Time is key when capitalising on Swiss export opportunities – you can bet your watch on it

Vincenz Wagner, senior market adviser for Switzerland at Enterprise Ireland, explains why it is time for smart Irish companies to consider this early adopter market.

Switzerland is known as one of the most competitive economies in the world, with one of the highest rates of GDP per capita, an attractive tax regime, and a stable legal and political system. What is less well known is that Switzerland imported more from Ireland than from the United Kingdom in 2016, at a value of €6.4 billion.

Switzerland is also already Ireland’s 5th bilateral trading partner. With a population barely double that of our own, Switzerland is the 11th largest market globally for sales from Enterprise Ireland-backed companies, ahead of larger markets including Canada and Australia. Exports to Switzerland from such companies in 2016 alone were valued at €300 million.

In the context of Brexit, now is a good time for Irish exporters to consider the market. Switzerland uses the English language widely for business, overcoming one challenge Irish exporters to Europe often face. Payment defaults and returns rates are significantly lower than elsewhere. Switzerland’s VAT rate of 8% is much lower than other European countries, for example Germany at 19% and France at 20%. The generally stable exchange rate between the euro and Swiss franc also creates favourable conditions for Irish exporters.

Two innovation nations

Switzerland shares a number of parallels with the Irish market, the most significant being innovation. Switzerland is the world’s most innovative country according to the Global Innovation Index, with almost 3% of GDP invested in research and development.

With Swiss buyers requiring quality, reliability and flexibility, Irish Small and Medium Enterprises can offer greater agility and customer focus than larger competitors.

Many Irish companies find customers in Switzerland more prepared to adopt innovative new solutions than those in nearby markets. With its early adopter reputation recognised across Europe, winning business with a well-regarded Swiss customer carries a lot of weight.

Switzerland is home to unique leading industry clusters, for example the life sciences cluster in the Northwest region of Basel. In addition to chemical and pharmaceutical firms like Novartis, Roche, and Syngenta, it encompasses a dense network of medtech, biotech, and nanotech companies, well-suited to the capabilities of innovative Irish companies in the sector.

Mark Ennis, Business Development Manager at Perigord, a leading provider of communication solutions to the pharmaceutical and healthcare industries, comments, “Swiss business people are interested in Ireland and are very professional. Customers in Switzerland expect the highest quality and service levels and Irish companies like Perigord can exceed their standards. Swiss customers are willing to pay for a pharmaceutical service that meets regulatory requirements and a vendor that fulfils their needs”.

Acquiring an ever-greater relevance is the Swiss ICT sector, with companies such as IBM and Google setting up offices in Switzerland, a good match for the capabilities of Irish technology companies. As a high-tech export nation, the market is in need of sophisticated high-end component suppliers.

Pam Chahal-Harris, Vice-President of Global Marketing at Nualight, a leader in LED case lighting technology, says, “One of the main reasons Nualight entered the Swiss market was due to its adoption of energy-efficient and sustainable technologies ahead of the rest of Europe. Switzerland has always had a very progressive retail culture, one that is happy to invest and test new ideas. Almost anything we launch which is new or likely to disrupt the market, we find Switzerland is one of first markets to adopt it.”

There remain challenges to doing business in Switzerland that Irish exporters should be aware of. Switzerland is not a member of the EU but its relations are governed by a series of bilateral agreements. EU standards are largely, but not always adopted. The Swiss government does not impede trade and investment; it considers liberalisation of existing laws to ensure Switzerland remains an attractive business location.

As Enterprise Ireland recognises the potential of the Swiss market, it has allocated resources and appointed a dedicated market adviser who will assist Irish companies in identifying opportunities and offer guidance on how to deal with challenges, including pre-visit support, in-market support, mentors, networking events, and financial assistance.

This article was originally published in the Sunday Independent.

Spotlight on Skills

Skills in the Spotlight for Irish Companies

Helen McMahon, senior executive for client skills at Enterprise Ireland, describes what Irish companies can gain from focusing on the critical skills required for growth.

With national and international competition for talent heating up, it is becoming increasingly difficult for Irish companies to attract and retain talent, across all functions of their business. Most Irish companies know that their performance and growth could benefit dramatically from access to a skilled workforce.

Many find it more difficult to define the critical skills they need to align with their strategic priorities. Companies can also find it challenging to assess which specific skills could have the greatest impact on the immediate and long-term growth of the business.

Enterprise Ireland has partnered with the Irish Management Institute (IMI) to deliver Spotlight on Skills, a series of one-day workshops that are run regionally and designed to help ensure that each company’s workforce has the capabilities required to support export growth and long-term strategic development.

Spotlight on Skills is supported by the Department of Education and Skills and is designed to help companies to get a response to their needs from national and regional education and training providers.

To date 76 companies, employing 10,012 people, have taken part in the workshops. Outcomes are both immediate and long-term, with the focus falling on identifying critical gaps across the whole company.

Kevin Clarke, General Manager at Green Isle Foods, describes the benefits of the programme for firms. “Our company’s growth and development is clearly impacted by our access to a skilled workforce,” he said. “The Spotlight on Skills workshop supported us to strategically explore the critical skills we need now and into the future for business growth. It helped us to define the actions we need to put in place for staff-resource planning into the future.”

Roisin Johnson, Head of HR at Ammeon, described the programme as “a practical workshop that provided a toolkit of techniques to help us identify our training needs and support the achievement of our strategic goals by building our company and our people’s capabilities. Spotlight on Skills is a straightforward framework that can be brought back into any workplace and used over and over again. We highly recommend the workshop to Irish companies.”

Spotlight on Skills also helps participants to think strategically about how they can attract and retain talent and develop career pathways for existing employees. Opportunities to upskill and reskill an existing workforce are highlighted and actions that can help to attract the talent needed to drive growth are identified. If a company is suffering from the loss of skilled staff who are departing for rival firms for career reasons, developing avenues for progression within the company can be impactful. Creating opportunities for staff to progress their career within the company can also be attractive to new talent.

Embracing opportunities to upskill and reskill existing employees can reduce the time required to onboard new talent to address shortages. The company report developed through Spotlight on Skills may indicate that existing employees could benefit from mentorship, coaching or other development opportunities. Companies are advised about programmes that can help meet skills needs quickly and get an opportunity to influence the development of new programmes to develop a skills pipeline.

In the longer term, Spotlight on Skills will help to bridge the gap between the priorities of Irish enterprise and the curricula of education and training providers. After a company has developed its report, the Spotlight on Skills team can facilitate contact with regional skills managers working for the DES who can help them to engage with education and training providers in their region.

The programme gives companies a strong voice on their needs. As a significant volume of critical skill needs is identified, providers can be encouraged to update their curricula, create programmes and develop additional apprenticeships or more learning opportunities.

This article was originally published in the Sunday Independent.

Bright Horizons for Irish Innovators

Sean Burke of Enterprise Ireland describes the factors that enabled Ireland to achieve one of the highest success rates for the Horizon 2020 SME Instrument in Europe.

There are areas of innovation we excel at in Ireland and results that prove it. At 13%, Ireland has one of the highest success rates for the Horizon 2020 SME Instrument in Europe, compared to the EU average of 6%.

Horizon 2020 is the EU’s €80 billion programme to support research and innovation, which launched in 2014. A 7-year programme, it is due to end in December 2020. Ireland’s overall success rate exceeds the EU average, with €475 million in funding secured to date for more than 1,100 successful applications by 536 higher education researchers and 430 Irish companies.

The SME Instrument funds the programme’s most commercial applications and is designed to support innovative companies to realise global ambitions and turn strong business ideas into market leaders. Its commercial focus helps companies to convert findings from cutting-edge research into a productised offering for international markets. Delivering grant funding in the range of €1-€2.5 million to support 70% of project costs, no repayment or equity dilution is required. Those conditions make the SME Instrument very attractive to companies with ambitions to internationalise.

The programme is highly competitive. Only 6% of the 31,000 European companies that applied were successful. Projects that succeed are truly innovative, with the potential to disrupt the marketplace. Approval has become a mark of pedigree on an international scale. A successful application can be transformative, elevating a company into the position of market leader. Successful companies span sectors, with big winners in areas including biotech, energy, agriculture, food sustainability, health and environment.

Eight Irish companies were among 210 European SMEs that achieved Phase 2 funding of Horizon 2020’s SME Instrument in 2017. Securing €15.45 million between them from a budget of €297 million, they include companies like AltraTech, Axonista, Soapbox Labs, and SwiftComply.

Axonista received €1.7m in funding in 2017 to develop its interactive video technology product, Ediflo, which enables customers to bring multi-platform interactive story-telling experiences to market faster. COO Dee Coakley explains, “Our product originally served large enterprises through direct sales made by the founders. Horizon 2020 allowed us to hire product development specialists and build a team focused on simplifying the enterprise product for a broader market. New verticals include media companies and brands that want to deliver interactive experiences, using existing video content to better engage audiences.”

The Instrument’s application process thoroughly assesses each company’s proposed innovation-led solution and its potential to achieve market penetration. Project support covers every stage of the business acceleration lifecycle, from business definition to planning and execution leading to full commercialisation.

Axonista’s Horizon 2020 proposal was strengthened by Research & Development work they had recently undertaken. Dee explains, “The R&D grant we received from Enterprise Ireland really helped. The application for Phase 2 funding asks if you have undertaken feasibility research. Being able to describe what you learned from an R&D project and how it helped to identify an opportunity or develop a solution delivers a robust proposal.”

Enterprise Ireland leads the Irish Horizon 2020 National Support Network, the expertise of which acts as a resource for new and seasoned applicants. Enterprise Ireland’s team helps companies to determine the best Horizon 2020 programme to meet their needs, prepare for their initial engagement, and provides feedback to improve the draft proposal. The objective is to build on Ireland’s strong track record and provide hands-on assistance to Irish researchers and companies that participate in the programme.

All innovative Irish companies with an eye on international expansion should apply. An award of up to €2.5 million and the mark of pedigree that Horizon 2020 brings changes a company’s prospects. As Dee concludes, “From an investor’s perspective, securing Horizon 2020 is a validation of the business and your ambitions. Investors know that an investment of nearly €2 million has been made to push your offering past the competition. That validation gives you a lot of leverage.”

Enterprise Ireland’s Sean Burke works with Jill Leonard to support the SME Instrument and Fast Track to Innovation actions in the new European Innovation Council (EIC) pilot in Horizon 2020.

This article was originally published in the Sunday Independent.

Local Enterprise heroes

Following in the footsteps of Local Enterprise heroes

For many companies, becoming an Enterprise Ireland client is a significant step on a journey that started at a regional level. Local Enterprise Offices throughout Ireland provide supports, advice and training to start-up companies and existing micro-enterprises of up to ten employees. It is in this environment that experience is gained and vital lessons are learned which allow companies to prepare for growth and to take their ambition global.

A recipe for successful growth to €21 million annual turnover

It was in 1993 that a young man from Clonakilty got in touch with his Local Enterprise Office (LEO) in West Cork to ask if they could help him turn his business idea into a reality. Diarmuid O’Sullivan wanted to produce traditional churn-made yogurts. He knew how to make yogurts but he didn’t have enough funding to get the venture off the ground.

“I had the idea but not enough money,” Diarmuid recalls. “I heard there was funding available from the Local Enterprise Office, so I contacted them and put in an application. The maximum support they could provide at the time was £50,000 and the LEO in Clonakilty was able to help me put my ideas into a business plan to help secure funding.

“I also received quite a lot of mentoring and coaching. That was all done at concept stage – I hadn’t even identified a production site – but the support meant that I was able to get Irish Yogurts up and running by March 1994.”

Diarmuid’s yogurt-making idea was a recipe for success. His company grew quickly and its products were soon on the shelves of Irish food shops and supermarkets.

“In one of those early years, we grew by about 78.5%. That brought its own challenges, with regard to working capital. The Local Enterprise Office suggested that I move onto Enterprise Ireland, where there were financial supports for fast-growing companies which were creating jobs.

“We hadn’t really focused on exports, not at that stage. That came after we started working with Enterprise Ireland. Our first export customer in the UK was Tesco.”

This progress was recognised in 1998, when Irish Yogurts was named winner of Ireland’s first ever National Enterprise Award. In just a few years, it had gone from being a bright idea with insufficient funding to becoming an award-winning food producer.

Today, Irish Yogurts employs 160 people at its Clonakilty base and sells to every major supermarket chain in the UK and Ireland. Its annual turnover has grown from €300,000 to €21 million, with exports accounting for 30% of their business.

“We appreciate the input of the Local Enterprise Office and Enterprise Ireland, who supported us and our staff every step of the way,” Diarmuid says. “We still work with them and avail of supports and advice. Enterprise Ireland is very much a part of our team.”

A roll of honour

Irish Yogurts is one of hundreds of companies from every corner of Ireland that have transferred from Local Enterprise Office support to become Enterprise Ireland clients. Last year, 80 companies made the move. In 2016, the figure was 40. The roll of honour includes 10 other former winners of the National Enterprise Awards:

It is a track record that the Local Enterprise Offices are proud of. Oisín Geoghegan, chair of the network of Local Enterprise Offices, said, “It’s one of our targets to transfer companies to Enterprise Ireland – it’s progression. Companies which transfer into Enterprise Ireland are companies with growth ambitions to be exporting and creating jobs, which is incredibly important, particularly for the regions. So we would see it as an indicator of success when a company moves on to Enterprise Ireland.”

Local expertise supporting global ambition

Engineering services provider Obelisk engaged with their Local Enterprise Office in Cavan, even before they set up the company in 1996. Four years later, Obelisk won the National Enterprise Award.

Founder director Colm Murphy said, “We were looking to capitalise on the growth of mobile phone usage by offering installation services for operators. The people in our LEO understood the idea that opportunity was coming down the track. That gave us the confidence that our idea was good and could to grow into something big.

“They had an incubator office which we were able to rent and provided grant aid for early employees. They also provided us with advice about how to set up a company, and other supports such as training and mentoring – there was a lot more to it than financial support.”

The support has been paying off ever since, Colm says. “Last year we turned over €27 million. Employee numbers are between 250 and 300 people. We’ve expanded to include infrastructure solutions for fixed telecoms and the energy sector in Ireland, the UK, and South Africa.

“We want to continue growing. We’re looking for further investment. Over the next two to three years, we’re looking to hit the €100 million mark in sales. Exports are currently a third of our turnover but we expect that to become a 50/50 split.”

So what part did being able to access business expertise and support at a local level play in the company’s success? “Back in 1996-97, we would have found it difficult to kick-off from a zero base,” Colm explains. “We were just a couple of guys with an idea, and sometimes going for funding and that kind of stuff can be daunting. But when you get the kind of support that we did from the Local Enterprise Office, that’s a massive kick start.

“I would recommend that any company should be in touch with their Local Enterprise Office. They’ve always been good at describing the product set they have and how they support you. If you don’t ask, you don’t get and if you’re not engaging with them then you won’t necessarily be aware of new supports that are on offer.”

Reassurance and support

The view that “if you don’t ask then you won’t get” is shared by John Lynch, Chief Technology Officer of Acutrace. The Dublin tech company provides software and hardware which allows companies to control and monitor their energy usage. They count the likes of Google, Twitter and IBM among their customers.

Founded in 2015, Acutrace wasted no time in contacting their Local Enterprise Office in South Dublin. John says, “We reached out to the Local Enterprise Office immediately and they were brilliant. They gave us an employment grants and we managed to employ two engineers under that scheme. Within the first three months, we were exporting to London.

The company was growing quickly and the Local Enterprise Office was instrumental in steering Acutrace towards Enterprise Ireland’s High Potential Start-up (HPSU) programme.

John says, “Once we learned the criteria for the HPSU, we used that as our yardstick to reach for. We knew we had to have significant exports, we knew we had to have a scalable product that would generate employment and we needed to have the magic number of a turnover of €1 million, so it was a good objective to hit and we exceeded the target that year.

“By the end of 2016, we had turned over more than €1.5 million and we were exporting 40% of a product that was created in Ireland to the UK.”

The advice, professional support and reassurance they received has left a lasting impression on John and Acutrace.

He says, “I’m coming off the back of 20 years in the industry and so is my business partner Aidan, but it’s a little bit different when it’s your own enterprise – the risks are higher and there’s an isolation you feel, it can be profound. Then you engage with your Local Enterprise Office and you feel part of something, that you’re being protected or mentored.

“There’s funding and that’s important, but it’s also having that extra bit of confidence that there’s someone else behind you who has your back, that if you are going to create employment, well there’s someone there who’s grateful for that and they’re helping you, and they’re encouraging you.”

“You might be destined for Enterprise Ireland but until you hit that criteria the LEOs will mentor you and steer you in the right direction.”

Working hand in hand

That direction involves advice and supports, which evolve and change to meet the needs of encouraging start-up companies and other micro enterprises of ten or fewer employees, says Oisín Geoghegan.

“We provide a very broad range of supports – initial business advice, information and guidance, training and mentoring, and financial supports such as feasibility, priming or expansion grants. It can include money to employ people or towards marketing costs, business development, and so on.

“We also point entrepreneurs and companies in the direction of other supports that are available, such as the New Frontiers incubation programme and Innovation Vouchers from other agencies such as Failte Ireland, Intreo, Bord Bia and Microfinance Ireland.”

“For companies with strong growth ambitions, we work hand in hand with Enterprise Ireland on their journey and ensure that they make that contact at an appropriate stage so their development continues to be supported.”

Frankfurt’s opportunity for Irish fintech

Frankfurt’s opportunity for Irish fintech

Jane Greene, senior market advisor for software and services based at Enterprise Ireland’s office in Dusseldorf, explains why Ireland and Frankfurt make for ideal fintech partners in a post-Brexit climate.

The result of the Brexit vote launched a conversation about the possible relocation of international banking services from London to other European cities. While Paris and Luxembourg have featured prominently, a leading narrative has positioned Dublin versus Frankfurt as location of choice.

It should not be a case of one city or the other, however. Regardless of the impact of Brexit, Frankfurt is too important a financial services hub for Irish fintech companies to overlook.

Frankfurt is the financial capital of the Eurozone, home to the European Central Bank, German Central Bank, and over 200 domestic and foreign banks.

The greater Rhein-Main region surrounding Frankfurt is home to one quarter of Germany’s fintech companies alone. As well as being the location for household software names such as SAP and Software AG, Frankfurt has seen international banks including UBS and Goldman Sachs announce the relocation of European operations to the city in the wake of Brexit.

Ireland is a globally-recognised centre for International Financial Services (IFS), with a 40-year track record in the fintech space. Fexco, which established in 1981, is now operational around the world. Newer success stories include financial services software company Fenergo and cross-border payments platform TransferMate.

The post-Brexit banking debate has shone valuable light on the strength of Ireland’s financial services sector and, particularly, its cohort of innovative fintech companies. As the debate has raised Ireland’s profile, it is now time to capitalise on that.

The biggest opportunity facing fintech companies is not Brexit but PSD2. The EU’s new Payment Services Directive is forcing traditional banks to digitise operations and open up to third parties, providing access to everything from customer data to payment infrastructure, to enable them to build innovative new services.

While initially fintech was viewed as a disruptor by banks, out to shake up “their” market, that view has changed dramatically. Today, legacy banks are in a race to source the best fintech innovators to help them improve services, not least in the face of challenger banks, such as N26.

The fact that this highly innovative, mobile-first bank is German speaks to the strength of the country’s financial services sector.

Niall Hogan, co-founder of Irish payments fintech Touchtech, comments, “While many older Germans are still quite conservative and use cash, the younger generation are like their Scandinavian and British counterparts and expect slick digital experiences. Our Germany headquartered client N26 has over 850,000 customers across Europe and is doing very well in Ireland. Our experience working with German financial institutions is that they take time to come to a decision, but once that decision is made follow-through is guaranteed.”

Enterprise Ireland tells Ireland’s strong fintech story in Germany, building relationships with innovation managers at some of the world’s best-known banks, and introducing them to innovative Irish companies that can partner with them to offer solutions in the areas of payments, security, compliance and data analytics.

The Irish Advantage website helps Enterprise Ireland to tell that story, encouraging international financial services buyers to source fintech partners established here.

With both banks and fintechs recognising that neither the “fin” nor the “tech” can succeed alone, Irish fintech companies that are serious about capturing global opportunities must consider Frankfurt.

However great your technology, building a strong value proposition and articulating the business problem you solve is key to securing time with buyers in the region. While using social business networks can open doors, Irish fintech professionals should be clear about the nature and purpose of their request or enquiry. While the fintech sector is international in nature, exceptional preparation for meetings is always a must in Germany.

This article was originally published in the Sunday Independent.


Egypt: the original export market

Mike Hogan, Manager for Middle East & North Africa at Enterprise Ireland, explains why the world’s oldest export market should be on the horizon of Irish exporters.

In an era in which there is much talk of emerging markets for Irish exporters, Egypt can claim to be one of the oldest, if not the oldest, export markets in the world. The pharaohs of ancient Egypt governed a nation that imported huge quantities of wood, metal and precious stones from neighbouring kingdoms. Today, as throughout history, Egypt is a key geographical gateway with a land connection to the continent of Africa and the Middle East and, through the Suez Canal, the sea lanes of Asia and the Mediterranean.

Ireland’s trading relationship with Egypt is more recent, developing in the 1970s and 1980s with the export of cattle and beef, evolving into a market worth over €100 million for exporters today. Much of this trade collapsed in the aftermath of the Arab Spring and the period of political turmoil that followed. However, with the devaluation of the Egyptian Pound in late 2016, and a sustained period of economic liberalisation, Egypt’s economy rebounded. It is now growing at 5.5%, the fastest in the Arab world. Egypt is attracting renewed interest, with over 30 Enterprise Ireland-supported companies attending a ‘Doing Business in Egypt’ event in Dublin on April 16th. Clearly, there is optimism that Ireland can reclaim lost exports and widen its portfolio into sectors such as food products, ICT, life sciences, education services, travel tech and agritech.

Cork’s Mervue Laboratories are active in the Egyptian animal nutrition market, aiming to double exports over the next three years. Commercial Director, William Twomey, says, “Egypt has massive potential and must be a target market for any serious animal health company. It can also be used as a gateway to surrounding markets, which is very attractive.”

While Irish eyes tend to focus on South Africa and Nigeria as Africa’s biggest economies, Egypt is the continent’s second-largest economy. This status was buoyed by the discovery of the offshore Zohr natural gas ‘superfield’ in 2015. Egypt’s economy should be understood within a wider context. It is a lower middle-income country akin to Vietnam and Indonesia, with a population of over 100 million. Unique in the Middle East, it has a sophisticated industrial base producing white goods, textiles, industrial goods, electronics and components, and an emerging automotive sector that includes among its exports London’s iconic red double-decker buses, but with hybrid engines. Within these sectors lie strong opportunities for Ireland’s industrial sub-supply and services sectors. Openet and Openmind Networks from Ireland’s telecoms cluster already sell to Egyptian mobile operators, and with Egyptians spending USD $6.1 billion per annum on media and recreation, there is scope to expand our digital content solutions.

Egypt maintains a strong position in the fast-growing global halal pharmaceuticals and cosmetics sector. It is the fourth-largest Muslim consumer food market, behind Indonesia, Turkey, and Pakistan. Egypt has already been targeted as a key market for Irish dairy product exports, and the rapid expansion of its retail sector, including large scale shopping malls and the emergence of hyperstore operators such as Carrefour, will potentially generate opportunities for the wider Irish food sector.

Thomas Cook brought its first tourists to Egypt in 1869. The country’s rich cultural heritage and beach resorts contributed a record 19.5% of GDP in 2007. Since then, its tourist sector has suffered shocks, due to terrorist attacks and the downing of a Russian Metrojet airliner in 2015. That triggered the cancellation of flights from key markets such as Russia and the UK. As the security situation stabilises, tourism has started to recover, with revenues jumping 123% in 2017, and higher-spending German and Russian tourists set to return in 2018.  The tourism sector is rife for modernisation, presenting a clear opportunity for the Irish tourism and travel tech cluster to assist Egypt to develop and reposition its product. Enterprise Ireland’s own travel plans include sectoral visits for Irish companies in autumn 2018 with the goal of re-establishing Egypt as an important Irish export destination.

This article was originally published in the Sunday Independent.

If you’re exporting internationally and interested in researching new markets learn more about the Market Discovery Fund.

hospital supply chain

How Irish medtech suppliers can navigate the US hospital supply chain

For Irish medtech suppliers, few opportunities are more attractive than successfully breaking into the US market. But doing so is not always easy.

 That isn’t just because the US medtech market is fiercely competitive. It’s also a matter of navigating a supply chain environment which is radically different to that familiar in Ireland.

Enterprise Ireland recently hosted a knowledge event aimed at helping Irish suppliers to prepare for entering the market. Dave Walsh, Director of Supply Chain Administration at the Boston’s Children Hospital, and Charlie Miceli, VP Network Chief Supply Chain Officer at the University of Vermont Health Network, shared insider insights on what US hospitals expect from potential partners.

Understand the role of supply chain

As an Irish supplier, you should begin by understanding the landscape and, importantly, how communication, collaboration and relationship building are more important than what Dave described as “the hot pitch”.

“If this isn’t a need we have right now, we’re going to tell you,” he explained. “If the opportunity isn’t there right now, but we think we’re going to need it in six months, we’re going to keep in touch with you.”

Establishing an introduction is based on networking and understanding that, as long as a deal is mutually beneficial, business can inevitably be done.

“We’re a team, we all work together. We want to work with you if there’s a benefit on both sides.”

Get to know different types of hospitals and procurement methods

Buying in the US market usually takes place either directly, when a hospital or health network deals with distributors and suppliers, or via a group purchasing organisation (GPO), in which smaller systems pool together to help them buy at scale.

While the promise of bigger orders can make large networks and GPOs attractive, their scale can also force them to be more risk-averse, so that sometimes it is more beneficial for Irish companies to work directly with smaller hospitals.

“Getting in at group level can reap huge rewards. There are six hospitals in the University of Vermont Health Network,” explained Charlie. “But innovation can sometimes take place at smaller hospitals.”

Make sure you have boots on ground

As working with a supplier on another continent can be perceived less favourably than local alternatives, perceptions of risk must be minimised for potential buyers.

“Being Irish can raise questions,” Dave said, “‘It’s a good quality product, but what if we have problems?’”

The most effective solution is also the most straightforward: to be present in the US, and available for regular meetings with key stakeholders. While that can mean frequent flights, it is also often essential to success.

US hospitals and GPOs will often expect to meet the boss, and just not their representative or distributor. The founder and head of your organisation will bring a uniquely intimate knowledge of the solution, and their involvement is also crucial to the collaborative approach required by US supply chains.

Consider your first move

While your first interaction is crucial, it will also depend on where your business is in its growth pattern. Begin by determining what stage you are at, and then select the time and venue to meet the right people.

“Trade groups are great,” explained Dave. “Whether national or smaller, such as regional meetings, they’re all worthwhile. I can meet 50 people in two days at these events. It could take an entire year at the hospital to achieve that.”

And while getting a slot at some trade shows can be expensive, ‘reverse expos’ – in which buyers occupy stands and are approached by suppliers, rather than the more traditional format – offer an increasingly popular approach to networking.

“Is it worth investing for a small company? A booth can be pricey but get into a reverse expo with the right plan and it could easily become money well spent.”

Consider your reimbursement model

Frustratingly for suppliers, there is little consensus on how the reimbursement model may change with the rise of the Internet of Things (IoT) and subscription models.

However, it is a matter of ‘when’ rather than ‘if’ things will change, and the best advice for now is to monitor the market closely to prepare for an impending shift.

“If change happens, it will happen quickly,” commented Charlie.

Avoid the ‘circular wheel’

The selling cycle in the US medtech market can be very long – approximately six months for a defined need, followed by a vetting cycle of three to six months, and longer again if a solution is not in response to a specific requirement.

For that reason, finding the right person at the right stage is crucial. Every time you’re passed sideways to another department or another contact can add days or weeks to an already lengthy process.

There is one simple way to avoid ending up on what supply chain calls the ‘circular wheel’: ask the question of how to engage.

“Try to understand what the roles are,” said Dave. “Ask us the question, we’ll find you the right person to talk to at the right stage.”

Take the heavy lifting off IT

“As everything becomes more digital, there is more pressure on IT departments in hospitals,” Charlie noted. “So you need to be able to take the heavy lifting off IT.”

At a minimum, it means that producers of digital products should be able to demonstrate an intimate working knowledge of technical details, from the interface standard to security risks and mitigations.

But beyond that, it may also have implications for companies that rely on free pilot schemes in healthcare facilities as part of their sales process. Such is the time and cost associated with implementation, that they must also be sold convincingly to make the offer worthwhile.

“A pilot has to go through the governance process, because IT has bigger cost growth than other departments,” added Charlie. “Free pilots do happen, but not without work. Implementation will be costly.”

Know your suppliers

There are few, if any, medtech suppliers who do not rely in some way on third-party suppliers. It’s crucial to recognise that, as the producer, you hold full responsibility for who they are, how they work, and their components or contributions to your end product.

“You’re accountable for everyone who feeds into your product,” explained Dave.

“It’s important to bear in mind that customs, standards, specs, and so on will vary from region to region.”

Use the data you have

One of the perceived barriers to entry into the US market is a lack of data, particularly in instances where it’s difficult to implement an initial pilot.

While local data is always preferable, due to differences in health system structures, European and Irish data can nonetheless make an incredibly strong contribution to the case. In fact, depending on the industry, it can even offer an advantage if it happens to be one where the EU is seen as a leader.

“Sterilisation, for instance, is more advanced in EU than the US,” said Charlie. “And the latency is five to seven years, due to testing and so on. So the demonstration of reliability and data from successful European adoption can make all the difference.”


Ireland enjoys a unique advantage in trading with the US and is Ireland’s second largest export market. Learn more about entering the US market here.

Our friends in the north offer opportunities for Irish companies

Marina Donohoe, Director UK & Northern Europe at Enterprise Ireland, describes how the UK’s Northern Powerhouse project is creating opportunities for Irish companies.

The north of England is engaged in a historic transformation from an industrial past to a bright future that connects vibrant cities and globally competitive commercial activities. The scale of those activities should not be underestimated.

Growing faster than anywhere else in the UK, if the north of England was a country, it would be the 10th largest economy in Europe, exporting €56.4 billion worth of goods each year and accounting for nearly 20% of the UK’s overall gross value add (GVA).


The UK potential

The opportunities set out in Enterprise Ireland’s recent Northern Powerhouse report play to the strengths of Irish companies, particularly in the construction, life sciences, and digital sectors.

Northern Powerhouse is a government initiative that aims to rebalance the UK’s economy, by maximising the combined potential of the north of England’s cities and regions, including Leeds, Manchester, Liverpool, Newcastle, Sheffield and Tees Valley, an area of approximately 14,400 square miles with a population of 14.9 million people. The goal is to create a collection of modern cities sufficiently close to each other that ‘combined they can take on the world’.

The initiative, first launched in 2016, is delivering substantial public investment, with a focus on improving transport infrastructure between cities in the north of England and supporting economic activities around emerging capabilities. As a result, Northern Powerhouse is creating a wide range of business opportunities suited to the strengths of Irish exporters.


Trading Partnerships

Theresa Grant, CEO of Trafford Council, comments, “Irish companies are long-standing trading partners to the north of England, contributing to its robust economy and reaffirming Ireland’s successful relationship to this part of the UK. With rail links like HS2 and HS3 and improved worldwide air connectivity opening up, enabling the cities in the Northern Powerhouse to grow and prosper, we anticipate the Anglo/Irish partnership will grow even stronger, as major opportunities to continue to work together and collaborate present themselves.”

The most significant opportunities are likely to arise from new economic activities and clusters, which are largely based on science and innovation. With the European Commission’s 2017 Innovation Scorecard ranking Irish SMEs first for innovation, Irish companies have a leading position internationally.


Significant growth for Irish companies

Brian Crowley, CEO of TTM Healthcare, says, Since 2012, the TTM Group has been working with NHS trusts, private hospitals and charitable organisations across the north of England, supporting more than twenty clients and employing 110 permanent and temporary staff. We see this region as of one of the fastest in growth terms for TTM, as we work with amazingly innovative and progressive healthcare organisations. Through the support of Enterprise Ireland and Northern Powerhouse, Irish Small and Medium Enterprises can provide modern, innovative and high-quality services across several industries which enhance the growth of the economy in the north of England.”

Ardmac, a construction specialist that works with leading companies across the pharma and technology sectors, has an office in Manchester and a portfolio of clients across the north of England. Ronan Quinn, CEO of Ardmac, comments, “Our business has seen considerable growth in the region in recent years. A significant amount of that business has come from building a shared vision of what our clients want to achieve. The ease of travel between the north of England and our offices mean that we can be face to face with a client within an hour – a key benefit for those working across multiple territories.”

Notwithstanding the threat of Brexit, the UK’s economy is in growth mode and remains Ireland’s most significant export market. Enterprise Ireland is focused on supporting Irish companies to consolidate and grow exports to the UK market, while also supporting them to diversify their export markets across the globe.

Companies interested in exploring opportunities should begin by downloading the Northern Powerhouse report.

This article was originally published in the Sunday Independent.

US tax

How to tackle the US tax system

With three different layers of taxation – at federal, state and local levels – the US tax system can be both complex and confusing. Irish firms considering doing business in the states should seek tailored advice from a certified public accountant or a tax lawyer.

The following pointers may work as a starting point to alert you to possible liabilities. Download the full Going Global USA: Learn your Legals guide now.

Individual taxation in the US

Irish citizens become liable for US income tax assessment if they are holders of a permanent residence card – a ‘Green Card’ – or if they are deemed to have ‘a substantial presence’ in the United States.

You will be deemed to have a substantial presence in the US if: you have been present in the country for 31 days in the current year and a total of 183 days or more in the last three years, based on a calculation including all days you were present this year, plus 1/3rd of the days you were present last year, plus 1/6th of the days you were present two years ago.

For example, if you were present in the US for 126 days in 2018, 2017 and 2016, you would be judged to be ‘substantially present’ and liable for US income tax assessment. Because 126 days in 2018 + 42 days in 2017 (1/3rd of 130) + 21 days in 2016 (1/6th of 130) equals: 189 days, which is greater than the 183-day threshold.

If you only visit the US for a maximum of 120 days a year, you do not cross the 183 day ‘substantial presence’ threshold.

Tax treaty benefits

An Irish company’s profits may become subject to US taxation once it is deemed to have a US permanent establishment (PE), under the terms of the Double Taxation Treaty agreed between the two countries in 1997.

An Irish company will be adjudged to have a permanent establishment in the United States when it has a fixed place of business there, or when it is conducting business activities through a dependent agent, which can include an employee of a third-party company.

The Double Taxation Treaty allows Irish residents and entities to be taxed at a reduced rate on certain types of income. For example, the normal federal rate of tax for foreign corporations is 30%, but where the 1997 treaty applies, it is 15% for Irish companies. Qualifying dividends are usually subject to 30% tax, but where the treaty applies it is 5%. Instead of paying 30% on royalties, or on interest paid by US obligors, in both cases, Irish companies pay zero.

To become eligible for any of the tax treaty’s benefits, Irish companies must provide customers with a US tax form, Form W-8BEN, which includes their US taxpayer identification number. Each issued Form W-8BEN is valid for three years.

Once an Irish company hits the threshold for US corporate taxation, it makes more and more sense to form a US subsidiary or entity instead of operating a branch office.

US state and local taxes

US state and local taxes, including income tax, sales tax and use taxes, are not covered by the Double Taxation Treaty. As a result, Irish companies may accrue state and local tax liabilities when none apply at federal level.

Taxation varies significantly from state to state and within states, so professional advice is vital, particularly when negotiating the ‘apportionment’ system, which is designed to mitigate income being taxed in multiple states.

As in Ireland, corporate taxpayers are taxed on an annual basis, and you may choose to organise your tax year so that it differs from the calendar year. New corporations can use a short tax year for their first tax period, if it benefits them. Self-assessed tax returns must be filed by the 15th day of the third month following the close of a tax year. Taxpayers can obtain a six-month extension to their filing, depending on a number of conditions including depositing the full amount of tax due.

While federal tax returns can be sent by hard copies in the post, online, or by using IRS tax-preparation software, Enterprise Ireland recommends that Irish companies use a professional service provider.

US tax credits

There are a number of tax credits and incentives available to foreign companies operating in the US. For Irish companies, those at state level are most relevant. Provision of tax credits varies greatly but can include credits for: jobs and hiring, investment, alternative and renewable energy, R&D, and using a particular port for imports and exports.

Some of these credits can be claimed retroactively. Furthermore, it is sometimes possible to negotiate a discretionary incentive with a state before commencing an investment project.

Transfer pricing

It is important that an Irish parent and its US operating subsidiary deal with each other on an arm’s length basis to minimise the risk of tax authorities challenging whether income has been earned in the US or in the firm’s home country.

Care must be taken to avoid challenges resulting from invoicing a subsidiary at a higher price than would be charged to a third party, and to avoid US customs problems when invoicing a related party at a price that is seen as too low.

Advice should be taken on the funding of US operations when investing in a start-up or in expansion, especially when looking for the most tax-efficient way to secure borrowings to fund expansion in the United States.

PwC has published a guide on US tax issues, which you can download here.

The IRS has an information page for foreign businesses here.

Download the full Going Global USA: Learn your Legals guide now.

Ireland is becoming an agritech island

How Ireland is becoming an agritech island

James Maloney, a senior regional development executive at Enterprise Ireland, outlines how innovative Irish agritech companies are helping to combat some of the world’s toughest challenges.

One of the biggest challenges facing the world is how to feed a population set to grow from today’s 7.6 billion to 8.6 billion by 2030, 9.8 billion by 2050, and 11.2 billion by 2100. Irish agritech companies will play a key role in helping to meet that challenge.

Enterprise Ireland recently announced two initiatives that are part of its ongoing work to support agritech companies to innovate and win in international markets, from start-up stage to the point at which they become established international players.

Last month, Minister for Business, Enterprise and Innovation Heather Humphreys officially encouraged Irish agritech and agricultural companies to apply for the Innovation Arena Awards that will be announced during the National Ploughing Championships in Screggan in September.

The Enterprise Ireland Innovation Arena is a unique platform in which Irish companies display pioneering developments, with more than 100 international buyers attending in 2017. Last year’s competition attracted 200 entries, 69 of which were shortlisted as finalist exhibitors at the Innovation Arena.

Enterprise Ireland also recently funded the development of a dedicated agritech R&D facility in Tralee to further support agritech innovation.

The word ‘agritech’ tends to conjure images of drones patrolling farms, autonomous tractors and harvesters, robotic milkers, and other futuristic technologies. While those images are accurate, the most important agritech developments will be those that support sustainability and allow us to do more with less, as we continue to produce high-quality food for the world’s rapidly growing population.

Ireland might be a relatively small agricultural producer globally but what we do in the sector, we do extremely well. Ireland has the highest standard of agricultural education in Europe and has established a well-deserved reputation for innovation across the entire agricultural value chain.

Irish agri-engineering exports are now worth a quarter of a billion euro annually to the Irish economy. Machinery produced by Irish manufacturers harvests grass throughout the world and is responsible for feeding cattle on every continent.

With regard to food quality, Ireland competes with the very best internationally, thanks to extremely low rates of antibiotic usage, no hormone usage, very high standards of animal welfare, and full traceability from fork to farm.

None of these developments occurred by accident. Striking the right balance between increased production and high standards of animal welfare and sustainability requires a combination of best farming practice and the kinds of innovative agricultural technologies Irish companies are becoming increasingly known for developing.

Irish companies like Abbey Machinery, McHale and Hi-Spec are already world leaders in the specialised production of machinery, such as mixer wagons for feeding cattle, high-quality baling and wrapping systems, slurry spreaders, agricultural trailers, and handling equipment for grain.

Dairymaster also leads the way internationally, with significant investments in in-house R&D and a strong customer focus. The company’s latest innovation is a smartphone app that allows farmers to remotely control their milk tank.

Another innovative Irish business, Moocall, has developed a collar worn by bulls that detects which cows are in heat and monitors the bull’s activity.

Keenan Systems’ InTouch service uses telematics to connect its mixer wagons in the field to a data centre in Ireland’s County Carlow, allowing for remote adjustment of feed mixes to optimise yield or milk production.

Equilume’s technology, which was originally developed to manage fertility in horses, has been proven to boost milk yields by up to 9% per annum.

In another area entirely, MagGrow has developed a technology which magnetises the droplets from a sprayer, causing them to bind better with plants, thereby reducing the amount of liquid required.

The need for change in traditional agricultural systems is being driven by a range of powerful forces, including pesticide reduction initiatives, the need to reduce antibiotic use, increased scarcity of water, and the challenge to provide sustainable food production systems for the growing world population. As Irish companies develop innovative solutions to meet these challenges, the world is taking notice.

This article was originally published in the Sunday Independent.

Irish construction

Digital ambition driving Irish construction to international scale

John Hunt, senior market advisor for the construction sector at Enterprise Ireland, describes how Irish construction companies are gaining competitive advantage by investing in digitisation.

For construction companies in Ireland, investment in digitisation was once hampered by uncertainty about cost and the likelihood of generating an immediate return on investment (ROI). Disruption from digital is, however, high on the international agenda. Globally, the sector is undergoing a digital transition, particularly evident with the increasing adoption of Building Information Modelling (BIM). Today, ROI is often understood by the sector to mean the potential cost of doing nothing, or the ‘Return On Inactivity’.

BIM, an innovative 3D digital process, gives construction professionals insights and tools to design, construct and manage projects more effectively. Irish companies have moved ahead of international competitors in the adoption of digital technologies, with Enterprise Ireland delivering targeted BIM capability programmes for SMEs since 2013.

A number of recent announcements further support Irish companies to compete in the evolving international marketplace, delivering an advantage at a time when there is much to gain from winning overseas opportunities.

As a major client of construction services, the government’s commitment to a four-year adoption of digital technologies across its public capital programme is an important milestone. A digital procurement directive was signed by the Minister for Public Expenditure and Reform, Paschal Donohoe TD and the Minister of State for Public Procurement, Open Government and eGovernment, Patrick O’Donovan TD.

The government announced its approval of the National BIM Council’s ‘Roadmap to Digital Transition’, the first digital strategy for the industry in Ireland, published in December. The Roadmap reports that Irish companies are aware that the adoption of international best practice positions them best for growth and do not wish to ‘reinvent the wheel’. The Roadmap’s strategy is aligned to support the needs of the SME community that makes up almost 95% of the sector in Ireland and across the European Union.

Research shows that Irish companies are well positioned to benefit from increasing demand for digitisation internationally. The third survey to benchmark levels of BIM adoption in Ireland reports that 76% of professionals are confident they possess the skills and knowledge required to deliver BIM, an increase of 9% on the 2015 figure. Research revealed a growing demand for BIM, with one company reporting, “We have hired 2 BIM modellers to work in the office and have started the process of becoming BIM enabled with a grant from Enterprise Ireland.”

The combination of increased government support and the strategy described in the Roadmap presents an opportunity for more Irish companies to become leaders in implementing common standards and guidelines to international best practice in BIM. It is essential that Irish companies use supports available to respond to demand and keep pace with international competition.

A number of designers, contractors and manufacturers lead the way in overseas markets across sectors. Scott Tallon Walker, Grafton Architects, Jones Engineering, and EPS are BIM exemplars that specialise in healthcare, education, data centre and water-related projects. Cork-based EDC were the first mechanical and electrical consultancy in the UK and Ireland to receive BIM Level 2 accreditation. As a BIM early adopter, the company capitalised on opportunities from the UK’s digital transition and developed a strong team of more than 15 employees in their London office. The progressive engineering company has delivered design work further afield. Earlier this year, EDC completed the detailed design for a $150 million commercial project in Lagos, Nigeria. Managing Director Richard O’Farrell says, “BIM enabled us to engage in a wider package of design works and a far deeper level of detailing than would have been possible before, opening up many opportunities.”

The work Enterprise Ireland has done to promote BIM to support the Construction 2020 Strategy and the recent Action Plan for Jobs 2017 has received wide industry support. These initiatives are timely and urgent, given the industry’s importance to the national economy. One in ten jobs in Ireland is employed by the construction sector. The push to digital best practice will give our companies more productive ways of working that improve competitiveness at home and overseas.

This article was originally published in the Sunday Independent.

Record food exports driven by Irish innovation

Record food exports driven by Irish innovation

Orla Battersby, divisional manager for food at Enterprise Ireland, outlines the factors driving the rapid growth of the country’s largest indigenous sector.

The value of Irish food, drink and horticulture exports increased by 13% in 2017, to reach €12.6 billion, a new record. This stellar performance marked the eighth successive year of growth for Ireland’s largest indigenous sector.

While many factors have played a role in the achievement, chief among them is the ingenuity and innovative capacity of Irish food companies. Successful exporters in this most competitive of sectors must by their nature be innovative. They must be capable of extremely rapid responses to changes in consumer demand, while at the same time remaining capable of meeting the exacting requirements of grocery multiples in relation to price, quality, and new product development.

At its simplest, innovation in food and beverage products is the market-led development of new or improved products to meet changing customer needs. But innovation is actually much more multifaceted than that. It is about embracing a culture throughout the whole business. Innovation means taking a customer-centric approach to all aspects of the company, from who is hired through to technology and processes utilised, the packaging of products and the way they are branded and sold.

Enterprise Ireland supports food and beverage innovation in numerous ways and has assisted approximately 100 significant in-company research, development and innovation projects for clients across the sector since 2013. These projects range from new, more efficient and lower-cost manufacturing processes to product reformulation and new product development, with the aim of breaking into new customer segments and markets.

Among the innovative companies supported by Enterprise Ireland is Keohanes Seafoods of Cork. They realised that many consumers did not like the hassle of preparing and cooking fish and were the first company in Ireland to produce a microwaveable skin film range of products, which means the consumer never has to touch the product. Keohanes used a packaging technology designed for other purposes and it has basically brought fish from the fish counter to the chilled convenience aisle.

Another Cork company, Dairy Concepts, manufactures hand-held nutritious dairy snacks for children, using patented milk casein technology. The key competitive differentiator of its Fruchee product is that it contains 40pc less sugar along with higher calcium, protein and Vitamin D than competitors.

Dublin-based Nuritas, led by Dr Nora Khaldi, is developing technology that combines artificial intelligence and DNA analysis to discover the health benefits of peptides in natural foods and is a great example of a food start-up company that Enterprise Ireland has worked with at feasibility stage and is now supporting to scale.

Large companies in the dairy, beverage and meat processing sectors are also highly innovative, as their export success demonstrates. In fact, the 2017 export performance was driven by a 19% leap in dairy exports to over €4 billion, and a 5% increase in sales of Irish beef. Dairy now accounts for one-third of all food and drink exports, with beef representing one-fifth of all exports at almost €2.5 billion.

There is clear evidence to demonstrate the role innovation has played in this success. Enterprise Ireland carried out a survey in 2016 which showed that firms who availed of innovation supports from us reported an average 67% growth in global sales.

These supports take many forms. The Agile Innovation Fund gives companies support of up to 50% of eligible project expenditure up to €300,000, which is very useful for projects which must happen rapidly. The approval process is fast tracked, enabling companies to get projects delivered quickly. In addition to in-company R&D, Enterprise Ireland also supports companies in collaborative innovation projects, helping them to access the insights of researchers working across Ireland’s third-level sector, and European expertise and funding under the EU Horizon 2020 programme.

But we cannot allow ourselves to become complacent when it comes to innovation. Food companies throughout Europe and beyond are competing for the same markets, while Brexit will create new challenges for Irish companies. A continued laser-like focus on innovation will be required in order to maintain and add to our success on international markets.

This article was originally published in the Sunday Independent.