business. This includes market and sector specialists, business accelerators and members of Irish business associations. Power up your progress by plugging into an Irish network Ireland Network Great Britain (In-GB) in-gb.co.uk The Irish International Business Network (IIBN) iibn.com The London Irish Business Society (LIBS) li-bs.co.uk The British Irish Chamber of Commerce (BICC) britishirishchamber.com Women s Irish Network (WIN) womensirishnetwork.com Irish Cultural Centre https://irishculturalcentre.co.uk The London Irish Graduate Network (LIGN) londonirishgraduatenetwork.com The London Irish Construction Network (TLICN) tlicn.com London Society of Chartered Accountants Ireland london.charteredaccountants.ie The London Irish Lawyers Association londonirishlawyers.co.uk The London Irish Centre (LIC) londonirishcentre.org Contacts in the UK Enterprise Ireland London Office 2nd Floor, Shaftesbury House 151 Shaftesbury Avenue London WC2H 8AL Phone: +44-207-438-8700 9
For further information on the services of Enterprise Ireland overseas, please go to http://www.enterprise-ireland.com/en/export-assistance/ UK Office Location & Contact Details Director UK and Northern Europe Enterprise Ireland London Office 2nd Floor, Shaftesbury House 151 Shaftesbury Avenue London WC2H 8AL Phone: +44-207-438-8700 Ireland s European Structural and Investment Funds Programmes 2014-2020. Co-funded by the Irish Government and the European Union. Enterprise Ireland Aug 2017 - (388)