Mary Buckley, IDA Ireland, outlines key findings in the IDA’s 2015-19 strategy review.
Investment from the US has always been invaluable for the Irish economy, and the success of foreign direct investment (FDI) over IDA Ireland’s five-year strategy for 2015 to 2019 clearly underlines that.
“The FDI performance over the past five years has been unprecedented and this strong performance will continue into the first half of 2020,” said Mary Buckley, executive director, IDA Ireland.
“Of particular importance over the past five years has been the regional impact of FDI.
“The ambitious target set in our strategy of an increase in investments in every region of 30% to 40% has now been met; 58% of all IDA jobs are now outside of Dublin.
"In this regard, regional development will be core to our new strategy for the period 2020 to 2024.”
However, she notes the possibility of significant downside risk in the marketplace over the next five-year period: “Those risks emanate from the possibility of an economic correction in key source markets, continued trade tensions, subdued global economic growth — and from domestic challenges related to competitiveness and the carrying capacity of the economy.
“We have developed our new strategy to, as far as possible, withstand the challenges of global political and economic uncertainty,” she added.
“Our value proposition continues to be strong. We are well positioned as a gateway location to Europe, and are committed members of the EU. We are stable, business-friendly, and supportive.”
Talent continues to be an important asset, and being competitive is more important than ever for IDA’s client companies to continue to grow and develop.
Today, there are 145,096 people working in over 1,549 FDI companies in Ireland — the highest employment in IDA Ireland’s 70-year history.
One third of multinational companies in Ireland have been here for 20 years or more, while Apple are celebrating 40 years with over 6,000 employees, and Intel is established 30 years with 4,900 employees in Kildare, Cork, and Shannon.
Pfizer, Analog Devices, Boston Scientific, Eli Lilly, National Pen, and Merit Medical have all been in Ireland for two decades, and others much longer.
“This not only reflects the commitment of these companies to Ireland, but also a longevity and resilience that comes from continuous transformation that will be as important as ever in the years ahead with the advent of the future of work, technological change, and the transition to a low-carbon economy.
“IDA will continue to support those companies who are in Ireland today to expand and grow, while at the same time working to attract the next generation of world leading companies to Ireland,” she added.
“In 2019, 88 investments out of 250 came from our existing clients such as Johnson & Johnson, Limerick, Stryker’s €200m R&D investment in Cork, and Valeo’s €44m investment in Tuam, Co Galway.
“All investments are hard-won, with our existing companies needing to compete against sister sites globally to win investments.
"Therefore, we cannot be complacent about winning FDI. Ireland’s competitiveness is key to our success.”
Ireland’s success of recent years has been broad-based, with the country enjoying growth across most sectors of the economy.
“Indeed, the sectors in which IDA client companies’ activities are focused — technology, life sciences, business and consumer services, financial services, and engineering — are those which reflect a modern, 21st century economy.
The fast pace of technological change is impacting upon all sectors, and there are changes within these sub-sectors — such as Industry 4.0 for high value manufacturing, artificial intelligence (AI), cybersecurity, and fintech.
“Ireland’s national cyber security cluster initiative has been recently established in Cork with the involvement of industry, academia, and Government focuses on the needs of the sector — enhancing innovation and the growth and competitiveness of an ambitious cluster of companies and organisations.
“In Limerick, IDA Ireland is collaborating with stakeholders on the development of an advanced manufacturing centre for the manufacturing sector to provide a soft landing for companies as they upskill and test the most appropriate digital technologies and practices for their sites.”
Having access to development land, buildings, and services is another important asset in the IDA arsenal.
“We work closely with the private sector to deliver property solutions nationally and market their commercial properties to our clients.
"However, at the beginning of IDA’s Winning strategy in 2015, the private sector was not investing in commercial property in regional locations outside Dublin so our Department of Business, Enterprise and Innovation committed €150m to development of a regional property programme including the construction of new buildings.
“The regional property programme has proven successful with nine buildings now delivered, and seven occupied or at an advanced stage of lease execution, with US companies like Meissner purchasing a building in Castlebar that will create 150 jobs; Opko acquiring our first completed building in Waterford with 200 jobs; Aerie Pharma leasing a building in Athlone; and Abbott having leased a building in Sligo.
“It is important to note that, for every 10 jobs created in an FDI company, and additional eight are created in the wider economy.
"Two buildings are just completed in Dundalk and Waterford and are being actively marketed.”
The IDA also have strategic sites that are large land banks usually for heavy utility capital investment companies: “For example, US companies such as West Pharma acquired our site in Knock House, Waterford, and Regeneron invested in Raheen Business Park in Limerick, and today employs 800 people.”
Regional locations seeing new buildings commence construction this year include Monaghan, Athlone, Dundalk, Carlow, and Sligo.
The presence of over 760 US companies across the country accounts for employment of 160,000, contributing significantly to regional development, with 59% of employment in US companies located outside Dublin.
“US companies are very important to the success of Ireland,” Mary Buckley says. “The US is historically the most important source market for investment into Ireland and, while this continues to be the case, IDA’s strategy of source market diversification is proving successful.”
In 2019, 63% of investment came from the US; while it remains the engine of jobs growth, the share of total investments from Europe and growth markets is up from 30% in 2014 to 37% in 2019.
“In 2019, we opened a new Canadian office in Toronto, and IDA now has pathfinders in the UAE, Turkey and South Africa.
In the imminent post-Brexit environment, Ireland will maintain close relations with the UK as a result of the deep and long-standing linkages between businesses and people — and because the UK will remain our nearest and largest neighbour.
“Our economic and political stability, along with a continued commitment to the EU, is a core part of Ireland’s value proposition to foreign investors.
"As companies seek Brexit solutions that will impose the lowest possible additional costs and the least possible disruption to trade, Ireland offers a base from which to sustain access to the single market, to minimise uncertainty and to grow their business,” she points out.
“Following the UK’s vote to leave the EU, Ireland has performed strongly in Brexit related investments, securing 90 investments with a commitment to 5,500 jobs, primarily in financial services and many have come from the US, such as Bank of America, J P Morgan, Citi and others.”