Scotland’s closest international trading partner is growing in importance – and for very good reasons
In a world of opportunities, it is perhaps easy to overlook those right on the doorstep.
Although technological advances and improved travel connections now give Scottish businesses access to the farthest flung corners of the global market, its closest international trading partner – Ireland – has become an increasingly important destination in recent years. It has climbed up to joint-third in the league table of Scotland’s biggest export markets behind only the US and the Netherlands – where the figures are skewed by the ‘Rotterdam-effect’ of oil exports passing through the port.
The £2.8bn of goods that headed to Ireland from Scotland in the latest 12-month period was more than double the figure in 2019, and more than three times the level of exports to China.
Jerry O’Donovan, Consul General of Ireland in Scotland, says the ease of doing business for Scottish firms in Ireland is a major attraction.
“I think people often just look at the hard trade figures but we perhaps tend to forget about the cultural piece which is a very big factor,” he points out.
“In terms of business and financial practices and the legal system there are many similarities with the UK which makes it a good place to invest, especially for new exporters. There are very few barriers for trade between Scotland and Ireland.”
For David Howarth, managing director of Inverness-based medical device consultancy iDE8, the impact of Brexit has been a key consideration in his firm’s decision to increase significantly its focus on the Irish market.
“We have been involved with clients in Ireland since we launched the business nine years ago but the consequences of Brexit have definitely made us look at it more closely,” says Howarth, who is joining a major Scottish trade mission to Ireland in November organised by Inverness Chamber of Commerce and Ayrshire Chamber of Commerce.
“The Irish market is seen as the gateway to the single market as it is now the only native English-speaking member country and a lot of major US companies have established their EU bases there,” he explains.
As part of its expansion plans in Ireland iDE8 is in the early stages of looking at setting up a physical office, possibly in Dublin or Cork.
With many exporters complaining that Brexit has significantly increased friction for UK companies looking to trade with the EU, O’Donovan points out that a key attraction of the Irish market is the continuing existence of the Common Travel Area (CTA) which means British citizens have the right to live and work in Ireland.
“That makes things far easier for businesses looking to work there. If you have a project or a services contract there which you need staff to work on you don’t need to apply for visas or working permits.”
As well as being a conduit to the wider EU trading bloc, the strength of Ireland’s economy currently makes it a particularly compelling market to look at.
The Irish economy grew five times faster than forecast last year, leaving it in the enviable position of having a budget surplus of some £7.4bn for this year.
For companies such as Edinburgh-based Anturas Consulting, the investment that windfall is enabling across Ireland’s infrastructure in areas including transport and electricity networks is a major attraction.
Managing director Catherine Leech’s experience of more than a decade of living and working in Ireland provided practical knowledge to support Anturas’ decision to establish an office there in 2022.
Leech had lived in Ireland during the global economic crisis which hit the country particularly hard but says the transformation since has been remarkable.
“The fact that the Irish are looking at building their own sovereign wealth fund highlights what a strong economy they now have. They have very grand plans to improve their infrastructure but they’ve just not got the people to do it and there’s a lot our firm can offer on these major programmes to help get them moving forward.”
The infrastructure management consultancy, which is involved in projects including trams, rail and power networks, is hoping to increase its presence on the ground to four or five people over the next 12 months.
“Ireland is the same as other markets in that people like to do business with organisations that have quite a strong footprint in the market,” Leech explains.
Although Leech has so far found the logistics of having a base in Ireland very straightforward, she points out a lack of accommodation is a potential issue for those looking to employ staff, particularly in Dublin.
“That could be a problem if you are looking to employ people although these days it is obviously easier to work from anywhere as long as you can be on the ground when needed.”
Although the fact that Ireland effectively has full employment currently means recruiting staff may also pose challenges, O’Donovan says that presents an opportunity for Scottish firms.
“Businesses will be looking at bringing in external resources or outsourcing work to help meet demand for their products and services,” he says.
