Why is it important for Irish SME to export?

September 15, 2010

Domestic markets will be sluggish for some time. Although it is likely that we will see growth in Ireland in 2010 and 2011 it will be low-level growth. Irish consumers are very cautious with many facing negative equity, or more likely, they do not know the real value of their property because there are so few buyers that the market is dysfunctional and this is leading to caution. Government expenditure will be cut by €3 billion more next year, although it is likely that further large cuts in following years are less likely. That being said, 87% of the labour force is in work although many earning far less than they did three to four years ago. We may have hit the bottom but it is going to be a long hard hill to climb.

However, if we could get more Irish SME to export and develop markets abroad we could develop a lot more quickly. Every million of extra sales developed from exports create wealth, 12.5% in corporation tax, new jobs and resulting savings in social welfare payments. So from a macroeconomic level this is a no brainer. So why do our SME not do more sales abroad?

There could be several reasons to explain this. First, for many years if you had money to invest then you put it into property rather than going through all the problems of trying to develop new customers in new markets. Another issue is that it is not as simple to develop sales in a new market as saying ‘go sell in other markets’. Irish people have generally been quite bad at learning foreign languages (being spoiled by the fact that our main language of usage is English, the international language of business). But sales are built up by contacts, introductions and physical presence. Many Irish business people would not have many hard business contacts in other countries especially outside the UK. It is not as simple as you arrive in Budapest, Prague or Tirana and go knocking on doors. There are cultural differences to doing business in other countries. Language is a barrier. Outside the European Union there are legal and tariff issues. Outside the Eurozone there are currency issues. Thus, we need to help Irish business people to develop linkages abroad and give them advice on how to trade in each market. Each market is different and needs to be addressed somewhat differently.

But there are things we can do to promote international selling by Irish-owned companies…


One Response to “Why is it important for Irish SME to export?”

  1. peterson08 Says:

    hi, its very informative, IPO , thanks

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