Five areas of competitive advantage

Expertise in markets: The State's industrial development agencies should place professionals with international sales and marketing experience with domestic businesses to help them bridge the export gap with the multinational sector, the Enterprise Strategy Group's Report says.Five areas of competitive advantage: where Ireland needsto get ahead according to the report

The report points out that the strong overseas sales growth of the last decade masks the fact that exports from foreign-owned multinationals in the Republic have expanded rapidly, while those from indigenous business have stagnated.

Official figures show that between 1990 and 2002, exports from the multi-national sector grew from just over 10 billion in value to 70 billion. In the same period, overseas sales from Irish companies grew 4.6 billion to €8.7 billion.

"This average annual growth rate of 5.5 per cent is in nominal terms, and when inflation taken into account, the real growth for indigenous companies has been negligible," the report says.

It adds that two domestic categories - food, drink and tobacco and other manufacturing - which account for 68 per cent of sales by indigenous companies, recorded little or no sales growth during the last decade.

The report identifies three key problems that have to be tackled to redress the balance: a scarcity of sales personnel with the right background, a perception that Irish marketing graduates lack practical experience; and the fact only 25 per cent of sales personnel in Irish small and medium-sized enterprises (SMEs) have qualifications in marketing, compared with 41 per cent in overseas SMEs. To deal with this, the report recommends the IDA and Enterprise Ireland establish a programme to place 1,000 graduates and internationally experienced professionals in Irish companies to "augment the stock of national sales and marketing talent". It adds that this should be complementary to existing programmes.

It also calls on the Department of Enterprise, Trade and Employment to establish a dedicated export unit within Enterprise Ireland with its own budget and leadership, to develop a more focused approach to export market intelligence and promotional activities.

The report says that higher education institutions should incorporate work placements and modules, focused on businesses' practical needs, into sales and marketing courses. Colleges should also make those placements and modules available to students on technical courses.

Another problem in this area is the fact that a lot of multinational exports from this country are directed from overseas, leaving Irish people in situation where they are not dealing with the people buying the goods that they are making.

"Foreign-owned companies in Ireland generally lack the business functions that engage with customers on a more active basis and build deep relationships with them," it says.

The report says that the country's marketing expertise would develop if the State successfully encouraged multinationals to locate activities like market research, Internet sales, lead generation, target marketing and sales management in this country.