How Irish firms can get help to diversify into new markets

With Brexit looming, potential trade wars between global trading blocs and currency volatility, now is the time for companies to develop a market diversification strategy.

This will make them better able to protect themselves against external shocks in 2019 and beyond.

Irish companies continue to win business in international markets. Those supported by Enterprise Ireland (EI) reported a 7pc increase in exports to a record €22.7bn in 2017.

Exports to the eurozone grew by 9pc to €4.6bn in the same period. The US and Canada, important markets for business and consumer software, saw growth of 7pc to €3.96bn.

Despite Brexit uncertainty, the UK saw a 4pc growth rate to exports of €7.6bn, a considerable achievement. However we must build on these successes and ensure that Irish companies are well positioned to continue to succeed globally.

A key focus of activities in Enterprise Ireland is to work with companies to identify and take action if they are overly reliant on one geographic or vertical market.

We understand the challenges facing SMEs as they research, develop and implement diversification strategies, and we have developed a suite of supports to assist companies succeed in these efforts.

The cost of market diversification can be an obstacle. In February 2018, Enterprise Ireland launched the Market Discovery Fund to help companies tackle the main challenges of preparing to enter a new market.

The fund has so far helped approximately 80 Irish companies to assess new geographic markets or to research the potential of a new product or service in an existing market.

It operates at three levels: up to €35,000; up to €75,000; and up to €150,000, supported at a grant rate of 50pc. The fund supports a diverse range of activities, including establishing market potential; identifying barriers to entry; assessing the competitive landscape; understanding market regulations, and determining the best route to market.

This research can inform the development of a robust and structured market plan, should the market opportunity be validated.

In addition to financial assistance, Enterprise Ireland offers many advisory supports. Our network of 33 overseas offices is staffed by teams with expert knowledge of the markets and sectors of greatest relevance to Irish exporters.

Over the past year, Enterprise Ireland increased the number of trade missions and events we lead to help companies to access decision makers in markets of strategic significance.

Our #IrishAdvantage campaign promotes the benefits of doing business with our companies and connects international partners with exporters. We also encourage companies to access market research reports through the Market Research Centre in our Dublin office or one of our regional locations.

The benefits of diversification are clear in the successes of Irish companies. For example, high-voltage solutions specialist H&MV Engineering has enjoyed rapid growth in recent years, particularly in the UK and Norway. CEO PJ Flanagan says EI's market research supports have been very beneficial.

"Enterprise Ireland helped us make initial contact and build relationships in new regions," he says.

"It can be lonely at first when you're trying to break into a new market, so it's great to have someone on the ground to give you support and help." H&MV's investment has delivered. The company anticipates UK turnover to reach £4m in 2018 and secured a €6m contract in Norway. Additional markets are now being assessed for potential.

At EI, we strongly believe that companies must diversify in order to thrive in today's rapidly changing economic landscape.

To learn more visit: https://globalambition.ie/supports/market-diversification-supports/

• Emer O'Byrne is a senior executive with responsibility for market diversification at Enterprise Ireland.