IDA Ireland Annual Report 2007 Press Statement

Ireland remains the most Foreign Direct Investment (FDI) intensive economy in Europe and IDA has continued to play its part in winning the highest quality investments. Together in partnership with a wide array of national stakeholders, we have continued to re-position Ireland and ensure we are viewed as one of the leading innovation led and knowledge-based economies of choice globally for mobile investment.

Barry O’ Leary, CEO of IDA Ireland

26/06/2008

IDA

IDA Ireland upbeat and positive as Ireland continues to win significant Foreign Direct Investments despite challenging global economic circumstances.

“Global Services, High Technology Manufacturing, Research, Development and Innovation (RDI) - the three pillars to our future success”

Annual Report Press Release - Word Version (111kb)

Annual Report Content Part 1- PDF (1774kb)

Annual Report Content Part 2 - PDF (2064kb)

Annual Report Statistics - PDF (2566kb)

“As Ireland continues its transition into a leading 21st century innovation-led economy, FDI will continue to play a significant role in our future growth and economic prosperity” said John Dunne, Chairman of IDA Ireland today (26th June 2008) at the launch of IDA Ireland’s 2007 Annual Report.

Mr Dunne said “The Irish economy continued its transformation in 2007. At the heart of this transformation is a belief in our ability to successfully compete with the best and a shared conviction that we can adapt, evolve and innovate in response to the increased challenges which lie ahead. Since the beginning of the new millennium, the manner in which IDA Ireland does its business has been evolving in line with changes in the global economic environment. Our focus is aligning around significantly increasing investment across three key pillars, namely global services, high technology manufacturing and Research, Development and Innovation (RDI),” said IDA’s Chairman.

The annual report 2007 outlined the Investment Highlights of 2007:

Of the 114 new investments in 2007,

* 26% were secured from clients new to IDA.
* 40% were R&D investments.
* 34% were expansions to existing facilities.
* A total of €2.3bn+ future capital investment secured.
* 33% of investments came from non US corporations, demonstrating the global appeal of Ireland as an investment location.
* 60% of these new roles in IDA supported projects have wage and salary levels in excess of €40,000 pa.
* Over 9,000 new full-time jobs with total employment in excess of 152,000 jobs in all IDA supported companies.
* In keeping with the IDA strategy of enhanced regional development, 64% of investments were located outside of Dublin.

Mr Dunne said, “FDI continues to play a significant role in our future economic growth and prosperity. Our national mandate in support of sustainable economic development has increased in complexity in keeping with enhanced globalisation and the sophistication of the goods and services originating in our economy. IDA Ireland’s ongoing success in attracting the highest quality FDI projects to Ireland has been and will remain paramount.”

The 2007 Annual Report stated that IDA supported companies in the year under review paid almost €3bn in Corporate Tax accounting for c.47% of the total corporate tax intake, and they are a crucial element of Ireland’s export base accounting for c.85% of manufacturing companies’ exports during the year. In addition, approximately one thousand foreign owned companies supported by IDA spent approximately €16bn in direct expenditure within the economy of which payroll accounted for almost €7bn.

Barry O’ Leary, CEO of IDA Ireland said “Ireland remains the most Foreign Direct Investment (FDI) intensive economy in Europe and IDA has continued to play its part in winning the highest quality investments. Together in partnership with a wide array of national stakeholders, we have continued to re-position Ireland and ensure we are viewed as one of the leading innovation led and knowledge-based economies of choice globally for mobile investment.”

Mr O’ Leary said “IDA client companies have been instrumental in driving our national productivity performance through their adoption of leading international practice in technology, operations, logistics and human resource management. Our national productivity levels as a result are high by global standards. Maintaining and improving our productivity advantage is critically important in an open economy trading into an increasingly competitive global environment.”

He continued “IDA Ireland asserts its position as a world leading economic development agency. Our organisation’s objectives and methodology have constantly evolved in line with the requirements of our client companies and emerging industries over the years. We have always been forward looking and in order to maintain our leadership, we are further developing our own skills and talent base in preparation for securing investments from an increasingly competitive environment. IDA is an organisation that at its very core has a competitive, client-focused culture. We will continue to invest in training and development to ensure that we, as an organisation, are always ‘Fit for the Future’. In this context, we have expanded our existing offices and opened new offices in France (Paris) and China (Shanghai). The expansion will be further developed in 2008 with new offices in India (Mumbai) and USA (Boston, Orange County) and extra personnel in Atlanta, New York, Mountain View and London as part of a significant redeployment of personnel to our overseas activities.”

The CEO said “IDA has continued to focus on seeking inward investment from top-tier corporations and companies within a number of high potential business sectors including Pharmaceuticals and Biotechnology, Medical Technology, Financial Services, International Services, Digital Media, Engineering and Information Communications Technologies (ICT). We are confident that there are further FDI opportunities for Ireland in these key sectors which will be augmented in the future by a number of emerging technologies, new business models and sectors such as clean-technology, convergence and services innovation.”

High Technology Manufacturing

During the last three years, in excess of €5bn in FDI projects approved by IDA Ireland were in manufacturing. These manufacturing investments are increasingly associated with product or process development activities. They are at the leading edge of technology where productivity and creativity are contingent on the skills, capability and agility of the labour force. IDA has built a strong international reputation in this area and manufacturing is the bed-rock on which the growth in Ireland’s FDI was founded.

Future manufacturing projects will increasingly include significant development activities. Our focus will primarily be on attracting investment in capital and skills intensive activities, where labour cost is not a significant percentage of total costs; specific niche operations, e.g. producing high value products, technology transfer, pilot runs or short production runs, and those with significant competence in demand fulfilment management. Mirroring the rest of our economy, manufacturing is also in transition. Higher technological investment and higher value products will be the hallmark of future manufacturing operations in Ireland.

Such investments in 2007 included Merck & Co Inc., which chose Carlow town for its new €200 million strategic vaccine facility, having acquired the entire 65 acre IDA Business and Technology Park. KCI, a leading medical technology company established operations in Athlone, Co. Westmeath and GlaxoSmithKline (GSK) announced an investment of up to €250 million over five years in its development and manufacturing campus at Currabinny, Co. Cork to manufacture products, including the active ingredient for TYKERB® (lapatinib), a new oral treatment for advanced breast cancer and Baxter announced a €75m investment for Castlebar.

Research, Development and Innovation (RD&I)

The Government’s coherent vision of establishing Ireland as a location for world-class research and innovation has shown strong results in 2007. As a result of the joint marketing programmes and initiatives undertaken by IDA Ireland and its sister agencies, Ireland is rapidly gaining a reputation as a keen competitor for global Research and Innovation from both multinationals and world-leading research institutes.

Ireland is gaining increasing recognition as a location in which to innovate and is empowering some of the leading global corporations to carry out research, development and innovation across a wide platform of activities, thereby enabling their future potential to create and commercialise new processes, products and services.

Some of the RD&I investments and academic and business collaborations in 2007 included:

* Merrill Lynch is establishing a €30 million RD&I centre in Dublin.
* Smith and Nephew united with NUI Galway’s REMEDI Centre to develop pioneering new treatments for orthopaedic joint diseases.
* Intel established the Technology Research for Independent Living (TRIL) Centre focused on the use of technology to support independent living for the elderly in consortia with TCD, UCD and NUI Galway.
* IBM Tivoli software development labs in Cork and Galway with a €24 million investment, creating 130 new jobs.
* GlaxoSmithKline initiated a research and development collaboration on Alzheimer’s disease with the Institute of Neuroscience in TCD and NUIG.
* Wyeth Corporation - €24 million in R&D and process development facilities in Dublin.

Global Services

Ireland, like many other highly developed countries, is experiencing strong growth in the services sector. Services by their nature make intensive use of advanced technology and require a highly skilled workforce. Ireland is an important location within the EU for a number of distinct service sectors, namely computer software, IT services, international financial services and regional services’ headquarters and a viable internationally traded services sector is a key component of sustainable economic growth.

* Microsoft Corporation, the largest software company in the world, announced its decision to invest an initial $500m in its new European data centre in Dublin. The state-of-the-art ‘mega’ data centre is the latest development in their ‘software + services’ strategy and will provide online services to millions of Microsoft users in this region.
* Equifax Inc., a global information solutions company and the largest credit reporting company in the US, expanded its Irish operation in Wexford - Equifax Commercial Services Ltd to add a range of new functions for the company’s European services.
* Fidelity Investments, one of the world’s largest financial services firms, is to establish a research and development function in Galway.
* Blizzard Entertainment Inc., a global leader in the entertainment software industry established its European customer support centre in Cork City.

Regional Development and Infrastructure

IDA in the past has increased the local potential for winning FDI through a national programme of strategic investment in critical infrastructure, properties and large sites. This continued through 2007 while commencing activities to realign our portfolio of properties along regional lines in support of the National Spatial Strategy (NSS). In 2007, circa two thirds of projects approved were to locations outside of Dublin, resulting in an extensive reach of highly valuable investments across a wide variety of business sectors.

Our national ambitions and clear sense of vision are well captured in the National Development Plan 2007-2013 and through the provision of €184 billion by the Irish Government, three times the amount allocated in the previous plan, to investment in science and innovation, infrastructure, transport, enterprise, and human capital. The plan is fundamental to sustaining Ireland’s projected levels of future economic growth and will increase our attractiveness for potential clients focusing on priority issues such as continued investment in transport infrastructure, a competitive commercial power supply; investment in R&D, and competitively priced and high speed broadband available everywhere.

Future Outlook

The critical challenge faced by IDA Ireland is to secure investments that are innovation intensive, technologically advanced, having the maximum economic impact and the highest calibre of potential employment. Since the beginning of the new millennium, Ireland’s offering to potential investors has been re-invented in recognition of the progress in our economic circumstances and the changed needs of the global marketplace. In the highly dynamic and interconnected world of global business, multiple factors that are increasingly associated with the Irish - agility, inventiveness, a desire to seek performance improvements and productivity gains are vital to corporate success and profitability. Clients comment positively on the coherence of national policy, the positive interaction of the development agencies and the speed and dexterity with which change is agreed and effected in Ireland.

These are factors that have proved critical to our success and will continue to be as the economy continues its transition to being increasingly innovation led. Our earlier advantages of having an abundant, highly educated labour supply and intrinsically low costs have been increasingly substituted by a depth of creative managerial talent, leadership in productivity, innovative business practice and in Research and Development expenditure resulting in superior ‘value-added’ activities.

Considerable changes have taken place in the global economy in recent years and the pace of change is likely to accelerate. Emerging nations will pose new competitive challenges and opportunities as will the developing markets in Eastern Europe and Asia.
As a small open economy that continues to outperform in terms of our size, national competitiveness is a matter of critical importance. A keen focus is needed on all the elements which constitute it. Service and infrastructure costs need to be benchmarked and aligned with best global practice. Clearly the challenge of leadership in these areas is great, but so also are the rewards.

Barry O’ Leary concluded, “Despite the economic turbulence currently being experienced, a reasonably strong investment pipeline coupled with our positive reputation in some of the world’s leading companies leads us to be optimistic that we will continue to secure for Ireland the best in innovation and investments from around the globe. So far this year, we have announced 22 investments and we expect a strong flow of announcements for the remainder of the year. Securing FDI investment is not a short term game, increasing our resources and footprint overseas, even in challenging economic times, indicates our long term commitment and determination to continue winning the best possible future investments for Ireland.”