We can’t take US investors for granted

A recent presentation organised by the American Chamber of Commerce underlines the strategic value of Ireland as an investment location for large US companies, writes Joe Gill.

It explains how well Ireland has positioned itself as a destination of choice for American companies expanding worldwide.

Some big numbers first: n In the first nine months of 2014, US companies invested over $35bn (€32.5bn) through their Irish businesses, making it the number one country globally for capital allocation. To put this in context, the spend in the UK was $23bn. In Canada, it was $11bn and in Mexico, $6bn.

These other countries have vastly larger populations than Ireland so on a per capita basis, we have secured enormous levels of investment. n Compared to the BRIC (Brazil, Russia, China, India) countries, Ireland is a powerful performer.

These states, in aggregate, secured $52bn of US investment in the five years from 2008 to 2013. Ireland had $81.1bn invested in it over the same period.

The stock of US corporate investment in Ireland now stands at about $240bn. These eye-popping numbers are a reminder that Ireland has worked hard to be a “go-to” location for growing US corporations. That is helped by many surveys that show Ireland to be a place that rewards risk-taking and investment. The DHL Global Connectedness Index ranks Ireland second out of 140 countries for 2014.

Our World Bank’s ‘Ease of Doing Business’ rank is 13 out of 189 states. The IMD World Competitiveness Rank puts Ireland at 15 out of 60 countries. These rankings, and the associated investment, are a tribute to decades of hard work by policymakers and institutions charged with attracting overseas investment.

The IDA and Enterprise Ireland have played a blinder is providing advice and assurances about Ireland’s credentials over the past 30 years during periods defined by political and economic turbulence.

By sticking to consistent messaging about Ireland’s openness to mobile investment, and providing a stable environment for long-term investment, we have won the support of hard-nosed corporate leaders.

The recent announcement by Apple that it had chosen Athenry for a huge data storage centre brings together a number of themes connected to Ireland’s ongoing value as a hotspot for cutting edge investing. Aside from the obvious advantages of access to qualified graduates, an English speaking pro-business culture, and tax transparency, Ireland is increasingly recognised as a safe harbour in a volatile world.

Being an island nation with strong US historical and cultural connections off the western fringe of Europe brings its own advantages to Americans. Geographically, and from a time zone perspective, it is easier to manage assets in Ireland than in many other countries.

The greatest risk to this position is complacency. It could be easy to develop a narrative that this mobile investment is so entrenched here that policy shifts will not affect it. That would be a mistaken assumption.

Any attempt, in particular, to impose additional tax or costs for operating here, either at a personal or corporate level, would be met with dangerous responses.

We know, for example, that countries including Scotland, Wales and Northern Ireland, have long studied why Ireland has done so much better than them in attracting foreign direct investment. Any sloppy moves that weakens Ireland’s appeal to mobile investing will be seized on with relish by competitors.

As an election looms, the issue of US multinational investing should be centre stage in any policy debates.

Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal