Firms must innovate and act now to get ready for Brexit

THE triggering of Article 50 on March 29, was a watershed moment for Irish companies and represents one of the largest structural changes in the global marketplace.

For Ireland, the impact of Brexit could be profound. More than 37pc of the exports of Enterprise Ireland-backed companies go to the UK and the exposure in certain sectors — such as food, construction and timber — is significant.

It is essential for Irish companies to use the period of the negotiations to prepare for the new world order, post Brexit.

If we wait until the new trading arrangements become known, we risk losing hardwon global market positions.

For Irish businesses, this means changing our business development plans and charting a different course towards new, more diverse export markets.

There are many questions that Irish SMEs need to consider in the context of Brexit, including their overall business strategy: logistics and supply chains; approach to currency-risk management; impact of potential costs such as tariffs; recruitment administration costs and visas; regulation and compliance; financing and the approach to entering new markets.

The starting point for any exporting business is to get an honest assessment of how well prepared the business is for Brexit.

To assist, Enterprise Ireland has developed a ‘Brexit SME Scorecard Tool’ — a starting point to help companies, and management teams, to begin to develop a Brexit response plan.

This online diagnostic helps companies to self-assess their level of preparedness for Brexit across six business pillars including business strategy, finance, sales and marketing, operations, innovation, and people and management.

The output is a report in a scorecard format that highlights the business’s level of preparedness against best practice.

It also contains a range of suggested actions and information, Enterprise Ireland services, seminars and supports.

Approximately 200 companies have already used the Brexit SME Scorecard to start their planning journey. Some companies are engaging with our teams around the globe to develop new markets.

Many realise that new markets will require different products or product modifications and we are helping them to make the necessary changes. Others are addressing competitiveness issues.

Innovation will be a key response to weathering the Brexit challenges and will drive our competitiveness.

Companies must innovate, adapt products and services for new markets and invent new processes and products, which will be essential to maintain profitability and ultimately support economic growth.

Enterprise Ireland will lead a major drive to increase the innovation capabilities and competitiveness of Irish companies through increased R&D funding and LEAN programmes.

Furthermore, we will help more Irish companies gain access to international markets with the aim of increasing exports outside of the UK by 50pc by 2020.

There is much speculation about what the end game will be — a hard Brexit, a soft Brexit or somewhere in between.

None of us know what the outcome of the final negotiations will be.

One thing is clear — we must act now, to make the smoothest possible transition to adapt to the new trading conditions.

I would encourage Irish businesses to complete the ‘Prepare for Brexit Scorecard’ to assess their Brexit exposure as a first step to developing and implementing a plan of action.