Who are Ireland’s exports partners? Where should we be looking for our exports?
So, if exports are good, and you know how you can start to export, the next question is: where to? This is the last post in the series, in which I explore who our exports partners are and where we can export to. The world is your oyster, really. Learn to look at other countries with the eyes of an exporter.
The UK: Ireland’s closest exports partner is having a difficult time…
Great Britain seems to be the natural choice when thinking of exports: here is a foreign country that’s geographically close, with which we share a history spanning several centuries, we speak the same language, and there are many cultural ties binding us.
The UK has been an important economic partner for a very long time. It used to be that Irish workers went to the UK in droves when jobs were scarce in Ireland. For all those reasons, we feel that we know Great Britain and it seems a natural exports partner.
But at the moment the UK is mired in recession. And with talks of a possible double-dip recession and the economic recovery “grinding to a halt”, maybe they need a positive economist of their own… John Whelan, in the IEA press release, remarked how sluggish the UK market was, and how that had impacted Irish exporters, shrinking market shares and profit margins.
When you are faced with a situation like this, what do you do? You have to react to what is going on and look for ways to be more competitive. You could try to source goods from lower cost regions, in order to decrease your prices or increase your profit margin. And, keeping in mind that this market still has to be served, you could also look to export elsewhere.
The other thing to remember here is that based on the money printing that the UK has decided to embark upon, inflation is bound to increase across the Irish Sea. As a result, Irish products may be increasingly cheaper as time goes on (assuming a stronger euro doesn’t annihilate the benefit) and hence, exports to the UK could rise considerably. (You need to register on the Financial Times website to read the article I link to – it’s free!)
Yes, it might be more comfortable exporting to the UK, rather than to China, because we know the UK inside and out, we speak the same language, we know the culture of the country. But if exporting to the UK is less profitable, what does a business leader do? They get out of their comfort zone and try new things.
The US: both a historical partner and a very interesting market for Irish businesses
Personally, I have started exporting to the United States. It’s a very interesting market for Irish businesses and it’s faring better than the UK, even though they are also going through the same recession as everyone else. The US economy would be the most concerning for us, because we have very strong ties to the US as well, and we need to ask ourselves: have we got enough steam to keep up with them?
If you look at export partners, you would want to choose domestic markets that look promising: it was announced on CNN recently that more jobs are now created in the US, and this is something international markets react to. US imports from Ireland also represent much more significant figures: in May 2011, they amounted to €1.8bn!
We have many links with the US, that we can develop and strengthen in many ways. After all, there are very few countries that get pride of place all over the US, every 17th of March… We’ve established excellent relationships there, by working on being “closer to Boston than Berlin”, and now our mission is twofold: strengthen those ties and tend to them, and learn the lessons of our success to replicate this in other countries.
Cultural and emotional ties between two countries are something that you need to be aware of: what are the bonds that exist between Ireland and another country, that you can build upon? I’m not saying this in a cynical way: it’s not a matter of reducing every human exchange to money. There needs to be a degree of mutual trust and respect between trade partners, and this happens more easily when two cultures are already friendly.
Have you thought of emerging economies?
On the other hand, have you thought of exporting to emerging markets? They’re often represented in the media as competition for Western economies, but you could just as well think of them as very promising markets. Indeed, they are already buying from us: Abu Dhabi’s city parking managing system was developed by an Irish company from Cork. We would do well to take a more proactive approach and take our cue from this Irish trade mission to the Middle East that took place in November 2010…
We have been able to establish strong trade ties with the US, and we should look to replicate that exercise with leaders in China, India, Dubai, Abu Dhabi, Singapore… We have to get to work on creating and strengthening those links.
Should we be afraid they’ll steal our jobs? I don’t think so. They need the things that we have to sell. What is it that you can offer to that country, to develop a relation with them? I requested a meeting with Enterprise Ireland’s office in the United Arab Emirates and was amazed at how well developed Abu Dhabi is – whereas Dubai gets all the headlines.
There is also much talk of the “BRIC” countries: Brazil, Russia, India, China. These are “big” countries, both in terms of geography, and in terms of economic potential. John Whelan quotes previsions according to which China would become the largest economy in the world sometime between 2030 and 2050.
It would be easy to be overwhelmed by the magnitude of these economies. Sometimes you feel like a very small fish in a very big pond. But don’t be afraid to bite off more than you think you can chew.
Also, be aware of BRIC countries, look for opportunities there, but keep a critical eye on them. If the time is not right for you to export to the BRIC countries, don’t worry: they are only 4 countries – out of more than 193 countries in the whole world!
Are you comfortable dealing with foreign cultures?
By now your head might be spinning with all the possibilities. I would like to draw your attention to something important: we cannot help but hold certain beliefs about foreign countries. After all, it’s difficult to know a culture that you haven’t been raised into. Some cultures are very different to our own and take some adapting to. This is why we tend to think in stereotypes that we derived from the media, from hearsay, etc.
But these are assumptions that you need to question. Always be aware that we have a certain bias and preconceived ideas about other nations, which can range from cultural stereotypes to – and there is no nice way to put it – downright racism. Those ideas are the lens through which we perceive foreign countries. It’s nearly impossible not to have them, so the next best thing is to be aware of them and test them.
Are these ideas holding you back? Would you “never do business with the Chinese” because “they are like this”, or “like that”? Think of a foreign country, and consider the first thing that comes to your mind: the Spanish are proud, the French all wear berets, the Italians all own Vespas… This cookie-cutter mode of thinking is not helpful at all in business.
If you want to export to a given country you will have to do extensive market research. And market research also consists in getting a finer, more complex idea of who your (foreign) customer is. If you’ve ever heard the advice that you should get into your customer’s head, now is the time to really put this in practice: can you truly get into the head of your Saudi Arabian customer? Do you know what their thinking habits are? Do you know what makes them tick?
In-depth market research is in fact a way to look beyond national stereotypes. And it highlights the fact that non-monetary exchanges are essential to business: it will be difficult to build sustainable trade partnerships if you don’t know, like and trust your (foreign) partners. When I was in Malta I became interested in other ways Malta and Ireland could become closer: student exchanges, cultural exchanges… When you bring two countries closer, everybody stands to benefit.
One very simple thing to do would be to join the local cultural exchange club. Polish? Brazilian? Russian? German? You can certainly find a club not far from where you live and immerse yourself in a foreign culture, also taking advantage of an original networking opportunity. It will stand you in good stead when you want to do business in that culture – or in any other culture: trying to adapt to foreign ways is a good mental workout generally.
And remember the Enterprise Ireland workshop entitled “Excel at Exports Selling”: one of the modules is “Doing Business in Different Cultural Environments“. You could attend this workshop, too.
So get out of your shell!
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