Ireland’s bright future as a location of choice for US FDI

Ireland's appeal as an FDI location is endorsed by 94% of American Chamber members in a survey

A decade of employment growth in IDA client companies, with US-Irish trade being the leading contributor.

Regina O'Connor, Director of Public Affairs and Advocacy, American Chamber of Commerce in Ireland, 

Regina O'Connor, Director of Public Affairs and Advocacy, American Chamber of Commerce in Ireland.

A century ago, on January 16, 1922, Michael Collins as chairman of the Provisional Government was handed over the keys to Dublin Castle which led to the establishment of the Irish Free State and later the Irish Republic.

As we mark the commemoration of this and many milestones over the last century, it is good to look ahead to Ireland’s next century.

Ireland’s economic resilience has been tested most recently, through the financial crisis, which created record unemployment levels; spiralling debt and deficit and the Covid-19 pandemic. And yet, we are seeing record numbers of growth, investment and employment in Ireland and positive forecasts for the coming year. US multinationals continue to play a central role in this growth and prosperity.

Today, Ireland is home to the world’s top five global software companies, 14 of the globe’s 15 top med-tech companies and all the top pharma companies.

There are almost 900 US multinationals in Ireland, directly employing over 190,000 people and indirectly supporting an additional 152,000 jobs in the wider economy. US companies spend more than €12bn on payroll, more than €8.8bn on goods and services and invest €6.5bn on capital expenditure each year.

AmCham has identified 60 key reasons, related to competitive advantage, why companies invest or plan growth in Ireland.

Talent tops the list — with Ireland having one of the most educated workforces in the world; ranking in the top 10 globally for quality of its education system; with the EU’s youngest population, proportionally having the fourth highest international workforce in the EU, and Irish workers being the most productive in the world (report by the OECD).

Further, as a location, other reasons of competitive advantage for Ireland include: ease of air connectivity, ranking as second in Europe and seventh in the world for the most competitive economy (as reported by the IMD), being a committed member of the EU Single Market and Eurozone, with an exceptional level of collaboration between industry, academia, state agencies and regulatory authorities driving the R&D sector.

Into the future, inward investment will be as much about where people want to live, as where businesses wish to locate, and it is by ensuring we remain competitive in the global battle for talent, that Ireland will continue to attract FDI. Further, with Ireland agreeing to sign up to an agreed 15% corporate tax rate for companies in scope, the competition for investment globally will be even more intense.

As we look ahead to the next century, it is the opportune m

oment to refocus. To use the analogy of “spokes of the wheel” regarding the retention of our global competitive advantage, there are a number of “spokes” which, together provide the traction that will ensure Ireland remains attractive as a home for talent and companies. These “spokes” must be well-oiled, and, in this article, I will highlight three. People (talent), place (Ireland) and planet, the opportunity to provide leadership on sustainability.

On talent, Ireland’s policy focus on improving quality of life outcomes for talented individuals and their families here is sharpening. As Government acknowledges, in a world where people can increasingly choose to work from anywhere, we must move faster to address the challenges that are holding us back. In our recent pre-Budget submission ‘Next Century Ireland’ AmCham recommends that Government implement a three-year global #WhyIreland campaign to help attract top talent.

AmCham continues to advocate for the speedy implementation of the following Government plans to enhance Ireland’s offering: Housing, improving transport connectivity opportunities via the National Development Plan and Broadband roll-out. Further, AmCham continues to advocate for a best-in-class visa and permit ecosystem, the enhanced digitalisation of the public sector and reducing the personal tax burden. As we think about the future of work, the development of more bus and train corridors between urban and rural centres will support the Government’s regional development strategy and relieve pressure on Dublin as a capital hub.

Secondly on Ireland as a location, as AmCham focuses on the policies where companies can continue to grow and invest, the same policies above are in play with infrastructure at the core. We are advocating for the improvement of both digital and physical infrastructure, including energy supply and capacity, water systems, and the enhancement of cybersecurity protections for critical public infrastructure. As we plan for current and future investment, we need to ensure that sufficient capacity exists within our energy grid to cater for both current and future power needs, while also advancing measures to meet our climate goals and supporting the transition to a carbon neutral economy, increase renewable energy sources and ensure interconnection ease to the energy grid.

This brings me to the opportunity that we have to be a nation which leads on sustainability. AmCham members fully support the Government’s climate goals, and the EU’s decarbonisation targets. In fact, many of our members are aligned to even more ambitious sustainability targets. Advancing our goals will require an all-of-society approach, and through working together we have the capability to make real change.

In a recent AmCham survey, 94% of members reported that their corporate headquarters, in the US, viewed Ireland positively as a location for future investment. As Ireland enters its second century as an independent Republic, our country has a bright future, and through collaboration we can ensure Ireland remains one of the best countries in the world in which to live and do business.