15th/16th February 2018

Addressing the Skills Needs Arising from the

Potential Trade Implications of Brexit

Expert Group on Future Skills Needs Workshops

Expert Group on Future Skills Needs

Independent, non-statutory body, established in 1997

Includes representatives from business, education and training providers,

trade unions and a small number of Government departments and agencies

Secretariat based in Department of Business, Enterprise and Innovation

Advises the Government on future skills requirements and associated labour

market issues, that impact on national potential for employment growth

Undertakes research, analysis and horizon scanning in relation to emerging

skills requirements at thematic and sector levels

Engages with Department of Education and Skills, Higher Education

Authority and SOLAS and other relevant bodies to produce an agreed action

plan to address the skills needs identified

_______________________________________________________________Department of Jobs, Enterprise and Innovation | Strategic Policy Division

Context of workshop- 1

https://dbei.gov.ie/en/Publications/Building-

Stronger-Business-Responding-to-Brexit-by-

competing-innovating-and-trading.html

• Contingency planning for

potential fallout from Brexit-

DBEI focus on helping firms to

compete, innovate and trade in

post-Brexit environment

• Range of DBEI research directed

towards understanding Brexit-

establishing the evidence base

• Purpose of study- to examine

whether Irish based enterprise

is adequately equipped from a

skills perspective to address the

potential trade challenges

posed by Brexit

Context of workshop- 2

(1) UK departure from Single Market and Customs Union- could bring new

border controls, barriers, resulting administrative/technical requirements for

Irish trade into and from UK market

Also questions around continued viability of UK landbridge as channel for

Irish trade

o Impact on efficiency of trade flows, creating disruption, additional business

costs, impacting on supply chains

o Freight Transport, Distribution and Logistics sector- key enabler of trade for

Irish based enterprise

(2) Also onus on diversification of Irish trade away from UK market to offset

potential impacts

Seeking out non-traditional markets may present other trade related

barriers and regulatory challenges for Irish based enterprise

_______________________________________________________________Department of Jobs, Enterprise and Innovation | Strategic Policy Division

Revisiting of previous EGFSN reports (trade related

skillsets)

• 2012’s Key Skills for Enterprise to Trade Internationally

o Focus on skills related to global/international management, sales, marketing, customer support, design and development, logistics/distribution, foreign languages/cultural awareness (i.e. trade diversification skillsets)

• 2015’s Addressing the Demand for Skills in the Freight Transport, Distribution and Logistics Sector, 2015-2020

o Focus on skills related to Freight Transport/Logistics (especially HGV driver shortage), trade compliance, Supply Chain Management (i.e. trade facilitation skillsets)

Current Exercise- 1

• Through current study- assess the progress, through

development of an adequate skills base, in implementing the key

recommendations of those reports, prepared at a time of less

potential for restrictive, complex and disruptive trading

arrangements with a key market and channel for Irish trade

• What other issues have arisen?

o e.g. Enhanced provision and programmes in international

management/sales/marketing/supply chain management,

introduction of foreign languages strategy, professionalization

and enhanced attraction of FTDL sector as a career option (e.g.

development of apprenticeship programmes for HGV drivers,

Logistics, enhancement of training for Customs Clearance/Freight

Forwarding)

Current Exercise- 2

• Undertaking of comprehensive research exercise in current study (engagement with enterprise sector)

• Stocktake and update these two reports, establish exact state of readiness of Irish based enterprise from a skills and competency perspective

• Expected outcome of study: preparation of an evidence based action plan that can be drawn upon and implemented

• Contribute towards development of the trade related skills base in Ireland, and its accessibility to enterprise, in a manner that:

o Helps Irish based enterprise navigate the potentially more complex and diverse trading environment post-Brexit

o Enhances the efficiency of trade flows, competitiveness and diversification into new markets

o Helps to grow and sustain employment

Qualitative Research- Study Sample

• Engaged with 64 internationally trading enterprises and firms within the wider Freight Transport, Distribution and Logistics sector, including key informants relevant to both areas, to determine:

o the potential impact of Brexit on their business

o their existing and prospective trade related skills needs

o how these needs could best be addressed

• Internationally trading enterprises concentrated in sectors identified by Government Trade Strategy (Ireland Connected) as ‘sectors of comparative advantage’ for Ireland- in particular Agri-Food, Health Lifesciences, Technology, High Value Manufacturing, Construction Services

• FTDL firms- included Third Party Logistics Providers, International Road Freight Transport Companies, Consultancy Firms providing Logistics Services as significant part of their business activity, Operators involved in intermodality and co-modality logistics activities

Purpose of Workshops

One of two identical workshops being held this week- one in Dublin and

one in Cork

Key role in qualitative research phase

Gather together Internationally Trading/FTDL stakeholders from industry,

policy and research

Main goals:

o To discuss and validate the preliminary results of the study

o To discuss the potential impacts of the key findings

o To brainstorm and discuss the measures that should be taken in order to

boost the availability of the relevant trade related skillsets in Ireland

Workshop Agenda

Addressing the Skills Needs Arising from the Potential Trade Implications of Brexit- workshop

Agenda

12.30 Registration, Tea and Coffee

13.00 Opening and Welcome by DBEI

13.10 Keynote 1 Overview of Study Findings- Internationally Trading enterprises

Keynote 2 Overview of Study Findings- Freight Transport, Distribution and Logistics Sector

13.30 First Breakout Session: Validation of study findings

14.30 Reporting of breakouts to plenary

14.45 Tea and Coffee Break

15.00 Second Breakout Session: Measures to address issues and opportunities

16.00 Reporting of breakouts to plenary

16.15 Wrap up and conclusions (AECOM and DBEI)

16.30 End of workshop

International Traders

Findings – International Traders

• Spoken to organisations across Construction, Agrifood, Technology, High Value Manufacturing, Health Lifesciences

• Key informants

• Reviewed Brexit specific documents, reports, policy statements, impact studies, articles etc

• Changes in skills requirements

• Particular challenges of Brexit (broken down by sector)

• Planned mitigation and suggestions for support from Govt and training and education providers

Approach – International Traders

• Size of the organisation

• Revenues across key markets

• Customs skills

• How transport goods

• Impact on business and subsequent changes to MO

• Changes in ability to recruit

• Support

Telephone Interviews

Agri-food

• Wide range of activities

• Rapidly growing global population and changes in

consumer preferences due to a burgeoning middle-

class in emerging markets

• The retail of agri-food produce is dominated by a

small number of large retailers

• Highly dependent upon the export market

Sector Profile

Agri-food

• Integrated UK&I manufacturing (e.g. packaged)

• Time to market is a critical factor

• Places limitations on the geographical reach of certain

products

• Market where Brexit has already been seen to have an

impact (currency)

• Small companies less likely to have awareness of non-

tariff barriers as they tend to depend on outsourcing

logistics

Agri-food

• Customs: H&S, TARIC

• Regulatory Divergence: Tailoring products to reflect specific market regulations.

• Supply Chain Auditing

• Sourcing

• Trade Financing: Managing VAT

• Languages: Translation, business, N.A. + Asia: French, Mandarin

• Cultural: non-verbal communication and awareness.

• Food Scientists/Meat technicians

Identified Skills requirements

Agri-food

• Northern Ireland a key market and seamless supply

chain with Ireland – Big shock

• Difficulties reported in exporting to 3rd countries

• Larger organisation – more proactive

• Suggestion that less business will be done with UK

• Big challenges with exploiting new markets

• UK a unique market (e.g. Cheddar)

Feedback

Technology

• Can be subdivided into three sub-sectors:

o Software Products and Services

o Electronics, Hardware and Firmware,

o IT-Related Services

• Software increasingly cloud based

• Much hardware production has moved abroad

• …but not Supply Chain Management functions

Sector Profile

Technology

• Products often air freighted as high value

• Dangerous goods

• Larger multinationals have dedicated global trading

teams

• Smaller organisations likely to use 3PL

• Concerns over regulatory divergence

Sector Profile

Construction

• Composed of companies producing physical goods, and support services

• Products include timber products, building systems, insulation products and fittings

• Demand for construction products and services is anticipated to shift toward South-East Asia and other developing markets

• Worries that there is an oversupply of offices in Dublin

• 55% of Ireland’s timber and construction sectors’ exports to UK

Sector Profile

Construction

• Construction output is currently estimated to be at 2001

levels, employing over 140,000 people

• Grappling with sourcing adequate levels of trades/

professions to fill important vacancies

• Number one issue lack of skilled tradespeople

• Apprenticeship uptake low

• Brexit may increase demand for office space in Dublin

• …but has created uncertainty

Sector Profile

Health Lifesciences

Sector Profile

• Latest contributor to corporation tax receipts in the

goods sector

• Highest level of profit per employee

• Ireland is a globally recognised centre of excellence

• Employs over 50,000 people directly and exports

over €445 billion annually

Health Lifesciences

Sector Profile

• High margin and time sensitive – air freight

• Engaging partners to explore alternative

arrangements and tackle regulatory

divergence/requirements

• Less exposed to UK market than other sectors

• Limited availability of cold chain storage

High Value Manufacturing

Sector Profile and findings

• Ireland provides a competitive high value

manufacturing location

• Likely to undergo significant disruption over the

next number of years due to the development of

new technologies

• Often multinationals with SCM centres in Ireland

• Varying levels of exposure to UK market

• Data Analysts and supply chain specialists

FTDL Sector

Sector Profile

Finding – Roles difficult to recruit into

• Drivers, drivers, drivers!

• Supply Chain Management roles

• Operations

• Sales and Marketing

• Customs Clearance

• Not just bodies through the door – quality

• Consistent with 2015 findings

• Perception of sector

• Turnover

Exposure to UK market

• Mixed response to survey

• Those most exposed to UK looking at other markets

(EU predominantly)

• Multinationals less exposed, but concerned

Impact of Hard Brexit

• “Very negative impact”

• “Minimal at the moment”

• “Unsure”

• “positive…customs clearance expertise is likely to become more in demand”

• “Will materially we change the way do business”

• Very negative impact – company is shutting down and Brexit is a major factor in this

• Exposed to landbridge

• UK/Ireland regulatory alignment

Change in import and export markets?

• Look to explore other European markets

• Adapt

• “Wait and see”

• Little evidence that markets further afield are being

explored/considered

• Costs associated with

training/recruitment/exploring new markets

Staffing numbers and training requirements

• Modest increases reported amongst some

respondents

• Generally in relation to customs clearance

• INCO terms/AEO

• FTDL sector not significant employers of British

workers in Ireland

FDTL Findings

• Chinese walls effect

• Legal issues potential for disrupting distribution rights for UK and Ireland

• Exposed to UK market and landbridge

• Feeling that Hard Brexit would be extremely difficult…

• …but don’t believe it will happen

• Uncertainty a huge issue

• Acknowledgment that customs clearance expertise was needed

• But not currently investing in upskilling/recruitment/alternative markets

• Wait and see!

Overarching Findings

• Varying level of concern and projected impact

• Not consistent across sector, size of organization

and exposure to UK

• Uncertainty affecting understanding of impact and

skills requirements

• Little evidence of intervention by majority of

respondents to upskill or invest in new markets

• General ability to recruit has got more difficult

Overarching Findings

• Larger organisations better placed to cope with new

customs requirements (existing markets, dedicated

trading teams)

• Few mentioned divergent regulatory environment

• UK employees generally very small proportion of overall

workforce

• Language skills discussed, but intertwined with cultural

awareness

• Europe rather than other markets cited as replacement

Breakout 1: Validation of Study Findings

Breakout 2: Potential Measures

Wrap up and Conclusions