Enterprise Ireland in £6m Europe plan

Enterprise Ireland yesterday introduced a £6 million (€7.62 million) initiative to encourage Irish companies to sell more in continental Europe. It also urged companies to look at moving labour intensive operations to eastern Europe to escape high salaries at home.

The goal of the export strategy, called "Euro-opp 2003", is to double the companies selling more than £5 million annually from the current level of 55 within three years.

The rationale is that, in volume terms, Ireland currently exports more to Britain than to continental Europe even though the population of the UK is only 20 per cent of that of the continent.

The second initiative will see Enterprise Ireland encouraging Irish firms to diversify their sourcing of components and materials, most of which currently come from Britain, and to outsource labour to eastern Europe.

To escape high salaries within the EU, Enterprise Ireland suggests that labour intensive work be moved to Poland, where wages are about a third what they are in Ireland. Hungary is also recommended. "A lot of US personal computer manufacturers are going to eastern Europe," Mr Murphy said "IBM, Dell, Gateway are all looking at low-cost labour areas. You have to follow the investment."

The strength of the UK economy and sterling have given Irish businesses a 25 per cent competitive edge in Britain. "Irish companies have taken their focus off continental Europe," said Mr Gerry Murphy, Enterprise Ireland's director for industrial products and Europe.

Mr Murphy announced the export initiative at a reception and dinner held here for an Irish - not French - audience. Why Paris? "To emphasise the point - to give it a European perspective and practice what we preach," Mr Murphy said. A total of 13 Irish companies already doing business in France - about half of them are SMEs - were invited as examples of what can be achieved. The Tanaiste, Ms Harney, was supposed to officiate but had to stay in Dublin to deal with industrial disputes.

As part of Euro-opp 2003, Enterprise Ireland is establishing "incubator units" in Germany, France, the Netherlands, Spain, Sweden and Austria so that Irish companies would have ready-made offices with reception areas, computers and professional services. These facilities will be provided at cost price. Although they can accommodate short visits, the idea is to assure customers that the strength of the Irish company was there to stay.

The £6 million funding for financial support for companies which want to invest in European markets will help fund market research, research and development to adapt products and the hiring of specialist staff. "We're not going to grant funds for one-off items," Mr Murphy said. "If there's a viable long-term plan for a serious investment, we're willing to participate."

Different languages and business cultures were a major barrier in doing business on the continent, he said. Enterprise Ireland was working with universities in Ireland to organise courses to address this. And to dissuade young Irish graduates from going to work for multinationals, he added that Enterprise Ireland was offering SMEs funding to hire them. Greater responsibility and business courses on the continent were proposed as incentives.