IDA to announce major jobs initiative

MAJOR job announcements by IDA Ireland are in the pipeline, chief executive Sean Dorgan said last night.

“We are competing strongly at present for a range of valuable investments and expect to be able to announce important decisions within the coming months, especially in the pharmaceuticals, healthcare and international services sectors,” he told the Dublin Economic Workshop in Kenmare, Co Kerry.

Meanwhile, he was happy to point out major investments were proceeding, such as Intel’s 2bn spend on FAB 24 in Leixlip, Wyeths 1.5bn biopharma development in Grange Castle, and other multi-million investments.

He said there was still considerable interest in Ireland among many leading international companies for higher level activities. This interest was spurred by the country’s successes over the past decade, and newer offerings, both in skills and the 12½% tax rate for all corporate trading profits.

But he warned that competition for new projects and the expansion of existing foreign companies operations in Ireland was increasing, stressing the need to either upgrade or replace these firms on an ongoing basis.

“Our real competitors for investment are now increasingly the advanced countries, including the US itself. “We may leave it in New Jersey” - the Nordics, Benelux, Switzerland (very aggressive on tax), or Singapore, a model economy in Asia,” he said.

“IDA Ireland believes competition in unavoidable, and in any case that is good for us. It keeps the focus on Ireland Inc on competitiveness and efficiency and in the long run it is likely to boost growth, rather than constrain it,” he added.

Mr Dorgan expressed concern about both local and global economic conditions in the short term.

“In the immediate future we are facing slow growth in the world economy with considerable political and economic uncertainties. The hope for recovery in high technology markets has not happened and it still seems as far away as ever, probably late 2003 at best.”

He acknowledged there were cost pressures on many businesses in Ireland, exacerbated by a slowdown in sales. On the other hand, labour market pressures have eased considerably.

“It is worth recording that, despite the worst downturn in the history of the IT sector, the five leading companies in the sector in Ireland (Intel, Dell, IBM, HP and Microsoft) continue to employ between them as many people here as they ever did.

“In October, 1999 these companies employed just over 13,000 people in Ireland; our current estimate for October 2002 is that they employ just over 16,000 people.”

A recent Forfas study based on US Department of Commerce data shows that the value of the total stock of assets of US firms in Ireland at the end of 2000 was the equivalent of 40% of Irish GDP.

“Is such a high dependence on FDI and in particular from the US wise? Doesn’t it leave us vulnerable, as the recent downturn in the US economy illustrates? We don’t think so,” he said.