The UK’s vote to leave the EU had an immediate, devastating economic effect on many Irish industries. To take just one example, by the end of 2016, six months after the referendum, around 10% of all Irish mushroom farms had gone out of business. Their total reliance on the value of sterling, which nosedived, meant their profit margins vanished almost overnight.
Since then, other UK-dependent Irish businesses have either scaled back investment plans or, along the Border, folded completely. Many have long-established, hard-won relationships with British customers, suppliers and retailers built up over decades. However, restricted market access, tariffs and customs delays in the event of a no-deal Brexit, which now seems almost inevitable, will have serious consequences. How can we minimise these effects?
Digital provides businesses with a way to reduce their exposure to Brexit by selling into new markets within the EU single market and customs union. The global power of the internet means that Irish businesses are no longer limited by the natural or political borders of Ireland or the UK. A small business in Tullamore can sell and ship to customers in Tokyo, Toulouse and Tel Aviv. Their online shop can remain open 24/7, 365 days a year. The internet has enabled a new, fast and flexible kind of business, which can put even the smallest Irish producers in all major markets at once.
In 2019, this probably seems like stating the obvious. The internet has been in Irish homes for 30 years. We shop on Amazon and connect on Facebook. Nearly all of us have smartphones and social media profiles. In many ways, the internet is as “ordinary” to us as running water and electricity.
But the data suggests that even though most of us are online and buying products, few Irish businesses are turning this “new normal” to their advantage. The latest IE Domain Registry Digital Health Index shows that less than a third of all Irish SMEs can take sales orders through their website. Even fewer can actually process sales online. Recent research from the European Investment Bank supports this, showing that indigenous SMEs are much slower in leveraging digital solutions to reduce costs, drive innovation and expand market presence. Meanwhile, the Irish consumer isn’t going without—they’re simply spending abroad.
E-commerce is worth over €12 billion to the Irish economy every year, but the majority of that ends up in the wallets of international retailers. With Brexit just days away, now is the perfect time to reverse this trend and begin a mass digital activation of Irish SMEs. Indeed, Brexit can be the jolt needed to accelerate positive and long-lasting change.
There are some important, useful steps that small businesses can take now. For the minority that already sell online, their focus should be on deepening relationships to retain customers in Ireland and building new ones with those in countries other than the UK. That means investing money in online marketing, social media best practice, market research and logistics.
For SMEs that have no online presence whatsoever (a surprising 15%) or only a limited one, now is the time for change. The internet can no longer be viewed as a separate, “nice-to-have” business strand. An online strategy is just as essential to a company’s success as a capable team or compelling product.
Websites, social media profiles and online shops can be set up in a matter of hours using affordable software. This software is designed to be used by people without any knowledge of coding or advanced computer skills. Many sectoral bodies and government agencies, such as the LEOs, offer workshops and funding schemes to help jumpstart SMEs’ digital ambitions.
However, as a country, we can do far more to change Ireland’s attitudes to digital business. Whole towns and sectors must be transformed. Certainly, there is no small appetite for this. In 2018, IE Domain Registry recognised Gorey, Co Wexford as Digital Town 2019. Bringing high speed broadband to the town was an enabler for business, the community, education and employment. The town was recognised as one of Ireland’s most promising digital hubs, having championed “de-commuting” and remote working in Co Wexford. Skibbereen, via the Ludgate Hub, has gigabit broadband, which allows local businesses to operate in a remote part of Ireland to connect with customers nationally and across the world. The most innovative SMEs are investing in digital and experimenting with new technologies. Read more about Gorey, Digital Town 2019
How can we ensure that these encouraging developments take place on a national scale? As part of a new initiative, IE Domain Registry is actively working with representative organisations and local government to create new, more intuitive ways for SMEs and local communities to access digital skills training and funding. With the right backing and access to resources, Irish towns and businesses can power through Brexit and open up to the global digital marketplace.