Ireland’s medium-sized businesses are more optimistic than their global peers but a more ambitious approach is needed to deliver their expectations, writes Patrick Dillon
Ireland’s medium-sized businesses are uniquely optimistic in their outlook ahead of the upcoming US presidential elections and in the wake of the recent elections in France and the UK.
Just 17 percent see geopolitical disruptions as a barrier to growth, compared to 42 percent in the Eurozone and 49 percent globally.
This confidence follows through in the main findings among the Irish respondents to our latest Grant Thornton International Business Report (IBR), which captures insights into the outlook of 10,000 mid-market firms across the globe.
Our Irish IBR respondents are optimistic about the outlook for the Irish economy in the 12 months ahead. Close to three-quarters (73%) of the Irish medium-sized companies we surveyed predict a positive future.
The findings are reflective of the resilience of Irish companies that have had to navigate a polycrisis in a short period of time, trading through the pandemic, cost-of-living challenges and disruption to global supply chains.
This is not just a case of looking at the world through rose-tinted glasses, however. Irish medium-sized companies are anticipating a healthy bottom line over the next year.
Close to three-fifths of the Irish companies we surveyed predict a rise in revenues (57%), profits (59%), and headcount (52%) in the 12 months ahead.
While it is fantastic to see such a strong sense of confidence among this cornerstone of the Irish economy, if the last few years have taught us anything, it is that none of us knows what’s around the corner.
To this end, the companies that will continue to succeed in the future will be those that remain hyper-focused on staying one step ahead of the competition – and this is where our International Business Report makes for slightly more concerning reading.
There is a significant difference in attitudes to innovation among Irish firms compared to their international peers. Just under a quarter (24%) of Irish businesses are preparing to increase investment in research and development over the next twelve months compared to three-fifths (60%) of their global peers.
We found a similar gap in levels of planned technology investment, with just under half (48%) of Ireland’s medium-sized firms budgeting for an increase, compared to 67 percent globally.
Ireland is a small pool compared to the ocean that is the global marketplace. If Irish firms are to realise their ambition and potential, then they need to look to new markets.
Investing in innovation is key to unlocking these opportunities, whether it is leveraging digital channels to reach customers in every corner of the world or developing tailored products or services for a specific customer segment internationally.
A confident economic outlook is great, but it doesn’t put money in your pocket. To paraphrase Benjamin Franklin, an investment in innovation pays the best interest.
Patrick Dillon is Head of Deal Advisory with Grant Thornton Ireland
*Disclaimer: The views expressed in this column published in the August/September 2024 issue of Accountancy Ireland are the author’s own. The views of contributors to Accountancy Ireland may differ from official Institute policies and do not reflect the views of Chartered Accountants Ireland, its Council, its committees, or the editor.
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