Meet the Ground Breaker’s

Digitalisation can be a great leveller for Irish SMEs

Irish SMEs have responded to the impact of the Covid-19 pandemic by accelerating online and digital initiatives and placing an increased focus on sustainability. These are among the main findings of the latest global EY SME survey which showed that although 82% of Irish SMEs have been negatively impacted by the pandemic to date, the resulting disruption has also amplified opportunities for digitalisation and a pivot toward the development of more sustainable business models. Indeed, more than half (54%) of those surveyed plan to change business models in response to new market conditions. The EY survey examined the impact of the pandemic on more than 5,600 SMEs in 16 countries across the world, including 310 in Ireland. The largely positive response to the challenges thrown up by the pandemic is particularly heartening for a country like Ireland where SMEs form the bedrock of the economy, accounting for 99% of active businesses and employing around 68% of the private sector workforce. The importance of the SME sector to the Mid-West region is even more profound. According to the 2020 CSO Business Demography survey, SMEs in the Mid-West employed around 122,000 people, accounting for 82% of total business employment in the region. While every Irish SME has been impacted by the pandemic to one extent or another, it is interesting to note that 13% of them say it has had a positive impact on their business. Furthermore, 21% have seen only a slightly negative impact and have been able to perform well despite the pressure and the uncertainty. Unsurprisingly, revenue and profit margins were the areas hardest hit. However, 45% of Irish SMEs said there was actually no change in their revenue or that they had seen turnover increase despite the pandemic. A similar number (47%) said there had been no change in their profit margins or that they had seen an increase. And 79% of Irish SMEs said that their brand reputation had either remained intact or improved. Many of these impacts are likely to be short-term or transient in nature. As we move on from the pandemic and Brexit, SMEs will have to meet new challenges presented by an increasingly competitive global marketplace. In that light, the longerterm effects of the disruption experienced over the past two years are to be welcomed. Irish SMEs have responded by accelerating digitalisation initiatives with more than a third (36%) of them reimagining their business processes online, and one in 10 (11%) planning to move to an e-commerce or online-only model. That gathering momentum will have long term positive impacts for Irish SMEs generally, and for the highly exportfocused SME community in the Mid-West in particular. For a long time, Irish SMEs have found themselves effectively locked out of a range of markets such as fashion, health and beauty, consumer products, and food and beverage due to high entry costs and highly competitive established brands. Local entrepreneurs with innovative, original products with well-crafted brands and a clear understanding of their customers and their needs are using digital tools to establish a market presence and voice. Authenticity of brand and product, deep understanding of target markets and skilled and persistent digital engagement with customers are critical to unlocking online growth and entrepreneurs and SMEs in the Mid West region have shown themselves well capable of doing all of this on a global basis during the pandemic. In short, digitalisation has the power to act as a great leveller which allows local SMEs to take on global brands and win. It also has enabled businesses to withstand disruption and take advantage of the opportunities thrown up in its wake. The pandemic may have uncovered levels of digital exposure that many businesses didn’t realise they had, but organisations with sophisticated digital platforms and systems were able to react quickly with less disruption – both in terms of flipping to remote working with no notice, but also in how they served their customers and their ability to continue to generate revenue. Sophisticated technology, data and systems are increasingly what help businesses differentiate themselves from the pack in today’s world. Today’s high-growth businesses are firmly focused on digital customer experience, CRM, supply chain optimisation, and projects that utilise technologies like AI and robotic process automation to improve business efficiency. And these technologies are now available within the cloud on a pay as you use service model bringing them within the reach of even the smallest SMEs. Of course, the impact of the pandemic has by no means been uniform. We only have to look at hospitality and tourism businesses here in the Mid-West to witness at first hand how some sectors have suffered more than others. That said, businesses that invested in their digital capabilities, both from operating and sales perspectives, have found the necessary changes in business and operating models more achievable. Finally, it was also encouraging to see that 60% of Irish SMEs say that running a sustainable business is very or extremely important to them. It is clear that health and wellbeing as well as environmental sustainability have increased in consumer consciousness. SMEs that can demonstrate how they can make a difference in these areas are more likely to prosper rather than succumb to threats in this regard.

By Leanne Storan

Director, Tax and Law and Eanna Brennan, Director, Strategy, EY Limerick.

Meet our Groundbreakers

Spring is well and truly underway in Limerick, bringing with it sunshine, daffodils and a much-needed boost in the region’s mood after two tumultuous years.

The Limerick Chamber worked shoulder-to-shoulder with our community during this time. We were honoured to be in a position to offer support to help deal with the challenges, and only too glad to celebrate our members’ many successes, too. The Limerick Chamber Regional Business Awards presented just such an opportunity last November. The tenth annual event offered an afternoon of well-deserved praise and recognition for the many business owners, presidents, directors and executives who shepherded their teams through the toughest of economic environments. Co-hosted by The Technological University of the Shannon: Midlands Midwest (TUS), the awards were designed to acknowledge companies in the local region who strive for success each

day – to recognise their hard work, commitment and innovative approach and to celebrate their contribution to the growth of their industry and in turn the region itself. Additional and much-valued sponsors included AIB, Holmes, Skillnet, BDO, Ernst & Young, Northern Trust, University of Limerick and Limerick City and County Council. With the new year in full swing, Limerick Chamber caught up with some of the winners of the 2021 Regional Business Awards to see what impact the recognition had on them and their teams. Croom Precision Medical was named overall Business of the Year 2021 – becoming the first SME in the awards’ history to gain the title. The County Limerick-based company designs and manufactures components for the global medical device industry. The firm, established in 1984 by Paddy Byrnes, specialises in precision engineering, including machining and handling precious metals for use in sterile environments. In 2018, Paddy’s son Patrick took the helm, joining the family business after a successful career with Stryker. The next three years were something of a baptism of fire for Patrick: “We had preparations in place to deal with Brexit, but COVID-19 came as quite a surprise,” he says. “We’re primarily focused on elective surgeries – hip

or knee replacements, for example – which were largely cancelled during the early days of the pandemic. Sales were hit hard, and we’re still not back to pre-2020 levels.” That said, the firm continued to grow despite these challenges, mainly due to their 38-year commitment to innovation, investment expansion, strategic acquisition and service performance – all key factors in the Awards judging process. A focus on research and development in particular started to pay key dividends, with 3D-printed implants becoming a core offering. “We’re lucky that we’re undergoing a period of rapid growth at the moment,” Patrick says, “which means we’ve more than doubled our workforce to 100 people and we’re actively expanding our facilities to handle the increase in demand.” The Limerick Chamber Business of the Year Award brought very specific benefits, Patrick says, not least the opportunity to celebrate in person: “The ceremony was one of the first social interactions we had since the beginning of the pandemic,” Patrick points out. “It was really great to catch up with the Limerick Chamber team, to connect with the sponsors, and spend time with the local business community”. The accolade also plays an important role in recruitment, which, as most of our members can attest, is an increasingly challenging part of operations. For Patrick and Croom Precision Medical, being an award-winner “helps to attract the best talent – they want to come and work in a dynamic, exciting environment, a place where every day is different and the work is recognised and lauded by respected organisations such as Limerick Chamber”.