‘Businesses that export cross-Border are more profitable, more resilient’

Crá, the successful Irish language TV detective series telling the story of a garda and a podcaster’s investigation into the discovery of a body in a bog in Donegal, tells us much about changing patterns in cross-Border trade.

Made by Fíbín Films, the TG4 and BBC Northern Ireland co-production begins its second series on November 3rd following the success of the first series – one that has so far been sold into 68 markets internationally.

“Though backed by TG4, we were short about 30 per cent of the budget to make it and we just simply couldn’t have made it without going north of the Border. Drama is a very expensive business,” says Bernie Hoban of Fíbín.

With the help of BBCNI and Northern Ireland Screen, the funding gap was closed, though the rules stipulated that the Northern contribution had to be spent north of the Border.

Post-production for the first series was carried out by the Belfast-based company Zoogon, but on the back of the successes to date Fíbín has now set up its own operation in Belfast.

“There are no barriers in our industry to people we can hire. For example, if we need a grip guy, we can hire him from Belfast, or if we need a writer, we can hire them from Myanmar, or wherever,” Hoban tells The Irish Times.

However, other companies are not so fortunate. “When I speak to other industries, there seem to be a lot of barriers,” Hoban says. “If they want to hire an electrician from Northern Ireland, they can’t because qualifications aren’t recognised south of the Border.

“If the two jurisdictions came together to recognise that a plumber is a plumber, an electrician is an electrician, that all qualifications are recognised, it would open up the island.”

In Castleblayney, Co Monaghan, the difficulties about cross-Border qualifications recognition are seen daily by Ohk Energy’s Una McCabe, the electrical company’s training and development manager.

Offering example after example , McCabe tells of one employee who recently qualified as a qualified certifier (QC), signing off on electrical works that are up to standard.

The employee did his apprenticeship in Northern Ireland, but his QC training took place in the Republic. “We are now trying to get him certified in the North as a QC, and his qualification isn’t transferring over,” McCabe says.

“They don’t speak to each other, and they are now expecting this gentleman, who has a list of qualifications, already a qualified QC, to do the course again in the North.”

Up to now, Ohk Energy has largely worked in the Republic, but recently won a significant contract with Power NI, Northern Ireland’s largest electricity provider, serving 450,000 homes and businesses.

“Businesses operating across Ireland and Northern Ireland should be able to invest in their people with confidence that those skills can travel with them. Ultimately, skills mobility is economic mobility,” McCabe says.

“If we want indigenous companies to grow, compete and create high-quality jobs across the island, removing unnecessary barriers to the recognition and development of our skilled workforce has to be part of that conversation.”

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The problems caused by the non-recognition of qualifications are attracting increasing attention following a study of the cross-Border services trade by Oxford Economics for InterTrade Ireland.

The regulatory issues were focused on in recent weeks by officials from both sides of the Border when they were briefed on the details of the InterTrade report.

“They were immediately interested, asking for a list of the problems. It was an immediate red flag. So, anything we can do to get that message out that there’s a problem is useful,” says InterTrade’s Stuart Mathieson.

For InterTrade, however, which has promoted cross-Border trade since it was created in 1999 in the wake of the Belfast Agreement, the sharp growth in services trade is a little-known success story.

“The really interesting thing about services is that it’s growing despite us not paying all that much attention to it. If we’d paid the same amount of attention as we do to goods, it could be twice what it is now,” says Mathieson.

Official figures tell only part of the success, with Northern Ireland’s Statistical Research Agency (NISRA) reporting that services trade quadrupled from €1 billion in 2011 to €4.2 billion in 2024.

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The growth in services – covering everything from construction to the film industry – is “outpacing” the growth in goods trade, “even as post-Brexit regulatory changes have introduced new complexity”, the NISRA says.

However, the numbers fail to capture the true scale of cross-Border services trade, since the numbers collected exclude financial services and tourism, and lag behind by a year.

Once adjustments are made, total trade in 2024 came to €6.25 billion, with Northern Ireland dominating the exchanges, with services exports to the Republic rising to €4.3 billion, while those from the Republic reached €2 billion.

And it is a story of success not well understood, most of all in Northern Ireland, says Mathieson. “Northern Ireland has a significant services trade surplus with Ireland, a massive one.

“If it had to reorient, for whatever reason, towards Great Britain, or maybe the United States, depending on whether it’s tech and things like that, the consequences would be devastating.”

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The Republic, says InterTrade, is “already NI’s largest non-GB export market, accounting for around 44 per cent of NI’s services exports to destinations outside the UK, a share that has risen consistently over the decade”.

“From NI’s perspective, the all-island services relationship is central to its external economic performance,” the report carried out by Oxford Economics for the Newry, Co Armagh-headquartered cross-Border says.

In all, NI’s services exports to the Republic account for just under a fifth of all services exports, placing it above most comparable “contiguous-border pairs in Europe”, as the report describes it.

The “asymmetry” in the numbers is reflected in the trade balance: Northern Ireland runs “a substantial and persistent services trade surplus” with the Republic of approximately £2 billion [€2.4 billion] a year.

Confirming the anecdotal stories of Northern Irish builders heading south in numbers every morning, the trade is skewed, with construction accounting for 55 per cent of NI’s services exports – growing by 21 per cent a year since 2011.

Highlighting the gaps in the statistics, the Oxford study finds that financial and insurance services emerge as the second-largest category in NI’s exports south of the Border, worth €750 million, approximately.

The number is partly explained by Northern Ireland’s success in the increasingly important area of cybersecurity in recent years, where firms such as Rapid7 and Proofpoint have bedded into Belfast successfully.

“We’ve got very, very good ICT companies here,” says Mathieson, as he looks out the window on to the Lagan from the Waterfront Hall in Belfast. “We’ve got a little bit of a specialism in things like blockchain, cybersecurity.”

From the Republic’s perspective, the cross-Border services trade is far less significant, amounting to less than 1 per cent of such exports, but that number is skewed by the dominance enjoyed by foreign-owned tech companies south of the Border.

However, there are signals that things are changing here, too – or that “an inflection point” has been reached, as the report puts it – because services exports from the Republic to NI increased 88 per cent in 2024.

The jump is explained by increases – to just over €1 billion – in manufacturing-linked services, construction and professional services, though whether that is “a durable structural shift, or a one-year spike” remains to be seen.

The possibilities for locally-owned firms in the Republic to begin their own “export journey” north of the Border are a key part of the Irish Government’s strategy, including co-operating with like-minded SMEs in Northern Ireland.

Our research consistently tells us the barriers are practical

—  Margaret Hearty

The growth in services trade over the last decade has been steep, but it is just the foundation, says InterTrade Ireland’s chief executive, Margaret Hearty: “Businesses that export cross-Border are more profitable, more resilient.

“Even more importantly, 75 per cent of them will then go on to export off the island. So, what holds businesses back? Our research consistently tells us the barriers are practical; they’re not fundamental.”

However, the barriers that are there – some left by the United Kingdom’s departure from the European Union – now see two regulatory regimes operating differently within miles of each other.

Left unattended, such divergences could get worse, since so-called active regulatory divergence has already happened in financial services and digital services, the report cautions.

In addition, there is a danger that passive divergence over years, where rules accumulate in one jurisdiction, but not in the other, will slowly bring gaps where there were none before, it goes on.

Broadly, however, the majority of firms operating on both sides of the Border find managing services contracts is “manageable and broadly straightforward, particularly where they are delivered remotely”, Hearty says.

The main barriers centre on VAT and payroll, especially for remote-working staff – an increasing headache and one that has led some firms to stop making cross-Border hires unless workers are going to be physically in the office each day, industry sources say.

In addition, Northern firms complain that there are difficulties infinding out about public procurement contracts in the Republic, despite the existence of the eTenders website.

The Belfast-based software company, SustainIQ, has successfully sold into the Republic for years, though Limerick-born co-founder Maria Diffley points to the differences that exist between Ireland and the UK for public contracts.

Unlike Ireland, the UK system has pre-qualification checks that companies can pass to be put on a list of companies that are told about the contracts coming up in their sector, “unlike eTenders, which has to be constantly watched”.

However, the difficulties are vastly outweighed by the positives, she says. “Customers appreciate that we are not remote, that we are but a drive away, and that we’ll travel if there is an issue.”

For Lisa Heavey of Dublin-based HB Label Print, which makes self-adhesive labels for the food industry and other uses, the help offered by InterTrade has been invaluable: “We got a contract from our first meeting,” she says.

Working north of the Border has been enlightening, she says. “Dublin has become quite metropolitan. Ulster people tend to be a bit anti-corporate; they like their sarcasm, their humour, and they’re straight. I appreciate that.”