Irish economy transformed by trade opportunities since joining EU

The more creative side of the EU was in evidence at the European Innovation Council (EIC) summit in Brussels just over a year ago when the European Commission announced the winners of the annual EU Prize for Women Innovators. The award is given to the most talented female entrepreneurs from across the European community and associated countries who have founded a successful company and brought innovation to the market.

A total of 21 firms were shortlisted and no less than seven of them were Irish. As it turned out three companies from Denmark, the Netherlands and Israel won the main prizes, worth €100,000 each. But an Irish business was chosen for the Rising Innovator prize, which includes €50,000 cash, awarded to exceptional innovators under the age of 35.

The winners were Ailbhe and Isabel Keane, founders of Izzy Wheels, which creates fashionable wheel-covers for wheelchairs. Recalling the great occasion recently, Ailbhe Keane told The Irish Times: “Winning the award was a huge dream for us. We put so much love and hard work into building our brand, so it was incredible to receive such enormous recognition from the EU. We are deeply motivated to create valuable products and collaborate with exceptional people in order to foster a more inclusive world.”

Izzy Wheels began as a college project in 2016 when Ailbhe was in her final year at the National College for Art and Design in Dublin. She recalls: “I created a collection of colourful wheelchair wheel-covers that matched my sister’s outfits. Izzy, my younger sister, was born with spina bifida and has used a wheelchair all of her life.

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“She always felt that her wheelchair was the first thing that people noticed about her, but it wasn’t a reflection of her personality. As soon as she put the colourful wheel covers on her wheelchair people began interacting with her in a really positive way. Strangers would stop her on the street to compliment her wheels.”

Ailbhe described how Izzy Wheels has grown from the kitchen table into a global brand, shipping to over 60 countries – “and most importantly, it has provided an outlet for expression and individuality to wheelchair-users all over the world”.

There was more good news for Irish women innovators when the prizes for 2022 were announced at the European Innovation Council summit in Brussels on December 7th last. Dr Ciara Clancy, founder and CEO of Beats Medical, a digital therapeutics company specialising in the treatment of neurological and CNS (central nervous system) conditions, was one of the three winners of the main EU Prize for Women Innovators. Niamh Donnelly, co-founder of Akara, a company developing robotic and artificial intelligence approaches to issues such as disinfecting hospital rooms, was one of the three winners in the Rising Innovators category.

The competition is funded by the EU’s Horizon Europe programme for research and innovation, and managed by the European Innovation Council and the Small and Medium-sized Enterprises Executive Agency (EISMEA). The State agency Enterprise Ireland is involved and promotes Irish engagement with the funding programme.

More generally, Enterprise Ireland works in cooperation with Irish companies from across the spectrum to win export sales. A spokeswoman explained that opportunities in this regard in the European Single Market are enhanced by lower costs and unfettered access to 26 other member states with a total EU population of almost 450 million and gross domestic product (GDP)of €15 trillion thanks to the absence of customs, tariffs and borders and the positive advantages of free movement of people and products as well as increasing regulatory alignment.

At this stage 20 member states with a total population of 350 million and GDP of €13 trillion have adopted the euro as their currency, leading to increased transparency and the absence of foreign exchange-related costs for Irish firms when selling to the other euro zone countries. Enterprise Ireland has 13 offices in 11 EU member states

Despite being an island off the coast of mainland Europe, Ireland’s connectivity is strong, with over 1,300 flights a week to Europe from Dublin airport alone. One of the more positive outcomes of Brexit is that maritime connections with mainland Europe have greatly increased, e.g., weekly crossings to France have gone up from 12 to 50 in the past two years.

Fifty years ago, when Ireland joined what was then called the European Economic Community, total Irish exports at a global level were €1.1 billion, most of them to the UK. Enterprise Ireland says that its client exports to the euro zone are almost six times this total trade and have grown by almost 85 per cent over a 10-year period, from €3.27 billion in 2011 to €6.04 billion in 2021.

The latest figures available for the number of people employed by Irish companies across the EU is 234,327 and many of these are working for our larger multinationals such as CRH, Kingspan, Smurfit Kappa, Kerry and Icon which have operations in mainland Europe.

Asked to comment on the results of our half-century in the EU, Fergal O’Brien of the Irish Business and Employers Confederation (Ibec) said: “The Irish economy has been transformed by the trade opportunities provided by our 50-year membership of the European Union. Both access to the EU Single Market and the benefit of EU trade deals with the rest of the world have opened up many new and prosperous market opportunities for thousands of Irish businesses.

“When we joined the EU in 1973 Ireland had a significant trade deficit, was reliant on the UK for 55 per cent of merchandise exports and had a very narrow export base which was predominantly agriculture-related. Some 50 years later our trade surplus is over €60 billion and we have a diversified export base across products and market destinations.

“The UK remains a key trading partner but the diversification benefits of EU membership means that it now accounts for just 10 per cent of goods exports. Ireland’s membership of the EU also helps to attract substantial levels of foreign direct investment, which supports the development of small and medium-sized enterprises (SMEs) and strong ecosystems in a complex range of innovative high-tech manufacturing and services enterprises.”

A spokesperson for the Industrial Development Agency (IDA Ireland), which is responsible for the attraction and retention of inward foreign direct investment (FDI) to this country, said: “Many of the world’s leading businesses have chosen Ireland as an attractive location from which to access the EU Single Market. The numbers of people directly employed in the IDA-supported multinational sector in Ireland has now reached 301,475, which is the highest FDI employment level ever and a 9 per cent increase on 2021. Fifty-two per cent of the investments won in 2022 were for regional locations, with employment growth recorded in every region of the country. As a member state Ireland benefits from EU market access rights and client companies note Ireland’s unwavering commitment to EU membership.”

Prof Iulia Siedschlag of the Dublin-based Economic and Social Research Institute (ESRI) believes that, overall, our presence in the EU has improved our economic and social wellbeing.

“Ireland’s EU membership has led to increased trade and efficiency gains associated with a better allocation of resources in line with comparative advantages and increased specialisation. Pro-competitive effects associated with market openness have led to lower prices and a greater variety of goods and services available to Irish consumers, increased investment and greater economic growth and prosperity. Ireland’s trade integration with the EU has incentivised and enabled Irish firms to enhance their innovation, exports and productivity.

“Ireland’s access to the EU Single Market has been an important factor for its attractiveness to foreign direct investment particularly by multinationals with headquarters in the US.”

She cited a recent analysis by the European Commission which found that if the Single Market didn’t exist the combined effects of higher trade barriers and less competition would have led to worse economic performance in the long run in all EU member states. “In Ireland’s case the GDP would have been lower by 13 per cent, consumption lower by 23 per cent, investment lower by 24 per cent, exports lower by 17 per cent, imports lower by 22.5 per cent, the capital stock lower by 19 per cent and employment lower by 2 per cent . The estimated negative effects on Ireland’s economic outcomes are above the EU averages.”