The outlook for entrepreneurship on the island of Ireland remains bright despite the twin headwinds of Brexit and Covid-19, with almost 9 out of 10 entrepreneurs (88%) intending to increase headcount in the next 12 months. That’s according to the EY Entrepreneur Of the Year™ Alumni Survey 2021, an annual barometer that looks at the key issues impacting entrepreneurs on the island of Ireland.
The broad view for the future is positive amongst entrepreneurs, however 96% cite talent issues as a major challenge to growing their business – both the availability of a skilled workforce across the island and the ability to attract and retain the right talent to their businesses. This has significantly increased as a point of concern since 2019 when 53% said talent issues were a major obstacle to growth.
While 40% of entrepreneurs said access to funding was an impediment to growth, just 21% said the implications of Covid-19 were a major challenge to expansion, indicating the unique mindset of entrepreneurs and their determined and innovative approach to business in the midst of a crisis. Interestingly, a further 29% of entrepreneurs surveyed said they had made a business investment with a fellow member of the EY Entrepreneur Of the Year™ Alumni community, highlighting that almost a third are turning to each other for funding or when seeking investment opportunities.
Commenting on the results of the survey, Rob Heron Partner Lead for EY Entrepreneur Of The Year™ in Northern Ireland said, “The survey results have overwhelmingly demonstrated strength of Irish and Northern Irish privately owned business and entrepreneurs. Despite the huge challenges faced over the last 18 months, the significant majority of entrepreneurs surveyed have growth and expansion at the centre of their plans for the coming months and years. The world has changed irrevocably due to the Covid-19 pandemic, but talent and financing still dominate the list of concerns for entrepreneurs, and this varies only modestly across geographies and sectors. Finding, nurturing and retaining talent in a competitive global market is critical and it’s vital to the economy that policy makers and business leaders tackle these issues head on.”
With the survey also finding that 44% of entrepreneurs perceive the post Brexit NI market as presenting new opportunities when it comes to its access to both the UK and EU markets, Rob added:
“Brexit continues to impact many businesses across the island. Our survey suggests, as it repeatedly has shown over recent years, that many Alumni can spot opportunity amongst a period of uncertainty and change. The survey also shows that Northern Ireland Alumni have experienced the most disruption in comparison to their peers in Ireland, but also see greater potential arising from the NI Protocol.”
Constant innovation and transformation define entrepreneurs
The survey shows that Ireland’s entrepreneurs are keenly focused on a range of strategies to deliver success. Over the next three years, 40% of entrepreneurs said they planned to expand to global markets and create new business models, while 39% expected to participate in M&A activity. Over a third (36%) said the area of their business in which they expected to implement the most change was in leadership and talent development, while 36% also expected that research and development and new product or service innovation would be a key area of focus. The majority (79%) agreed that the priority for their senior leadership teams will be the ability to manage multiple and continuous transformations within their organisation, while 70% stated that leadership must lead disruptive innovation and business reimagination.
A similar pulse survey of Irish entrepreneurs in May 2020 showed 75% of entrepreneurs had suffered a loss of revenue due to the pandemic, but encouragingly, despite the crisis, revenue for the group increased overall by 20% since 2019 and more than half (53%) were able to maintain or increase headcount since 2019.
Neil Gibson, Chief Economist, EY Ireland said, “The macro economic data points to a sharper recovery from the pandemic across the island than most forecasters predicted, and the EOY survey results show us that our entrepreneurial family are also beating expectations. Despite challenges that no business plan will have prepared them for, many have pivoted to seize new opportunities or completely changed their ways of working and their business model from what they had originally planned. This solution focussed, nimble, problem solving mind-set is a stark reminder that even in an ever more digital and technologically driven world, talented people remain core to the island’s future.”
Government response to pandemic broadly welcomed
The survey results also highlight that the Government response to the pandemic was broadly endorsed by the entrepreneur community, with 62% describing government as supportive or very supportive of entrepreneurship. This came alongside a strong appetite for continued support and innovative policy solutions for the varied and geographically diverse group of entrepreneurs that the island of Ireland is home to.
When it comes to how COVID-19 is impacting the entrepreneurial community, respondents cited their current most significant challenges as supply chain delays (41%), balancing remote versus on site working (40%), the supply and cost of raw materials (36%), wage inflation (36%) and forecasting challenges (30%).