UK IT Market
Industrial sector opportunities for Irish companies in the UK
Industrial Products
Construction
UK Print & Packaging
Electronics
Healthcare
Automotive
Defence & Aerospace
Process
Engineering
Emerging Technologies
Biotechnology
Photonics
Nanotechnology
Consumer Products
The UK Retail Sector

UK IT Market:
The UK IT market is a key target market for Irish software and services vendors. In 2002 their exports to this market earned €455m, an increase of 14% on the previous year.

Total UK IT spend in 2004 is estimated at £73.4 billion (Kew). Over 30% of the above spend is on software and IT services. Purchasing power is highly concentrated with 44% of the total spending done by the top 500 companies. Competition from local and international suppliers is intense - contracts are hard won.

The UK IT market is highly fragmented with 185,000 IT companies doing business, including more than 14,000 resellers. The top 10 software and services players are IBM, EDS, CSC, Accenture, Fijitsu Services, Capita, HP, BT Global Services, CGEY and Logica CMG.

Key sectors of focus for Irish technology companies are financial services, telecommunications, public sector, eLearning and life sciences.

Industrial sector opportunities for Irish companies in the UK

Industrial Products:
Following on a difficult year in 2002 which saw overall Irish exports to the UK fall, 2003 has continued to offer substantive challenges to Irish industrial exporters looking for market growth.  Despite the flatness of the market, half yearly figures (imited sample base) show that companies in a number of Enterprise Ireland key industrial sectors have increased market sales including Construction/Print Packaging 9.9%, Engineering 6.5%, Life Sciences & Chemicals 4%, and Electronics and Precision Components1.8%.  Despite these encouraging signs, Irish exporters continue to face many challenges in the UK as they seek to enter or develop their market position.

Construction:
Total construction output is expected to reach £80 billion in 2004, reflecting growth of almost 12%, and continuing the elongated growth cycle that was a feature of the market throughout much of the 1990's. 

UK Print & Packaging:
The UK print & packaging industry is one of the largest UK manufacturing sectors utilising more than 160,000 employees in more than 12,000 companies. 

Electronics: The UK electronics industry is now the fifth largest in the world in terms of production, due to rapid growth in the 1990s of 11% per year. The total value of output is approximately $60 billion and the industry employs some 269,000 people in manufacturing, with another 352,000 in the software and services sector.

Healthcare:
The healthcare industry as a whole anticipates growth in the coming years, and the UK medical equipment market is expected to increase significantly in real terms throughout the forecast period to reach a value of almost £4B by 2007. This sector holds good potential for Irish clients, especially given their experience of dealing with Irish based global healthcare leaders. However, strong competition from UK and foreign sub-supply companies is clearly a barrier to entry.

Automotive:
The UK automotive industry employs around 850,000 people and is worth approximately £40 billion, representing 8% of the global industry size. It contributes 3.4% of gross domestic product and 9% of the UK's total exports. Opportunity exists for Irish clients offering a higher value add solution to car manufacturers and tier 1 and 2 suppliers.

Defence & Aerospace:
The UK is the second largest exporter of defence IT and electronics, a reflection of a worldwide reputation in defence, our industrial base, product range and international links. The UK also remains the preferred European location for global players.

Process:
The traditional UK processing industries are experiencing lean times. There are few sectors of UK industry that are more closely linked to the state of the economy and which are affected so quickly.  Many UK manufacturers are carrying trading losses, unable to maintain sales in the face of growing European, euro zone competition.  Thus, the industry has been forced to consolidate its position, rather than grow. To put meaning on this for Irish companies, it implies product and process intensification to increase efficiencies from existing capital stock.

Engineering:
UK engineering firms have begun to experience the first signs of a turnaround in their fortunes for more than two years. The stronger pound currency and some signs of global markets improving have helped manufacturers reap the rewards of their efforts to improve competitiveness.  But it was demand for exports which propped up order books as companies continued to report a decline in domestic orders.

Emerging Technologies

Biotechnology:
The UK is second largest Biotech sector after the US.  Annual turnover is greater than £2bn and the sector comprises 400 companies.  R&D is up three fold while employment has doubled.  The main clusters are Cambridge, Oxford, London, the North West and Scotland.  Strengths include a strong science base, an entrepreneurial culture, a good stock market, a mature venture capital market, an established Pharma sector and a good tax environment.

Photonics:
The UK Photonics industry is at an early stage in its development and primarily focused on R&D and component design and manufacture.  The industry is export orientated.  Industry clusters are in Scotland, Wales, the Midlands and South of England.  Significant funding is being invested in research and commercial development by the DTI and development agencies.

Nanotechnology:
The UK has excellent research credentials in nanotechnology, with world leading research.  Key centres include Glasgow, Oxford and Cambridge.  There are a number of other significant centres and universities, with over 1500 researchers UK wide.  The UK government has recently announced it will inject 90 million towards nanotechnology R&D and commercialisation.

Consumer Products

The UK Retail Sector:
Retail sales are expected to outperform GDP growth in 2004; sales are forecast to grow by 3.7% to reach £222.7 billion. Retail sales now account for just over 1/3 of consumer expenditure.

Perhaps the most important trends for 2004 include:

• The further consolidation of market share in the hands of multiples, which will account for nearly 90% of sales in 2004.
• The continued closure of independent retailer outlets at the rate of about 4,000 a year (across all categories); the independent sector's share of retail sales is now at 10% and falling
• The further development and increasing sophistication of retail centres and consumers outside London, in particular in cities such as Birmingham, Glasgow, Manchester, Leeds and Nottingham
• The continued growth of value retailing across all categories
• An increased focus on supply chain issues by retailers, particularly as an area to cut costs and streamline operations - the numbers of both suppliers and distribution centres used by retailers will drop, as will lead times, and penalties for "non-compliance" of contract terms & conditions will get harsher.

The UK consumer products team assists companies with the following activities:

• Market strategy and market entry assessment
• Brand architecture mapping and brand building
• Marketing and PR
• Customer relationship & channel management
• Agent and sales representative recruitment
• Sales lead generation
• Product feedback
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