IDA warns of inward investment complacency

IDA warns of inward investment complacency
Frank Ryan, IDA chairman, Business Minister Heather Humphreys, and Martin Shanahan, IDA Ireland CEO, at the publication of the IDA’s figures for the first half of 2018. Picture: Maxwell

By Geoff Percival

The IDA has warned Ireland will see an erosion of inward foreign direct investment (FDI) flows if it takes its eye off the ball in terms of international competitiveness.

A study by EY earlier this week showed Ireland dropping out of the top 10 most attractive European destinations for FDI, with Finland replacing it.

And, despite publishing strong figures for the first half of this year, the IDA has said Ireland cannot be complacent about its attractiveness to overseas companies looking to invest in the EU.

“Unless Ireland stays competitive, we will not continue to see these investment numbers, it’s as simple as that,” said IDA chief executive Martin Shanahan.

“Ireland cannot be complacent about its competitiveness. The last three years have seen record job creation numbers within the IDA Ireland client portfolio — there are over 210,000 directly employed in FDI companies in 2018. We cannot take this investment for granted and companies will go elsewhere unless we maintain an environment that is conducive to doing business.

“There needs to be a continued relentless focus on competitiveness and IDA Ireland will work with Government to ensure that those areas prioritised by investors are addressed.”

The IDA said Ireland won 139 fresh inward investment projects in the first half of 2018, up from 114 for the same period last year.

Of the 139, 51 were regional investments made outside of Dublin.

Investment was particularly strong in the areas of technology, financial services and pharmaceuticals and the agency said it expects that the investments will lead to the creation of over 11,300 jobs.

Mr Shanahan said that while attracting more regional investment has proved “very challenging”, “steady progress” is being made with 344 investments approved for the regions in the three and a half of the IDA’s current five-year strategy, compared to 346 over the full five years of the previous strategy.

He said the IDA has been expanding its “Brexit- focused conversations” with potential investors, this year, across a number of sectors including pharmaceuticals, medical devices, legal and broadcasting — all of which are looking at their arrangements following the UK’s exit from the EU.

“Brexit forms part of the backdrop to all investment engagements we have with clients these days.

“We estimate that in excess of 40 companies have chosen Ireland as a result of the planned exit by the UK from the EU, with Brexit being a factor in other decisions,” Mr Shanahan said.

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