Don’t take US FDI for granted, says Intel chief

An increase in R&D spending and a greater focus on improving the talent pool need to be the main focus areas relating to the maintenance of Ireland’s competitiveness this year, according to the main representative body for US firms based here.

At his unveiling as this year’s president of the American Chamber of Commerce Ireland, Intel Ireland general manager, Eamonn Sinnott warned against taking inward US investment for granted, adding that international competition for US foreign spend is “fierce, and growing all the time”.

“Continued US investment into Ireland is a key contributor to the success of the Irish economy into the future,” Mr Sinnott said yesterday, also noting that “Ireland needs to be on top of its game in order to win new business”.

“The key area of skills and talent will be a top priority for the American Chamber during the year ahead. This is an area where we believe we can help to improve Ireland’s offering through closer collaboration with Government and local business in identifying the skills that are needed and ensuring that the right environment is in place to meet the demand,” he said.

“This is probably the most competitive aspect in the fight to attract new investment and Ireland needs to be ‘battle ready’. A lot has been done in recent years, not lest the new focus on maths and science in our schools.

“We believe this needs to be accelerated if Ireland is to maintain its competitive edge, as other countries are also very focused on skills in recognition of its paramount importance in the decisions that are made in the US and elsewhere to located investment abroad,” he added.

That said, he suggested the battle for more science, technology and maths-based talent is not just an Irish problem, but a worldwide phenomenon. He added, however, that if a skills shortage was widespread in Ireland, we would not have had the FDI success we have seen in the past few years.

Ireland needs to focus more on R&D spending, as it currently lags behind the EU average, Mr Sinnott said.

“Building an environment that fosters and supports research development and innovation is a key to attracting US FDI, and will support the creation of stronger local collaborations. Ireland has developed a track record, over recent years, of successfully delivering on R&D investments, which bring with them significant benefits to the Irish economy and society.

“However,” he added, “Ireland’s R&D spend as a percentage of GDP — at 1.58% —currently lags many of the countries with which we compete for investment and that of the EU average, 2.02%. This represents a missed opportunity and there is clearly scope for improvement.”

Mr Sinnott’s remarks follow on from IDA Ireland, earlier this month, reporting a bumper year for job creation in 2014 and expressing cautious optimism for this year. Net employment, amongst IDA client firms, increased by 1% in 2014 to 7,131 jobs, the highest level in a decade. US firms made 140 investments, creating 11,000 new jobs and representing 73% of the total FDI jobs created in 2014.

Yesterday, Mr Sinnott said that recently announced tax initiatives, including the ‘knowledge/patent box’ incentive and R&D tax credit improvements, were welcome and would provide more certainty to overseas firms looking to locate here.