“While businesses continue to experience recovery across the island, it is at a slower pace than in recent quarters, where in the first quarter in 2015, 88% of businesses were stable or growing,” cross-border business development agency, InterTrade Ireland said in its latest quarterly business monitor published this morning.
The survey showed the level of firms achieving stability or still growing had dipped marginally in the second quarter of the year to 83%. With the latest monitor, InterTrade has focused on what differentiates rapidly growing firms from the rest.
It found that companies in growth mode are much more likely to have innovated across all areas of their business in the past three years.
Three quarters of moderate-to-rapid growth firms have introduced new or improved products or services in that time, while more than 60% have taken on new processes, machinery, equipment and/or tools, the survey found.
“We took the opportunity with this quarter’s report to look at what type of firms are driving growth and what they are doing differently or better,” said Aidan Gough, strategy and policy director at InterTrade Ireland.
“Although moderate- to-rapid growth was found in businesses of all sizes, types and sectors, it was especially prevalent among larger firms. In particular, the report confirmed that those firms that are exporting and those who take a more strategic approach to growth such as having a formal business plan in place are more successful.”
Mr Gough said the finding that such a high percentage of successful companies come from the pool which has improved its product base, or scaled-up, underlines previous results showing businesses which innovate are three times more likely to expand than those who don’t.
“Excellence in innovation processes, culture and skills is at the core of rapidly growing firms, with these businesses more likely to have dedicated R&D staff and a more formal process in place for managing innovation than non-growth firms,” said Mr Gough.
He said more than 50% of non-growth orientated firms share an ambition to grow, but need the necessary support agencies to help them avail of cross-border opportunities “that will help them to overcome specific capability deficiencies in the areas the survey has identified, and translate that ambition into a growth reality”.
The InterTrade report shows that just over 80% of firms have ambitions to increase in the immediate future, with 71% planning to invest in staff training.
More than 50% say they engage in cross-border trade, while 41% export outside of Ireland and the UK.
Size and market orientation matter to respondent firms more than sector or location; and skills and getting the right people are key characteristics of growth firms with 82% of management in surveyed firms holding a third-level qualification.
The survey’s release coincides with a new pan-European report showing that over 50% of Irish companies believe late payments pose a threat to their survival.