Ireland continued in 2010 to win significant foreign direct investment. Most encouraging is the substantial increase in the scale of these investments from many of the world’s leading companies. In the past year the job numbers within investments secured show a marked increase, with the average employment per investment double the 2009 level. Export led growth is feeding through in the employment portfolio of IDA’s clients, which created almost 11,000 new jobs in 2010, significantly up on the previous year’s total of 4,615.
Barry O'Leary, CEO IDA Ireland
Foreign Direct Investment (FDI) in Ireland increased significantly in 2010, despite global economic uncertainty. IDA has continued to increase the number of companies investing in Ireland for the first time while encouraging existing operations to expand and diversify their operations here. Amongst those investing in Ireland for the first time in 2010 were D&B, Telefonica, Warner Chilcott, LinkedIn, EA, Riot Games, Webroot, FC Stone, Spencer Stuart, Fi-Tek, Genband, Synchronoss, Aspect, Streamserve and IIR.
Despite the turbulent global economy in which, according to the OECD, foreign direct investment declined by 8% and with increased competition for FDI, IDA secured 126 investments. IDA client companies created almost 11,000 new jobs in 2010, well in excess of 2009’s outcome of 4,615 jobs. Many of IDA’s existing and new clients are actively recruiting in Ireland, including HP, Accenture, Citi, Google, Facebook, Eli Lilly and MSD.
Welcoming the results, the Minister for Enterprise, Trade and Innovation, Batt O'Keeffe TD said, ‘Despite the period of global recession over the past two years our value proposition to multinational firms either operating here or choosing to hub in Ireland for the first time remains one of the strongest in the world.’
'The combined influence of Ireland's increased competitiveness, commitment to our 12.5% corporate tax rate, and quick and decisive measures taken by the Government to combat the challenging economic situation has resulted in an excellent flow of foreign direct investment.’
'The pre-crisis levels of investment are coming from our traditional markets of North America, mainland Europe and the United Kingdom, as well as from new high-growth markets.’
'It is clear from these results that the Government's investment strategy for science, technology and innovation is the right one to create high-quality jobs and support export-led economic recovery.’
'Crucially, the Government has resourced the State's enterprise and innovation agencies, including IDA Ireland, under the four year plan for economic recovery to meet their job creation targets and accelerate our return to sustainable economic growth,' said Minister O'Keeffe.
IDA Ireland CEO, Barry O’Leary said, ‘Ireland continued in 2010 to win significant foreign direct investment. Most encouraging is the substantial increase in the scale of these investments from many of the world’s leading companies. In the past year the job numbers within investments secured show a marked increase, with the average employment per investment double the 2009 level. Export led growth is feeding through in the employment portfolio of IDA’s clients, which created almost 11,000 new jobs in 2010, significantly up on the previous year’s total of 4,615.’
Export led economic recovery
It is generally accepted that Ireland’s economic recovery will be export led. Economic forecasts project strong growth in Ireland’s position, with the ESRI estimating Irish exports to grow 7.5% in 2010 and 5.5% in 2011. IDA clients account for over 75% of total Irish exports. The growth and development of multinationals, with their strong focus on high value goods and services exports is fundamental to the Irish economy and is an essential component of Ireland’s economic recovery.
In March 2010, IDA published its strategy for the forthcoming decade, Horizon 2020. This presents our view of how the environment in which we operate will change over the next ten years, and the opportunities for FDI created by global trends. Horizon 2020 sets out our targets for the 5 year period to 2014, as well as the direction IDA will take in the pursuit of these goals. Today’s results provide strong grounds to be confident that IDA will achieve its 5 year targets.
Existing Clients and their Transformation
Transformation of clients’ operations and activities in Ireland is a core element of Horizon 2020. In keeping with IDA’s focus on transformation within its client companies it has been encouraging to see that a large number of existing clients announced expansion and diversification investments. These involved skills uplift, technology uplift, RD&I in product and process, and energy initiatives or taking on new mandates in order to increase their Irish operations’ strategic importance within their parent corporations.
Companies that announced expansion and diversification investments in 2010 included, HP, SAP, Google, PayPal, eBay, AOL, Gala Games, Kellogg’s, Kostal, Eli Lilly, MSD, Stream Global Services, ServiceSource, Salesforce.com, Hertz and Accenture. International Financial Services firms expanding include Zurich, Axa, Citi, State Street, UnitedHealth Group, Allianz and Generali.
Manufacturing is a core strategic pillar of the Irish economic landscape. With a strong base of many of the world’s leading multinationals with significant manufacturing operations in Ireland including Intel, Analog Devices, EMC, Abbott, Medtronic, Boston Scientific, Liebherr, Kostal, J&J and Pfizer located here, manufacturing will continue to remain an integral part of Ireland’s FDI portfolio. With our improving competitiveness, Ireland continued to attract manufacturing investments during 2010 including Warner Chilcott, MCI, Merit Medical, Hollister, Yves Rocher, Lufthansa Technik, Goodman Medical, Zeus, Valeo and Freund.
Research, Development & Innovation (RD&I)
2010 saw IDA win a number of high-value RD&I projects for Ireland with over €500million in new RD&I investment secured. RD&I plays a strategic role as part of Ireland’s FDI landscape embedding existing employment and setting the groundwork for increased future employment. Among the companies that announced RD&I investments in 2010 included IBM (Smarter Cities), United Technologies Research Centre (Renewable Energies), Alcatel-Lucent /Bell Labs, HP Galway, Biotrin, and Accenture’s Global Analytics Centre.
Science Foundation Ireland (SFI) initiatives have enhanced the research environment for international investors, many of whom are collaborating with SFI funded initiatives.
CAO choices and future job opportunities
Foreign Direct Investment is constantly evolving, particularly due to the development of new technologies and business models. Employment opportunities will continue to be provided by multinationals for individuals who have appropriate skills. At a time when parents and students are examining the best prospects for their future and where long term employment opportunities exist, the data overwhelmingly suggests that meaningful opportunities continue to arise in sectors such as information technology, digital media, advanced manufacturing, lifesciences, medical technologies, international financial services and internationally traded services. IDA client companies are actively recruiting candidates who are technology competent with engineering, mathematics, science and international financial and multi-lingual skills.
Ireland’s relative FDI position
During the year IBM’s 2010 Global Locations Trends report ranked Ireland 1st globally for jobs by inward investment per capita, injecting renewed confidence in Ireland’s reputation for FDI. The IBM report also enhanced Ireland’s position with top 10 global rankings for both jobs in R&D and jobs in business support services.
Also in 2010, the IMD World Competitiveness Yearbook, for the key measures influencing foreign direct investments, ranked Ireland;
These are critical criteria for multinationals making mobile investment decisions.
Irish competitiveness improved significantly in 2010. Business costs including energy, private rents, office rents, services, construction and labour have all become more competitive. Both gas and electricity prices are now below the Euro average, and the cost of living has also fallen. Office rents have decreased sharply – typically up to 40%, whilst the EU has forecast that from 2008 to 2012, Ireland’s labour costs will have improved 13% relative to the EU (27) average. The improvement in competitiveness is helping secure new FDI for Ireland and a continuing focus on improving competitiveness is essential.
National Infrastructure Developments
Ireland’s infrastructure has improved significantly in recent years, enhancing our attractiveness as an FDI location. Improved road access to Gateway locations, EirGrid is building an East-West electricity interconnector to ensure security of supply and provide an export outlet for any excess energy, new ESB Telecoms and Hibernia (Project Kelvin) international telecoms infrastructure, and the completion of Dublin Airport’s Terminal 2 opening the possibility of new direct access to existing and growth markets, are creating a positive impact. Dublin’s Port Tunnel enhances the transportation of goods and also facilitates linking the International Financial Services Centre to Dublin airport in a mere 20 minute commute. Other infrastructural improvements include major rail investments with a suite of new rolling stock, extension of the light rail network in Dublin, and enhanced frequency and shorter inter-city journey times are enhancing Ireland’s attractiveness as an FDI location.
Horizon 2020 sets out to achieve a challenging target of securing 50% of investments outside Dublin and Cork. It is encouraging to see companies investing in key regional locations, such as Warner Chilcott (200 jobs, Dundalk), Global Indemnity (30 jobs, Cavan), MCI (50 jobs, Manorhamilton, Co Leitrim), United Health (200 jobs, Letterkenny), Zeus (75 jobs, Letterkenny), Elanco/Eli Lilly (ongoing investment in Sligo vaccine facility), Freund (25 jobs, Tullamore), Valeo (R&D investment at Tuam, Co Galway), Hollister (200 jobs, Ballina, Co Mayo), Merit Medical (100 jobs, Galway), EA (200 jobs, Galway), Stream Serve (20 jobs, Galway), Lumension (20 jobs, Galway), Synchronoss (Galway), IIR (50 jobs, Galway), Genband (100 jobs, Galway), Aspect (Galway), HP (105 jobs, Galway), Goodman Medical (115 jobs Galway), Enercon (30 jobs, Tralee), Straker (25 jobs, Tralee) and Citi (Waterford). Cork investments included Eli Lilly (100 jobs), United Technologies Research Centre (37 jobs), Otterbox (50 jobs), PAS Technologies and Yves Rocher.
Horizon 2020 sets a target that 20% of Greenfield investments by 2014 will be secured from growth markets. This emphasis on growth markets has led IDA, in recent months, to open a new office in Singapore, a second office in China (Shenzhen) and plans to open a second office in India (Bangalore) in early 2011, complementing the opening of offices in Shanghai and Mumbai in recent years.
IDA will continue its transformation journey to increase the effectiveness and efficiency of the agency while continuously reviewing and amending its operational foot-print both domestically and internationally.
Employment Portfolio and Transformation
IDA Ireland client companies created 10,897 new jobs in 2010, significantly up on the previous year’s level.
Our strategy includes winning as many new jobs as possible each year and giving equal priority to maintaining existing jobs. We recognise that job losses occur every year for a variety of reasons including changing competitiveness, competition from sister sites, product and technology lifecycles or global location rationalisation as a result of mergers and acquisitions.
To address the need to maintain jobs in Ireland, IDA is actively encouraging its clients to strongly engage in transformation initiatives, and is assisting them in programmes to:
There is a requirement to have a constant agenda to support clients improve and invest to transform their Irish operations to ensure jobs can be maintained and losses minimised.
In 2010, 9,545 jobs were lost by IDA supported companies leaving an overall increase in IDA’s employment portfolio of 1,352. A number of the job losses arose from the implementation of job reductions announced in the first half of 2009.
FDI Impact on Economy
IDA supported companies directly employ c.139,000 people with a total impact of 240,000 jobs in the Irish economy, and account for €110bn or over 75% of total Irish exports (goods and services). These companies contribute over €19 billion in direct expenditure to the Irish economy.
FDI Outlook and Ireland’s Reputation
The global outlook for FDI in 2011 remains challenging but a continuing focus on improving competitiveness will place Ireland in a favourable position to win further significant FDI and contribute strongly to Ireland’s export led economic recovery. Significant FDI wins in 2010 have built a strong momentum for investment which will be carried through in 2011. It is encouraging to note that many investments secured last year will be recruiting this year, feeding further employment-growth in IDA’s portfolio. IDA’s focus will continue to be on high end manufacturing, global services and RD&I across a wide range of sectors. In particular ICT, Digital Media, International Financial Services, Internationally Traded Services, Lifesciences and Cleantech are poised for further growth.
Restoring Ireland’s reputation in the international media will be a key priority in 2011 and IDA will work closely with all relevant stakeholders in Team Ireland. Ireland’s value proposition which includes our talent pool, attractive corporation tax regime, strong track record of FDI companies and technological capability remains strongly attractive to many of the world’s leading multinationals and emerging companies.
To position Ireland in the global business community IDA commenced a new marketing campaign in North America in Q4 2009. During 2010 we built upon this campaign extending its reach to Europe and India. It is critically important that Ireland’s investment message is carried in international media, and media interviews with global business channels such as CNBC, Bloomberg and Fox have been a feature of our marketing effort.
IDA Ireland CEO, Barry O’Leary concluded ‘There has never been greater need for increased levels of FDI. As a nation, and leveraging the assets and capability of Team Ireland, we are well capable of continuing to attract and increase the level of inward investment in Ireland. It is particularly encouraging, against the backdrop of last year, that IDA secured investments from 47 companies establishing a presence in Ireland for the first time, with a further 79 investments from existing companies already here. The level of confidence demonstrated by overseas investors in Ireland ensures we will remain one of the leading locations in the world for foreign direct investment.
The international FDI community continues to have confidence in Ireland. We too should be confident in our ability to secure increased levels of investment. Our enhanced competitiveness means Ireland is winning more FDI business, which is contributing significantly to Ireland’s export led economic recovery.’
|TOTAL NUMBER OF INVESTMENTS APPROVED||126|
|EXISTING CLIENTS, of which||79|
|No. of Expansion Projects||42|
|No. of Research, Development & Innovation Projects||37|
|% of Investments locating outside Greater Dublin and Cork||37%|
|% of Jobs locating outside Greater Dublin and Cork||45%|
|Investment in Research, Development & Innovation Projects||c.€500m|
| Annual Corporate Tax Payments of IDA Client Companies
(Note - Corporate Tax data refers to year 2009)
|€2.4 billion (est)|
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