Consortiums and business growth on IFI projects:
Once Britain leaves the EU, companies there will be unable to tender for European Commission-funded development work. Given that Brits currently win the lion’s share of a multi-billion public tender activity, it’s an opportunity for even the smallest of Irish businesses.
Swords Consultancy, a one-man band run by Charley Swords in rural Co Wicklow, provides management training services in developing countries around the world, most recently Tajikistan.
Swords, who spent 18 years with Bank of Ireland, has worked on developing leadership and management training in banking and financial services in Africa and East Asia. If a project requires a number of skills, as was the case recently in Ethiopia, she forms a team with affiliate consultants.
“These countries are in a very similar position to where Ireland was in terms of economic development 30 or 40 years ago,” said Swords. “Much of the work involves ensuring countries learn from our successes, and mistakes. ”
ISME, the small and medium-sized business lobby group, estimates economic development programmes, run by the EU, World Bank and the IMF are worth $1 trillion annually. Not to be confused with aid programmes, these fund improvements in economic infrastructure. Contracts, typically worth hundreds of thousands of euros, are usually awarded to networks of firms or consortiums through competitive tenders.
As British firms exit, Irish SMEs need to partner up and join the party, said Neil McDonnell, ISME chief executive. “Irish firms have strong experience and native English — all reporting for such projects is in English — they have much to offer partners from the EU and beyond,” he added.
ISME is seeking government support for SMES to compete for international tender opportunities.
Consultant Ross McCarthy of Keystone Procurement says Ireland performed well in tendering for international economic development programmes, then got out of the habit “during the boom”.
Denmark, which has a similar population to Ireland, earns between €400m- €500m a year through the delivery of goods and services to development programmes. In Ireland the figure is €25m.
Ireland has expertise in areas such as agribusiness, biopharma, biotech, tourism, aviation and airport retailing — all are in demand. It’s about “monetising” untapped value in your business,” says McCarthy.
This is not aid, he added. “It is a way of making regions more stable and secure economically,” he said. “It could be advice about how to develop a tourism industry in India, for example.”
Up to 60% of a project fee is paid up front, so companies do not have to go to huge expense funding international expansion, said McCarthy. Funders are a good mark too, which “massively reduces the risk of international expansion.”
“The commissioners of these programmes want agile companies that offer the best multi-disciplinary solution,” said McCarthy. “Companies with deep knowledge and expertise make for good business partners, and the majority of work is won by consortiums.”
Being native English speakers “makes Irish companies attractive prospective partners.” Ireland and South Korea are also the only countries to have jumped from least developed nation to highly developed nation in two generations, said McCarthy. “Many developing countries are curious about our journey and want to learn from that experience.”
Work can be bolted on to existing activities and be a new income stream for a modest investment, said McCarthy.
He estimates the average cost for a lead bidder at around €5,000. In a consortium, the cost is shared. Teaming up with international partners can also lead to business in the private sector too.
Seamus McCann set up Astec in 2001, through a management buyout of a division of Eircom. From the outset, it bid on ICT and telecoms tenders issued by the European Commission, the World Bank and the Islamic Development Bank.
Astec now develops strategy and policy for governments in developing countries and writes tenders for the European Commission. It employs six people and has worked in more than 100 countries.
McCann, currently chairman of Consulting Ireland, a free network, says the activity needs government support.
“In Ireland we don’t know how to write up projects or proposals in a way that makes us attractive,” he said.
Agencies are not focused on supporting entry into emerging markets such as Africa, South America or Asia,” said McCann. “But these are where the opportunities are. Ireland is missing a very big trick indeed.”
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Article by Sandra O’Connell appeared in Sunday Times business section on 02 April 2017
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Keystone Procurement’s new division, www.sluamor.com, facilitates the sourcing and development of consortiums for companies interested in International Development opportunities.
