It’s No Joko – Huge Opportunities Lie in Wait for Irish Firms in Indonesia

Indonesian President Joko Widodo’s recent European visit to push for deeper economic ties with the EU has enhanced opportunities for Irish firms in South East Asia.

Trade talks between the EU and the Association of Southeast Asian Nations (ASEAN) collapsed in 2009, and since then the Commission has adopted a strategy of bilateral Free Trade Agreements (FTAs) with member countries.

Already, ASEAN members Vietnam, South Korea and Singapore, have agreed FTAs; and in April, President Widodo – or Jokowi, as he is widely known – met EU leaders, when it was agreed to start talks on a deal for Indonesia.

Jokowi is a reformist who recognises that openness and competition are a pre-requisite for driving one of the largest emerging economies in the world over the past decade. The average annual growth rate there exceeded 5pc over the past 15 years, and modest growth was even recorded during the global crash.

The raw statistics show Indonesia accounts for almost half the GDP of the 10-nation ASEAN bloc and a quarter of the population. But a word of warning – despite being the fourth most populous country in the world with over 250m people, many are scattered across 17,000 islands, shut off from world markets and the thriving Javanese economy around the capital, Jakarta.

There is though, a burgeoning middle class with ever-increasing disposable income. Boston Consulting estimates 71m people are in the Middle-Class and Affluent Consumer (MAC) category, and that will double by 2020.

So, when Jokowi recognises the need for market-friendly measures and the lowering of regulatory and trade barriers, then Irish exporters’ ears should prick up – especially among those already trading in South East Asia who can leverage their position. The legal and regulatory environment is a challenge. However, while getting a market foothold can be slow going, there is a strong appetite for partnerships within the business community and experienced professionals ready to assist.

A colony of the Netherlands until 1945, Indonesians are familiar with dealing with Europeans.

Irish firms like airplane upholsterer Botany Weaving, engineering design firm PM Group, food ingredients supplier Kerry Group and H&K International kitchen supplies have been doing business there for years.

Historically, Indonesia has imported mainly from China, Japan, the US and its ASEAN neighbours, but there is a growing support network for European firms.

Importing expertise and technology rather than goods and services is a noticeable feature of Indonesian business strategy.

Many Irish third-level institutions are active in this market – the booming aviation sector has substantial training needs and, as domestic manufacturing increases, firms experienced in delivering services for multinationals in Ireland can export this know-how.

But Irish companies need not limit their ambition here. Tech travels and Indonesians, particularly the younger population, are big on connectivity, in every sense, and often carry two phones.

Apps and other mobile-enabled services are major growth sectors. Irish companies experienced in the added-value technology sell have opportunities in sectors such as telecoms, aviation and health. There is also increased demand for foreign brands and produce. This presents an opportunity for Ireland’s food and ingredients companies offering quality products, new flavours and more variety.

In Indonesia, relationships are central to doing business, and a local partner is strongly advised. Choosing the right route to market is crucial and local associates are advised because of their knowledge of the legal environment, the way of doing business and their networks.

Unlike some markets, where it is possible to sell largely on the strength of your offering, serving the Indonesian market remotely from Ireland through email and web conferences will not work, even for the technology sell.

Facetime is a pre-requisite and be prepared for meetings where more time is spent with small talk rather than big numbers. It’s very social. They work on ‘jam karet’, or ‘rubber time’, meaning punctuality or meeting duration is unpredictable and nothing gets done in a hurry.

It’s about building the relationship. Presence on the ground or even in a neighbouring ASEAN market is well received and highlights your long-term commitment.

They’ve got to like you before they trust you. And they’ve got to trust you before they’ll do business with you. To seize the Indonesian opportunity, come early and come often.

Smruti Inamdar is a director of the ASEAN region with Enterprise Ireland and is based in Singapore

This article was originally published in the Sunday Independent

Ireland’s Polish Community Helps Make Poland a Great SME Target

It may be a bold claim, but Ireland’s trade relationship with Poland is unique among non-English-speaking countries.

While other EU markets may be richer and more populous, strong personal and professional ties between the two countries makes Poland easily accessible to Irish businesses.

People generate contacts and Ireland has few rivals with Poland in terms of people connectivity. Approximately 3% of the Irish population is Polish, spread across the country. Irish companies have seized the opportunity this offers, using their Polish staff to access this market, represent them and set up offices. For example, of the 42 companies participating in Enterprise Ireland’s 2015 Trade Mission to Poland, over 50% were represented by Polish staff.

The Polish economy has come a long way in the past decade. It did not suffer as badly as other countries during the recession, with continuous GDP growth due to large EU transfers and Poland’s growing attraction for foreign direct investment (FDI) and manufacturing migration.

EU funds have built out the transport infrastructure, meaning companies such as Amazon now effectively service Germany from Poland. Conglomerates such as LG, Samsung, Merloni and Philips have been attracted here too.

The country is also a leading market player for ICT (cloud, ecommerce and enterprise solutions) and business process outsourcing. Over 50 Irish companies have operations in Poland, with many such as CRH, Steripack, Kingspan, Smurfit Kappa and ABP having production facilities.

Many Enterprise Ireland clients export directly into Poland. The fastest growing export sector is the sub-supply of goods and services to multinationals with operations in Poland. This is simply business expansion where Irish companies with existing relationships with FDI in Ireland, extend their export footprint to Poland. But there is opportunity for firms of all sizes.

Other key exports include smart farm goods and services (agricultural technology, veterinary products and animal nutrition), materials handling equipment, pharmaceuticals and medical devices and construction services.

Ecommerce is a particularly easy way to access the Polish market with the sector growing 20% year-on-year and worth nearly €10 billion. And it may also be about to get a bit easier. Allegro, Poland’s equivalent to Ebay or AliBaba, is the dominant player in the online sales market. It engages with small and medium enterprises who want to expand their online offering to Poland, and is ready to provide sales, logistics and payments support to Irish online businesses. Allegro transacts over 150,000 purchases daily with clothing and babyware being the most popular exports from Ireland. Often this is just simple re-selling by individual entrepreneurs – so if they can do it, there is no reason SMEs in sectors like dry food, giftware and clothing could not follow suit.

Conducting business in Poland is, for Irish firms, about as easy as it comes. There are 11 direct-flight destinations, the country ranks ahead of Germany and France for English speakers and Irish and Polish business culture is broadly similar.

However, it is not all good news. Poland is a notoriously price-sensitive market with corporate buyers feeling more comfortable making a decision on the basis of lowest price. This is an issue for Irish companies because we tend to sell on quality and value-added criteria.

As a former member of the Communist bloc, it should also come as no surprise that the country is quite bureaucratic – but this only really affects in-country operations and has little impact on exporters. Remember, Ireland is unusual in our low level of bureaucracy. Nonetheless, compared to other markets, Poland ranks as a particularly strong export opportunity for Irish firms of all sizes.

Starting To Export – How to Get Export Ready

The progression from mainly operating in the Irish market to exporting is one of the most transformative and challenging transitions many companies make. Here, co-founders of Monsoon Consulting, Dublin Bharat Sharma and Stephen Kenealy, explain how Enterprise Ireland’s Get Export Ready programme helped them embark on that journey.

What does the company do?

We are one of the leading digital agencies in Ireland offering content and ecommerce solutions that are built on the open source Drupal and Magento content management platforms.

How long have you been exporting?

We’ve been exporting since taking an office in the UK in February 2014.

What was the pivotal point that made you look at exporting?

We were looking at enterprise-level projects, and the Irish market was limited in size, so we decided early on we should attempt to break into the UK market.

What changes did the business have to make to become ‘export-ready’?

We needed to become certified solutions partners in the two technology stacks we work on so that when we were going into pitches against UK firms, we’d be operating on a level playing field. We achieved certification with Magento and are now one of just 17 partners at our level across the UK and Ireland, and the only one here with it. We also became an Acquia enterprise level partner [Acquia makes a popular version of Drupal] and are currently in the process of getting all our developers certified.

Are you targeting any other markets currently?

At the moment it’s just a case of trying the UK and It’s just been a case of trying the UK and seeing where it goes from there. Obviously, the European market would be a target for us on a more long-term basis but we need to get traction in the UK market first to demonstrate a capability there and then to go out further. In terms of the two technologies we focus on, most of the market for these is driven and controlled from the UK and so we need to expand our footprint there and can then hopefully scale from there elsewhere in Europe. In hindsight, focusing on the UK market early in the piece, has proved beneficial as the UK works its way towards Brexit.

What routes to market do you use?
We have channel partnerships that we’ve established with both Acquia and Magento, and they have been good lead generation providers. We’ve also become close allies with service providers who are not our direct competition, but who complement our solutions so there’s a good reference network with them. We also realised early on that opportunities wouldn’t just fall from trees simply because we’d opened up an office in the UK so we engaged with Enterprise Ireland on a sales mentoring programme and that’s been a really great help to us. We are also looking to partner with a company over in England for more lead generation opportunities and we’ve spent a lot of time ourselves flying in and out of London, which has helped us get traction there.

What changes did your business have to make to become export ready?

We invested in some areas such as expanding our team. To support this, we also signed a big lease for an office near Clonskeagh where people can more easily collaborate and together. With the help of Enterprise Ireland, we’ve also looked at how we can fundamentally improve the way we do business and have embraced lean principles in our processes, which has led to a performance and productivity boost of up to 50%.

What advice would you give other would-be exporters?

Don’t take your eye off cash flow or off your existing clients in Ireland.

Any mistakes you’ve made you’d care to share?

I think we charged into the UK expecting things to take off immediately on the basis that we’d been successful in Ireland. If you can get some key references from operational stuff you’re doing here before breaking into the UK and can establish a go-to-market strategy ahead of time, it will serve you well. We didn’t do enough of this early on and it made it difficult to get in the door.

How would you like to see the opportunity you have evolve?

We aim to be one of the largest and most successful e-commerce and content agencies in Europe.

Get smart!

When is a bin not a bin? When it is also an advertising hoarding, a Wi-Fi hotspot and an environmental monitoring station. Welcome to the world of the smart city, where ICT is creating multipurpose infrastructure with inbuilt features, making it easier and cheaper to manage.

Smart cities have been defined as cities that aim to achieve high levels of sustainability, economic development and quality of life through investment in physical capital (infrastructure), human capital, social capital and ICT. A more hard-nosed way of looking at smart cities is in terms of the commercial opportunities they offer ICT product and service providers.

Nevertheless, technology, and the internet of things (IoT), in particular, does provide a means for improving the efficiency of our cities and urban spaces. Dublin City Council’s ‘smart bin’ initiative is a case in point. ‘Smart bins’ are solar-powered rubbish bins producing the energy required to power internal compactors that reduce the volume of rubbish. As a result, bins are emptied three times less often. An additional smart bit is that, when they are full, the bins send an alert to head office letting them know.

These types of bins were first trialled in Dun Laoghaire, using bins manufactured by Massachusetts-firm Bigbelly. However, a key Bigbelly component, the antennae, was provided by Taoglas, an Enniscorthy-based firm that is a world leader in antenna design and manufacture.

Taoglas produces a myriad of antennae because different methods of wireless communication are needed for different applications and locations – such is IoT. For example, Taoglas’s 5-in-1 Storm product, typically used on police and emergency vehicles, houses two LTE MIMO antennae, two Wi-Fi MIMO antennae and one GPS antenna. Not only do officers remain in radio communication with their dispatch, their dispatchers can view the live, or recorded, video feed from the vehicles’ onboard cameras and from the cameras worn on the officers’ person. HQ also has live access to data about the officers’ and vehicles’ performance. In the case of the officers, they can track heart rates and whether the officers are standing, seated or prone, and, in the case of the vehicles, they can see where they are located, how they are being driven and when they next need a service.

Another Irish company is involved in the technology behind some of these smart police vehicles. Dublin-based Davra Networks is a world leader in the development of IoT application enablement platforms, a platform-service that allows IoT developers to easily deploy and scale their applications.

Davra’s CEO Paul Glynn says IoT is about “people connecting things that they never connected before”. He explains that by networking assets, by whatever means, Wi-Fi, cellular, satellite or via a low-power WAN such as Sigfox, it becomes easier to manage those assets individually or as a whole, “to solve management headaches be it in a factory, a power supply or a smart city”.

An example of IoT everywhere is Wembley Park in London, a massive 85-acre urban regeneration project. As well as being billed as “the UK’s biggest buy-to-let building scheme”, Wembley Park is hailed as “the world’s best connected mini-city”, with Irish firm Magnet Networks, a specialist in FTTP (fibre-to-the-premises), providing homes and businesses with broadband connection speeds ranging from 100MB to 2GB.

Building contractors aren’t especially interested in FTTP until they hear that it can reduce their M&E (mechanical and electrical) cabling costs by up to 65%, says Magnet’s CEO Mark Kellett.

“Because you can run multiple services on the fibre, you don’t need copper cable for the phone, cable for the temperature and humidity controls, cable for the TV and CAT5 cable for PC connectivity. It also means you only need one satellite dish for the whole building – and only one satellite box.

We are learning from each phase of the project. For example, the builders spent too much money on connection points in the first set of apartments because students don’t want to plug their laptops and devices into the wall. As long as they have three-bar Wi-Fi, they are happy.”

Wembley Park is built around Wembley Stadium and Wembley Arena (now officially the SSE Arena), and it is also home to the London Designer Outlet (LDO), an 85-store shopping centre that Kellett describes as ‘Kildare Village on steroids.’ This is an example of a physical and economic investment to create a smart city environment, as the student residents have a source of weekend employment in the LDO. There is also part-time employment available when events are held in Wembley Stadium or the SSE Arena.

There is smart city ICT aplenty there too. “There is a number plate recognition system in the car park, so from the DVLA database, we know who each car belongs to and where each car owner lives,” says Kellett. “That has a security application but we can also make a good guess as to a visitor’s spending-power, based on their address. And, if a visitor logs on to our free Wi-Fi, we will have some access to their browsing history, so we can direct them, via their smartphones, towards special offers they might be interested in. We can also follow them as they travel through the London Designer Outlet or past the shops on the way to the Wembley Stadium and see where they stop and what they are looking at. There are a number of Irish companies who are very good at tracking how people travel through a retail space, and we are working with them on that.”

“The Internet of Things is very like what we used to call ‘M2M’ or machine to-machine communication, with one small difference,” says Glynn. “With M2M, data is siloed; with IoT, you are using multiple sources of data. A good example is in fleet management where with, say, a refrigerated truck, you have one solution, such as Fleetmatics providing GPS information and telematics. You have another solution, GreenRoad, providing data on driver behaviour. Another solution, Blue Tree, is monitoring the refrigeration in the trailer, and all the pallets in the trailer are tracked using RFID. In the world of M2M, each of these solutions works separately. With IoT, you put a network on the vehicle, using a Cisco or a Dell router, and you collect the data from all those sources, and you use them together to work more intelligently.

“Also, you don’t need to send all the data into the cloud on the network all of the time. For instance, the onboard computers fitted on most car engines since 1996 produce more than 25,000 data points every minute. You don’t want to be sending all that over the network continuously. You need the system to send the data when it needs to be sent. We are involved with a connected light rail system in San Diego and a heavy rail system in New Jersey. Vibration levels are one of the things that need to be monitored: if the vibrations go beyond a certain threshold, an alert is sent to the operator. But the threshold varies according to the ambient temperature: the colder it is, the lower the vibration threshold before an alert is sent.”

In the smart city sphere, Glynn sees IoT opportunities galore, especially in the areas of transport, energy and security.

“One of the big issues is who is going to pay for it and, secondly, will you be able to get various parties to share their data,” he says. “In some countries, you can force people to share their data, in other places you can’t.” Because Dubai’s smart city initiative is being driven by the country’s ruler, it is on track to have the world’s smartest city by 2020 (including connected police cars enabled by Davra Networks).”

“Cities in Europe are a bit behind that,” says Glynn, but he points to some very European initiatives that are already bearing fruit. “In Croatia, they have fitted all their manholes with sensors, so they know when they are being lifted when an authorised person isn’t present. As a result, they have become very good at tackling the growing problem of copper cable theft.”

“There are great opportunities for those who will develop IoT apps and it is something that is becoming easier to do. A developer can use our ConnecThing AEP platform for free with up to three devices to help them get their ideas beyond the proof-of-concept stage. Once an app has been tried and tested, it might be sold by our 65,000 reseller and system integrator partners. For example, we have a revenue share with the developer of a smart healthcare app that is sold per hospital bed and is now doing very well in the United States.”

Brendan Carroll, CEO at EpiSensor, a Corkbased specialist in the Industrial Internet of Things (IIOT) space, says that the sector is a particularly good one for smaller companies.

“Traditionally, when a company was having an IT upgrade or having a LAN installed, all the work would be done by a single large supplier, an integrator like Siemens or Honeywell or Schneider Electric. In IoT, a lot of the solutions are made up of layers of different technologies from different companies, so that creates huge opportunities.”

Enterprise Ireland development adviser Robert Bushnell believes that the IoT will become so ubiquitous, people will stop using the term.

“There was a time when people talked about digital cameras and digital music but no one uses the term digital anymore,” he says.

Glynn agrees, “It’s like e-commerce: it’s everywhere now and nobody uses that term.”

Market Access: Breaking into India

Finding the right partners will help ensure that the process of breaking into the India market goes smoothly. VU2VU Networks have been working closely with Enterprise Ireland’s India office and are on the cusp of a new beginning in a tough market.

To learn more about Enterprise Ireland supports and for further information on doing business in India click here