Living the American dream
Foreign direct investment is working both ways, with many Irish companies making a big impact in the fiercely competitive US market
Irish Ambassador to the US Dan Mulhall opened Spearline’s new headquarters in Skibbereen, Co Cork, in August. From left: Matthew Lawlor, co-founder and chief technical officer of Spearline, Daniel Mulhall, and Kevin Buckley, co-founder and chief executive of Spearline. Photograph: Dermot Sullivan
The obvious differences in scale and size between Ireland and the US do not appear to have prevented Irish businesses from having a major impact across the Atlantic. There are now more than 800 Irish companies active in the US market, employing more than 100,000 people across 38 states in all sectors. Ireland recently became the fifth largest investor in the US, surpassing even France and the Netherlands.
But what kind of Irish companies do well in America? What sets them apart, and what are the must-haves?
Sean Davis is Enterprise Ireland’s regional director for North America, working with Irish companies keen to take their bite of Uncle Sam’s $21 trillion economy.
According to Davis, US multinationals employ more than 160,000 people at their bases in Ireland, whereas Irish-origin companies employ about 106,000 at their American locations – an impressive ratio, considering Ireland is one-seventieth the size economically of the US.
Irish business culture is pragmatic and adaptable and Irish people tend to have a can-do attitude and this is something that is valued in the US
Current Irish success across the Atlantic can be traced back to the very beginnings of our long history with the US, says Davis. “We have decades of trade with the US so there is a cultural familiarity – not just socially but also from a business perspective, which is important.”
Andrew McIntyre is head of law firm William Fry’s foreign direct investment group. He agrees that the performance of Irish businesses in the US market in recent years has belied our relatively small size as a country, and he also puts this down to our rich cultural links and shared history.
‘Cultural and familial links’
“Irish people and Irish businesses have familiarity with the US through a common language and long-standing cultural and familial links and increasingly with US business culture through the presence of a large number of US businesses in Ireland,” he says.
“Additionally, Irish business culture is pragmatic and adaptable and Irish people tend to have a can-do attitude and this is something that is valued in the US.”
In a more practical sense, Irish-US businesses also benefit greatly from the “outstanding” air connectivity between the two nations, Davis says.
Our advice to companies is that you can’t fly border to border and coast to coast chasing customers. The geography is too big
“Right now, we have direct flights going into Boston, New York, Miami, Atlanta, Chicago, Seattle, Washington, San Francisco and Los Angeles as well as seasonal flights to Dallas,” says Davis. “These are all major hubs for US domestic airlines so that connectivity onwards is hugely important too.”
Despite this, businesses would be wise not to consider the US market as a single nut to crack, Davis advises. “Our advice to companies is that you can’t fly border to border and coast to coast chasing customers. The geography is too big, it’s too expensive – it will wear you out economically, physically and mentally.”
The key is “geocentricity” – finding that location where you have reasonable access to your customer base, he adds. “You have to look at it in terms of bitesize chunks and go to where your resources and opportunity are best aligned.”
Companies dealing in commodities need not apply – what the US craves is innovation, and Irish companies are happy to oblige. Examples include Drogheda company WaterWipes, which, Davis says, “have taken this market by storm on the consumer retail side”. The other end of the spectrum is Soapbox Labs, a Dublin-based company which provides speech-recognition technology for children and which recently just signed a multi-million dollar deal with Florida State University on a major child literacy project.
“The common denominator is innovation,” Davis explains. “Trust, people and innovation – those are the three pillars on which we sell Irish businesses.”
The US may represent a significant market opportunity for Irish businesses, with great rewards for those who make the grade – however, the logical corollary of this is that the US is an ultra-competitive market, McIntyre explains. He echoes Davis in saying that Irish companies need to have a unique selling point in order to succeed there.
“There are many elements required to be successful in the US market but the companies that succeed are those that do their research in advance and have a clear strategy before entering the market. For example, from a regulatory perspective, doing business in the US can be complex. Businesses operating in the US will be subject to federal and state laws and taxes, which can vary from state to state,” he explains.
As Irish businesses look to diversify beyond our nearest neighbour for expansion opportunities, the US is an obvious target
The US market has long been an important source of growth opportunities for large, established Irish companies but a more recent phenomenon is the number of Irish companies entering the US market in search of growth opportunities at an earlier stage in their development. This is happening across all sectors but particularly in technology, life sciences, food and beverage and business services, McIntyre says.
We are in turbulent times – Brexit still looms and the White House may get a new resident next year – so what does the future hold for Irish companies keen to do business in the US? McIntyre says there are both challenges and opportunities.
“As Irish businesses look to diversify beyond our nearest neighbour for expansion opportunities, the US is an obvious target. The continued strength of the US dollar against the euro means that set-up costs in the US will be higher in euro terms, but exports from Ireland will be cheaper in the US. However, from a secular perspective, the US economy is in a strong position and the US will continue to be an attractive market for Irish companies.”
Case study: Spearline
Matthew Lawlor is co-founder and chief technical officer with Spearline, a rapidly-growing telecommunications solutions provider with clients in more than 70 countries. Its platform helps monitor phone numbers for audio quality and connectivity globally and Lawlor explains that they work with many US businesses.
“Not all of them have offices in Ireland but the big ones that are here have helped make our name. The large US multinationals with headquarters in Ireland have helped us to forge those links.”
Lawlor is keen to acknowledge the support the company received from Enterprise Ireland when it was engaged in its initial research and development, as well as the US Embassy – Irish Ambassador to the US Dan Mulhall recently opened its new headquarters in Skibbereen, west Cork.
Yet, ultimately, the company’s success among US businesses is down to the product, Lawlor asserts.
“What we do really has benefit for our customers. We wouldn’t be successful if the product didn’t do that. US companies are very customer-centric so making sure that the customer can contact them for sales or support are hugely important. If there are any issues, we are flagging it and identifying it long before it impacts the customer – this allows them to offer a higher-level customer experience.”
This means word-of-mouth business has been brisk. Spearline enjoys a high net promoter score (NPS) of 73 per cent – this measure indicates the loyalty of a firm’s customer relationships. “Everything over 60 per cent is considered world class,” Lawlor says. “Our US clients are happy to promote us to other businesses and act as a reference for us.”
Lawlor says face-to-face interaction is crucial – jet lag is part and parcel of growing a business in the US. “We all travel there a lot and our customer engagement managers meet our clients face to face, which is very important. It might sound corny, but Irish people are well-liked over there, we get on very well.”