Export activity to Germany can be the way forward

Fatoumata Tall, senior consultant, OCO Global, on new opportunities

AS a small open economy, Northern Ireland’s prosperity relies upon looking beyond its borders, and if we’re serious about tackling our structural productivity weaknesses, encouraging more SMES into export and international partnerships will be key. Understanding those overseas opportunities and getting a feel for new markets is the first step.

Belfast-based OCO Global is an advisory firm in the international trade, investment and economic development sector.

With staff on the ground in 14 offices across four continents, understanding the geo-political trends which shape international trade is the basis upon which OCO Global advises governments, economic development agencies and firms seeking to grow internationally.

Without being too brash, OCO’S overseas offices have ‘followed the money’ and we’ve established a presence in markets which are dynamic and offer strong growth potential, including Frankfurt.

Although Lufthansa operates direct flights between Belfast and Frankfurt, it’s probably a city and region which most aren’t overly familiar with. Located in the State of Hesse in western Germany, Frankfurt is probably the country’s most international city and Europe’s financial centre. It’s home to the European Central Bank, the Bundesbank and was the location of the Rothchild’s first bank. With 700,000 residents the city is a vibrant financial, cultural and commercial hub. It’s also prosperous (GDP per capita is higher than London or Paris) and its transport connections are among the best in Europe.

Frankfurt is a city with a medieval square at its core and skyscrapers on the horizon — it’s sometimes nicknamed ‘Mainhattan’ after the local river. For the culturally minded it offers opera, ballet, art and theatre, but there’s also a great nightlife and plenty to whet the appetite.

Make sure you try the local apple wine and green sauce on a trip to Grosse Bockenheimer Strasse, also affectionately known as ‘pig-out-alley’. There’s also a surprisingly large Irish diaspora which provides a readymade support network.

Culturally, doing business isn’t hugely dissimilar to Northern Ireland, particularly as German ‘Mittelstands’ (SMES), often family-owned and based in smaller cities, are the backbone of the economy.

They’re characteristically dependable, rooted in their communities and proud of their products and services. Punctuality is viewed as a sign of respect and like most Germans, Frankfurters value fairness and reliability. They also have a great dry sense of humour, but usually leave it for social settings rather than the boardroom.

OCO opened its Frankfurt office last year to increase its German presence and access opportunities across central Europe.

We have 25 internationalisation specialists working with local economic development agencies, Mittelstands and British and Irish firms looking to break into or enhance their German presence.

With a population of 82 million, Germany is Europe’s largest economy, accounting for 21% of European GDP. Economically, things have been difficult with the Ukraine war coming hard on the heels of the pandemic, but there are emerging signs of recovery.

The country’s trade surplus reached 4.3% of GDP last year (above the average for the last two decades) and growth, while forecast to be sluggish this year (only 0.2%), is expected to quickly catch up with the Euro area average in 2025. As of last month, economic sentiment was at its highest for two years and inflation had fallen to a three-year low. Private sector R&D investment is up 8% to €81.8bn and wholesale gas prices are back to 2018 levels.

Structural problems remain such as an aging workforce which has impacted productivity growth, and a lack of public investment in infrastructure. Overall, however, this remains a large, prosperous market with good growth opportunities.

Germany is Northern Ireland’s fourth largest export market (£500m in 2021), but there’s scope to scale up activity. There are particularly strong synergies in Life Sciences (Germany is Europe’s largest healthcare and life sciences market), cybersecurity and agri-tech. Frankfurt hosts the world’s largest agricultural machinery trade fair and German farmers are investing heavily in technology (AI/BIG data, sensors and mobile apps).

With its large population and three million businesses, Germany is also a major fintech market. Car manufacturing also remains strong (Volkswagen and BMW produce 10% of the world’s electric vehicles). The popularity of Germany as a headquarters location for major global companies provides no shortage of opportunities across technology and science for suppliers with innovative solutions.

Frankfurt has much to offer for business and pleasure and is a great entry point to the EU. It’s a city which takes business seriously but has plenty of time for socialising. As the saying goes, ‘Erst die Arbeit, dann das Vergnügen’ — ‘Work first, fun afterwards!’