A strong capital city, regional growth and maintaining the Irish-American business relationship is key to ensure long-term growth in the Irish economy.
Denis Collins, CEO of Smarter Dynamix, and chair of the IDA Ireland Regional Development Committee and an IDA Ireland board member, said that there are huge challenges on the horizon for Ireland, as with many countries. But, he added, Ireland is better-placed than many to fend off these challenges and keep developing.
Steady job growth has been a constant in Ireland for a decade in terms of FDI. For a summary of IDA’s key US-Irish business statistics, see today’s US Business In Ireland supplement with today’s Irish Examiner,
produced in partnership with the American Chamber of Commerce Ireland.
Year on year growth According to IDA Ireland, there has been year-on-year growth in FDI clients since 2009, and that is not showing signs of slowing down either.
Many of these are based in US companies and, as such, the protectionist economic policies from that side of the Atlantic are a cause for concern for some.
Mr Collins says that there really are plenty of reasons for optimism too.
“The American-Irish relationship is a long-term, strong, trustworthy relationship and one that remains very relevant still,” he said. “It shouldn’t be the only one that we have from an FDI standpoint but it needs to be one that we take care of.”
Mr Collins pointed to a number of potential geo-political factors that could undermine the relationship between Irish and American business, namely that of the protectionist economic policies of the current US administration and, of course, the spectre of Brexit.
“These factors could inhibit potential growth in the coming years — but the US dynamic remains a cornerstone of economic policies here,” Mr Collins said.
Part of the reason for this thinking, Mr Collins said, is that the Irish-American relationship is not a one-way street.
Often, the conversation relating to Ireland, the United States and FDI focuses on the presence of American companies in Ireland. With good reason: the numbers employed in North American companies in Ireland grew by 7% in 2018, according to the FDI, and US enterprises are a crucial employer in the south-west region, specifically.
Of the 186 FDI companies in the south-west of Ireland, 114 are US multi-nationals. In total, they employ 32,203 people.
But, Mr Collins was quick to note that the relationship works both ways.
“Ireland Inc drives an incredible amount of exports that drives tremendous value for the United States,” he said.
“Research and development, supply chain, export jobs — it goes beyond the pharmaceutical presence here. Per capita, Ireland is one of the top reciprocal jobs creators with the US. That is the benefit of a long-term relationship that is built on more than just trade: it is family, is a shared history. And, while there are some tough headwinds ahead, that will stand to us.”
How does Ireland ensure that the international climate does not cause major issues in the years ahead? Mr Collins said that there is quite a bit that is needed.
“We need to have a strong Dublin,” he said.
“We all know about the importance of regional development but there will still always be companies that want to be based in the capital for whatever reason so a strong Dublin is important.
“But, more and more, we are seeing the importance of complementary strategies and that means that Ireland, just like everyone else, needs to offer diverse value for the rest of the country to draw people out.”
This has been a cornerstone of IDA Ireland policy in recent years. Almost 60% of all IDA-supported FDI jobs are now based outside Dublin, with many regions seeing particularly strong growth last year. The west of Ireland saw 8% growth in job creation, with the Midlands (14%), the mid-west (6%), the mid-east (7%) and the south-east (7%) all performing strongly too.
Mr Collins said that such growth is promising — and important.
“We need to keep building on what we have: up-sell and expand. That is as true for Ireland as any business,” he said.
He pointed to the need for collaborative clusters, including close ties between industry and regional authorities, as well as business development agencies.
“It is about understanding the value of place,” he added.
“Bring industry, government and academia together with place and you can identify opportunities, gaps in skills and then drive towards a goal.”
There was growth in almost all industries in Ireland last year. The IDA Ireland 2018 report showed a 9% growth in bio-pharmaceutical jobs, a 6% growth in tech, a 12% growth in international finance and a small boost in engineering and industry too. But that isn’t where the opportunities end, Mr Collins said.
In fact, Ireland has the chance to grab the bull by the horns when it comes to several emerging industries he said.
“Advanced manufacturing presents an incredible opportunity for total market disruption,” he said.
“And just the like pharmaceutical industry, these jobs are sticky. These companies will come along and make really big investments in operations and, therefore, will be there to stay.” And it doesn’t end there, he said.
“Media — we are talking animation like Cartoon Saloon and Brown Bag, but also virtual reality — is a huge opportunity, as is analytics,” he said.
“There is already huge growth in analytics but the opportunity is there for more. Look at the cyber-security sector, where we already have the basis of a very strong cluster, and how that links into another growth area in data centres. All of these are huge drivers with potentially huge employment.
“Analytics, data and cyber-security are all linked and that can be what cloud computing was ten years ago. CIT launched the first cloud computing masters in the world — it made the New York Times — and people come from everywhere to do it. Companies all need a place to put their data and if that backdrop is here, they will come.”
Mr Collins said it moves beyond simple data solutions and into areas like prescriptive analytics, an area of business management that not only stores and analyses data, but tells people what course of action to take from there.
He said that fintech (financial technology), agtech (agricultural technology) and proptech (property technology) are all hugely important, emerging industries that also present massive opportunities for Ireland when it comes to job growth.
“It is important, too, to tie these in with indigenous businesses: small, medium and large, and to create a diverse working pool that drives the creation of skills,” he added.
It is far from a simple task. With so many plates to keep spinning, it will take huge buy-in from a large number of important players.
But, Mr Collins said, the rewards could be huge.
“We need to be focused on herding the cats,” he said.
“For global FDI, for indigenous business and to be prepared for the headwinds of Brexit and protectionism.
“We have to be focused on driving collaboration across horizontal groups. We need to look outward and to see exactly which groups need to work together.”