IDA chief: We need to stay ahead of the pack

IT’S a bit like the Heineken Cup, said IDA chief executive Sean Dorgan when describing his organisation’s approach to securing investment for Ireland.

He was referring to the need for cities and towns across Ireland to join forces in putting a pitch together to sell a particular area toinvestors.

“You couldn’t send a Cork club side out to play in the Heineken Cup because they’d get slaughtered, instead we send out the provinces. It is the same with investment. Because we’re relatively small we have to step it up a level and it is important that regions come together and act cohesively as regions.”

This, he said, will be one of the challenges that lies ahead for the IDA over the coming years — years when the agency will no longer be in the hands of Mr Dorgan who is passing the reigns to Barry O’Leary at the end of the year.

“The challenge will always be to keep ahead of the competition and we’ve done that for the last ten years.

“We need to stay ahead of both the lower cost locations which are moving quickly, but also from the competition at the high value activity because the really significant investment we got over the last ten years has been won against high skill locations.

“Amgen and Google were both won against Switzerland and that’s not seen as a low cost location. We don’t want to be a low wage location, we want to be a high wage one but in order to be that we have to be really good at the many skill intensive activities,” he said.

So how does the IDA go about luring companies like internet giants Google to Ireland?

“Well Google isn’t yet ten years old, it was founded in 1998, but within two years of it being founded it came on IDA’s radar as a company that had something interesting and we got to know some key people at the company, many of whom we already knew as they had worked in other companies in Silicone Valley.

“We talked to them and understood what Google was trying to do and where it needed to go and when it needed a location in Europe we set out to meet its needs.” High-end companies are the types of firms the IDA has set its sights on over the last few years.

They agree that some manufacturing is moving away from Ireland, such as the more basic manufacturing, which is very cost sensitive and can go to lower cost locations but, according to Mr Dorgan, there are as many people employed in manufacturing in Ireland today as there were ten years ago. “What’s happening is that more and more manufacturing coming to Ireland is technology based and requires more technicians, engineers or scientists to run it rather than basic operatives.”

He added the striking thing about manufacturing in Ireland is that you can think of a million euro per head of investment for every employee you may be talking about. “Look at Intel, they have invested about e5 billion and they have 5,000 employees. Wyeth are the same and Eli Lilly will be when they set up in Kinsale.

“One of the important challenges for Ireland is that we keep a good flow of people in science, engineering and IT because there are huge opportunities and its going to be of a competitive advantage to us.”

Mr Dorgan is not afraid to say that the slowdown in the US economy may have some marginal effect in Ireland but he said that it is not unusual that every few years an economy would go through cycles.

“IDA’s approach has always been that we go out and look for the best investment and we aim to get them and some of the best companies are growing even in tough times and we have a record that shows that we can win investment.

“In fact we took off in the early 1990s when the US economy was slowing. We only need a very small share of a very large market to perform superbly. We’re not phased or put off by macro economic conditions.”

The IDA now has 13 offices across the world, five in the US as well as offices in France, Germany, Britain, China, Korea, Japan, Taiwan and Australia. These are also among the many countries that have come to them over the last few years asking about their work.

“We’re very successful because of the connections and the relationships we have. In very few countries do things come together so well. It’s the relationships that we have and the fact that we know the people in the companies and we know everyone in the Irish public system and the serious players in the private sector All of that connects up very well and few countries can really achieve that.

“When people come and ask what we do and how we do it we can give them some clues but in fact they can’t really replicate it. There’s hardly a country in the world that didn’t visit Ireland in the last five years and ask how did you do that and tell us how you did it.”

Mr Dorgan has been with the IDA for the last eight years and said that over the years there has been a few investments that have slipped through their hands but in general its success rate has been pretty good.

“We win far more than we loose. Over the last number of years the really good ones have been in digital media like Google.”

The challenge now said Mr Dorgan will be to keep ahead of the competition.

So after eight years as head of one of the most influential government organisations around, what has been his highlight?

“A highlight for me has been getting into new areas such as digital media and pharmaceutical and the transformation of activities at exciting companies.

“Also, how Ireland has presented itself from a place of labour surplus and low cost back in the 1990s to a high value and skill and research intensive location.

“Wyeth, Intel and Centcor have been the big investments over the years but the small ones are just as important.

“A lot of progress has been made over the years and we need to continue that progress,” he said.

“There are some good investments coming along, as well as some more IDA technology parks over the next few years.”