ISSN 1649-7589 VOL 10 | ISSUE 02 | SUMMER 2014

ALSO INSIDE THE DEAL DOWN UNDER Australia’s best opportunities for software and services LATIN LESSONS Mexico’s speedily reforming economy TELLY SALES TV3 goes international with 3 Studios EXPORTERS EXPAND THEIR FOOTPRINT IN AFRICA The move into Nigeria, Ghana and Kenya THE THINGTERNET: HARDWARE GETS A SOFT SIDE Why everyday products need to get smart

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THE MARKET COVER STORY Enterprise Ireland The Plaza 014 Innovate to grow internationally East Point Business Park Growing exports by managing innovation Dublin 3 T: +353 1 727 2954/2000 REGIONS AND SECTORS

PUBLICATIONS MANAGER 013 Are we on board? Duncan Black Business opportunities from Milan Expo 2015 E: [email protected]

EDITOR 022 The deal down under Mary Sweetman Australian opportunities for software and services E: [email protected] T: +353 1 727 2990 026 Latin lessons DESIGN & PRODUCTION A look at Mexico’s speedily reforming economy Boyle Design Group

PROOFREADING 030 Italy and Spain shine on Mary McCauley Harnessing synergies in southern European markets PRINTED BY Turner Print Group 034 In a class of its own The Market is sold by subscription Ireland pitches for Chinese students (+353 1 727 2970) 046 Exporters expand their footprint in Africa Readers may email comments and suggestions to the.market@enterprise- The move beyond South Africa into Nigeria, Ghana and Kenya ireland.com PEOPLE AND COMPANIES The views and opinions expressed in 010 Telly sales The Market are not necessarily those of Enterprise Ireland. Published by TV3 goes international with 3 Studios Enterprise Ireland Corporate Marketing Team. 038 Irish whiskey regains its spirit www.enterprise-ireland.com/en/ Smaller producers look to capitalise on strong tailwinds publications 049 Sky’s the limit for Irish travel software Travel and tourism software companies are flying high in international markets

BUSINESS 020 How to know if you’re not on top of product management Assess your company against our ten-point checklist 042 The Thingternet: Hardware gets a soft side Everyday products need to get smart by incorporating software

REGULARS 002 Noticeboard News for and from the export community 008 Diary What’s on, where and when 052 Gadgetry No strings attached 054 Good Reading Books worth reading 056 Market Intelligence Recently published market research MAGAZINES IRELAND MAGAZINES IRELAND IRISH MAGAZINE AWARDS 2011 IRISH MAGAZINE AWARDS 2009 BUSINESS EDITOR MAGAZINE DESIGNER 058 Trade Regulations OF THE YEAR OF THE YEAR Trade regulation and negotiation update

Enterprise Ireland is funded by the Irish 059 Travel News Government and part-financed by the European Union under the National Development Plan Flights and travel update 2007-2013. 060 City Guide Madrid

SUMMER 2014 | THE MARKET 002 Noticeboard Irish Business

Cool runnings for Ostia as Gartner endorsement boosts sales

artner doesn’t apply its across the spectrum but the most Gcoveted ‘cool vendor’ status successful areas are financial easily, so it was something of services, local government, also a coup when Irish software universities and retailers,” said company Ostia Solutions Power. achieved this recognition mere Ostia decided to approach months after engaging with the Gartner early this year, because respected technology research it found enterprise customers and analyst firm. would often ask for proof It helped that Ostia’s flagship that its technology had been middleware, Portus, isn’t some independently validated. “Our newly minted web app but is target markets are essentially the product of 50 person-years of listening to people like Gartner development. Its name derived and we believe it’s a huge boost SINEAD CROWLEY, EXECUTIVE Connecting Irish from the ancient Roman gateway to our business to have that level DIRECTOR, Portus makes data from legacy of endorsement from Gartner,” IIBN (IRISH innovation to UK industry INTERNATIONAL systems available on a variety of Power told The Market. BUSINESS NETWORK), AT THE at inaugural Ones to devices and applications. Ostia expects its newly acquired ONE TO WATCH To do this, many companies status, which was officially EVENT Watch event traditionally needed integration conferred in May, will help grow teams which made the process revenues to €1.5 million. “We’ll oinciding with President expensive and time consuming. be looking at increasing our sales Higgins’ state visit to Ostia addresses both of these fourfold based on this, and based C challenges in an agile way, using on other activity,” said Power. the UK this April, Enterprise software rather than people. “We “Ultimately, we see our business Ireland held an inaugural can cut integration cost by 70 per growing over the next three years cent but we can also show results to €10–15 million.” Ones to Watch workshop in days rather than weeks or and networking event for months. It’s the speed to market “Our target markets innovative Irish companies. that people are more interested are essentially in,” said CEO John Power. Hosted by the Embassy of Over the past two years, listening to people Ireland, London, the event Ostia has shifted its strategy like Gartner and we from being services-driven to believe it’s a huge was aimed at supporting high being product-focused. To that potential start-ups growth in end, it has been working more boost to our business the UK. Forty such businesses closely with partners such as to have that level of systems integrators and vendors endorsement from participated, joined by 60 of like Software AG, in order to their key UK customers and remain lean while growing Gartner” sales internationally. Ostia has JOHN POWER CEO OSTIA partners, including Facebook, customers in Spanish local Telefonica, Techstars, Vodafone, government, as well as large Marriott Group and The British banks in Germany and Norway. It is also represented in Australia, Fashion Council, as well as South Africa, the UK and US. The strategic UK experts and leading company employs 15 people and British investment institutions. expects to grow to more than 20 in the next two years. It is also The event was also attended by recruiting a direct sales operative the Tánaiste, Eamon Gilmore, for the UK market. “We’re seeing the biggest sales and by Enterprise Ireland CEO in financial services, insurance Julie Sinnamon. and banking. We have customers

THE MARKET | SUMMER 2014 003

Russian airline deal for OpenJaw

ne of Russia’s largest airlines, S7 OAirlines, has selected Irish company OpenJaw’s complete t-Retail Platform, to enable its customers to search, discover, plan and book their entire trip JIM FITZPATRICK, BROADCASTER AND CONFERENCE CHAIR; PAT O’HARE, as well as to shop across S7’s own and BUSINESSMAN AND FIRST ANGEL INVESTOR IN SURETANK; AND PATRICK JOY, FOUNDER AND CHAIRMAN OF SURETANK. partner networks, through codeshare Growing numbers of VC funds and negotiated prorate agreements. Air create positive funding environment ancillaries and high margin ground ancillaries, such as hotel, car, insurance, ith more local venture capital funding available than ever Wbefore, innovative Irish businesses have now got greater and transfers, will also be available for access to equity funding. That was the message from the 13th cross-sell within the booking flow. InterTradeIreland Venture Capital (VC) Conference, which took place in Belfast this May. “There is an array of funding and equity supports available to Irish high-growth companies, particularly venture capital, seed and business angel funding,” Drew O’Sullivan, InterTradeIreland’s lead equity adviser told delegates. “Over the last 12 months alone, we have seen a number of companies raising significant funds, including AMCS Group Logentries, Movidius, Sophia Search, Swrve, Intercom, Cleverbug and, of course, one of the biggest success stories led by an Irish team, Stripe. “What is particularly interesting to note is the growing number of local investors. Major overseas investors have also been attracted to Ireland,” he added, “including the likes of Highland Capital, DFJ Esprit, Polaris, Better Capital, Carlyle Cardinal, MML and Sofinnova …There has never been a better time for investor-ready SMEs to seek funding in Ireland.”

THE VSTREAM Cathx Ocean announces subsea vStream brings F1 Fans GROUP AND SAP HAVE BROUGHT F1 FANS TO engineering win with Bluefin Robotics to the heart of McLaren THE HEART OF MCLAREN Mercedes mission control MERCEDES ildare-based underwater technology company Cathx Ocean MISSION expects to more than double its workforce over the next 24 CONTROL. K rish creative and technology company The months with the creation of 50 additional jobs. The announcement, vStream Group has launched an online made during Enterprise Ireland’s trade mission to Texas, came as US- I initiative for SAP and the McLaren Mercedes based subsea engineering manufacturer Bluefin Robotics confirmed Formula One Team, which it says is truly a that it is to equip its high-speed Autonomous Underwater Vehicles ‘world’s first’. (AUVs) with subsea camera and laser-based imaging technology from The interactive video website gives motor Cathx Ocean. This is the latest in a number of recent deals secured by racing fans around the world exclusive access Cathx in Europe and the US in recent months. to the nerve centre of the McLaren team. Fans Companies in the defence, commercial and scientific space depend can interact with the 2014 McLaren Mercedes on Bluefin’s fast-moving AUVs for the completion of crucial subsea car and gain virtual access to the race trucks survey and engineering tasks, such as real pipeline visual surveying at and trophy cabinet as well as engaging in depths of up to 4,500m, where there is no room for error. an interactive on-board lap with 2009 world The Cathx M12 imaging system aboard the AUV extracts champion Jenson Button. The vStream information in realtime from the underwater images it collects, Group developed the site in conjunction with providing critical decision-making data to the AUV, thus saving Bluefin UK partner Right Formula, a major player in customers time and money. Formula 1 sponsorship activation.

SUMMER 2014 | THE MARKET 004 Noticeboard Irish Business

OpenHydro to partner in Bay of Fundy next generation tidal energy project

rish tidal technology company IOpenHydro has been selected by the Nova Scotia Department of Energy in Canada for a tidal energy demonstration project Historic joint Irish-UK- at the Fundy Ocean Research NI Mission to Singapore Centre for Energy (FORCE) test site. OpenHydro was selected ONE OF OPENHYDRO’S OPEN-CENTRE TURBINES, PICTURED ON THE SHORES Air Show as part of a competitive process OF CARLINGFORD LOUGH, CO LOUTH, undertaken by the department BEFORE DEPLOYMENT. his February, Ireland, Britain and Northern in its drive to progress the 16m commercial scale turbines. TIreland embarked on a historic trade mission, development of a tidal energy On successful completion, the with a joint branded presence at Singapore Air industry in the Bay of Fundy. project has the potential to be Show. The initiative was first agreed in talks OpenHydro will now proceed the world’s first multi-megawatt between An Taoiseach Enda Kenny and British with plans for deploying fully array of interconnected tidal Prime Minister David Cameron back in 2012. grid-connected 4MW tidal turbines, providing energy to The programme began with an aviation array to be in place in 2015. over 1,000 customers in Nova breakfast hosted by the Irish government, The array will consist of two Scotia. attended by close to 100 industry experts and with a keynote address by Dermot Mannion (formally CEO of Aer Lingus) deputy chairman of Royal Crisp maker cracks UK with Brunei Airlines. That afternoon, the Irish delegates Tesco stores deal were given exclusive access to ST Aerospace, the engineering section of Singapore Airlines. eogh’s Crisps has agreed a deal with Tesco UK, which will The three jurisdictions were represented on the Ksee the family’s hand-cooked artisan potato crisps go on mission by the Irish Minister for Jobs, Enterprise sale in 255 Tesco stores throughout the UK. Keogh’s Farm and Innovation, Richard Bruton; Stephen currently employs 40 at its farm in Oldtown in North County Hammond MP, Parliamentary Under-Secretary Dublin. “This is a brilliant boost for us,” said MD Tom Keogh. As of State for Transport; and Arlene Foster MLA, a small, family-owned business, this deal with Tesco UK opens a Minister for Enterprise, Trade and Investment. potentially massive opportunity for the business. Enterprise Ireland CEO Julie Sinnamon was also in “Tesco Ireland has worked with us to get our brand to this attendance. stage in the UK. The deal has the potential to allow us to double The following day, the ministers were joined our turnover in the UK quickly and opens up the chance to try by 30 companies from the three jurisdictions to additional markets in Europe where we don’t currently stock our open the first joint UK-Ireland branded trade show products.” stand at the air show. MINISTER OF STATE AT THE DEPARTMENT OF AGRICULTURE, FOOD AND THE MARINE, TOM HAYES, TD; WITH TOM KEOGH FROM KEOGH’S CRISPS AND JOHN PAUL O’REILLY, Singapore is one of the major international COMMERCIAL DIRECTOR FROM TESCO IRELAND. hubs for aerospace in the Asia-Pacific region, and Malaysia is also becoming a hot contender in this sector. The 10 member countries of ASEAN have ratified proposals for an ASEAN Single Aviation Market (ASAM) to be operational by 2015. ASAM will be modelled on a similar system to the European Union model, allowing carriers to cross over the skies of the 10 member countries freely. Irish companies already successful in the market include Cut-e, CarTrawler, Essco, Dublin Aerospace, Kerry Abrasives, Parc Aviation, Shannon Airport Authority and DAA.

THE MARKET | SUMMER 2014 005

National Competitiveness Council Healthy growth in UK as warns of upward cost pressures ViClarity lands NHS deal

n its 2014 ‘Costs of Doing show that labour costs are hen a product trial is cut short because the IBusiness in Ireland’ report, rising again, following a number Wprospective customer wants to move to a the National Competitiveness of years’ decline; industrial larger-scale project, it’s usually a good sign. That’s Council (NCC) has pointed to the electricity prices have increased how it proved for ViClarity, the Tralee-based start- Irish economy being at a turning in recent years; and an upward up which had been working with Southern Health point, with a disimprovement trend is evident across a range NHS Trust in the UK on a pilot scheme for its in overall relative cost of business service costs. compliance software. competitiveness and a series The NCC emphasised ViClarity’s software gathers information from of upward cost pressures the importance of multiple sites and presents it in dashboard format, emerging. Ireland’s international cost with a screen that is designed to draw attention to While the report confirmed competitiveness remaining problem areas in an organisation. that Ireland’s cost base has a key economic priority for Late last year, ViClarity won a tender to provide improved across a range of government and cautioned its software to 220 wards across 24 NHS Southern metrics, it noted that the country that further structural change hospitals. The key was winning over the users – is still a high-cost location is required to ensure that which were the hospital matrons – early in the pilot for a number of key business costs do not escalate, eroding phase. “If you can get someone excited as a user inputs. The NCC’s harmonised competitiveness gains already and they see it can help them, you’re on a good competitiveness indicators made. starting point because you’ve got inside allies: it helps with the procurement side, with the IT side and the tendering side,” ViClarity managing director Ogie Sheehy said. ViClarity created two modules in its software specifically for the NHS. The first allows matrons on their walk-around to record up to 300 criteria such as medicines control, patient care and hygiene on tablet computers. The second tool requests details from each hospital ward, including availability of beds, and the number of trained staff on duty, using it to provide a daily situational report. Hospital administrators can now see key operational information in real time. Initially worth more than £60,000 per year, it is ViClarity’s largest deal to date, according to Sheehy. “The beauty is, because it’s a recurring Pocket Anatomy wins Best revenue model, we have done the hard work during the pilot. At the end of the day, it’s one of 500 NHS European Start-Up award trusts in the UK. We’re looking at a much bigger picture. The NHS Southern is happy to market the ocket Anatomy, a start-up based in NUI Galway’s Business solution to other trusts on our behalf.” Innovation Centre, has won the ‘Boost’ Best European Start-Up P ViClarity worked with a UK partner which competition at The Next Web Conference in Amsterdam. As part of specialises in the healthcare sector when it was the competition, one hundred start-ups were selected from across preparing the NHS tender. The company also Europe, out of which 10 were shortlisted to pitch on stage at one of employs a salesperson based in the City of London, Europe’s top tech gatherings, attended by over 2,500 web, technology to target the UK’s financial services market. and business leaders. Pocket Anatomy was selected as the overall winner by a panel of judges from WeTransfer, 500 StartUps and TNW. The win comes “If you can get someone excited as hot on the heels of Pocket Anatomy’s achievement on the other side a user and they see it can help them, of the Atlantic – being only the third European company to join the New York-based Start-Up Health Academy. you’re on a good starting point because The Galway company’s 3D visual software solution has been you’ve got inside allies: it helps with the described as the ‘Google Earth of the Human Body’, facilitating procurement side, with the IT side and doctor-patient diagnoses communication and promoting patient and personal healthcare understanding. the tendering side ...”

SUMMER 2014 | THE MARKET 006 Noticeboard Irish Business

10 emerging countries “hot on the heels of the BRICS”

fter 10 years of frenetic growth, the ABRICS are slowing down sharply, according to the export insurance specialists Coface. Coface is now forecasting growth for 2014 of, on average, 3.2 points lower than the average growth these countries registered over the previous decade. At the same time, TRILOGY MD EDEL CREELY, PICTURED WITH ENTERPRISE IRELAND CEO JULIE SINNAMON AND TAOISEACH ENDA KENNY. other emerging countries are accelerating their development. Among them, Coface has Lateral thinking pays off in UK identified a ‘top 10’, with good production prospects and sufficient financing to support as Trilogy expands expansion. Acknowledging that there are significant s a relative newcomer to the IT services market in Ireland, differences in the business environments ATrilogy Technologies made an acquisition to gain new customers within the 10 economies, Coface has split quickly, so it’s not surprising the company chose a similar approach them into two strands of ‘new emerging’ when expanding to the UK. In April, the Dublin firm announced countries. In the first group are Colombia, the acquisition of b2Lateral, a provider of IT services, professional Indonesia, Peru, the Philippines and Sri services and consulting. Lanka, which have a sound business climate Trilogy managing director Edel Creely said the London-based (A4 or B), similar to that of the BRIC countries company hadn’t previously provided the kind of remote managed today. services which Trilogy currently offers, so there are opportunities Kenya, Tanzania, Zambia, Bangladesh and to upsell these services to b2Lateral’s customer base. “That’s a great Ethiopia comprise the second group, having place to start in a new market,” she said. very difficult (C) or extremely difficult (D) Creely said there was a good cultural fit between the two business environments, which could hamper companies, and b2Lateral’s strengths in virtualisation technology their growth prospects, Coface says. complement Trilogy’s services. “We’re bringing a new set of services “Naturally, it will be more difficult for the to their business that they can go out and sell. It’s very important if second group of countries, which could take you want to bring the team with you in acquiring a company, that longer to fully realise their growth potential. it’s something everybody’s comfortable with. There was no doubt on However, their business environment both sides that it was the right thing to be doing,” she told The Market. problems are relative: in 2001, the quality of When looking at its growth strategy during 2013, Trilogy governance in Brazil, China, India and Russia originally considered setting up a reseller channel to serve the UK. was comparable to that of Kenya, Tanzania, Having researched that market and commissioned a report from an Zambia, Bangladesh and Ethiopia today,” expert consultant, it ultimately decided against this option. Instead, says Julien Marcilly, Head of Country Risk at it sought a corporate broker with knowledge of the UK’s IT services Coface. sector and prepared a specific brief about the type of company it “With growth in developed countries being wanted to acquire. structurally weaker today, the ‘new emerging’ “In our case, we’re selling to sub-1,000 user companies, so you countries may benefit less from trade towards need a number of good salespeople on the ground. That local these countries than did the BRICS in the relationship is still an important part of what you’re selling. So that’s 2000s. Their growth rates will depend more why this route to market will work well,” said Creely. on their domestic markets and on exports to Trilogy will use its own brand in the UK, and is developing a new other emerging markets,” he added. strategy for the market with the help of Enterprise Ireland in London. “We’re not expecting to sell to the UK from Ireland. It will be a UK “With growth in developed countries company, messaging and branding that will be relevant,” said Creely. being structurally weaker today, B2Lateral employs 20 people. At the same time, Trilogy is creating 30 new jobs and moved to new facilities in Dublin to accommodate the ‘new emerging’ countries may growth of more than 250 per cent in the past four years. The company benefit less from trade towards these anticipates its turnover will be more than €10 million on the back of countries than did the BRICS in the the expansion and acquisition – where it all started in 2009, following the acquisition of the technology services firm IT Focus and a merger 2000s.” with another, TeamDBA.

THE MARKET | SUMMER 2014 Equine Markets 007

MARION HUGHES FROM KILKENNY, RIDING HER HOME-BRED HHS HERITAGE FORTUNA IN THE GRAND PRIX AT DUBAI SHOW JUMPING CHAMPIONSHIP, 2014. THE HORSE IS OWNED IN PARTNERSHIP WITH MARION AND HH SHEIKHA MAITHA BINT MOHAMMED AL MAKTOUM, DUBAI.

ere in the United Arab in Syria, other Arab nations are PROSPECTS HEmirates, love of horses runs basing their horses in the UAE, The Middle East, and SPORT in the blood of most locals just and European riders are also particularly the thoroughbred like it does back in Ireland. coming here for the FEI World racing nations of the UAE, OF KINGS Thoroughbred racing begins Cup Shows at the start of the Saudi Arabia and Qatar, are in November, with meetings year. proving to be successful targets taking place throughout what The Dubai Show Jumping for exporters of racing and SOARS IN is a short season. Meydan, and Championship (CSI-W Dubai) endurance-related products, its iconic grandstand, is home is considered by many as the such as feed, supplements, to Dubai International Racing premier show in the Middle bedding and saddler items. THE UAE Carnival fixtures, including the East, featuring the region’s top Lack of grazing pastures and The Middle East is Dubai World Cup – the world’s showjumpers as they compete the harsh climate mean that richest horse race, with a $10 over three days for a share of a thriving equine upkeep of competition horses million prize fund, and the word the Dh750, 000 in prize money. is even costlier than elsewhere; market, with lots of is that it will increase in value It is an ideal occasion to meet the average cost of keeping a potential for Irish soon. the Arabian equestrian set in a sport horse in livery in Dubai companies. Conor The Dubai World Cup, at the friendly environment, with a for example is €1,000 per week. Hyland reports from end of March, heralds the end of great competition. Hay and feed is imported from Dubai. the racing season, when a large countries as far away as Canada, number of horses return to the ENDURANCE the USA and Australia. UK, Ireland and South Africa The industry is also supporting It can take some time to for the off-season. This is the the development of home-grown gain insight into the culture time when purchasing decisions businesses. Several studs in the and equine market of the UAE. will be made regarding the UAE breed pure Arabian horses, Business is built primarily on coming season. However, tender not only for races but also for relationships, so you can expect processes often extend into horse beauty contests, which a number of visits before any September before being awarded. are popular across the Gulf-Arab real business talk is done. The Credit terms can vary from 90 region. Likewise, many of the companies that have done well day to anything up to 500 days. world’s leading endurance horse- in the region are the ones who racing stables are based in UAE, commit to the market and are SHOWJUMPING with satellite yards in Europe. out on a regular basis and being In recent years, we have also seen These are essentially ‘five-star seen at the right events. a greater focus on showjumping hotels’ for horses, and purchasing in the UAE. Partly as a result of the best for these animals is a For further information, email conor. the Arab Spring and the situation way of life here. [email protected]

SUMMER 2014 | THE MARKET 008 Summer Diary What’s on JUNE

Trade Mission to Qatar and ICT Market Study Visit to Poland Oman June 11 to 13 June 1 to 3 Krakow has emerged as Poland’s Led by Minister Joe Costello, leading ICT centre. This visit will this mission will focus on the feature end-user pitch opportunities, construction, engineering and meetings with the Krakow education sectors. development community, and V: Doha, Qatar, and Muscat, Oman prospective partners who can assist E: sean.davis@ with wider CEE market penetration. enterprise-ireland.com V: Krakow E: mike.hogan@ Customer Value Proposition enterprise-ireland.com Workshop June 3 Swiss Business Mission This workshop is designed to help June 11 to 13 you differentiate your organisation A number of multi-sectoral by the value you provide to your receptions and events in Geneva targets rather than solely by the and Basel and offer networking products or services you provide. opportunities with customers and V: East Point Business Park, Dublin 3 partners. E: claire.minogue@ V: Geneva and Basel enterprise-ireland.com E: eddie.goodwin@ enterprise-ireland.com Digital Marketing Strategy Workshop Pitch Network Partner Seminar June 5 June 17 This programme is designed to Free half-day pitch-network- help you define the purpose of partner seminar in preparation for your digital marketing and create a Meet-the-Buyer events on supply digital marketing strategy for your opportunities in public sector company, underscoring your unique construction projects. Attendees will value proposition within the market learn about the art of speed pitching, space. partnering and consortia building V: Eastpoint Business Park, Dublin aimed at national and international E: claire.minogue@ public sector projects. enterprise-ireland.com V: Crowne Plaza Hotel, Santry, Dublin 9 Horizon 2020 Information E: orlagh.murphy@ Workshop enterprise-ireland.com June 5 Information seminar providing Working Capital, Cash Flow a detailed overview of Europe’s Management and Bank largest research and innovation Engagement programme. June 17 & 18 V: Athlone This topic will explore the effective E: pj.oreilly@ management of a company’s short- enterprise-ireland.com term resources to sustain its ongoing activities, mobilise funds and New Zealand National Field optimise liquidity. Days 2014 V: Cork (June 17), Dublin (June 18) June 11 to 14 E: tom.early@ Enterprise Ireland will host a enterprise-ireland.com national stand at Mystery Creek Fieldays – the largest agribusiness event in the Southern Hemisphere. V: Hamilton, New Zealand E: @enterprise-ireland.com

THE MARKET | SUMMER 2014 009 SEPTEMBER

UK Insurance, Risk & International Festival of Software & Internationally European Food Processing Compliance Conference and Business 2014, Liverpool Traded Services Trade Mission Platform 2014 Dinner June 24 to 26 to Australia September 10 June 17 The International Festival of September 1 to 5 European Food Processing Platform Conference and networking dinner Business 2014 aims to attract 250,000 This mission will specifically focus provides Irish companies from for Enterprise Ireland clients business people from across the on the following end markets: a range of sectors including providing technology and services world into Liverpool. Enterprise financial services, communications construction and engineering to the UK insurance industry and Ireland’s UK office plans to use this software, healthcare and travel. with a platform to develop new their guests. festival to promote innovative Irish V: Sydney, Melbourne relationships with senior executives V: London companies to the UK market and E: regina.okeefe@ from leading European food E: judi.blackmur@ create connections with relevant enterprise-ireland.com processing and beverage companies. enterprise-ireland.com buyers in the UK. In parallel, Enterprise Ireland V: Liverpool Saudi Agriculture 2014 will organise a site visit to a food Middle East and Turkey ICT E: gavin.mcwhirter@ September 8 to 11 processing facility, followed by an Opportunities Seminar enterprise-ireland.com Saudi Arabia’s 33rd international industry dinner in Amsterdam with June 17 agriculture, water and agro industry key contacts from the Irish and Event aimed at bringing together US Consumer Markets Peer trade show. European food processing industry. Irish ICT companies and ICT experts Learning V: Riyadh V: Amsterdam from the Middle East to present and June 24 E: daniel.cunningham@ E: david.corcoran@ discuss business opportunities and US legal and retail experts will enterprise-ireland.com enterprise-ireland.com potential collaboration. deliver a seminar on how to set up V: Dublin and do business successfully in the Competitive Carriers E: abdull.ali@ US. Association Conference and enterprise-ireland.com V: East Point Business Park, Dublin 3 Exhibition E: marie-claire.hoey@ September 8 to 11 Korean Biopharma and Telecom enterprise-ireland.com An opportunity to learn about the Networks Study Visit latest trends in telecoms, cloud and June 22 to 25 Using the Internet to Compete in mobile and to meet with tier 1, 2 This study visit will feature two International Markets and 3 carriers and related eco-system programmes aimed at exploring June 26 stakeholders. the new market opportunities This seminar will highlight how V: Las Vegas and building the networks with client companies can use the E: fergal.omoore@ key players in the value chains internet to market their products enterprise-ireland.com for business development. One is and services more successfully in geared towards biopharma related international markets. TechCrunch Disrupt 2014 CRO and plant engineering service V: Kilkenny September 8 to 16 companies; the other is aimed at E: eoin.osiochru@ TechCrunch Disrupt SF 2014 expo those providing base-station-related enterprise-ireland.com and conference, networking and disruptive technologies. pitch opportunities. V: Seoul V: San Francisco E: dianne.rhee@ AUGUST E: simone.boswell@ enterprise-ireland.com enterprise-ireland.com US IT for Health Market Market Study Visit to China August 28 Canada Agritech June 23 to 27 Event aimed at informing September 9 to 11 This mission is geared towards companies about trends, Market study visit to the Canadian companies in four key sectors: opportunities and best practice outdoor farm show. financial services, ICT, clean market-entry strategies for the US V: Woodstock, Ontario technologies and life science. The Health IT market. E: ross.ocolmain@ overall mission will commence V: East Point Business Park, Dublin 3 enterprise-ireland.com in Beijing and diverge to different E: ronan.kelly@ locations for each sector. enterprise-ireland.com V: Beijing and Shanghai E: gary.fallon@ enterprise-ireland.com

SUMMER 2014 | THE MARKET THE EXPORTER: TV3 010

TV3’s day-to-day operations might be a bit different from the average Irish company. But like most successful exporters, building its own intellectual property, choosing good local partners and looking at the bigger picture have been key to its recent success in international sales. John Stanley reports. TELLY SALES orking from a very small home afforded by developing formats, owning the audience base, TV3 has developed intellectual property and entering into co- over recent years to establish a productions to share costs. Wpresence on the international TV3 is now working with some of the biggest stage. In what is essentially a new business names in entertainment production globally, model, the company’s production arm 3 some of whom, are coming to the Ballymount Studios has repositioned itself as a developer of campus in Dublin to produce their content. international co-productions, says Andrew Byrne, 3 Studios is still primarily focused on Head of Development and Formats, TV3 Group. meeting the needs of the station’s domestic schedule, which airs 45 per cent indigenous ORIGINATING CONTENT content. But working with London-based DRG, In a recent update of its programming plans and one of the leading independent distributors of strategy going into 2015, the company revealed content in the world, it initially found significant that TV3’s programming spend on originated success internationally with observational and content will exceed its spend on acquisitions documentary series like Animal A&E, its series on for the first time in its history. This focus on Temple Street Children’s Hospital and a two-part originated content is a direct consequence of the series on Phoebe Prince, an Irish girl who took opening of the TV3 Sony HD Studio last year her own life after moving to the US and being and the company’s recognition of the potential bullied at school there.

THE MARKET | SUMMER 2014 THE EXPORTER: TV3 011

These successes opened eyes to the Filmed in front of an audience of 700 people on TV3’s biggest potential of co-productions with overseas-based an impressive 5,000 square foot set, it took 12 broadcasters and independent production months to complete between pre-production, home-produced companies. In addition to producing factual filming and post-production. But it has been an show to date, and observational series, TV3 saw potential in outstanding success, sold in over 76 countries, working within the station’s mantra of “We from New Zealand and Poland to China and a Keith Barry: Brain entertain”, Byrne says. Developing a new studio number of countries in South America. TV3’s Hacker, has been was a natural progression, facilitating new third major studio production this year was the entertainment formats. new game show format Crossfire, a co-production sold in over 76 with the Scandinavian Nice group. countries, from THE BIG PICTURE Byrne emphasises that this does not mean Over the past year and a half TV3 has been asking that programmes are being designed for foreign New Zealand and itself, Byrne says, “What’s the bigger picture? audiences without regard for the domestic Poland to China How do we change the culture and increase our one. “Irish audiences are very intelligent, and scope?” As a deliberate business development our primary obligation is to meet their needs. and a number of approach, TV3 has reached out to a variety of But they are also a very good sounding board countries in South international partners, including independent for our ideas. They are very TV savvy, perhaps programme makers and distributors as well as because of their familiarity with the variety of America. established broadcasters, in countries as far apart TV productions and shows produced by our close as Canada, Singapore, Australia and South Africa neighbour, the UK.” with a view to co-productions. For example, it developed a new game show CHANGING THE BUSINESS MODEL format, The Lie, in conjunction with STV. For its He points out that TV3 has plenty of slots to version, the Scottish broadcaster flew its own fill with its own content at peak times over the hosts, participants and audience into TV3’s new weekend and during the week, giving good Sony HD Studio, helping to share the costs of opportunities to make programmes with both setting up the format and facilities with TV3. home and export markets in mind. The format has already been sold to France, and “For us, this is a better business model. A six other territories are interested in acquiring nice idea and a simple format can travel right options, Byrne says. around the world,” he says, as indeed it has done. TV3’s biggest home-produced show to date, In addition to launching its first originated soap Keith Barry: Brain Hacker, demonstrates just drama next year, TV3 will launch two major how important getting the right format can be. entertainment co-productions in 2014. Sitting

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“For us, this is a On A Fortune with UK company Zodiak RDF, and that partnering with producers in other markets Algorithm, with Soshefeigh Media of Canada, will has helped TV3 gain cultural insights into other better business both be filmed in the new Sony HD Studio, as will audiences, what will work with them and what model. A nice further episodes of The Lie, co-produced by STV. won’t. The company, she observes, has become 3 Studios will also double its factual and a sophisticated player in the international idea and a simple documentaries output from 50 to 100 hours marketplace. format can travel in 2015, including new factual series such as Enterprise Ireland coordinates an Irish Paramedics, Islander, filmed on the West Coast of presence at the MIPTV and MIPCOM events right around the Ireland, 24 Hour Shelter and Lazy Chef. in Cannes, which each year bring together world.” Such an approach is clearly not without programme makers and buyers from around the risk, even if that financial risk is shared with world. There, TV3’s The Lie was earmarked as a co-producers. “For every 10 ideas you have, some format to watch in the same breath as Ireland won’t resonate as you might have thought, or being touted as the next Israel for its output evolve as you might have hoped. But you would in new formats. In addition, TV3 received EI certainly expect at least half of them and more funding for the development of ShowPal, a like three quarters of them will be successful,” new “second screen viewing companion app” Byrne says. designed to deliver “rich and related content and Enterprise Ireland supported the information around the show you are watching”. establishment of 3 Studios and some of the This development reflects changing trends company’s business trips to London and in TV viewing. Close to 60 per cent of Irish people Singapore. On the periphery of some of the watch TV online, with 70 per cent of tablet biggest TV consuming countries in the world, owners and 68 per cent of smartphone owners Singapore is a location wide open to new ideas using their devices while watching TV. about audiences and funding of productions, The evolution of a new business model at Byrne says. TV3 does appear to be reaping a reward. David “The development process is constantly McRedmond, the company’s CEO, recently in flux, developing new relationships and revealed that Q1 2014 was the best quarter’s partnerships. EI has helped us with funding and trading for the group since 2008. Revenues were advice.” up five per cent, including a 60 per cent year-on- year increase in digital revenues. This followed RESPONDING TO MARKET TRENDS the successful long-term refinancing of TV3’s Linda Crosbie, senior development adviser in debt in 2013. Employment at TV3 now stands at EI’s International Services Division, points out 267 people, the highest it has ever been.

THE MARKET | SUMMER 2014 ITALY: EXPO 2015 013

accommodation and transport Milan’s hosting of Expo 2015 could reportedly found a good site for its pavilion, close to one of has reportedly attracted the provide opportunities for Irish companies. the main entrances, thus being attention of more than 100 Paddy Agnew reports from Italy. guaranteed a visitor catchment tour operators. Then too, area of anything up to two Milan city and the Lombardy million people. The 1.1 million region’s preparations, not to square metre Expo site is itself mention, increased security currently being constructed requirements could all offer in the Rho-Pero area of Milan, opportunities. The point is made north-west of the city, close to by the Expo 2015 team, who the ‘red line’ underground and told The Market that, thus far, reasonably accessible (traffic €900 million of work had been permitting) to both Linate and awarded via tenders publicised Malpensa airports. in the official European Union Whilst it seems less likely Gzzette, adding: “ There are also that Irish companies might get other opportunities relative to a slice of the construction action tenders for the handling of the ARE WE ON on the main site, it is possible event – goods and services in that ancillary opportunities may the working area; promotional present themselves, especially events; security arrangements; BOARD? relative to the huge influx of ticketing; communications; foreign visitors. The Expo team hospitality; and reception.” xpo 2015 is the overall plan, Expo 2015 of more than 40,000 volunteer Paul Maguire, at Enterprise everything that has been flying well under the workers may face major Ireland’s Milan office, points “Ewe would like Italian radar. The Expo 2015 problems when dealing with the out that much of the tender to see promoted. After all, organisers themselves are the linguistic challenges presented documentation is exclusively we have €31 billion worth of first to admit that the project by seven million tourists. in Italian, but he says that food and wine exports ... The has encountered problems, In the areas of translation Enterprise Ireland can help environment, the agricultural many of them created by the and fast money conversion, two Irish companies identify ecosystem, the focus on exceptionally wet Milanese areas where Italy traditionally opportunities by providing technological innovation, these winter, but they point out that does badly, there could be them with information and are all elements in our vision. the main site is now working flat openings for companies with key introductions. “Expo is the We need to talk it up; we need out, 20 out of 24 hours per day the relevant knowhow. Any world’s largest non-sporting to accelerate the physical (and Entitled ‘Feeding the Planet, company that can simplify repeated event,” he says, “and mental) building sites so that Energy for Life’, Expo 2015 payment for goods and services, nothing else brings together Expo becomes a huge stimulus will investigate, illustrate and not to mention offer options so many countries, ideas and for the entire country”. analyse just about every aspect during and after the Expo, cultures.” The speaker making the of arguably the most urgent might find work, especially if above comments was newly problem facing the international preparations fall badly behind For information on the tender appointed Italian Prime community today. Given the schedule. process, see http://en.expo2015. Minister, Matteo Renzi, in his universal theme, it is expected Likewise, that large org/transparency/competitive- very first speech to parliament to be a huge draw, with some 20 number of visitors needing tenders-and-rfp in late February, 2014. It is million plus visitors, 30 per cent intriguing that in a speech in foreigners, expected over the six which he outlined some of the months. Ancillary opportunities may key elements in his government So where is Ireland in all of programme, Renzi found space this? For a variety of reasons, present themselves, especially for Expo 2015, due to be held in Ireland was late in signing up relative to the huge influx of Milan from May 1 to October 31 for the Expo, and it was only next year. following then Prime Minister foreign visitors. The point, of course, is Enrico Letta’s visit to Dublin that apart from polemics in early November 2013 that related either to delays or to Ireland actually confirmed its the creation of a ‘Via d’Acqua’ participation. Despite being or waterway fundamental to late for the party, Ireland has

SUMMER 2014 | THE MARKET COVER STORY: BUILDING INNOVATION CAPABILITY 014

EMPOWERED TO INNOVATE All pictures courtesy of Design Partners

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The latest EU scorecard casts Ireland as an innovation Evidence for the follower rather than a leader. But a new programme aims innovation-export- to stepup performance by building ambition and capability employment link within indigenous industry, leading to winning new products The European Commission’s and services for international markets. Anthony King 2010 paper on the reports. ‘Internationalisation of European SMEs’ draws on a substantial body of research to suggest a positive link e’re familiar with courses, Hernández points out that Ireland falls between innovation, exporting bootcamps and fully fledged behind countries such as Sweden, Germany, and company performance MBAs to build leadership Denmark, Finland and the UK in terms (as measured by sales prowess among corporate of research and innovation performance, turnover and job creation.) top brass as well as the fine- according to the latest EU Innovation tuning sessions and workshops Scorecard 2013 research. “Closing the gap on A 2011 Journal of Wto get sales teams fit, hungry and ready to Ireland’s innovation capability in comparison International Business close the deal. But what about a company’s with recognised innovation leaders is likely Studies paper ‘Exploring the ability to innovate? Who drives that? How are to bring about substantial benefits for Irish complementarity between projects identified, prioritised and implemented? companies and the wider economy,” she innovation and export What management processes are in place to argues. for SMEs, suggests that ensure all these things happen and happen innovation and exporting work systematically? COMPETITIVE LANDSCAPE WHERE ONLY jointly to improve company For ambitious Irish companies that want to THE BEST SURVIVE performance. SMEs that both lead the innovation charge, a new programme There will be two prongs to the programme, innovate and export generate led by Enterprise Ireland in partnership with the according to Julie Ryan, Head of Client significantly greater sales Irish Management Institute (IMI) may provide Development at IMI. “The first is that we offer growth than companies that the impetus. a highly supportive environment for companies do one or neither. Later this year, management teams from to develop their fitness to innovate at their 50 SMEs are to be selected to take part in the own pace. Second, we will develop a highly A report from first ever Innovation4Growth programme. The competitive landscape for ideas, and only the 50 companies, represented by three executives best will survive,” she told The Market. NESTA ‘Measuring from the management team, will begin a journey For the initial 50 entrants, Enterprise Business Growth: that will take them through an innovation-boost Ireland will consider a range of organisations camp and on to tailored mentoring and coaching. (see panel), from biosciences to cleantech to High-growth Fifteen companies will then be shortlisted and IT, and it will include companies at different firms and their assigned a dedicated coach to take them on stages of innovation. “The boost camp is a blend a mission with a clear objective – real-world of the theory from international and Irish best contribution to innovations that yield new processes, services or practice, innovative lectures and workshops, employment in products. so you get people into the room to start talking “The overarching objective of the Innovation about things,” explains Cathy Winston, the the UK’ indicates 4Growth programme is to build a cohort of Innovation4Growth programme director. “By that companies management teams within Irish companies the time they are finished, they will come off the that can deliver significant international growth learning curve at speed.” that innovate through innovation,” explains Karen Hernández, In this respect, all those from the 50 successfully a senior executive with Enterprise Ireland’s companies who suit-up for the programme Capability and Mentoring Department. “So this will be winners, Winston insists. All should grow faster and, is about building the capability to generate and experience a change of mindset about innovation in turn, employ validate new ideas that meet customer needs; and be inspired to see that this is doable, and supporting participants to implement a number that their companies and their employees are more people than of important innovation initiatives within their well capable of it. “It kicks off with a bang, with non-innovating companies; and building the confidence and the boost camp involving the three top speakers capability to drive and sustain an innovative in this space giving inspiring and engaging talks,” companies. organisation.” she says.

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Those who exit the programme after they must go and apply it in their own company. this stage may need time to become more “These modules work from the market back,” ‘innovation-ready’ before they take part in the Winston emphasises. “You look at the market subsequent phase on later programmes, or for insights and ideas, then start to filter the they may feel that they have already gained ideas for those that look like they’ve got merit, enough insight to start shaping their company’s and then move into prototyping, then onto approach to innovation and get initial projects or testing in the marketplace selection and finally processes kick-started. implementation.” Meanwhile, the 15 who will take their Speakers will include Roberto Verganti, innovation-readiness plans further will a global influencer on design thinking; Stelios have been selected on the basis of having Kavadias, Professor of Enterprise Studies in demonstrated the time, the team and the Innovation and Growth at Judge Business tenacity to drive innovation. “We will use all sorts School, Cambridge University; and Julian of methods to assess them,” Ryan says. Birkinshaw, a professor at London Business Their prize will be the opportunity to School with a key interest in organisational participate in a further five modules, designed culture and innovation. There will also be an around leading thinkers and delivering best international visit to IMD in Switzerland. “We practice in terms of academic and commercial chose Switzerland because it’s a high-cost reality. They will then move into workshops to economy like Ireland. The Swiss believe in hammer away on their new material; finally adding value rather than slicing costs, and that

PHOTOS: TECHRETE

THE MARKET | SUMMER 2014 COVER STORY: BUILDING INNOVATION CAPABILITY 017 is what we need to do in this country,” says innovation process embedded in their companies Winston. to power growth. The 15 executive teams will be supported For company leaders considering whether as they move back into their companies, because this programme may be for them, Winston is they will need to identify changes that might keen to dispel some myths. There is a belief that be required back at the ranch. “There is going innovation applies just to companies like Apple to be resistance, which they are going to have and Google. This is because they are so highly to overcome to make things happen, and this is disruptive in their innovation and so leading edge, where tenacity comes in,” adds Winston. Finally, but they are just a tiny minority of the innovative there will be an innovation showcase sponsored organisations out there. Innovation has become by Deloitte. a bit of a scare word, she says, but in a real

context, it is about “looking into the seeds of time CATHY WINSTON, INNOVATION4GROWTH OVERCOMING OBSTACLES TO INNOVATION to see which grains will grow and which will not. PROGRAMME DIRECTOR The programme has been designed to overcome Winston also stresses that innovation the fears and challenges of the companies is not a luxury; it is a bare necessity. “If you and to inspire them by showing them the best are not constantly introducing new products practice from organisations that succeed. It and services, then you lose market share and will take up to 24 months to complete, and decline as a company. And there is a lifecycle output for the committed companies will be in business; if you are not growing, you are two or three new products or services plus an generally in decline.”

Case study 1 move aircraft parts for the new Techrete puts a concrete focus Airbus” he explains. on innovation That said, his biggest piece of advice is for companies to Techrete is in the business and the fact that employees are listen to their own people. “If of pre-cast concrete, but not encouraged to pitch in. you do what your own people the grey ordinary stuff. This The company also takes think is worthwhile, you will is high-end reconstituted ideas from other sectors and go a long way.” Secondly, he concrete, brick, terracotta, welcomes visitors to the advises on not being too narrow etched concrete and shot- factories on the quid pro quo in your focus. “Inevitably some blasted concrete cladding. basis that they can make a initiatives will die away and Techrete won a creativity award won’t bear fruit, but people for its panels at the Athletes’ can become demotivated if Village for the London 2012 everything just grinds to a Olympics, for example, where halt,” he warns. His third piece the company was involved in of advice is that you need to over 30 buildings with various dedicate people to driving the façade designs. process. “Don’t think that that Techrete is driven to person who has a normal day innovate by clients, often job will do this as well,” he says. leading-edge architects. “If “They will provide the idea, but you want to stay in the game, they won’t execute it.” you’ve got to innovate and go with them. All the architects return visit to their facility. A want to be different and want business trip is worthwhile to have their own signature if you return home with just buildings,” says Techrete’s one new idea, Sweeney adds. Marcus Sweeney, but the “Ideas need not come from the company also innovates from concrete business. For example, within. It is woven into it’s we installed rotating cranes in fabric through an internal our new factory. We saw them group that comes up with new at a British Aerospace facility, ideas, brainstorming sessions where they were using them to

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She believes that Ireland has unfortunately set up management information systems and become internally focused as a nation and that become locked down. This makes it hard for there has been a huge focus on operational them to embrace new ideas or new projects. excellence in business, which has sidelined the It is something Winston has encountered long-term view. Another issue right now, she says, many times over the 15 years she has worked is the fact that 48 per cent of boards are made up to help foster innovation in companies. “I can of financial controllers or accountants, and that honestly say that the most difficult thing to do can overload the room with risk-averse voices. in a company is to try to be an agent of change,” “Financial controllers don’t like taking risks and she says. Consequently, the Innovation4Growth spending money on big projects that they don’t programme will provide participants with skills have a guaranteed return on,” she explains “Yet and know-how to drive new thinking in their with innovation there are no guarantees. You just organisation. set everything up to maximise the opportunity for a return.” In Germany, boards have many more THE REQUIREMENTS OF AN INNOVATIVE engineers, who tend to be on the lookout for new ORGANISATION opportunities and new problems to solve. “We are One of the focuses of the programme will be trying to bring that line of thinking into play.” about listening to the marketplace. “Eighty per Compounding the problem, many established cent of the companies that have been innovative companies will resist change when they get to and introduced three to four products in the last few a certain size. They put all their ducks in a row, years have done so in collaboration with customers

Case study 2 is often the human aspect of A product designer’s thoughts things that get rationalised out.” on innovation Technology for technology’s sake can be a common pitfall. Design Partners is an Irish and Design in Dublin. “When Rather than pouring over product design consultancy you are dealing with complex questionnaires or marketing with a long track record in products that have high design data, he recommends that creating consumer, lifestyle [requirements], user-interface design teams should go out and medical products. From content, mechanical content and and meet the end users in studios in Ireland, San Francisco human content, then you need their environment. “With a and Eindhoven, the team has to look at all those things and medical device, you can put it worked with a whole host of into the hands of clinician or organisations from start-ups patient and talk it through with seeking to build a brand around them. Site visits can be quite a new idea to global corporations revealing,” he adds. “Sometimes such as Logitech and Medtronic. nursing or medical staff have One of the company’s recent hotwired or hacked or kludged projects was the design of the things together to come up Calor mini-BBQ. with a solution to a problem. “We find that coming at Spotting and understanding the problem from a different that can create opportunities to perspective is one of the ways innovate.” we can create innovation. This is about looking at the problem keep all of those balls in the air,” holistically – at the whole rather he told The Market. than the component parts,” “That needs to be established explains medical design director at the beginning, and it needs Eugene Canavan. to be used as a filter throughout Canavan has been with the process,” he adds, warning Design Partners for over 15 that as product development years and is a tutor at the Centre proceeds, companies can lose for Medical Device Design at sight of what they are trying the National College for Art to achieve. “I would say that it

THE MARKET | SUMMER 2014 COVER STORY: BUILDING INNOVATION CAPABILITY 019 or suppliers. So it is about digging deeper with that an audit of accounts is a process, so an To register interest the people they were closer to – in other words, auditor comes in and goes through accounts market-backed thinking,” Winston says. and gets information out the other end, the or find out more Another factor in success is having a CEO or same is true of innovation,” she explains. “It The Innovation4Growth managing director who is willing to look into the starts with intelligence and insights gathered Programme is open to future and get involved in new services and new from employees and the marketplace, and then established Enterprise markets. “Companies that have CEOs who see those ideas are put into a process to see if they Ireland clients that have an themselves as leaders – people who are asking: represent an opportunity in the market.” existing growth plan where What next? And what if? – are at an advantage,” To become more innovative, you don’t have to they have identified innovation Winston notes. “We have had such challenging throw the baby out with the bathwater, however. as a means for further growth times, and [before that] such boom times, that “There is a fear that you have to change direction in international markets. CEOs have often ended up doing more managing so much that all your resources and emphasis It is geared towards than leading.” shifts into the whole company becoming management teams, so Winston’s third recommendation is for innovative, and everybody has to be innovative companies must have a companies to adopt a systematic approach. In and agile and flexible. Well that is just not management team that one US study, 75 per cent of the responding possible,” Winston says. What is really required can devote time and effort companies admitting to being not very good at is to start up some promising projects while the into contributing fully to innovation. Noteworthy, however, was that the current business continues to run as normal, the programme, i.e. by other 25 per cent (the self-proclaimed innovative earning the bread and butter and dealing with the attending the workshops, and ones) had a process in place. “In the same way here and now. business coaching sessions in-company and driving the innovation projects through PHOTOS: DESIGN PARTNERS the business. It is expected that the participants will comprise three members of the management team and most likely the CEO. Moreover, it is envisaged that the companies will have embarked on innovation in their company and have a level of management practices to support an innovation culture and process, or at a minimum the intent to develop such practices, processes and culture and an understanding of the organisational commitment to this.

Interested participants may contact Karen Hernández at 01-7272577 to discuss the programme in more detail or express interest by emailing innovation4growth@ enterprise-ireland.com.

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Absence of individuals prioritise their Ad-Hoc Product Leadership rarely says no to Customer or work, and, in a culture of the Positioning new projects, and resources 01 Market Focus priority du jour, there can be a 05 There is a lack scurry between projects with – ‘Inside-Out’ rather than large element of confusion and of understanding of the little focus on the endgame or ‘Outside-In’ an unhealthy lack of focus. value proposition for each corporate strategic objectives. Conversations with customers Requirements change core product. Engineering are driven by the CEO/founder continually, business priorities positions the product from a No Innovation/ or the sales team and there is are not articulated clearly technical standpoint and fails Ideation Strategy inconsistent feedback to the and the product direction is to understand or demonstrate 08 The company has product development team. not aligned across functions. how the product relates to a no clear process for capturing There is little understanding Engineering usually calls customer need or problem that new ideas, prioritising these across the organisation of the shots and drops or can be addressed. Marketing ideas or bringing them the target or addressable changes features with little battles to understand the through a gating process. market, with ad-hoc capture or no consultation with key technical complexities of the There are lots of potential ideas of competitor, customer or stakeholders. Requirements product, and, with a lack of a within the core team, but there market data and no formal are often not understood defined value proposition, the is nobody to catch these and links between marketing and during development so are company struggles to position prioritise investment. There is product development. There regularly re-scoped to suit the product to its own sales no culture of innovation. is no mechanism in place to tight deadlines with little team and ultimately to the support proactive engagement understanding of market or market. Unconscious with customers, and the customer impact. Resources Decision-Making company is struggling to create move frequently between Unclear View 09 Product decisions products that customers want. projects and there is a of Product are made in the absence of developing culture of ‘fire 06 Commercial any supporting commercial or Lack of fighting’ or ‘organised chaos’. Performance market data. The company is Leadership Engineers are creating and Development resources are moving so fast that no one sees 02Alignment testing code, but, if asked to assigned arbitrarily with little it is in a cul-de-sac. to Drive Strategic Objectives link back to a clear business focus on return on investment. The established leadership case, they are struggling. It is difficult to ascertain the Lack of team, responsible for core cost to develop any product Competitive operational functions such A Tactical Rather release or to link these releases 10 Differentiation as engineering, marketing, Than a Strategic to a value proposition or Customers are finding it finance and sales, are operating 04Approach product strategy. Marketing difficult to find compelling in silos with little cross- In order to win business, the promotions do not associate reasons to select the company’s functional interaction. There company tends to approach upcoming releases with products. The company has not is little or no cohesion on how each customer engagement value to the customer. Win/ focused on identifying unique these functions will drive as a bespoke deployment, loss analysis does not exist selling points for the products corporate strategic objectives with solutions tailored to the or is ad hoc at best – data or solutions and is therefore or prioritise product strategic customer’s exact needs. There are not fed back to the struggling to position itself direction. is a lack of cohesion between product development team. competitively. customer releases with a Product pricing is arbitrary These indicators can Lack of Focus – large ‘services’ component and unclear. There is no manifest themselves to Unclear Product for each deployment. Code mechanism to associate varying degrees in companies, 03 Direction has become difficult to product releases with clear depending on their stage of The company’s product manage across customer revenue targets. Pricing growth. They are a useful strategic direction is driven sites, and the development hugely across customers due litmus test for the need to solely from the personal team is struggling to manage to the bespoke nature of the adopt a product management hunches of the CEO, CTO, an increasing number of deployments. discipline. sales or other leadership team customer quality issues with members. There is little or no a knock-on impact on release Too Many IntegratedThinking provides customer validation or link to dates. Engineering priorities Projects and Too mentoring and support to corporate strategic objectives. are predominantly driven 07 Few Resources companies establishing product- The ‘Highest Paid Person in from sales opportunities, with The company has no gating orientated disciplines. See the Organisation’ (HIPPO) little focus on the strategic process to prioritise project www.integratedthinking.ie, E: has a huge influence on how direction. investment based on ROI. [email protected]

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Whether consciously or not, most companies adopt some aspects of Siobhan Maughan, a product management discipline from their inception. The founders founder of often perform the product management role – defining product strategy, IntegratedThinking, setting revenue targets, meeting customers, capturing requirements, identifies 10 top supporting marketing initiatives and managing investment priorities. indicators that However, as the company grows, it becomes more difficult to cover all bases, and the essential parts of a true product management discipline your company may need to be part of a more structured function within the company. So need a product what are the top 10 indicators that your company needs to reposition to management adopt a product management discipline? discipline. 10 WAYS TO KNOW YOU MAY NOT BE ON

Help Developing a Product TOP OF PRODUCT Management Discipline Enterprise Ireland recognises the importance of product management in growing and MANAGEMENT scaling software companies, says Jim Cuddy, head of Enterprise Software Solutions at Enterprise Ireland. “Almost without exception, the most successful software companies that Ireland has produced in recent years have an effective product management process,” he told The Market. Supports for companies introducing product management ranges from consultancy to short-term training to full postgraduate diplomas and masters qualifications. Enterprise Ireland’s ‘Lean for Software’ initiative supports a number of good practices in software companies, including product management. See the ‘Productivity’ section of Enterprise Ireland’s website (http://tinyurl.com/keahd8g). In addition, Skillnets provides in-company training (regionally) in product management (email [email protected]), while DIT provides postgraduate courses (see http://tinyurl.com/ m6zwyf4).

SUMMER 2014 | THE MARKET SOFTWARE MARKETS: AUSTRALIA 022

In advance of an Irish trade delegation hen Enterprise Ireland’s ‘Software to Australia, Ian Campbell talks to & Internationally Traded Services’ a number of indigenous companies trade mission lands in Australia this about sector-specific opportunities WSeptember, they will discover a nation relatively unscathed by the world financial crisis. for exporting technology products and The country recently recorded its twenty-third services. consecutive year of economic growth, and it’s the twelfth largest global economy with the fifth highest per capita income. It’s also the third largest market for Enterprise Ireland software companies, behind the USA and UK. A common language and similar culture provide THE superficial inroads into doing business in Australia, but it’s more than that according to Regina O’Keeffe, software and services adviser for EI in the region. “The economic relationship between Ireland and Australia is stronger now than at any time in our DEAL history with two-way trade of more than $2.8b per annum and an active Irish diaspora network,” she says. “Enterprise Ireland software clients continue to find a receptive market in Australia, successfully evidenced by the growth in their exports by 19 per DOWN cent from 2011-12 to a level of €190m.” To dig deeper into the opportunities down under, we talked to sector-specific business people about the tech trends and cultural challenges that await UNDER Irish firms with an eye on the continent.

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Enterprise Ireland is coordinating a Software and Internationally Traded Services trade mission to Australia, which is expected to be led by the Minister for Jobs, Enterprise and Innovation, Richard Bruton TD and Enterprise Ireland CEO, Julie Sinnamon. Focusing on software for financial services, telecoms, healthcare and travel, the trade mission will run from 1 to 5 September, 2014, taking in Melbourne and Sydney. There will be strategic sector-specific group events held during the week, Insurance providing clients with an opportunity to network with Insider view: Andrew Hyland, Hot technologies: A more Cultural challenges: “Doing potential business contacts/ group head of programmes competitive market means any business is more formal than partners while also allowing with QBE Insurance solution that reduces risk is it is in Ireland, particularly if them to invite their own Group, a global company welcome, which is why there is you are working with the big Australia-based business that specialises in general a lot of interest in IP connected Australian corporates,” he partners or customers. insurance. devices – the ‘internet of warns. There is a long sales There will also be PR things’ – that facilitate remote process to get through the opportunities for Enterprise Sector trends: “An monitoring. On-premise security door, and when you do, don’t Ireland clients who have exceptionally slow-moving systems are one application; expect an immediate decision. significant announcements industry, dominated by a few another is in vehicles. “We have Everything is consensus driven, to make over the course of large players, that takes a long companies that will put a black according to Hyland. “They like the trade mission. time to change,” is how Hyland box in cars to monitor drivers. it to go to the next person or a characterises the Australian This helps under 25-year-olds committee before they make a For further information, insurance sector. He said its reduce their premiums.” decision. You can’t tell people contact Regina O’Keeffe at: future will be influenced by He also sees opportunities for what to do in Australia. You E: regina.okeeffe@ three factors: new technology, solutions that help reduce the have to ask them – it’s very enterprise-ireland.com innovation and generational regulatory burden and unlock egalitarian.” T: +61 2 9273 8515. change. All three combined have value in the mountains of data Finally, do your research. shaken the established way that insurance companies “Get to know the nuances of of doing things with younger collect. “Big data and customer the market here, the different customers using the power of analytics are in demand because regulatory requirements. We web engines to become much they can help reduce risk and see a lot of Irish companies more discerning customers, lower the price of insurance coming and getting meetings, searching out the best policies products, making companies but they tend to be a bit for their needs. more competitive,” he says. opportunistic. They need to be more structured and understand the business problems they are trying to solve.”

SUMMER 2014 | THE MARKET SOFTWARE MARKETS: AUSTRALIA 024

IT Services Telecoms

Insider view: Dermot Mobility is becoming big for Insider view: Marie Holmes is Though it’s still early days, McCann is managing director businesses with the Bring Your a seasoned telecoms executive Holmes also anticipates of Kaseya in Australia and Own device culture gaining who started out in Ireland opportunities centred on the New Zealand, a global IT traction with Australian firms. and now provides consulting ‘internet of things’, the concept management software and McCann lumps it all together services in Australia of connected homes and services company that thrives as “the consumerisation of vehicles, not just traditional at the coalface of technological IT”, a process of technological Sector trends: Like Ireland, communication devices. change. simplification that puts rolling broadband out to the end users in control of the regions is a big challenge in Cultural challenges: “There Sector trends: In the last six technology rather than the other Australia. According to Holmes, have been a number of Irish months, 60 per cent of Kaseya’s way around. successive governments success stories here in the past, new business has been delivered Other areas rife for new have blown hot and cold on like ChangingWorlds, Opennet by its cloud platform, reflecting technologies include livestock enthusiasm for the state- and NewBay, but Australia is a a major paradigm shift in the IT management and electronic funded National Broadband long way away and it’s not the industry, according to McCann. metering. “The public sector is Network. “There is recognition kind of market I’d recommend “Initially, there were lots of looking for greater efficiency that strong underlying starting up with,” she says. reasons touted as to why the and innovative solutions across infrastructure is critical for cloud wouldn’t work but the the board,” he says. The good things like e-health, but cost is While it’s English-speaking and business argument is winning news is that the procurement an issue,” she says. familiar, there are practical because it’s the most efficient process has been simplified challenges, like time zones and way to consume IT,” he says. in recent years, and there are Hot technologies: Data the sheer size of the continent. opportunities for new suppliers. analytics, small cell technology For those prepared to take it on, Hot technologies: IT and LTE are all high on the Holmes recommends a presence management in the cloud Cultural challenges: He agenda. “Telcos are sitting on on the ground “because people and increased automation are urges would-be tech companies rich client information and are do business with people”, though driving Kaseya’s business at the to be cognisant of how to do at the early stages of trying to not necessarily a permanent moment, particularly system business in Australia and not to monetise it,” says Holmes. They office and infrastructure. “It management tools that free come expecting an easy inroad also need to address mobile will require time, money and up IT staff to work on other into China. “A lot of companies network congestion, which is investment,” she warns. projects. “We’re embracing come here and see it as a why small cell technology is the whole idea because labour stepping stone but proximity another big focus. is expensive in Australia. doesn’t lead to success. To trade Companies need to automate in China, you have to be in China, repetitive and mundane tasks.” not Australia.”

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Healthcare Business Consultancy

Insider view: Julien O’Connell may hinder adoption. “The Insider view: Brendan Cultural challenges: There is chairman of Mercy Health, Australian healthcare sector Connelly is a partner at are a lot of key Irish people in a 6,000 strong Catholic has a proven track record of BearingPoint Pty, a consultancy senior positions in Australia, organisation that runs acute looking for the best solutions recently acquired by Chinese providing a real opportunity hospitals, residential care irrespective of where they are firm Pactera. to network and bridge any facilities and home care developed. The issue is upfront cultural divide. When it comes services. costs versus perceived benefits.” Sector trends: There is a to products and services, aim shift away from premium high. “Look at differentiated Sector trends: Like most Cultural challenges: Having consultancies to niche service IP in software and services. developed countries, Australia worked with a number of Irish providers, according to Connelly. Understand the move to service is struggling to cope with businesses, O’Connell observes Responding to dramatic cuts in business models and try and be an ageing population. The that the successful ones have IT budgets there’s also a shift to part of it,” he said. increasing demand for services taken time to understand niche innovative commercial models Connelly shares Dermot threatens to outstrip the opportunities rather than simply based around shared risk rather McCann’s view that Australia ability of the state to supply push a product. He warns that than fixed prices. isn’t a natural stepping stone to them, prompting healthcare healthcare providers are batting China but knows from personal organisations like Mercy to away technology companies all Hot technologies: The experience that it works well rethink the way services are the time, so be prepared. adoption of subscription-based as a gateway to Singapore, provided. “It’s about delivering “Good ideas might not fit services, including cloud Malaysia, Korea and Japan. care to where the person current IT models, and you software and business process most wants it to occur,” says have to remember that a huge outsourcing, are the prevailing O’Connell, “home care instead of amount of money has been trends that Connelly sees. residential.” wasted on technology where “Because of the hype, a lot of expectations have just not been clients think the cloud will save Hot technologies: There met,” he says. “You need to have millions, and they are shocked is a growing opportunity for a presence here and understand when they realise it’s not always e-health solutions that support the place,” he adds, recalling the guaranteed,” he says. the concept of clinical care in visiting Irish businessman who the home. Mobile technologies, planned to cover a couple of remote diagnostics and cities by car in the same day. A handheld patient records are hot drive he thought he could do in areas; tracking devices are also a few hours would have actually in demand. O’Connell warns, taken him four days. however, that cost constraints

SUMMER 2014 | THE MARKET COUNTRY REPORT: MEXICO 026

Mexico aims to speed growth in its economy with a series of far-reaching reforms – making it the right time for Irish companies to take a closer look, writes Gordon Smith. LATIN LESSONS

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rish businesspeople heading down Mexico way to start in All roads lead to Mexico a new market are actually blazing a trail that’s much older for auto parts supplier than they might realise. In the 1840s, Irish emigrants made ith Mexico an increasingly important their way south from the United States and fought in the Wmanufacturing location for US car makers Ibattalion of San Patricio and are now feted as heroes in Mexican and sub-suppliers, Kilkenny firm Thomas Butler history. Engineering (TBE) found itself looking more closely at More recently, Irish involvement in Mexico’s aviation sector the market. The company develops high-end machines dates back to the late 1980s, according to Declan Ryan, founder which build car parts such as lock mechanisms, and managing partner of Irelandia Aviation. The low-fares airline seats, critical springs and brake components. After developer holds a 49 per cent stake in the Mexican low-cost redeveloping its equipment with new technology, carrier VivaAerobus and is actively looking at expansion opportu- TBE won a global tender with auto industry provider nities. Well-known Irish names such as Smurfit and Kerry Group Peterson Spring’s plant in Querétaro, 215km north of have also been established in Mexico for some time. Mexico City. Ryan believes there is a natural affinity between the two Managing director Thomas Butler has seen first- hand the staggering expansion of industry in the area. countries. “I think the cultures are very alike, for many reasons: “We brought the latest technology that we make, socially, we and the Mexicans are very close, through family and they picked it up and they made good use of it. They religion. With regard to business, the Mexican culture wouldn’t actually outperformed our North American customers. be as ‘American’ as ours; it’s a little more conservative and polite, I think Mexico really is a very good example of a place but I think we could learn from that.” that’s going forward,” he says. TBE has already supplied three units into Mexico, with a fourth scheduled for June, each worth close to “I THINK THE CULTURES ARE VERY ALIKE, FOR €250,000. “We are making high-end technology, which they can’t get in the market. The cost is not as much MANY REASONS: SOCIALLY, WE AND THE MEXICANS of an issue, so they’re biting that bullet and paying that ARE VERY CLOSE, THROUGH FAMILY AND RELIGION. price,” says Butler. He acknowledges that price is likely to become more of a factor as the market matures. WITH REGARD TO BUSINESS, THE MEXICAN The company has international agreements CULTURE WOULDN’T BE AS ‘AMERICAN’ AS OURS; with its key component suppliers, which take care of after-sales service. Butler says this is an important IT’S A LITTLE MORE CONSERVATIVE AND POLITE, consideration in Mexico. Next on the list will be to BUT I THINK WE COULD LEARN FROM THAT.” recruit a Spanish- and English-speaking engineering expert who sells machinery similar to TBE’s and who can act as the company’s local agent. There is a natural openness to doing business in Mexico, as Butler, who himself speaks Spanish, also plans evidenced by 45 free trade agreements it has with other countries. to spend more time in the market this summer to Irish companies that spoke to The Market for this article (see research it further. “Right now, I’m doing the business panels) also say this progressive outlook is reflected in their own development myself from here, but I’m actively looking at getting a sales resource on the ground. dealings. Eventually it could lead to about 20 per cent of our Activity among Irish companies in Mexico has been steadily business. It’s still a young market as far as we’re rising again over the past two years, says Gloria Garcia of BMT concerned. We want to learn a lot more. There’s a lot Consulting, Enterprise Ireland’s local representative in the of potential for us there.” market. What’s more, the reform agenda being pursued by the government of President Enrique Peña Nieto, allied to improved safety in the country, has enhanced the positive perception of Mexico and boosted confidence among external investors. “It’s an open, stable economy, it’s growing and becoming more globalised,” says Garcia. “It’s a market of more than 110 million people where we have different social classes from low to middle and high income. The latter are growing, so we have a potential market that is comparable to industrialised markets of around 40 million people with purchasing power, who want European products and want European standards of technology.” Goldman Sachs, which coined the BRICS acronym for high- growth emerging markets, has anointed Mexico among a new tier of ‘MIST’ markets. It has forecast that the Latin American state will be the fifth largest economy in the world by 2050.

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In early May, a Mexico–Dublin business conference was held to highlight opportunities for Ireland and Mexico to work together. Ireland’s ambassador to Mexico Sonja Hyland pointed out that the “ambitious and far-reaching reform agenda” of the Peña government ranges from energy, education and telecoms to tax and financial services. “You see and feel an incredibly dynamic and innovative economy and a warm and welcoming society,” she said. In his address, Mexico’s Minister of Economy, Ildefonso Guajardo Villarreal, forecast strong growth in the coming years. “For the Mexican economy to create enough jobs for the Mexi- can people, we have to grow at 5 to 6 per cent per year,” he said. Transport boom boosts Noting that Ireland’s business landscape is populated largely by CarTrawler’s outlook on Mexico SMEs, Villarreal said the government’s reforms are intended to allow growth among small and medium-sized Mexican firms and exico ticks most boxes for CarTrawler as it looks not just the large global players. Mto increase its foothold in a growing market. The He noted that the last 12 months have seen seven constitu- company provides a car rental booking engine for the tional reforms and additional changes to regulatory frameworks, websites of airlines, hotels and travel providers and designed to encourage further investment and entrepreneurial has already signed some local carriers in a country that has more than 200 airports. “There were probably activity in a range of sectors. For example, Mexico receives foreign well over 100 million passengers going through direct investment to the order of US$20 billion per year, and the Mexican airports during 2013. The other great thing country has established strong clusters in automotive, aviation that’s happening in the Mexican market – which is and electronics, Villarreal said. He gave the example of Nissan, a wave we are riding – is that the low-cost carriers which has had a presence in Mexico for 30 years but now plans have really taken off. The middle class is growing in to increase production from 100,000 cars to almost 1 million by Mexico and that’s reflected in the growth in travel 2015. “They trust our free trade policies will be there for a while, and transportation,” says Michael Cunningham, chief and they believe Mexico is a good platform from which to sell to commercial officer with the Dublin firm. other markets … We are the best gateway to sell goods in Latin It helped that some of CarTrawler’s team were America and North America.” already familiar with Mexico, having dealt with some As this article went to press, the federal government unveiled of its airlines in the past. “Mexico is a great country to do business in – there are no barriers that we a National Infrastructure Programme that includes investment of came across, no legal or commercial issues,” says up to 4 trillion pesos (€227 billion) in a massive overhaul of roads, Cunningham, adding this is unlike other countries in railways, ports and telecoms. Some commentators believe this Latin America which can be more protectionist and, plan alone could add between 1 and 1.5 per cent to GDP growth in consequently, harder to crack. the coming years. While the sales process in Mexico can be slower Conor Fahy, regional manager for Latin America with than in Europe, the key to making the breakthrough Enterprise Ireland, believes the timing is perfect for Irish firms is in taking a considerate approach. Personal to start looking more closely at opportunities in Mexico. “A lot relationships are important, and a regular presence of companies are learning about how these changes will impact. in the market is critical. “You don’t go there with the It’s a big market, it’s complex and it takes time to understand it. attitude that ‘this is a third world country and we’ll It’s the right time to start discovering opportunities and engaging show them how it’s done’: that won’t work there. You need to be respectful,” he says. with them,” he says. CarTrawler’s business model doesn’t require Regular trips are a key part of this, as personal relationships salespeople to be based on the ground; it prefers to are a key part of Mexican business culture. Philip Nolan, GM have a business development team specialising in the for sales and services with Openet, points out that he visits the global airline sector. Another group in the company’s market on average every six weeks. The telecoms billing provid- Boston office handles some day-to-day customer er signed a deal with America Movil late last year, and Nolan is service issues with Mexican customers. optimistic of further sales in the market. Cunningham describes CarTrawler’s Mexican Fahy suggests that early-stage research and business develop- business as “beyond the exploratory stage. We have ment can be done relatively cheaply by using a North American the reference customers, we have the content to sell, office as a base of operations. Galway-based medical device maker so it’s about getting around to penetrating the market Aerogen has taken this approach, working from its Chicago of- fully. We would hope to be, with a bit of luck, signing at least one other airline. We would hope to double fice. “Most of Mexico is either an hour ahead or behind where we our business in Mexico within 12 months. It should are, but you’ve got the majority of the working day to deal with be a top 10 or 12 market for us – that would be in our the principals that you’re dealing with,” says Stephen Lacke, the three-year projection.” company’s general manager for the Americas.

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Aerogen has an OEM agreement to add its nebuliser tech- Early start Mex the difference nology to an existing manufacturer’s ventilator product and is for Combilift also working with an in-market distributor to file for regulatory ood business is where you find it – or sometimes approval in Mexico. “Once we get the regulatory pathway, we will where it finds you. Material handling specialist have a feel for how important Mexico will be for us. It’s not in our G Combilift was just two years in existence when it was top five markets right now, but based on the size of the popu- approached by Mexican distributor Cargotec who knew lace and 40 per cent of the country with some type of popular Combilift founder Martin McVicar from a previous insurance, that would at least give the indication that there are company. McVicar admits Mexico was not even on the healthcare dollars available,” comments Lacke. “We don’t have company’s radar back in 2000. “It was an easy way a sense of how broad acceptance will be, but we’re going to put to get some additional business without us having to some energy into determining that over the course of next year.” make additional investment,” he recalls. Aerogen has been able to pursue a twin-track route to mar- Combilift’s early wins in Mexico were around ket, and Garcia says the key for Irish companies to be successful the Monterrey industrial segment, where many US in the Mexican market is to be similarly flexible. That may mean companies have manufacturing hubs. “Probably because of that, we found quite a lot of the decision makers adjusting their usual sales channel for a new market and either there speak very good English, which meant it was easy working with a partner or selling directly as the sector requires. for me or some of my people to meet with them. And Garcia advises working with more than one representative because many of the companies have some influence in Mexico – keeping in mind that an agent may be representing from the US, they were very open to new concept many other brands and an Irish company that doesn’t manage the products,” notes McVicar. “One of the things that relationship is unlikely to see many sales for their efforts. “You definitely I admire about the Mexican companies is they should aim for organised and well managed competition. These want to operate competitive businesses, make them as agents shouldn’t compete in the same territories but they should profitable and as competitive as possible, and because know they don’t have exclusivity so they know that if they don’t that’s their main focus, there are great opportunities for deliver, you won’t continue to do business with them.” innovative products that bring them value.” That open culture has led to sales growth for Combilift, which is keen to seize further opportunities. TIPS FOR DOING BUSINESS IN MEXICO To that end, last year it hired a Spanish speaker based in Panama to develop the Mexican market by expanding into A similar outlook on life means that Mexicans and the steel industry and oil and gas sector. “In the next 12 Irish are well matched in business; there’s room for months, we’re definitely expecting a 50 per cent growth humour in the discussion and the signing of a con- in sales in Mexico, and that’s as a result of doing more tract is cause for celebration in the form of a meal local trade shows and having our own person spending 25 per cent of his time in Mexico,” says McVicar. and drinks. But as with any international market, it’s With many other international markets now worth knowing some of the nuances of the culture established for the company, McVicar has since had to improve your chances of success. time to rethink his export strategy. “Our best route to a new market is to visit some potential customers and ­– You won’t find customers, agents or suppliers get a feel for how they would like to see that product online or via phone calls: doing business in Mexico being supported, for them to do business with us. We has to be in person, and relationships are very talk to the end users and then sign the distributor important afterwards,” he says. But there are no regrets. “I wouldn’t say it was an incorrect decision. Working with ­– Invest in at least one or two trips per year to visit Cargotec over the last 14 years has given us a great your clients or build on your connections in Mexico foothold in the market. We have over 200 Combilift through networking events or conferences forklifts operating successfully there, which gives us a great reference base to build on.” ­– Book meetings no more than 6–8 weeks in ad- vance of travelling (not before, which other foreign businesspeople often try to do). Bear in mind that you’re unlikely to get an exact time and date for a given meeting until a week before your trip ­– When you visit, it’s good practice to bring a small gift from Ireland – Mexicans appreciate presents as a token of goodwill. You should also budget for inviting your clients to lunch.

SUMMER 2014 | THE MARKET REGIONAL FOCUS: SOUTHERN EUROPE 030 ITALY AND SPAIN SHINE ON

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Italy and Spain, not unlike Ireland, have received their fair share of bad economic press lately, but despite these negative headlines, Italy is still a member of the G8, and Spain – with a smaller population – isn’t far behind. Both markets account for significant exports for Irish companies and have a long and rich history of trading with Ireland. Italy is Ireland’s fourth largest Eurozone export market, while Spain is its sixth. To label both markets as the same would be unwise. However, there are a number of similarities and synergies. ITALY AND Aside from a similar culture generally, there are similarities in the type of market, market needs and business culture as a whole. It’s not by coincidence that among the top 50 Enterprise Ireland clients exporting to Spain and the top 50 for Italy, 50 per cent appear in both lists. So any company considering one of these markets could benefit by taking the time to explore possible synergies between the two that could lead to big pay-offs. Cian Molloy SPAIN SHINE reports on some of the Irish already there, while the local Enterprise Ireland offices highlight hot and cold sectors. Italy a good call for Blueface Spain tops it for Ezetop

ON P telephony services “We entered the market pain is the most “Spain was always going company Blueface chose here by buying a similar valuable European to be a good market for us IItaly as the first country company to ours that was Smarket for mobile because it has a high level of for its expansion into Europe already operating in Rome. I top-ups company Ezetop, immigrants, with significant because of market conditions would recommend that other which is set to use the populations of Africans, South and the fact that it is one of Irish companies use a similar country as a location for its Americans and Romanians 10 countries in the world with strategy because it means you southern European marketing – both first and second a Hutchinson 3G (‘3’) mobile immediately have people with operations. generation.” network. local knowledge. Founded in 2006, Ezetop When Ezetop first entered Blueface is a mobile virtual “It is a great place for enables people living abroad to the Spanish market, it had network operator that can offer recruiting talent” he adds. send mobile phone top-ups to an office in Barcelona, but companies efficiencies and “Because of the economic family and friends back in their once operations were up and additional functionality on their situation, there are lots of home countries. Its primary running, they were supported landline and mobile networks. skilled graduates available who users are emigrants from 200 from Dublin. However, now “There are huge opportunities are typically bilingual, and it’s a different countries. Top-ups Ezetop is re-opening its Spanish in Italy for us,” said co-founder market where people are ready are available for purchase in office, to be closer to the and director Fergal Brady. “The to adapt new technologies. 20 different host countries Italian market, which it sees as economic background in Italy Also I think they like the Anglo- via ezetop.com, white-label being similar to Spain. is similar to that in Ireland, so Saxon approach to business, if I websites, through a number “When you enter the there are a lot of companies can call it that. They perceive us of smartphone apps and via Spanish market first, you need here looking for ways to save as more commercially-focused POS terminals at more than to have a presence there,” money on their business and deal-orientated and that 450,000 locations. said Bors. “I’ve heard Spanish overheads and looking to attitude and methodology is “Before we go into any clients say: ‘There are Irish improve their communications. well received. country, we look at the number companies with very good We are close to unique in the “The downside is that of immigrants living there and products, but we don’t want way we bring landlines and commercial law in Italy is at the level of remittances they to risk doing business with mobile services together, with substantially different from are sending back home,” said them because they don’t have a single voicemail box for both Ireland and the UK. It’s quite Reka Bors, head of European a presence here’. Once you are and with easy transfer of calls old world really, with public distribution. “If there is a high up and running, after a year, from landlines to mobiles and notaries signing off on all level of remittances, we can you can scale back like we did, vice versa. documents and filing them draw the conclusion that there but at the start you have to be away. The administrative and will be a willingness to top-up there.” legal overheads are probably family phones as well. comparable to those we have in Ireland, but there are more steps involved, and it takes longer to get a contract implemented and legally finalised.”

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Hot and cold industries for Irish companies in Spain “Spain is very important to Openet, Areas of success Areas of difficulty as it gives us a local presence when Telecoms Construction IT for travel Engineering selling into multinational operators Financial services software Consumer retail like Telefonica, Orange and Vodafone, Medical Devices Education but we also back this up with regional Pharmaceuticals Digital Media presences.” Cleantech

Healthy prospects in Italy Mobile giant makes Spain the one for Openet

ith one of the best In comparison to the French, hree of the world’s “Spain is very important to national health Dr Rice says the Italians are biggest mobile phone Openet, as it gives us a local Wservice systems very open to hearing about new Tcompanies – Telefonica, presence when selling into in the world, Italy offers ideas and ways of doing things. Orange and Vodafone – are multinational operators like excellent opportunities for “They are very willing to listen active in Spain, so it makes Telefonica, Orange and Vodafone, Irish companies that can and learn, and they will listen for perfect sense for Openet to be but we also back this up with deliver increased efficiencies a very long time,” he says. “But active there too. regional presences. For example, for doctors, hospitals and you have to be careful that they Working with 80 Telefonica has several mobile healthcare administrators, says are not just learning from you so telecommunications providers operators in South America, and Dr Malachy Rice of Kokomo, they can implement your solution in 32 countries, Openet Openet has a regional office in a healthcare IT consultancy. themselves. Also when they give supplies revenue management, Brazil that supports our South Previously, Rice was global you access to the Italian market entitlement control and network American operations, so it’s a sales and business development for the first time, they will want intelligence technologies. With good mix. manager with the S3 Group to know what is in it for them. the growth in data-rich mobile “Also partnering with which in, partnership with the “It’s a very networked society, 4G services, the company, which system integration companies Italian company Telbios, won a which has its advantages, but it employs some 950 people, is important to us, so having a contract for a new model of care does mean nepotism is rife and is experiencing an increasing local Spanish presence makes it for chronic diseases in Lombardy very often you get the feeling demand for its telecoms policy easier for us to work with partner Region in 2012, which was said that the final outcome of a and charging products. companies that are active in to be one of the largest of its negotiation has been preordained “A key decision to invest Spain. And it makes sense for us type in Europe. – you just have to make sure in Spain was the fact that it’s to drive our Portuguese activities “The Italian healthcare you are on the right side of that the home of the headquarters from Spain too.” system is very sophisticated,” deal when it reaches its fated of the Telefonica Group,” says Cabrero says that, for Openet, says Dr Rice. “For example, conclusion.” Openet director Luis Cabrero. there are not many differences they have a smartcard system Rice recommends Italy “If you want to do business with between doing business in Spain for use every time you visit a over Spain for those selling companies like Telefonica, you’ve and in most other countries. GP or a hospital, so they have healthcare solutions, because got to show willingness to invest. “The issues facing an operator great records about healthcare the Spanish market is so It would be tough to try and in Spain are often the same consumption, and they can fragmented. “In Spain, every sell into Telefonica with a non- as those in, say, Argentina very easily put together models region has its own health Spanish-speaking team that flew or Ireland. Openet will win that help improve how that minister, and every region wants into Spain once a month, then more business by providing healthcare is consumed. I was to do its own thing, with the held meetings in English and innovative products that help involved in a study that surveyed result that Spain is the wild west flew back out again. operators increase revenue and 200,000 patients; in Ireland, a of healthcare. The one advantage control costs.” similar survey would typically of Spain is that it is easy to meet involve only 200 people.” the Minister for Health, but that is only because there are so many of them.”

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Hot and cold industries for Irish companies in Italy “In Italy, they are working to pull Areas of success Areas of difficulty themselves out of difficulty. They are Medical devices Construction materials IT for travel Construction projects interested in hearing about technology Pharmaceuticals Consumer retail that they can use to be more efficient Financial services software Electronics or to add value. Whereas in Spain, they Cleantech Education Aviation seem to be waiting for someone else to Digital media pull them out of their difficulties.” Agricultural Machinery

Natural partners for Monex Bookassist finds its place in the sun

ith the highest Once Monex partners with ounded in 1999 and “There is much more tourism volumes in a local financial institution now with 70 staff optimism in Italy; we are starting WEurope, Italy and or card payments system Fbased across seven to see year-on-year growth in Spain are naturally valuable provider, it supports that partner European countries, Bookassist pricing, but in Spain, it is still a markets for Monex Financial in marketing the benefits of is a provider of booking race to the bottom.” Services, a specialist in dynamic currency conversion engine software and online In each of its overseas dynamic currency conversion at point-of-sale (POS) to marketing knowledge for markets, Bookassist hires local (DCC), used primarily by leisure retailers. “In-market partners the hotel industry. Currently, personnel who are already well and business travellers. have been, and will continue to the company handles about connected in the hospitality The Killarney-based company be, instrumental in generating €200m annually in direct industry. “Advertising jobs in now operates DCC services further business relationships hotel bookings on behalf of its new countries has not been in 46 countries, with clients within these markets,” says De clients. successful,” says O’Mahony. supported from 10 international Barra. “In 2012, 21 per cent of our “In our industry, so much support centres. Last year, Although she believes revenue came from Spain and works by word-of-mouth Monex handled 128 million DCC that both Italy and Spain are 11 per cent from Italy. But last recommendation. When we enter transactions. saturated for DCC, she says year, at a time when our overall a new market, we go in having Its growth strategy has that tourism growth projections revenue was increasing, it was already formed a relationship, always involved working with point to Italy holding the 15 per cent from Spain and 12 out of Ireland, with a high-level local partners, says marketing greater business potential for per cent from Italy,” CEO Des hotel chain that will act as a manager Mai De Barra. “Monex Monex into the future. O’Mahony told The Market. brand ambassador behind us initially commenced market “Those figures tell the story,” and will work with us at chief engagement by availing of he says. “Both countries were officer level. Through our Enterprise Ireland’s knowledge, hit by the financial downturn, clients, we find people who market research and other but each seems to have reacted have good local knowledge and resources and by participating in differently. In Italy, they are who will be professional. In EI-led trade missions. Following working to pull themselves out the hospitality industry, sales these initiatives, we received of difficulty. They are interested are not all about price: they are introductions to local partners, in hearing about technology that about developing a reputation such as BEE in Italy, which they can use to be more efficient for quality, reliability and has enhanced our business or to add value. Whereas in trustworthiness.” opportunities substantially. Spain, they seem to be waiting The local partner methodology for someone else to pull them breaks down culture and out of their difficulties. language barriers, and it works well for Monex.”

For further information about doing business in Italy and Spain, email [email protected]

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nyone who opens the Xin Jing Bao exams rather than creative thinking. Also, or other popular daily newspapers getting into overseas universities is actually sold at Beijing news stands will easier for students from moneyed backgrounds Aappreciate how big a product who don’t make the cut at Tsinghua or Fudan. education is for Chinese consumers. Amid pages of adverts for language courses and test SPEND, DESTINATIONS AND DISCIPLINES preparations courses, there are big-print flyers International education has also become a and adverts for international universities status symbol for China’s middle classes. As seeking to lure Chinese students overseas. their numbers expand with economic growth, Some of those adverts are placed by Irish there’s going to be a corresponding demand universities. And perhaps surprising for some for education – both third level and secondary back at home, Ireland is being promoted in level, according to Shen Minggao, head of China as a low-cost place to learn. Ireland is economic research at the Chinese arm of cheaper than most of the rest of the EU, and it’s Citibank (and himself an overseas student in cheaper than the UK, explains Wang Xiaogang, the 1990s). Chinese families spend an average an agent at Wiseways, one of China’s largest 7per cent of household income on education agencies matching students with overseas (compared to 5 per cent in India) according to universities. Citibank research, but that figure rises to 9 per Speaking at her office in Zhongguancun cent for Chinese households making more than in Beijing’s university district, Wang said a US$28,000 per year. business degree in Irish universities such as A look at the data published by Chinese UCD and UCC costs less than RMB100,000 education bodies suggests universities in MONEY SPENT BY per year, with humanities degrees going for English-speaking countries are the clear RMB90,000 per year. A year at Ohio State (a winners from spending by wealthy Chinese: CHINESE STUDENTS popular option for Chinese students) costs over 60 per cent of Chinese outbound students MAKES UP A BIG the equivalent of about RMB250,000 to go to English-speaking countries. But the clear RMB300,000 in tuition fees alone, says Wang. winner is the US which gets a massive 42 per CHUNK OF SINO-IRISH Money spent by Chinese students makes cent of the total Chinese student overseas TRADE. IT, PHARMA up a big chunk of Sino-Irish trade. Education traffic, according to the Chinese government- stands well above any other industry in run Service Centre for Scholarly Exchange. AND AGRICULTURAL Ireland’s trade with China (IT, pharma and A better-travelled China has more EXPORTS ALL TRAIL agricultural exports all trail the sums made diverse needs. There’s been a strong shift by Irish institutions from fee-paying Chinese from engineering and computer science THE SUMS MADE BY students). Students account for a third of visas towards business degrees and postgraduate IRISH INSTITUTIONS issued in 2013 by the Department of Justice’s study abroad, in particular a shift from visa office in Beijing, with families visiting engineering to business, social sciences and FROM FEE-PAYING those students accounting for almost another even humanities. The largest portion (29 per CHINESE STUDENTS. third of visas, according to officers spoken to cent) of Chinese students studying in the US in for this report. the 2012–2013 academic year chose business Over 450,000 Chinese students went and management, according to the Beijing- overseas to study in 2013, compared to 140,000 based Chinese Service Centre for Scholarly in 2007. About 2,000 of that figure went to Exchange. This represents the first time that Ireland for third level study. Last year, 273,000 business replaced engineering degrees as the Chinese students came back home to compete first choice of US-bound students, according to with 7.3 million graduates of domestic the Exchange. universities for jobs. Quality has been the key As Chinese multinationals like telecoms reason motivating Chinese students to study equipment maker Huawei and e-commerce abroad. Though students still compete fiercely giant Alibaba become global players they for places in China’s top colleges like Beijing “require a flow of business graduates with University, Tsinghua University (Beijing and strong language skills”, explains Wiseways’ Fudan Universities in Shanghai), many Chinese Wang Xiaogang. “This will become even more students have been driven overseas by repeated the case when the Chinese currency becomes scandals at home over academic plagiarism, a global currency, and Chinese capital and overcrowded classrooms and an education investment start to flow even more around the system still skewered to rote learning and world.”

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Mark Godfrey reports from Beijing on the opportunities and challenges for Irish education providers in the world’s largest market for overseas education. IN A CLASS OF ITS OWN

“These days, it’s not just a case of acquiring skills to take back home, Chinese outbound students also seek cultural experiences.”

QUAN YING

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Without the instant recognition enjoyed by Ivy League schools and British institutions like Oxford (all brand names in China), Irish universities have to work extra hard establishing links with agencies across China. It’s crucial to engage with as many reputable agents as possible. “We deal with some of the big agents in the main population bases, the big cities,” explains Bei Zhang, a veteran overseas education agent who represents UCC in China. Chinese students and parents rely on education agents or vendors for the bulk of their knowledge about universities and destinations, explains Jie Wu, a graduate of the American College in Dublin now working for a Chinese investment company based in Shanghai. “Agents typically match students with colleges according to their study purpose and financial means,” she explains. There may be another draw bringing students to Ireland. Emigration opportunities are also becoming a decider for Chinese “I chose Ireland Many Chinese students are getting a students and their families as urbanites seek business qualification on top of an engineering to leave behind the much-reported smog to do my degree – others also come to boost their English and traffic (not to mention rising real estate postgraduate language skills to compete in a global economy. prices) of China’s cities. Agents also promote “I chose Ireland to do my postgraduate because Ireland on the emigration angle, says Wang because we had we had an agent in my home city who suggested Xiaogang at Wiseways: “There are certain an agent in my Ireland as a place to take a language course,” benefits to Ireland, which we promote, such as explains UCD graduate Bing Wang. After a the ability to work 20 hours a week … also you home city who year studying English in Dublin, Bing went on can spend a year in the country after study suggested Ireland to graduate from the Michael Smurfit School to secure a job locally and you can secure of Business in 2001 with a higher diploma in permanent residence by staying there for four as a place to business studies. years.” take a language Wang (who had an undergraduate degree in Safety and scenery – two selling points engineering) has spent a decade working in the pushed by Education Ireland, the umbrella course.” UK and Russia before coming back to Beijing: brand responsible for the international market- he is now head of the EU–US department of ing and promotion of Irish higher education BING WANG SUNGHO Engineering & Construction Co institutions – are attractive for wealthy Chinese UCD GRADUATE Ltd, a Korean-invested firm building Chinese families, explains Jie Wu. “Ireland has great factories for multinationals like Hyundai, Kia fresh air, and it’s a small country so it’s easy to and Toshiba. know.” Indeed, she’s currently advising Chinese citizens on investments in Europe and thinks IRELAND’S STRENGTHS AND WEAKNESSES environment and affordable real estate prices The comparative lack of a big brand university are all attractive points for Chinese families name is a weak link for Ireland in attracting who see education for their children as a step- students like Bing Wang, who says he relied on ping stone to eventual emigration. his agent for advice on Ireland because he hadn’t There has, however, been no major influx heard of any of the country’s universities. “With of Chinese investment in an official Irish invest- their help, I learnt that Ireland uses English as an ment scheme advertised in China last year: only official language and has a globally recognised a dozen Chinese applicants took up a so-called education system. He chose UCD based on an investment residency permit, offered by the agent’s advice: “I saw it as a national capital Irish government in return for a minimum university, a bit like Beijing University in €500,000 investment in Ireland, according to China ...” the Department of Justice.

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CHANGING NEEDS, EXPANDING MARKET Chinese students China’s demand for overseas education is expanding, but the nature of demand has and parents rely evolved. An overseas degree no longer has the on education cachet it had, simply because there are so many more graduates coming back now compared to agents or vendors 20 or even 10 years ago when it was still largely for the bulk of government who sent and funded the students. However, rising incomes are creating a their knowledge previously unseen wave of mature students, about universities travelling for intensive language training. Among them is Dublin-bound Quan Ying (English name and destinations. Angie), who is taking a year out of her job as JIE WU producer at the Beijing bureau of National Public GRADUATE OF THE AMERICAN Radio (USA). She’s spending €6,000 on a year-long COLLEGE IN DUBLIN English language programme at Griffith College in Dublin. Quan is drawn to Irish culture and music after a memorable month travelling the country in 2010. “These days, it’s not just a case of acquiring skills to take back home, Chinese outbound students also seek cultural experiences,” she says. Quan says her friends, who went to London and Paris, questioned why she was travelling to flight between Beijing and Ireland’s capital may what they considered an off-beat destination. be a crucial help to Ireland in attracting more But a friendly population and easy access to Irish students from what has become the world’s media institutions both impressed Quan: during biggest education market. During a visit to China her time in Ireland she got to play a bit part in in April, DAA boss Kevin Toland suggested an Air the RTÉ soap Fair City and sit in on an editorial China direct service to Dublin will commence this meeting at The Irish Times newspaper. year, a welcome move surely for agents of Irish A significant challenge, however, remains in education and tourism here worrying that Ireland the general lack of awareness of Ireland. “I still find isn’t making a strong enough impression on a real lack of knowledge among education agents China’s middle classes. And more momentum is in China … some of them ask me basic questions likely to come from the fact that Enterprise Ireland like is Ireland still at war?” says Jie Wu. Others see is currently hiring a new education officer for the a gradual improvement in awareness of Ireland, market. in part due to promotion by the Irish tourist board While there is a clear economic payback for but also thanks to some neat PR tricks. Angie Ireland in attracting fee-paying Chinese students Quan explains how the Irish embassy in Beijing (and their families who visit as tourists), it’s managed to get a large section of the Great Wall increasingly the case that Irish educators will need in China lit in green this year for St Patrick’s Day. to go to China where there is a vast emerging adult “I was amazed to see this reported in even smaller education industry and a demand for training and circulation newspapers in China.” language skills at the corporate level in particular. The relative inability to attract Chinese Adult English language teaching, after-school tourists to Ireland (which remains outside tutoring and preparation for international tests are the Schengen European travel area) may be three key growth areas identified by Karan Khemka, compounding the problem. Despite an advertising a consultant at the Parthenon Group, advising the campaign by Tourism Ireland, the numbers of China operations of international education groups bona fide Chinese tourists (as opposed to family like UK-based Pearson, which operates the Wall visits) travelling to Ireland remained below Street chain of English language schools here. He 10,000, according to visa officers in Beijing. Better predicts a 10 per cent annual growth in demand for connectivity – and awareness – will be vital if private English-language education in China. That Ireland is to attract more students from China. prediction is based on “underlying characteristics” Indeed, as peak recruitment season looms in of the private education market here: “it’s profitable China’s education market, a battle by the Dublin and the regulatory regime is relatively relaxed”, he Airport Authority (DAA) to establish a direct says.

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BERNARD AND ROSEMARY WALSH, WALSH WHISKEY COOLEY DISTILLERY IRISH WHISKEY REGAINS ITS FIGHTING SPIRIT

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COOLEY DISTILLERY JACK TEELING COOLEY DISTILLERY

Thanks to a well-resourced marketing push by global players, Ireland’s big whiskey names are regaining their brand-width. Aiming to ride on their coattails, smaller producers are now intent on taking their own bite of international markets. Charlie Taylor reports.

t’s heart-warming to think that Irish whiskey may once Back in 2003, Irish whiskey made up just over 9 per cent again become the most popular whiskey in the world, as it of beverage exports, but it now accounts for 28 per cent of all was before Prohibition in the United States. There were once such exports, and the association is predicting further growth. Ino less than 37 distilleries in Dublin – across The Liberties, Last year, association members collectively exported 6.2 million the Coombe, Newmarket and Smithfield. Currently, the whole nine-litre cases worldwide. This number is expected to double to of Ireland has fewer than 10 distilleries in operation, and only 12 million cases by 2020 and double again to 24 million cases by a handful of these have been operating long enough to have 2030. products sufficiently aged for sale. But a revival is underway. Irish whiskey exports have grown GROUNDWORK by 220 per cent since 2003 and are now valued at €350 million. A lot of credit for the recent success of Irish whiskey must go The leading markets for Irish whiskey currently are the United to Pernod Ricard and its subsidiary Irish Distillers, which have States, Ireland, France, Russia and the UK, and, while many worked hard to establish Jameson as a premium brand in key whiskey producers are busy trying to build their market share markets such as the US. It is already Ireland’s top-selling whiskey in these territories, some are also eyeing up new markets as the brand. reputation of the product grows. Sales of Jameson grew by 13 per cent in the nine months to According to the most recent figures available from the end of March led by strong US demand. Its success has helped International Wine and Spirit Research (IWSR), the Irish whiskey to boost the overall reputation of Irish whiskey, with many category grew by over 10 per cent in 2012 alone, with sales to the younger drinkers in particular finding it more approachable than US and Russia up 22 per cent and 18.8 per cent, respectively. Scotch. Newer market entrants, such as West Cork Distillers, Buoyed by such strong tailwinds, over 15 new distilleries are want to piggyback on Jameson’s success and make inroads into currently being developed across Ireland, and a number of more export markets. established producers are reporting record sales. The sector is David Phelan is an industry veteran, who was previously a set to invest over €1 billion in Ireland in the next 10 years as it key director on the Baileys marketing team in Diageo and with expands to meet demand, according to the newly formed Irish C&C International, before finding success of his own, producing Whiskey Association, which comprises of heavyweights such as and launching brands such as Boru Irish Vodka, Clontarf Irish Diageo, Irish Distillers and Cooley, as well as newer companies whiskey and Coole Swan Irish Cream Liqueur. He says the future like the Teeling Whiskey Company. looks bright for whiskey producers of all sizes.

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INDUSTRY VETERAN DAVID PHELAN COOLEY DISTILLERY

“Irish whiskey is a hot category at the moment, and the last five years, with 95 per cent of sales coming from exports. reason is that it has been developed by some of the biggest Its key markets are the US, Russia, Scandinavia, France and players around. There’s William Grant with Tullamore Dew, Germany. In partnership with Illva and its existing distribution Diageo with Bushmills, Pernod Ricard with Jameson and more partners, the company plans to gradually expand to major Asian recently, Suntory and Cooley. These companies have spent a lot markets, such as India and China. Walsh Whiskey Distillery is of time and money in promoting these brands overseas, and, in developing its own distillery and visitor centre in Royal Oak, Co doing so, have created opportunities for smaller players to come Carlow, which should open within 18 months. in,” he said. “It’s so important when everyone is investing big money Phelan, who now runs Oileain Marketing, said there over the long term in distilleries to have a tried-and-tested are a number of other factors that could also benefit newer route to market,” said Bernard Walsh. “The interesting thing entrants to the market. “There’s huge growth in craft distilling, about our product is that we’re out there selling the brand particularly in the US right now. Consumers increasingly want ahead of any new supplies coming along. We’re building up to know more about the products – such as where they are our distribution network, and our partnership with Illva gives from, how they’re made and who’s making them. Drinkers are us more muscle on that side of things. In some of the markets looking for something more authentic, and this has led to a rise where Illva is particularly strong, such as in Asia, we don’t really in sales of bourbon, rye and Irish whiskey. have much of a presence, so they will give us great access to “The fact that Irish whiskey is also considered a good these territories once our new supplies come on stream.” mixer will also help sales, especially as there’s a real craze for Having sold the Cooley Distillery in Louth to Beam in flavoured brands right now. Producers are already reacting to 2011 in a deal worth $95 million John Teeling, a serial investor, this with the likes of Jack Daniels and our own Paddy bringing has announced plans to spend €35m over the next four years out honey – and apple-favoured varieties,” he added. transforming the Great Northern Brewery in Dundalk, Co Louth – the former Diageo site where Harp was brewed. Teeling’s plan BOXING CLEVER for the renamed Great Northern Distillery will be threefold: To Some smaller players trying to bolster sales overseas are produce own-label Irish whiskey for retailers worldwide, make partnering with bigger companies. Walsh Whiskey Distillery, bulk whiskey for brand owners with no distillery assets, and an established producer of premium brands based in Carlow, provide grain whiskey for smaller pot still distilleries. recently announced a major €25 million expansion programme Meanwhile, Teeling’s sons Jack and Stephen are behind on the back of an investment in the company by Italian drinks recent entrant the Teeling Whiskey Company. “Everything giant Illva Saronno, which owns Tia Maria. is cyclical in the drinks trade,” Jack Teeling told The Market. Walsh Whiskey, which was founded in 1999 by Bernard “There’s a movement away from trendy white spirits, towards and Rosemary Walsh, already sells 40,000 cases of The Irishman more authentic, flavoursome brown ones. Young people might and Writers Tears a year, through a supply deal with Midleton start off drinking vodka or gin, but then they tend to develop distillery. It has seen revenue growth of 300 per cent in the their palate. Irish whiskey is often seen as particularly suitable

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WEST CORK DISTILLERS FOUNDERS DENIS MCCARTY, GER MCCARTY AND JOHN O’CONNELL because it provides an easy entry point to brown spirits, because “There are some markets where Irish whiskey isn’t known of its smooth taste and its long history. These appeal to drinkers at all. I know from experience in trying to sell whiskey in the in other markets,” he said. Caribbean and parts of South America that it’s just an unknown category. There are plenty of other opportunities out there HEALTH WARNING to be pursued. It could be that there’s more of a role needed The Teeling Whiskey Company also recently announced at national level to help promote Irish whiskey as a whole in plans for its own distillery and visitor centre in Newmarket emerging markets,” he concluded. Square, Dublin. It exports to 18 countries but is bullish about increasing this figure. “The big opportunities for smaller producers is to go for the more mature markets and drive “Everything is cyclical in segmentation,” he said. Teeling can avail of good contacts in the trade through the the drinks trade. There’s a family’s existing relationship with Cooley, which is now owned movement away from trendy by Japanese drinks group Suntory, but he sounds a note of caution about expanding into emerging markets. white spirits, towards more “Outside of the traditional markets where Irish whiskey authentic, flavoursome is known, it’s difficult trying to get established. The bigger players haven’t gone into these territories yet, and there’s also a brown ones.” problem with a shortage of product,” he said. “The bigger guys are ramping up production and are likely to start working on emerging markets shortly. We’re reliant on them because there’s a massive education programme needed to build the Irish whiskey brand generally in these territories.” Jack Teeling’s views are echoed by John O’Connell, co- founder of West Cork Distillers, a Union Hall-based producer formed in 2008 by two former deep-sea fishermen and a food scientist. “There’s a major health warning associated with the boom in Irish whiskey. Everyone is getting obsessed over its growth, and in fairness it is doing really well in some markets. But a lot of that growth is associated with one or two brands. There’s a big challenge for any new brand that comes onto the market as it has to be positioned carefully to differentiate itself,” he said.

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THE THINGTERNET: HARDWARE GETS A SOFT SIDE

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Who says that only the tough survive? With the Thingternet revolution already upon us, everyday products need to get smart by incorporating software capability, or else wind up getting left on the shelf, writes Anthony King.

hen the New York Times announced a hardware from cars to gadgets to fridges to sports equipment goes online. renaissance in Silicon Valley in 2012, it name-checked Intel predicts that this next stage of the internet could see 31 two companies – SOS Ventures and PCH International. billion web-connected devices come alive by 2020. WBoth are Irish. These were centre stage again when At the Dublin hardware seminar, though, senior the Financial Times reported last year on how their hardware development advisor Robert Bushnell of Enterprise Ireland accelerator and incubator programmes are nurturing innovative stressed that it is not all about start-ups.” We want to get existing products to market. companies in electronics and on the industrial side to start This spring, the two companies spoke about opportunities cooperating with software and communication guys to come up for new hardware at an Enterprise Ireland seminar held at the with new products using the new technology. We would like to Gibson Hotel, within sight of Dublin’s quaysides. Also at the see companies coming together and launching spin-outs too,” he seminar was an example of smart hardware from newcomer stressed. Adaptics, which recently went through an accelerator Since 2007, Apple has shaken our expectations of how programme. This Irish start-up will offer a kitchen scales called hardware and software should combine. “They weren’t the first Drop, which talks with your tablet and comes with a recipe to marry software and hardware, but certainly the way customers app. and people use hardware changed because of the intuitive and This is just one of a swell of new smart hardware products, simple way they do it, [for example] slide to unlock. From there, it wirelessly connected to smartphones, tablets and PCs. Think spawned a huge Internet of Things, exploding the whole space,” Google Glasses, Nest’s smart heating thermostats and the recalls Joe Perrott of PCH International. “Everybody now has Smartwatch from Pebble. Start-ups are introducing new, smart connected devices.” Dumb products of all hues could get left on products, challenging and displacing their “dumb” pre-internet the shelf. predecessors. These are filling up a new basket, the ‘Internet of Perrott, a mechanical engineering graduate from Cork Things’, a motley collection of wirelessly connected devices. Institute of Technology, met PCH’s CEO Liam Casey when he Irish start-ups are pitching in. Brim Brothers, for instance, moved to China in 2004. He’s worked for PCH ever since. He is launching a device this summer that attaches to cyclists’ told the seminar about the company’s new hardware incubator shoes and gives them all sorts of useful information on their called Highway 1, based in San Francisco. PCH offers supply- performance. Climote, a more established Irish company, now chain management services, guiding start-ups from design and allows for total control of your home heating – remotely. engineering, through to manufacturing, logistics, even sales. Technology changes mean you don’t have to be a tech THINGTERNET geek to get involved in the Thingternet. Revolutionary new Climote competes against heavy hitter Nest Labs, founded in arrivals like the credit-card sized Raspberry Pi computer, 2010 by a former Apple executive and pocketed by Google earlier which sells for $25 and $35, and the open-source prototyping this year for $3.2bn in cash. For The Economist, this buy signalled platform Arduino are shaking things up and allowing makers the coming of age of the ‘Thingternet’ – a world where everything to construct inexpensive prototypes. “It is much easier for start-

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THE SHIMMER WEARABLE ups in this space now to come up with a prototype. They can use SENSING PLATFORM 3D printing and even use crowdfunding [for financing],” says Perrott. ounded in 1996 by These tools have changed the whole market, Adaptics co- FPaddy White, Realtime founder Tim Redfern says: “It has allowed people like us to Technologies provides a take a handmade prototype and turn them into a real product. range of design and contract Before the Arduino platform and the proliferation of open electronic manufacturing source software, even a prototype would cost thousands, but not services and serves a number anymore. For Redfern, 3-D printing at the Highway1 incubation of international corporates, centre in California was also a revelation. Companies in this including LG and O2. When incubator, split their training time between San Francisco and looking for opportunities to Shenzhen, China’s own electronics hotspot. develop its own products, the Coolock-based firm turned INCUBATE AND ACCELERATE to technology acquisition SOS Ventures sends its chosen start-ups for 111 days to Shenzhen, in 2008, with a licensing China, where each team develops and begins manufacturing deal to commercialise its new products. “We bring them to Huaqiangbei, the world’s Intel’s Shimmer Wireless greatest electronics market,” explains Noel Joyce of SOS Ventures Sensor Platform. Shimmer (and founder of the Designhub in Tullamore). “There, people is a small wireless sensor can get bits and pieces and build prototypes, and there is an platform that can record investment of $50,000 in each of these companies.” This, the and transmit physiological Haxlr8r programme, helps start-ups turn things like the Arduino and kinematic data in real board, Raspberry Pi into game changing products like the time and can be used for a Adaptic’s iPad- HEX Air Robot; Spark Core, which allows you add Wi-Fi to any wide range of applications in integrated Drop product; and Nomiku, a gadget for high-end sous-vide cooking in healthcare, sports science the home kitchen. and environmental science. leaves any bog Joyce notes the proliferation of open source software, William Lyons heads standard kitchen which allows you to take bits of code online to drive a sensor or the division within Realtime scales in the dust. It whatever you need. Ireland is producing “armies of coders and set up to develop the promises new levels electronics people” who will “add to this open-source knowledge wearable sensing platform. that we can all access”, he says. Williams Lyons, chief marketing Shimmer recently signed of accuracy, but will officer at Shimmer, who attended the hardware seminar, believes a deal with US company also do things like that a burgeoning hardware ecosystem in Ireland is bringing Emerge Diagnostics for a suggest replacement closer the day when such tech incubators and accelerators could device that allows for clinical operate in this country. assessment of soft tissue ingredients and allow Irish companies like Shimmer (see panel) are certainly injuries, he explains. “What you put together opening up the trail. Shimmer offers wearable sensing Shimmer replaced was a customised recipes. technology to companies. “There is a growing recognition that massive cart-like device that hardware is hard but that it is becoming more feasible and that wasn’t really usable and had the supports and tools are available for people within Ireland to be wheeled from location to go for it,” says Lyons. to location,” But now it has a Joyce emphasises design as critical to success. “When the briefcase with the Shimmer consumer turns off the device or stops interacting with it, sensors that are lightweight they need to still have a beautiful product.” He talks in terms and about the size and weight of the look and feel of the material, the things that get people of a matchbox. They pop excited about a product and make them want to talk about it. it onto the customer and “You must help them connect on an emotional level to your wirelessly transfer the data product idea, and that is the result of design as a differentiator. to a PC, Lyons says. “They That is what we try to achieve at Haxlr8r,” he told the seminar plan to expand this product audience. across the US.” What Haxlr8r tries to do with its teams is fill in the missing parts of the jigsaw like design, marketing and getting the story across. “A prototype is a far cry from a finished product,” he stresses. “The product must have compelling value to the customer. ”

THE MARKET | SUMMER 2014 NEXT WAVE 045

Adaptic’s iPad-integrated Drop, for one, leaves any bog HOME HEATING UNDER standard scales in the dust. It promises new levels of accuracy, CONTROL but will do things like suggest replacement ingredients in a recipe and allow you put together customised recipes or adjust limote offers control of weights of ingredients. Right now, the product is at fine-tuning Cyour home heating, with stage. The product design is sharp, modern and clean-cut, and a digital panel that takes 30 Drop picked up the accolade Best Consumer Hardware Award at minutes to install and which Launch Festival in San Francisco earlier this year. can be remotely controlled. The Dundalk-based company, SO WHERE’S THE DOUGH? a spin-out of Smarthomes, This is all about the various technologies coming together launched its remote heating and creating a hardware opportunity, notes Bushnell, who control hub in April 2012 at says all kinds of companies can get involved and offer the Energy Show in the RDS, domain knowledge. They could be in the food production, Dublin. The snazzy-looking transportation, security or building sectors. “A non-tech control can be operated from company could supply one part of the knowledge in terms of a smartphone app, computer what the product has to actually do,” he explains. web portal or from anywhere New technology can be disruptive for even a solid product. in the world via a text Mark Hanley of Isle Systems spoke at the ‘Opportunities in message. New Hardware’ seminar about his company Isle Systems’ new “It is quite a disruptive product – a personal alarm button. It was only in 2011 that product and business model phone manufacturers started to shift wholesale to devices with in that most people would touchscreens, dispensing with buttons or keypads. This has, only ever think of changing says Hanley, made it difficult for people to raise an alarm if they You don’t have their heating controls if the are in danger or have an accident. “At some point in everybody’s to be a tech geek current one broke down or a life, you will need to raise an alarm, perhaps you [a senior] have boiler needed to be replaced, fallen and you need to help. Touchscreens can be a problem,” he to get involved in but we bring an upgrade says. Isle Systems came up with a USB-sized button that signals the Thingternet. opportunity,” explains your phone to send out that SOS. Revolutionary Eamon Conway, MD, who Eamon Conway, one of the founders of Climote [see panel], new arrivals like left Honeywell in 2010 to a home technology company, emphasises that it is all about set up Climote with Derek giving the customer a good experience, and that can mean less the credit-card Roddy, CEO. Just like people is more. Apple’s massive success was based on four products, sized Raspberry switched to smartphones, he notes. And technology developments like open-source Pi computer and we are pioneering a similar software, inexpensive Raspberry Pis, 3D printers and Arduino journey for home heating microcontrollers are allowing makers to build and manipulate a the open-source controls, and our hub acts as range of hardware to add to the Internet of Things. prototyping platform a gateway to wider connected Similarly, there is an opportunity to take advantage of Arduino are shaking homes, he adds. platforms like the Shimmer, another enabling platform that is Climote has partnered open and configurable and can be applied to a whole range of things up and with several large energy applications. allowing makers to companies, including Scottish “Existing companies on the industrial side and the construct inexpensive Power, Electric Ireland electronics side can combine with the whole communication prototypes. and Power NI, which have and software side to come up with new types of products, brought the technology to which could be in monitoring, in food production, logistics, their customer base over the diagnostics, so it is not just about a couple of young guys last two years. It is one of coming up with a start-up idea,” says Bushnell. “A lot of the three companies that have knowledge is in the existing companies. They can have all the commercial partnerships domain knowledge, but they need to take advantage of these in place with UK utilities, new technologies. They don’t need to know about everything. the other two being Nest They can collaborate with other companies. This is a great and Hive. “We are an Irish opportunity.” company with big plans for For some products, going wireless could be the only international expansion,” says alternative to being left on the shelf, as billions of Thingternet Conway. smart devices gain ground.

SUMMER 2014 | THE MARKET REGIONAL FOCUS: SUB-SAHARAN AFRICA 046

EXPORTERS EXPAND THEIR FOOTPRINT IN AFRICA

THE MARKET | SUMMER 2014 REGIONAL FOCUS: SUB-SAHARAN AFRICA 047

n July 2013, Africa officially became the fastest growing At present, just 12 per cent of all African exports go from economy in the world. “Africa needs everything, and, in the one country in the region to another. That compares with inter- case of countries with huge mineral and energy reserves, Asian trade of 40 per cent and intra-European trade of 65 per Imoney is no longer the problem; it’s about how you can meet cent. “Given the expectations of intra-Africa trade growth and specific needs,” says Fred Klinkenberg, Enterprise Ireland’s man the associated increase in travel within the region, we need on the ground there. Last year, Enterprise Ireland established an aggressive strategy to capitalise on these opportunities,” an office in Johannesburg, its first in sub-Saharan Africa (SSA). Klinkenberg says. He points out that South Africa, Kenya and In its first 12 months, it worked with 75 individual clients. Ethiopia all have modern fleets of aircraft and are battling to Opened in conjunction with ESBI, the office provides hot-desks secure the position of SSA’s main air transport hub. and incubator units for clients. “We’re hoping to create a small Other areas of potential include telecoms – with ‘Ireland House’ here,” Klinkenberg says. exceptionally high growth levels of mobile phone penetration set Enterprise Ireland is now developing a broader ‘spoke and to continue – and banking. “Banking in many African countries is hub’ strategy to tap into opportunities in other rapidly growing highly developed, and the banks have strong balance sheets and countries in sub-Saharan Africa (SSA), such as Nigeria, Ghana and are well managed. They are highly innovative too, for example in Kenya. facilitating cash transactions by phone,” Klinkenberg says. Earlier this year, Thessa Bagu was appointed as a trade A five-day trade mission to Johannesburg, Cape Town and Lagos representative in Nigeria, which has now overtaken South Africa last November saw participation by 37 companies with interests in as the continent’s biggest economy. “While this is not a full financial services, telecommunications and education. Coinciding office, it’s important to recognise that Thessa does provide a full with the visit, EI took Ireland’s first national stand at AfricaCom, the EI service,” Klinkenberg says. This includes market research, annual pan-African exhibition and congress for telecommunications partner or distributor identification, hot-desking and meeting professionals. The net result was participation in nine networking space facilities for Irish companies visiting Lagos and practical events, involving 800 people, 20 individual client itineraries, 200 support and advice for EI clients. meetings and contracts signed to the value of €7 million. Enterprise Ireland also hopes to develop stronger links with Klinkenberg says that the planned evolution of Enterprise Kenya later this year and to develop a network of ‘pathfinders’ for Ireland’ services in SSA will expand the focus beyond the East and West Africa. telecoms and financial services sectors into life sciences; education; oil and gas; and engineering and construction. He OPPORTUNITY AREAS expects that it will lead to an increase in the client base EI is “There is a real commercial opportunity for Ireland, especially in actively working with at any given time to around 100. Nigeria, in vocational training. It is a rapidly growing economy, lacking in skilled labour, and there are good ‘train-the-trainer’ IRELAND EXPANDS ITS FOOTPRINT and e-learning opportunities. Africa is skipping the PC and going The challenge for Irish businesses interested in tapping into SSA’s straight to latest mobile phone technologies,” Klinkenberg says. growth potential is knowing precisely where to begin. Traditionally, Across Africa, an average 20 per cent of government spending is they have started with South Africa. Currently, there are well over now going into education. 150 EI client companies that export there, and 35 Irish companies He also sees big medium-term potential for Ireland in have operations on the ground, employing over 13,000 people. These aviation services. Both Boeing and Airbus have identified include the global engineering specialist Kentz, one of Ireland’s Africa as one of their two biggest areas of future sales growth largest privately owned agri-businesses, the Queally Group, and the opportunity, the other being Asia. food and food ingredients companies Kerry Group and Glanbia.

As Irish companies move beyond South Africa into growth regions such as Nigeria, Ghana and Kenya, Enterprise Ireland is also broadening its resources in the region, with a new ‘hub and spoke’ approach to sub-Saharan Africa and a series of African trade events planned for 2014. John Stanley reports.

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A number of smaller companies have joined them, creating noting that, in about 15 years’ time, the population of Kenya is a wider Irish footprint across SSA. They include Chevron, which expected to rise from around 70 million to 120 million, while the last year announced a major vocational training contract in German population will fall by about 10 million to 60 million. Nigeria, and Portwest, which is active in South Africa, Nigeria, “Whatever way you look, these are early days for Africa, and they Uganda and Kenya, supplying protective clothing and personal are exciting,” he says. safety equipment to personnel in the oil and gas industry. Also He has words of caution, however. “You must be 100 per following its African clients in the oil and gas sector is Suretank, cent committed to the region and willing to be patient for up to which manufactures specialist offshore tanks and containers. two years or you simply won’t achieve success. It’s also hugely Then there are the financial services and telco industry software important to take time finding the right partner. For an SME, it providers like CR2 and Adaptive Mobile. Meanwhile, in the can be very hard to bank roll the time spent putting right early consumer space, baby/nursery equipment company Clevamama mistakes.” recently secured distribution into Checkers in South Africa and is From a practical point of view, even though Africa is a long doing well on online platforms like Kalahari and Takealot. way from Ireland, the widespread use of English and the legacy of Among 2014’s schedule, Enterprise Ireland has already European legal systems make it a relatively easy place in which to hosted a market study visit for six companies interested in the do business, he says. mining sector and will host a briefing breakfast focused on oil For Sigma Wireless, which specialises in the design and supply and gas, and engineering and construction this June. This will be of critical communications systems to public safety and utility followed in September by a trade mission to Nigeria and Ghana customers, entry into SSA was more opportunistic than strategic, and participation in AfricaCom in November. says CEO Tony Boyle. But having looked at more mature markets, Africa is clearly not for all exporters, and Klinkenberg even he recognises the greater potential in developing markets. The suggests it’s “not for the faint-hearted”. A local partner is essential, company has now established a network of contacts and has done he stresses. “We can help companies identify potential local business throughout Southern and Western Africa. “Getting the partners and undertake initial screening, but the clients obviously first reference site for us was very important; that’s always the have to do their own due diligence. hardest part. But Africa is a good place to do business in. Once you establish relationships and look after your customers, you will find SOME PRACTICAL ADVICE FROM IRISH COMPANIES great loyalty in return,” he told The Market. One company for which SSA has been a good move is Sentinel Fuel “There’s a strong awareness of Ireland, partly through our past Products, which designs and manufactures fuel management and activities as missionaries, and there’s a positive disposition towards fuel tank alarm systems. CEO Kurt Reinhardt identified potential the Irish. We anticipate that half of our new business over the next in the market because of its considerable reliance on diesel fuel to three to four years will be in Africa.” provide both primary and back-up electricity generating capacity. In Nigeria, he points out, it is not unusual to have 15 to 20 power For further information about doing business in sub-Saharan outages a day. “Our system has been embraced massively in the Africa, talk to [email protected] or, for sub-Saharan region,” he says. He also has a keen eye to the future, Nigeria, [email protected]

What is the real truth about Africa’s economies?

longside a continuing legacy With increasing urbanisation, roads and port facilities, and countries has narrowed, Aof poverty, Africa is seeing Africa now has 52 cities with partly with the aim of increasing and even countries which do growing economic activity, as more than a million inhabitants export capacity. Gross fixed not have the benefit of any well as targeted foreign aid. and a total population of 1.2 investment grew an estimated exportable natural resources, With a $2 trillion economy with billion. While only a tenth of 7.3 per cent in 2013 and is now such as Ethiopia, Mozambique a GDP growth rate of around six these people have disposable equal to close to a quarter of and Rwanda, have sustained per cent, the continent is much income, that proportion is GDP. Foreign direct investment relatively high growth rates for wealthier than many people growing rapidly. “By 2020, continues to play an important over a decade. The globalisation imagine, Fred Klinkenberg says. it’s expected that half the role, too, with net FDI inflows of services could become an Of course, there is massive population will have disposable last year of $43 billion, up $6 important source of growth diversity between the 48 income, and, by 2050, a quarter billion on 2012. About a quarter for the region, as technology countries that comprise sub- of the world’s workforce will be of the world’s FDI flows into and outsourcing enable service Saharan Africa. These include in Africa,” Klinkenberg points out. Africa each year. providers to overcome traditional 19 states regarded by the World Across the region, many There are significant constraints of physical and Bank as “fragile and conflict countries are engaged variations in economic geographic proximity. Modern affected”, 11 as low income, 13 as in ambitious investment performance between countries services are becoming drivers lower-middle income and eight programmes, primarily designed but even here there is progress. of growth and development as upper-middle income or high to install basic infrastructures, The gap between the growth in a number of SSA countries, income. such as power generation, rates of oil and non-oil producing including Kenya.

THE MARKET | SUMMER 2014 TRAVEL AND TOURISM SOFTWARE 049

SKY’S THE LIMIT FOR IRISH TRAVEL SOFTWARE

Charlie Taylor writes that travel and tourism software companies are flying high in international markets.

rish software firms working in the travel sector have been making the headlines of late with some high-value money deals. Although these companies may be operating across different market sectors, all share a Icommon goal, which is to grow their business beyond Ireland and become major players in the travel and aviation industries. “As with companies in other sectors in Ireland that are performing strongly, we’re smaller, smarter and can move faster than some of the bigger international organisations,” said John Magill, a travel software and services specialist with Enterprise Ireland. “We have some very bright people working in the travel sector which is why companies such as Hostelworld and CarTrawler have all succeeded. There are around 60 to 70 firms in the travel space in Ireland. None of these are big companies but all are good at understanding processes and their domain knowledge is usually better than their clients,” he added. Many of those organisations working in the travel space are focused primarily on the aviation industry. As Aidan Brogan, chief executive with Datalex makes clear, a combination of unique factors ensures that companies based here are in a good position to make it big in the sector. “In the post-war era, Ireland historically held a key position in the aviation sector in Europe, both geographically and industrially. Ireland’s geographic convenience for transatlantic travel led to the growth of an aviation and avionics sector, particularly on the west coast. That expertise continues to grow today. Combined with a leading education system and a highly skilled workforce, particularly in the area of technology, Ireland has excelled in nurturing its aviation skills into a wider range of disciplines, including distribution, airline retailing and new technologies,” he told The Market. In a sector with so many companies already succeeding, it’s not easy singling out winners, but here are just a handful of ones to watch.

SUMMER 2014 | THE MARKET TRAVEL AND TOURISM SOFTWARE 050

CarTrawler Recent big win: In March, investment firm BC Partners Who they are: CarTrawler bought a majority stake in the was established in 2004 by firm, worth an estimated $450 brothers Niall and Greg million (€326 million). Under Turley, whose father Joseph the deal, previous stakeholder set up the well-known Argus ECI (which took a €110 million Car Hire company in 1959. stake in the company in The Turley brothers sold a 2011) and the firm’s founders stake in CarTrawler to private all sold their shares. The equity firm ECI in 2011 for an arrangement also saw Insight BOXEVER FOUNDERS DAVE O’FLANAGAN, DERMOT O’CONNOR AND ALAN GILES estimated €110 million. Venture Partners co-invest in the business through the Boxever Recent big win: Boxever has What they do: CarTrawler acquisition of a minority stake. won a number of travel-brand has a car rental distribution CarTrawler’s management Who they are: Boxever is accounts in recent months, system that connects airlines, team, which includes chief a Dublin-based big data and most notably a deal with hotel groups and online travel executive Mike McGearty personalisation platform for Tigerair, the Asian low-fares brands in real time to over are staying on and retaining airlines and travel operators, airline that was originally 1,000 car rental agents at 30,000 a shareholding in the firm. established in 2010 by Dave co-founded by aviation locations. The company has McGearty has said that O’Flanagan, Dermot O’Connor entrepreneur Declan Ryan. annual bookings of around five following the sale of the and Alan Giles. The company “Signing Tigerair is an million vehicles and sales of company, it intends to double currently employs 25 people, incredible validation of what close to €500 million. its workforce over the next but expects to double its we’re doing at Boxever. Their two years and expand into new workforce in the next 12 focus on customer centricity Main overseas markets: markets. months. is completely aligned with our The company’s client list vision. Airlines have access reads like a who’s who of What they do: Boxever to vast amounts of untapped global travel brands. More enables airlines and travel structured and unstructured than 50 international airlines companies to gather and information about their guests with a combined total of analyse data in real time, and very few are using this over 300 million passengers enabling them to understand effectively,” said O’Flanagan. use CarTrawler’s car rental and communicate with their In addition to the deals, distribution system. Its clients customers better by analysing the company also announced include Aer Lingus, Tigerair, their interactions. in March that it had raised West Jet, Vueling, Virgin $6million (€4.3million) in Australia, Emirates, Fly Dubai, Main overseas markets: “We a new funding round led by South African Airways, Finn went live with our first airline Polaris Partners, a $3.5 billion Air, Malaysian Airlines, Iceland customer, Widerøe, in October American venture fund. Air and Gulf Air. While 2012, chief executive Dave “The funding enables us to CarTrawler already operates O’Flanagan told The Market. accelerate our growth plans in 174 different countries, it is “We are travel-centric and are and drive our product strategy aiming to expand further in the now the leading Big Data and so that we can capitalise on the coming years. personalisation platform for huge opportunity in travel,” airlines and travel operators said O’Flanagan. around the globe.”

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“Our customers cover the Main overseas markets: globe from WestJet (Canada), The company has an extensive Delta Air Lines (USA), COPA customer base across Europe Airlines (Panama), Aer Lingus and Asia–Pacific and satellite (Ireland), Virgin Atlantic offices in London and Manila. (UK), Air China, Philippine Clients include easyJet, Qantas Airlines and Virgin Australia. GERRY SAMUELS AND PASCHAL NEE Group’s Jetstar and Jumeirah Most recently, Datalex has Hotels & Resorts. announced the opening of an Mobile Travel office in Beijing. China is the Technologies Recent big win: MTT has fastest growing travel market (MTT) been in full expansion mode in the world, and Datalex is since raisingUS$5million (€3.6 positioning itself for continued Who they are: Established million) in a funding round success in this market,” said in December 2005, in the days from DFJ Esprit in 2012. It Bolger. before smartphones were a recently opened new offices in Datalex reality, MTT was co-founded Dublin’s Grand Canal Docks Recent big win: It’s been an by travel technology veterans and announced a major new Who they are: This Dublin- impressive 12 months for the Gerry Samuels and Paschal Nee recruitment drive. based firm, which trades on the company, with a number of – the team that previously built The company said its ISEQ, was established in 1985 big deals signed. These include Gradient Solutions, a leading expansion has been aided by and now employs 300 people contracts with JetBlue, Virgin airline internet booking engine a number of multimillion across 25 nationalities at seven Atlantic and most recently company headquartered in deals with outfits such as locations around the world. with Brussels Airlines. Dublin, which went on to be LATAM Airlines Group, a Latin “Brussels Airlines selected bought by Sabre in 2000. At American airline group and What they do: Datalex is Datalex’s Travel Distribution the time of going to press MTT BCD Travel, one of the world’s a provider of e-commerce Platform (TDP) to power employed 70 people but was in biggest travel companies. and retail solutions to the their new e-commerce the process of recruiting for a Samuels recently said the travel industry. The company and airline merchandising further 50 employees. company is considering ways recorded an 18 per cent solution, allowing for the to “super accelerate” growth. increase in total revenue to personalisation of offers to What they do: MTT €27.5 million last year. their customers. Brussels specialises in developing Airlines experienced year-on- mobile technology products Main overseas markets: year growth in its passenger for airlines and large travel “Datalex has customers across numbers and load factor companies, enabling their the globe, and, in 2013, over in 2013, and the carrier is customers to avail of mobile one billion people used our currently undergoing an booking and check-in, and software to shop for airline investment programme aimed to manage all aspects of both products and services,” chief at further growth for the personal and business travel executive Aidan Brogan told airline. TDP is about helping via smartphones and tablets. The Market. airlines to grow their business, and Datalex is looking forward to being an integral part of this process,” said Brogan.

SUMMER 2014 | THE MARKET 052 Gadgetry

The rise and rise of mobile work and play has spawned a host of ancillary NO STRINGS products and services. In this issue, Ian Campbell looks at contenders ATTACHED in the cloud back- up and sharing arena and wireless speakers. Microsoft, Google or Dropbox … which one to choose?

s tablets and smartphones become the Collaboration and office applications Amain interface into our digital lives, there is are available in Google Drive as well, with a growing demand for backing up and sharing the internet giant providing alternative files online – pictures and videos as well as spreadsheets, word processing and presentation documents. Competition is hotting up but right documents to those made famous by Microsoft. now, if you made a decision purely on a price-per- Almost as seamless as OneDrive, you can gigabyte basis, Google Drive would win. save documents to your desktop in Microsoft From the outset, it offers 15GB for free, formats as well as others. To upload, simply compared to 2GB on Dropbox and 7GB on Microsoft drag and drop a file – Word doc, picture or OneDrive, but it’s when you look for a high volume, video. The beauty of both systems is that they paid-for service, that the gap opens up. Google automatically sync files between cloud and recently slashed its prices and offers a terabyte desktop. And both allow real time co-authoring of storage for the equivalent of just $10 a month. of documents and automatic versioning, which Microsoft OneDrive and Dropbox charge $4.16 means you are always working on the latest and $8.25, respectively, for only 100GB a month. copy. Expect a price war to ensue and check for updates. Dropbox has the sync features and the ability Cost, of course, isn’t your only consideration. to drag and drop files, but it doesn’t provide Take it as a given that you will get more out of any applications. The selling point is its sheer Microsoft if you are running Windows on your simplicity. When you download it, Dropbox desktop and even more if you have a mobile with is seamlessly presented on your desktop or the Windows Phone operating system. While mobile device as just another drive, another all three platforms offer mobile and desktop place to store files. You can even have it set up apps and seamless integration with your hard to automatically upload files when you connect drive, Microsoft has exploited its long-standing a device, whether they’re documents from a success with Office software to deliver the richest USB stick or pictures from a camera. And one experience. You get built-in integration with advantage over the others is that there is no file desktop applications and the option of creating size limit for uploads – OneDrive stops at 2GB documents in the browser and saving them to the and Google at 10GB. OneDrive or your own hard disk. Which one you will choose may depend on existing allegiances – Microsoft or Google. If you are unaligned and want to keep it that way, then Dropbox is waiting. Whether you want to pay a premium for more storage is another consideration and may well be influenced by factors other than the amount of digital content you’ve accumulated. If, for example, you suffer with a slow broadband connection, the last thing you will want is to save lots of big files to a cloud service.

THE MARKET | SUMMER 2014 053

Wireless speakers If you want to share your sounds UE Boom, €199 Sony SRS-BTV25, €125 or simply take a break from ear buds, he speaker accessory market for the price difference – the Sony light and flimsy, wireless speakers Tsmartphones and tablets has boomed the Boom reassuringly robust. Play back some as people use their mobile devices for audio songs and the gulf between them grows bigger. are available in every entertainment, whether it’s live streaming The Sony’s audio is certainly sharp and shape and size from services like Spotify, accessing MP3 libraries crisp, but the dynamic range isn’t there. It may or listening to podcasts. If you want be an improvement over the onboard as little as €10. to share your sounds or simply speakers you get with a tablet take a break from ear buds, or smartphone, but it’s wireless speakers are still tinny and thin. The available in every premium you pay for shape and size the Boom rewards from as little as you with much €10. richer, warmer The sound with problem with a decent the really bottom cheap and end. And cheerful because it products comes with is that the an app (for audio quality iOS and is not much Android), better, and you can sometimes adjust EQ worse, than settings or buy you’ll get through a second one the onboard for setting up true speakers of a top-end stereo. smartphone. So consider In terms of value for what you have before you go money, both are a bit steep. shopping for something better. There’s a hefty price premium If you want a speaker that’s as mobile as on wireless speakers, regardless of audio your phone, you enter the realm of pseudo quality. It’s astonishing to think that a single spatial sound, because you can’t get stereo out UE Boom costs nearly twice as much as a of a single box. We looked at two models: the pair of Wharfedale hi-fi speakers that deliver Sony SRS-BTV25, €125, and the Ultimate Ears a whole different class of sound. It all comes (UE) Boom from Logitech at €199. down to what price you are prepared to pay for Both allow NFC (near field communication) portability and the value you place on audio or Bluetooth to make the connection, searching quality. out a device before automatically pairing. Simply done. They use a micro USB socket for charging built-in lithium-ion batteries, have a 3.5mm input jack for plugging in an audio source directly, and plus/minus buttons for volume control. Both have onboard microphones for using the units as speakerphones, pausing the audio to take a call. There the similarities end. Each adopts a very different design aesthetic, and it’s hard to dislike either. The Sony is a tennis ball-sized sphere, while the Boom is lozenge-shaped and 18cm high. Before you plug them in, you can feel

SUMMER 2014 | THE MARKET 054 Good Reading By Lucille Redmond

Lucille Redmond’s speed-read through the best of the business new- BOOKS releases from Q1, 2014. WORTH READING

ersonality is destiny – employs people with this hen Michael Smurfit more than ever when natural competence is lucky: it Wwas sixteen and, like you are dealing with describes someone who is open his friends in Clongowes, Ppeople from different to cultural diversity and enjoys studying for the Cambridge cultures. For Irish companies, exploring new approaches. entrance exams, his father the ability to negotiate with Allied are the competences took him and his brother strangers is all-important. of ‘intercultural sensitivity’, Jeff out of school, gave them In a lifetime’s work, with its twin aspects of cultural overalls and put them to work Ursula Brinkmann and Oscar awareness and attention in his Clonskeagh factory. “He van Weerdenburg have to signals; ‘intercultural even insisted that I join the assessed over 30,000 people communication’, involving union,” writes Smurfit in A Life in intercultural relations. active listening and an adaptive Worth Living, his fascinating Most of their clients are senior communicative style; and autobiography. executives in multinationals, ‘building commitment’, which “Dad was serious about my but their subjects include is about skills in building becoming a member of the students, workmen, members relationships and reconciling union,” writes Smurfit. “He of every trade and profession stakeholder needs. was a socialist at heart, and, from many countries. Companies that buy abroad, unusually for a factory owner, Brinkmann and van with a diverse workforce or insisted that all of his workers Weerdenburg’s book with customers from varying joined the union.” Intercultural Readiness gives cultures can all gain from this Smurfit Sr had brought his readers the meat of their superb guide. family over to his wife’s native method. Working with Dublin from England, where he teams of anthropologists and had bootstrapped from nothing intercultural experts, they’ve to build up a successful tailor’s refined a method for finding shop and then moved into the who is naturally excellent box business. at negotiating intercultural Young Smurfit didn’t like differences, as well as strategies it much. He sourced a job in for developing intercultural Toronto and applied to go to competences. Canada, but on failing the Their work over decades physical – he had TB – he was has identified four areas of whooshed into the Peamount competence. Among these sanatorium for a year. is ability in ‘managing There, he learnt to live for uncertainty’. A company that today: “I held the hands of men

THE MARKET | SUMMER 2014 055

When his father handed From a one-day conference changed his life. over the firm to his sons, his in 1984, TED talks grew to an Great advice, great examples, lawyer objected, but Smurfit Sr annual four-day gabfest in and useful for anyone who will replied: “If my sons cannot look Monterey, California, with the speak in public. after me, it is better I should audience paying $475 each. never have lived.” He had no In 2001, technology magazine pension – so Michael and Jeff publisher Chris Anderson bought him an annuity. bought the conference and Smurfit writes of the moved it to Long Beach, criminal Martin Cahill’s claim California. This year, it’s moved that he crept through the to Vancouver, Canada. Since Smurfits’ house and left empty- 2005, many talks have been handed when he saw Norma shared online. lovingly sitting beside a child’s The thousands of speakers bed knitting; he doesn’t believe range from Bono to Al Gore to who were dying” of cancer a word of it. Yet in 1977, he Chimamanda Adichie to Bill or tuberculosis, he writes. appointed a personal security Gates to Einstein the Parrot. Reinforcing this impulse was manager. But why are the TED talks the random traffic accident in Most interesting is his so viscerally involving? Gallo Toronto that left the friend he view of Telecom Éireann, and writes that they share a bunch had planned to go to Canada how rationalising it, from a of characteristics. They are ce sales trainer Conor with crippled. situation where it took two emotional, pulling you by the AKenny learnt his key A Life Worth Living is a page- years to get a phone line, heartstrings. They are novel: principle when he worked turner. Smurfit returned to laid the groundwork for the neuroscientists have told for a kindly Jewish family the family business – this time arrival of the tech and pharma Gallo that novelty is the single business in the early 1990s. to the office – and was sent to multinationals and the Celtic most effective way to capture After he made a costly mistake, the US to learn about modern Tiger. a person’s attention. They are his boss told him: “Conor, machinery and management A fascinating story, just memorable because they take good decisions come from techniques such as costing and the birthday present for one’s only 18 minutes. wisdom; wisdom comes from planning production: “I learned favourite entrepreneur. His book is entertaining experience; experience comes that just about every aspect of and fun and uses the teachable from bad decisions.” production and delivery was moment. Gallo describes Bill Kenny’s book on how to a whole lot more efficient in Gates opening a glass jar at sell, Sales Tales, is full of these America,” he writes. TED to release a flying swarm, funny-but-true experiences: His book is full of wonderful saying, “Malaria is spread by how he used Turkish Delight to descriptions – of how he went mosquitoes. I brought some make and seal a contract, how out on his own (with his here. I’ll let them roam around. it takes 3,416 bolts to hold a father’s help) in Wigan; set There is no reason only poor sports car together but just one up a system of bonuses based people should be infected.” nut to dismantle it, and why on production, believing that Neuroanatomist Dr Jill Bolte you should listen more than “money motivates people”; Taylor did something similar talk, especially in a sauna. and how he fell in love with in describing the effect of her Intercultural Readiness: Four his wife, Norma. She was the massive stroke, when she opened competences for working first Jewish person he had met; a jar and took out a human brain, across cultures by Ursula she thought Irishmen dug the complete with spinal cord, and Brinkmann and Oscar van roads. told an audience full of ewww, Weerdenburg (Palgrave) There is a rip-roaring story he TED talks – Technology, then full of fascination how the A Life Worth Living: The of Smurfit reacting to the TEducation, Design – are brain works and why it has two autobiography of Michael threat of competition when conferences designed to halves. Smurfit (Oak Tree Press) the Anglo-Irish Free Trade spread ideas. By definition, Freeman Hrabowski, Talk Like TED: The 9 public Agreement ended tariffs in those who speak are excellent chairman of University of speaking secrets of the 1965. He had taken over his communicators. Carmine Gallo’s Maryland, Baltimore, told of world’s top minds by Carmine father’s firm, and now he took Talk Like TED offers to share the persuading his parents to allow Gallo (Macmillan) over his Irish competitors, at “public speaking secrets of the him to march for freedom and Sales Tales by Conor Kenny odds with his father as he did it. world’s top minds”. go to jail, aged 12, and how that (Oak Tree Press)

SUMMER 2014 | THE MARKET MARKET INSIGHTS BRIEFING 056

The Internet of Things Will Digital Entertainment in the Compiled by Enterprise Ireland’s Demand New Application Home: Technologies and Market Research Centre team. Architectures, Skills and Global Markets Tools BCC Research MARKET Gartner January 2014 April 2014 This report characterises and INTELLIGENCE This analysis argues that few quantifies the global market organisations will escape the potential of residential need to connect smart objects entertainment and its different Enterprise Ireland’s Market Research Centre hosts Ireland’s with corporate systems and elements (digital TV, gaming, most comprehensive collection of business intelligence resources and is staffed by specialists who can assist EI clients applications; therefore, IT audio, and networking). find company, market and project information. organisations must master Projections are provided for the new skills, tools and the total home entertainment The centre subscribes to a wide variety of databases, including architectures required by the market through 2018, along – Frost & Sullivan internet of things. with estimates of the market – Forrester in terms of cost per device for – Euromonitor Passports M2M Communication in each type of system, and the – AMA Research Manufacturing: Future cumulative totals for the market – BvD Orbis of Internet of Things in overall. The reports summarised on these pages are just a sample of the Industrial Automation type of information available. Follow us on Twitter @EI_MRC Frost & Sullivan The Transformation of Mobile to see further examples of recent reports available or check out February 2014 Middleware the MRC site at www.enterprise-ireland.com/MRC This report describes the types Gartner of wired and wireless networks April 2014 EI clients can access the MRC by emailing market.research@ used to enable communication This analysis argues that mobile enterprise-ireland.com or by phoning 01-727 2324. Access to all on the plant-floor. It also application development resources is governed by contracts with our providers. explains the growing trend platform (MADP) vendors towards the development of try to offer everything to ICT/SOFTWARE A Mixed Bag For The Latin the internet of things in the build, test and deploy a American Tech Market In manufacturing set-up. mobile app. Specialised Asia Pacific Tech Market 2014 And 2015 vendors have introduced Outlook for 2014 to 2015 Forrester Wearable Computing: cloud-based alternatives to Forrester March 2014 Technologies, Applications mobile middleware; thus, April 2014 The latest outlook for this rising and Global Markets app developers must decide if This report from Forrester Latin American tech market BCC Research mobile-back-end-as-a-service reveals that the 2014 and shows improved purchases February 2014 offerings can replace MADP 2015 outlook for business and in 2014 compared with 2013. This report reviews the history middleware. government purchases of tech Chile, Colombia and Mexico will and the current state of wearable goods and services in the Asia continue to see good growth, computing market, discussing Pacific region is mixed – strong while Brazil will recover from the types of devices available in countries like China, India an economic slowdown that and providing an analysis of the and Thailand that have shown hurt tech buying in 2013. industry structure, including signs of weakness in 2012 and Argentina and Venezuela will major companies and market 2013, weak in Japan where remain weak, as governmental shares, and major markets and tech market growth had been mismanagement of their drivers. better in 2013, improving in economies hampers tech Australia and South Korea but demand. Telecommunications still subdued, and holding steady services and hardware remain elsewhere. the largest part of the Latin American tech market; however, software and IT services are becoming more important.

THE MARKET | SUMMER 2014 MARKET INSIGHTS BRIEFING 057

FOOD, RETAIL AND Confectionery UK 2014 Offshore Wind Turbines: US Markets for Peripheral CONSUMER PRODUCTS Key Note European Market Shares Vascular Devices April 2014 2013 Medtech Insight European Retail The analysis argues that the Datamonitor March 2014 Segmentation: Emerging way in which short- and long- September 2013 In 2012, approximately Patterns Of Multitouchpoint term trends will combine in This report identifies offshore 3.8 million interventional Shopping the coming years will shape wind turbine manufacturers, procedures for the diagnosis and Forrester the future outlook of the UK their market shares and how treatment of peripheral vascular April 2014 confectionery market. This is these will change in the future. devices were performed in the This report uses Forrester’s particularly relevant given the It also looks at customers and US, generating an estimated global retail segmentation to upcoming 2016 deadline set by the number of offshore wind $1.67bn sales. The number of help e-business professionals the Government’s Responsibility turbines that have been ordered interventions is expected to understand the nuances of Deal, which many major in the European market, increase at a CAGR of 2.0 per shopper behaviour across manufacturers signed with the the dominant models and cent during the forecast period. European markets. The aim of improving public health. the market outlook for each This report includes analyses of segmentation identifies key Key Note therefore forecasts European country. products, current and forecast touchpoints used along the modest market growth of 11.7 markets and competitors and path to purchase to help create per cent between 2014 and 2018. Product and Pipeline opportunities. the most relevant shopping Assessment of the Global experiences for target customers. Orphan Drugs Market Peripheral Vascular Surgical CLEANTECH, LIFE SCIENCE, Frost & Sullivan Products: Technologies and The Global eCommerce CONSTRUCTION AND February 2014 Global Markets Opportunity INDUSTRIAL This research provides a global BCC Research Forrester overview and analysis of global February 2014 March 2014 Data Centre Construction orphan drugs development, with According to BCC, the global Gone are the days when most Market Report UK 2014–2018 an emphasis on the US market. market for peripheral vascular brands offered just one or two Analysis. It provides an analysis of drug surgical devices reached $5.8 international sites: today, a global AMA Research development and regulatory billion in 2012. This market eCommerce footprint is the February 2014 activity by disease area and is projected to grow from $6.2 end goal. This report examines This report provides both a geography, a detailed product billion in 2013 to $8.4 billion how eCommerce organisations quantitative and qualitative and pipeline analysis of orphan in 2018 with CAGR of 6.3 per are tackling global markets, analysis of the data centre drugs by therapeutic area and cent from 2013 to 2018. The US where they’re falling short, and construction sector. It focuses disease and a company analysis, accounted for a 52 per cent share what they can do to maximise on market size and trends, including key companies to of the overall market in 2012 and opportunities. influences, key end-use sectors watch. is forecast to decline to a 47 per and future prospects. cent share of the overall market Consumer and Innovation Medical Devices Pricing & in 2018. Europe accounted for a Trends in Frozen Food 2014 Feed-in Tariffs in Europe Reimbursement 2014 26 per cent share of the overall Datamonitor Datamonitor 2013 Business Monitor International market in 2012 and is forecast March 2014 This report aims to explain the March 2014 to decline to 22 per cent of the This brief outlines the most changes that are taking place in This guide provides information overall market in 2018. important consumer and product European feed-in tariffs (FiTs) on medical device pricing and trends impacting the frozen and to predict the future of FiTs reimbursement in 17 established food category globally, using in the European renewables and emerging economies. Datamonitor’s TrendSights energy market. It examines the increasing mega-trend framework. role that health technology Home Energy Management assessment plays in the Consumer and Innovation Systems reimbursement decision-making Trends in Pet Care 2014 Datamonitor 2013 process and procurement Datamonitor This report explores the strategies , both of which February 2014 different approaches to home have a direct impact on device Using Datamonitor’s TrendSights energy management and how pricing. Regions covered include mega-trend framework to they differ. It looks at the main Asia-Pacific, the USA, EU and organise key themes, this brief IHD and PCT manufacturers and Americas. outlines the most important the products they offer as well as consumer and product trends the main drivers and inhibitors impacting the pet care category of growth. globally.

SUMMER 2014 | THE MARKET 058

EU challenges Russia in the EU-US trade talks set to enter An update on customs compliance, WTO over pork import ban fifth round trade regulations and negotiations he EU has launched a t the time of going to press, Tcase in the World Trade Aa fifth round of EU-US trade TRADE REGULATIONS, Organisation (WTO) against talks was due to take place in the Russian ban on imports of Arlington, Virginia from 19 to INFORMATION AND pigs, fresh pork and certain pig 23 May 2014. The talks are part products from the EU. of a trade and investment deal, NEGOTIATIONS Russia closed its market to known as the Transatlantic Trade the EU – cutting off almost 25 and Investment Partnership, or per cent of all EU exports – at the TTIP. Visit the EU’s dedicated end of January 2014. It based its webpage http://ec.europa.eu/ decision on four isolated cases trade/policy/in-focus/ttip/ for of African swine fever (ASF) updates as the negotiations take detected in wild boar at the place and background about the Lithuanian and Polish borders talks. with Belarus. A step forward in the EU- EU plans for more flexible Ecuador Trade Talks visa rules for non-EU epresentatives of the EU and Information on export duties and regulation is available in the nationals Ecuador met this March in ‘Export’ section of Enterprise Ireland’s website. R he European Commission Manta, Ecuador, to discuss the Thas presented proposals possibility for Ecuador to join Change of EU Vat rules for The EU adopts temporary aimed at shortening and the existing trade agreement telecoms, broadcasting and tariff cuts for Ukrainian simplifying the procedures for between the EU and two other electronic services exports to the EU non-EU nationals wanting to Andean countries, Colombia and he European Commission n 14 April, the EU adopted come to the EU for short stays. Peru. The Commission reported Thas published explanatory Omeasures to cut tariffs on The proposals are designed that the second round of talks notes to help businesses Ukrainian exports to the EU. to help the European tourism took place in a constructive prepare for the new VAT rules The EU Trade Commissioner industry at a time when atmosphere and delivered good for telecom, broadcasting and Karel De Gucht noted that these international competition is progress towards the conclusion electronic services, which will are autonomous trade measures becoming increasingly fierce. of the deal. enter into force on 1 January, providing tariff preferences A comprehensive trade 2015. for Ukraine and constitute WTO rules in EU’s favour agreement signed in 2012 has From that date, VAT will be an important part of the EU’s regarding Chinese applied to trade with Peru since 1 charged where the customer is package to help the country restrictions on access to rare March, 2013, and with Colombia based, rather than where the during this difficult period. They earths since 1 August, 2013. seller is, in the case of cross- will apply until 1 November, he World Trade Organisation border business-to-consumer 2014, at the latest. T(WTO) has issued a panel transactions. See http://tinyurl. ruling against China’s export com/p9ynewk EC plans to revise rules on restrictions on rare earths, as well organic production as tungsten and molybdenum Free WIPO IP seminars in ith the EU organic sector that are used as essential Ireland this June Wnow firmly established, the components by a wide range he World Intellectual European Commission wants to of European industries. In line TProperty Organisation take a closer look at the basic rules with the previous ruling on (WIPO), in partnership with IP to see if it can reduce the number other raw materials, the WTO Unit of the Department of Jobs, of derogations from organic found that China’s export duties Enterprise and Innovation, is norms granted when the sector and quotas were in breach of running a couple of seminars was getting established in order China’s WTO commitments and on IP for industry in Ireland, to increase harmonisation in the were not justified for reasons in Dublin on 16 June and in EU market. It plans for controls to of environmental protection or Limerick on 18 of June. They cover the entire production chain conservation policy. The WTO will be free to attend and aim and be risk based. In addition, the panel’s ruling backs the claims of to provide a good information Commission is aiming to develop the EU and its co-complainants, session and networking a specific export policy for EU the US and Japan, and secures opportunity for companies. organic products and streamline non-discriminatory access to raw the current import regime. materials.

THE MARKET | SUMMER 2014 Travel News 059

Canada here Domestic demand set to we come make China the world’s his summer, a total of 48 biggest business travel Tflights per week will operate market to and from Dublin Airport to Toronto, Montreal and St John’s ising demand for meetings, incentives, in Newfoundland as a result of Rconferences and exhibitions (MICE) bookings a series of new routes taking off in China has driven unprecedented growth in between Canada and Dublin. business travel, according to a study from GBTA. Launched in April, Aer Chinese business travel spend is expected to Lingus’s new service to Toronto grow 16.5 per cent to $262.1 billion in 2014 and will operate year-round, with overtake the US in 2015 as the number one a daily flight between Dublin business travel market in the world. and Toronto during the summer The report, GBTA BTI Outlook, found the season and up to four times per surge in Chinese business travel spending was week during the winter months. being driven by both domestic and, to a lesser extent, international outbound travel, with domestic travel making up almost 95 per cent of the spending on Chinese business travel. Over the past decade, China’s largest airports have doubled in size, and the construction of new Moscow hotel prices airports continues, including Beijing’s second international airport due to open in 2018. China topple as Sydney also has almost 2,000 hotel projects in the pipeline, amounting to 435,000 additional rooms. continues to top otel prices in Moscow and Kiev have fallen Flybe offers new Irish Hdue to the impact of the ongoing crisis in Ukraine. According to hotel.info’s monthly connections to London City price barometer, average hotel prices in Moscow Airport fell by 18.5 per cent in March, while the cost of rooms in Kiev dropped by 31.5 per cent, s part of Flybe’s major expansion at London compared to the same month in 2013. Moscow ACity Airport, the airline will commence four- had been the most expensive European city for times-daily services between Edinburgh and hotel rooms a year ago, according to hotel.info’s Dublin and three-times-daily services between ranking, but it now ranks the Russian capital Belfast and Exeter from October 27. in fourth place behind Stockholm, Oslo and Separately, CityJet has announced new Helsinki. shareholders INTRO Aviation through an Irish A separate study published by the hotel Meanwhile, in May, Air holding company. The airline will continue to bookings firm HRS showed that hotel rates Canada relaunched its seasonal operate 700 flights a week. dropped by 7 per cent in Moscow during the last Dublin-Toronto flight as a year- quarter. The study also indicated a 2 per cent fall round service through its new in rates in Zurich, but it placed London first as leisure brand, Air Canada rouge. Europe’s most expensive capital for hotel stays. The two airlines join Air Transat After London, the largest increases in at Dublin Airport on the Toronto room rates were seen in Athens (€81), Warsaw route. In addition, Air Transat (€76) and Milan (€108), where the room rates already flies to Montreal. increased by 14 per cent for the Greek capital, A third new Ireland-Canada and around 11 per cent for the other two service will operate from June capitals, according to HRS. 15 to October 5, 2014, with The survey found Europe’s cheapest room WestJet commencing non-stop rates, averaging just €66 per night, in Budapest. daily flights to Dublin from St. Meanwhile, in both the HRS and hotel.info John’s, Newfoundland; direct rankings, Sydney continued to top the list (same-aircraft) flights from globally as most expensive city for hotel stays, Toronto; and connections from despite seeing decreases in rates during the past across WestJet’s network. year.

SUMMER 2014 | THE MARKET 060 City Guide By Tony Clayton-Lea MADRID

A fine example of one of Europe’s great aristocratic cities, Madrid sourced from Galicia and feature gammon, is a major centre for international business and commerce, as fish and specialties such as caldo gallego well as hosting the head offices of many large Spanish companies (Galician white bean stew/soup). Tiled (including Repsol and Telefonica). The city is also a global financial beautifully inside and out, this is as much leader and is in the top five centres of commerce in Europe. Madrid’s a culinary treat as it is a visitor attraction urban agglomeration boasts the third largest GDP in the EU, and its and business opportunity. (No website)

international influences in arts/culture, science, media, environment THREE THINGS TO DO IF YOU HAVE A and politics add to its status as one of the world’s most important FEW HOURS TO SPARE: cities. Madrid’s modern infrastructure, however, has not affected its Relaxing: Jardin Botanico, Plaza de admirable preservation of its historic neighbourhoods and streets. Murillo 2, is a luxuriant botanical garden that houses over 30,000 plants. Although FROM THE AIRPORT TO THE CITY: Victoria, Plaza de Santa Ana, is a city-centre-based, it’s a total retreat and With four terminals, Madrid Barajas landmark building very close to Puerta ideal for gathering your thoughts before a International is one of the largest airports del Sol and the Museo del Prado. It boasts business meeting. www.rjb.csic.es in Europe and is located 13km from the a conference room, a 24-hour fitness gym, city centre. There are various options to free Wi-Fi and a self-described ‘everything Tourist Sight: Faro de Moncloa, Avda de choose from. These include a ten-minute- is possible’ reception service. los Reyes Catolicos, is Madrid’s radio and plus Metro service to the centre of the city, www.memadridreinavictoria communications tower, and, at a height a 40-minute Airport Express bus journey madridhotels.it of 92m (302ft), it offers the best views of and, of course, taxis. www.madrid-airport. the city as well as the sierras in the far-off info EAT: background. Be warned: the experience in Lunch: Café del Circulo de Bellas Artes, C/ the glass lift up to the top isn’t for sensitive SLEEP: Alcala 42, is one of the city’s best known stomachs! 1st Choice: Hotel Il Castillas Madrid, and most appreciated (and elegant) rooms Abada 7, is centrally located and in which to have a relaxed chat, a read of a Museum: Museo del Prado is Madrid’s reasonably priced accommodation within newspaper or a strategic, if casual, business best-known tourist attraction, so prepare five minutes’ walk of Puerta del Sol and meeting. (No website) to be surrounded by many other visitors as the commercial centre of the city. Meeting you wander through gallery after gallery of rooms are available and the Wi-Fi is free. Dinner: You can’t visit without paying visual art masterpieces. Three hours won’t www.hoteldoscastillas-madrid.com a visit to a tapas bar, and Casa do do it justice, of course, but if you’ve only Companeiro, C/San Vicente Ferrer 44, is got time for one museum, then make 2nd Choice: Hotel ME Madrid Reina arguably the city’s finest. The tapas are sure it’s this one. www.museodelprado.es

THE MARKET | SUMMER 2014 Enterprise Ireland International Network

Head Office

REGION/OFFICE TELEPHONE FACSIMILE ADDRESS

Dublin +(353 1) 727 2000 – The Plaza, East Point Business Park, Dublin 3, Ireland

Northern Europe

Amsterdam +(31 20) 676 3141 +(31 20) 671 6895 World Trade Center, Strawinskylaan 1351, 1077 XX Amsterdam, Netherlands Brussels +(32 2) 673 9866 +(32 2) 672 1066 Park View, Chaussee d’Etterbeek, 180 Etterbeeksesteenweg, Bruxelles 1040, Brussels, Belgium London +(44 20) 7438 8700 +(44 20) 7438 8749 2nd Floor, Shaftesbury House, 151 Shaftesbury Avenue, London WC2H 8AL, England Paris +(33 1) 5343 1200 +(33 1) 4742 8476 33 rue de Miromesnil, 75008 Paris, France Stockholm +(46 8) 459 21 60 +(46 8) 661 75 95 Box 5737, Sibyllegatan 49, 114 87 Stockholm, Sweden

Germany, Central and Eastern Europe and the Balkans

Budapest +(36 1) 301 4950 +(36 1) 301 4955 Bank Centre, Szabadság tér 7, Budapest 1054, Hungary Düsseldorf +(49 211) 470 590 +(49 211) 470 5932 Derendorfer Allee 6, 40476 Düsseldorf, Germany Moscow +(7495) 937 5943 +(7495) 680 5362 c/o Commercial Section, Embassy of Ireland, Grokholski Pereulok 5, Moscow, Russia Prague +(420) 257 199 621 +(420) 257 532 224 Trziste 13, 118 00 Prague 1, Czech Republic Warsaw +(48 22) 583 1200 +(48 22) 646 5015 Ulica Mysia 5, 00-496 Warsaw, Poland

Southern Europe, Middle East and Africa

Dubai +(971 4) 329 8384 +(971 4) 329 8372 4th Floor, Number One Sheikh Zayed Road, PO Box 115425 Dubai, United Arab Emirates Istanbul +(90212) 319 1832 Buyukdere Cad.Metrocity AVM D Blok Kat:4, Levent, Istanbul, Turkey Johannesburg +(27) 115505440 – 24 Fricker Road, Illovo, Johannesburg South Africa Madrid +(34 91) 436 4086 +(34 91) 435 6603 Casa de Irlanda, Paseo de la Castellana 46 – 3, 28046 Madrid, Spain Milan +(39 02) 8800991 +(39 02) 8690243 Via de Amicis, 53-20123 Milano, Italy Riyadh +(966 1) 488 1383 +(966 1) 488 1094 c/o Embassy of Ireland, PO Box 94349, Riyadh 11693, Saudi Arabia

The Americas

Austin +(1 512) 514 6151 7000 N Mopac Expwy, Suite 2099, Austin, TX 78731 Boston +(1 617) 292 3001 +(1 617) 292 3002 535 Boylston St, 5th Floor, Boston, 02116 MA, USA New York +(1 212) 371 3600 +(1 212) 371 6398 Ireland House, 345 Park Avenue, 17th Floor, New York, NY 10154-0037, USA São Paulo +(55 11) 3355 4800 – Rua Haddock Lobo, 1421 – Conj 51, Cerqueira César, São Paulo, 01414-003, SP, Brazil Silicon Valley +(650) 294 4081 – 800W, El Camino Real, Suite 420, Mountain View, CA 94040, USA Toronto +(1 416) 934 5033 +(1 416) 928 6681 2 Bloor Street W, Suite 1501, Toronto, Ontario, M4W 3E2, Canada

Asia-Pacific

Beijing +(86 10) 8448 8080 +(86 10) 8448 4282 Commercial Section, Embassy of Ireland, C612A Office Building, Beijing Lufthansa Ctr., No. 50 Liangmaqiao Road, Chaoyang District, Beijing 100125, China Hong Kong +(852) 2845 1118 +(852) 2845 9240 Room 504 (5/F), Tower 2 Lippo Centre, 89 Queensway, Admiralty, Hong Kong New Delhi +(91 11) 424 03 178 +(91 11) 424 03 177 Commercial Section, Embassy of Ireland, 230 Jor Bagh, New Delhi 110 003, India Seoul +(82 2) 721 7250 +(82 2) 757 3969 Ireland House, 13th Floor Leema B/D, 146-1 Susong-Dong, Jongro-Ku, Seoul 110-755, Korea Shanghai +(86 21) 6010 1380 +(86 21) 6279 7066 Commercial Section, Consulate General of Ireland, Suite 700A, Shanghai Centre, 1376 Najing Road West, Shanghai 200040, China Singapore +(65) 6733 2180 +(65) 6733 0291 Ireland House, 541 Orchard Road #08-00, Liat Towers, Singapore 238881 Sydney +(61 2) 927 38514 +(61 2) 926 49589 Level 26, 1 Market Street, Sydney 2000, NSW, Australia Tokyo +(81 3) 3263 0611 +(81 3) 3263 0614 Ireland House, 2-10-7 Kojimachi, Chiyoda-ku, Tokyo, 102-0083, Japan

For any other markets not mentioned, contact Market Development Dublin. For further contact information, visit www.enterprise-ireland.com/contact www.the-market.ie