We could turn Brexit to our advantage with UK spending plans
Published 10/07/2016 | 02:30
Despite understandable concern over the UK's Brexit vote, our nearest neighbours will remain a natural first market for Irish exporters - due to proximity, shared language and similar business cultures.
While exports to the UK as a proportion of global client sales fell 8pc over the past decade to 37pc (due to market diversification), they still grew 12pc last year to more than €7.5bn.
Strategies to offset the consequences of a Brexit are of course advised - but businesses in Ireland would be missing out if they discounted the UK market. In fact, Enterprise Ireland has identified several key opportunities for Irish companies based on UK government initiatives and evidence of sectoral growth.
For instance, the UK's National Infrastructure Delivery Plan envisages spending stg£483bn on more than 600 projects in all sectors across the UK, up to 2021 and beyond.
Irish companies are operating in these sectors already and there are huge opportunities in such planned investments as £483bn in 10 waste projects; £256bn in 167 energy projects; and £134bn in 329 transport projects.
Billions more are to be spent on flood and water infrastructure - €6bn has also been earmarked for communications and £5bn for science and research.
UK water utilities are planning expenditure of £41bn up to March 2020. Enterprise Ireland is working with UK and global buyers with access to this opportunity, which could also be a stepping-stone to international projects.
The UK government's Northern Powerhouse initiative alone will see £134bn spent on rebalancing the country's economy by bolstering infrastructure in Liverpool, Manchester, Leeds, Sheffield and Newcastle. The opportunity lies in road, rail, freight, aerospace and skills development. For example, the HS2 high-speed train network will cost £55.7bn.
Enterprise Ireland also has a strong geographical focus on Scotland. The Scottish administration has highlighted the strategic, large-scale investments they intend to take forward within a number of key sectors over the next 10 to 20 years.
Key areas of investment in Scotland which will provide opportunities include energy, water and housing. For instance, the housing supply budget has been set at £690m for 2016-17. This will deliver between 8,000 to 9,000 affordable homes, 28pc more than the average output in the last two years.
While much of this is construction-related, there is also plenty of opportunity in other areas partly or fully publicly funded.
For instance the National Health Service (NHS) proposes a capital outlay of £8bn by 2020 aimed at improving efficiency. Spending includes £1.8bn to create a paper-free service; £1bn on cyber-security/privacy; £400m digitising the NHS and £250m on data for outcomes research.
Opportunities will also arise in financial services and fintech. The City of London alone has more than 250 foreign banks and numerous other financial institutions and associated advisory, legal and professional services companies.
Opportunities always exist for Irish companies with the right solutions and competitive offerings. Irish legal, professional services and IT solution providers could find openings, as UK-based firms seek new structures around regulation, compliance, currency-handling, money-laundering and data-handling.
This is a sector where Enterprise Ireland has been working for years, and as new opportunities unfold, EI is well-placed with high-level contacts to introduce our clients to key decision-makers.
Ireland has a thriving aerospace sector that can make inroads into the UK industry which accounts for 17pc of the global market and is considered the largest player in Europe. Turnover in 2015 rose by £1.9bn to £31.1bn.
Enterprise Ireland's participation at the Farnborough Airshow this week is a key initiative to support Irish companies seeking to do business in this growth sector.
Like nature, business abhors a vacuum, so whatever the final outcome of the British people's vote to leave the EU, it will continue to offer prospects for Irish business.
Anyone considering entering or developing their UK presence need not be put off. Just contact an Enterprise Ireland development adviser for guidance.
Marina Donohoe is Enterprise Ireland director for UK & Northern Europe
Sunday Indo Business