Barry O'Leary
Chief Executive Officer
John Dunne
Chairman
The 130 Foreign Direct Investments secured for Ireland in 2008 were the result of the pursuit of a combination of first time investments and expansions in Ireland and the transformation within companies with existing operations here. This multi-focussed approach continues as an integral part of IDA's strategy into the future.
Ireland has a strong track record in attracting investment in Information Communications Technology (ICT), Life Sciences, Financial Services and Globally Traded Business (GTB) including Digital Media, Engineering, Consumer Brands and International Services. Ireland's positioning as a 'Smart Economy' continues apace combining our innovative, enterprise economy with an ever–increasing growth in the emerging areas of Clean / Green Technologies, Services Innovation and Convergence.
The importance of Foreign Direct Investment to Ireland cannot be underestimated as the following statistics demonstrate:
During 2008 significant first time investments from globally renowned corporations were secured across a broad range of sectors. Social Networking giant, Facebook announced Ireland as the chosen location for their International Operations Headquarters, Blizzard, an electronic gaming company significantly increased their employment at their operations centre located in Cork during the year, leading pharmaceutical contract research organisation, PPD is establishing a 200 person operation in Athlone, Co. Westmeath and global leader in medical devices, Zimmer announced a €50 million investment in a new manufacturing operation in Shannon creating 250 high quality jobs. These investments represent a small overview of what was achieved in 2008 but are a true endorsement of Ireland's continued ability in attracting cutting-edge investments from innovative corporations and new emerging business sectors.
Ireland's FDI landscape has continually undergone its own transformation, scanning the horizons of enterprise focusing on and securing FDI novel technologies, innovative business models and new markets. Ireland's success story continues to evolve from that of a location based originally on manufacturing to a rebranding of ourselves as the 'Young Europeans', through to today's model of the 'Smart Economy' built on the dual strengths of our innovativeness and entrepreneurship.
With the capacity for transformation at the very core of our national economy, IDA places significant importance on transformation within our client companies. IDA actively works with all clients to search out new corporate mandates, to seek novel emerging businesses, to up-skill employees and to invest in the latest capital equipment, new process technologies and research, development and innovation in order to position our clients for potential future investments. A 2008 NIB/IMI survey identified 'the continued movement of multinational companies into higher value-added activities. In the last survey in 2005, only half of all companies rated their Irish operation as either strategically important or very important in terms of their global operation.' The survey cited that this figure has now risen to 'two out of every three companies.' 6
The focus on transformation by IDA with our client companies is one of the key reasons why Ireland continues to win investments from companies with existing operations here. Of the one hundred and thirty FDI investments won by IDA in 2008, ninety five of these were from such companies. Expansion investments in 2008 were in high value activities predominantly centred on Research, Development and Innovation, Global Business Services or High Value Development and Manufacturing.
Examples of expansion investments include a €25 million expansion by Cook Medical, one of the world's largest medical device companies, at its medical device manufacturing and services facility in Limerick. The expansion will add an additional 200 jobs to the already existing workforce of 400 in Cook Medical Limerick. Alcon, a leading eye care company announced a €21.14 million expansion at its Cork operation increasing employment by 186 jobs. Pfizer Inc., the world's largest pharmaceutical company, announced a €190 million investment for the establishment of a biologics facility in Co. Cork adjacent to Pfizer's existing facility in Ringaskiddy with the creation of 100 new high quality jobs while Coca Cola announced a €220 million investment in a new flavour and manufacturing facility in Co. Wexford. Microsoft expanded its Irish operations with a €360 million investment in a strategic data centre.
These investments and many others help secure the future long-term viability of Irish operations through a steady progression up the value chain. These value-led investments are examples of IDA's commitment to transformation and expansion within our client companies and of the FDI base within Ireland as a whole.
Ireland achieved an impressive level of RD&I investment during 2008 with planned investments in research and development by IDA supported companies totalling €420 million. This represents a 22% increase in the level of RD&I investments over that of 2007. Three particularly exciting and significant RD&I announcements were by global IT giant IBM in areas as diverse as the establishment of a Global Centre of Excellence for Water Management to the development of green data-centre technologies; DePuy, part of the Johnson & Johnson group announced the establishment of a new innovation centre in Cork; SAP Business Objects, the world's leading provider of business software, chose Ireland as the location for its new R&D centre investing €30 million with the creation of 100 jobs and AON, a provider of risk management services, insurance and reinsurance brokerage chose Dublin as its location for a global Innovation Centre with the creation of 100 jobs.
RD&I is a key element of enterprise that facilitates competitiveness, increases efficiency and productivity in business processes and resulting in products that are innovative and of superior quality. The nature of such RD&I investments is that in general they are less employment intensive. However, RD&I investments in many instances further underpin employment in existing operations and provide the foundation upon which future employment is built. An example of this is the €50 million R&D investment by Boston Scientific at its Galway facility which employs 3,000 people and is an integral part of the Corporation's strategic plans. The investment comes on foot of previous R&D investments in Boston Scientific that led to the successful development of cutting edge medical device products, through to regulatory approval and global volume launch.
RD&I investments are future-oriented and critical to meeting the ambitious targets set out in the Governments Strategy for Science Technology and Innovation 2006-2013. A unique collaborative environment of academia, government and enterprise both indigenous and foreign owned exists in Ireland providing an innovative environment that has helped foster many of these significant wins. Science Foundation Ireland (SFI) funded researchers have formed productive academic-industry relationships with nineteen of the IDA supported company R&D investments in 2008.
A cartogram is a map in which countries have been resized according to certain data; it shows the world from the data's point of view. This cartogram, created on behalf of the Institute for Large Scale Innovation, sizes countries according to several factors related to their innovation efforts: R&D spending, the number of post secondary degrees awarded, and the number of patents issued.
Source: World Bank data and John Kao, Chairman, Institute for Large Scale Innovation
Examples of these include;
Intel Ireland which has developed research collaborations with a number of SFI-funded researchers, including
Boston Scientific is collaborating with the Network of Excellence for Functional Biomaterials (NFB) led by Prof. Abhay Pandit, NUI Galway which is researching the next generation of biomaterials.
Synopsys Ireland Ltd is carrying out joint research in the design of low power consumption chips. The research programme is in collaboration with the Departments of Electronic Engineering and the Centre for Efficiency Oriented Languages (CEOL) led by Prof. Michel P. Schellekens in University College Cork (UCC).
Shimadzu Corporation, a company working in the areas of scientific, medical, industrial and process control equipment is collaborating with SFI funded Applied Optics Group, at NUI Galway, who are leaders in the field of novel imaging techniques, led by Prof Chris Dainty.
IBM Ireland which has research partnerships with several SFI-funded research groups including:
The Solid State Pharmaceuticals Cluster led by Prof Kieran Hodnett, University of Limerick intends to provide the necessary skill set to comprehensively investigate pharmaceutical solids and is working with IDA client companies Eli Lilly, Pfizer Ireland and Helsinn.
Cost of Starting a Business and the number of procedures Involved, 2009.
Source: World Bank Doing Business 2009.
FDI investors who have located operations in Ireland consistently comment on the flexibility and agility of our people. Ireland's reputation for flexibility and the ability to respond quickly and decisively, when faced with challenge, is renowned, a fact referenced in the IMD yearbook 2008. Additionally, Ireland was ranked fifth globally for overall productivity within the economy driven largely by foreign owned companies.
The current global and Irish economic downturn facilitates Ireland's renewed focus on competitiveness particularly in the areas of energy and labour but also construction and other costs. Addressing these issues in a focused manner will leave Ireland in a stronger competitive position optimising our ability to benefit from the global upturn.
Ireland is ranked globally as the seventh best place in the world to do business 7 and possesses a strong and competitive investment environment. We have one of the smallest tax wedges in the OECD, 34% of our population is under twenty-five years of age 8 and 40% of twenty-five to thirty-four year olds have a third level education. 9
Ireland is well placed to provide the labour force to back up the high level investments we are actively seeking to locate here. Not only is our own workforce young, innovative and highly educated but is further enhanced by our unrestricted access to the workforce of the European Union member states. Ireland continues to serve as an ideal European gateway into an EU marketplace of 500 million people.
The Irish skills pool continues to be a major attraction for Foreign Direct Investment locating in Ireland. The IMD World Competitiveness Year Book 2008 ranked Ireland ahead of France, UK, Germany and Spain as having an education system that meets the needs of a competitive economy. The same study placed Ireland first of eleven countries for flexibility and adaptability of workforce when faced with challenges.
The people of Ireland are renowned for our 'can do' attitude. An English-speaking population, excellent quality of life and reputation for being one of the most welcoming nations in the world all add to Ireland's attractiveness for foreign owned companies in setting up and further expanding upon their operations here.
IDA has also undergone transformation during 2008 in order to optimise its business practices and to actively develop new business opportunities. IDA transitioned 10% of staff resources from Administration and Support to Business Generation.
Four global teams were established for Life Sciences, ICT, Financial Services and Globally Traded Businesses.
The US continues to offer significant opportunities for FDI. To further drive the development of business opportunities from our main market, IDA opened two new offices in Boston and Irvine, Orange County and increased staff resources in the marketplace. Following on from the opening of an office in Shanghai in 2006, IDA continues to further diversify the sources of FDI. In March 2008 IDA opened an office in Mumbai recognising the potential to win FDI from India. Senior representatives in IDA visited Brazil, Russia and the Middle East with a view to establishing a presence in these markets.
IDA is fully committed to securing a balance in regional development. The challenge in achieving an even spread of investment is intensified as the sophistication of investments increase. They require a concentration of highly qualified and educated workers, supporting infrastructure and high level business services.
Frequently, competition for Foreign Direct Investment comes not from other countries but from city regions with populations in excess of one million people. Dublin is the only recognised city region in Ireland that meets this criteria. If FDI is to continue to contribute to balanced regional development the other regions of the country must be promoted as regions of scale with urban centres that provide the range of infrastructure and services that high value investment projects demand. IDA continues to vigorously promote such regions to potential investors.
In 2008, 60% of foreign investments to Ireland were located outside of Dublin. This success supports national policy as outlined in the National Spatial Strategy (NSS) the aim of which is to achieve a balance of social and economic development across the country. In particular the NSS focuses on the presentation of areas of sufficient scale and critical mass as national regional gateways and hubs.
The South-East Region for example, comprising Waterford, Wexford, Carlow, Kilkenny and South Tipperary has a population of over 460,000 people, two Institutes of Technology, a regional airport at Waterford, a deep-water port at Belview and a ferry port at Rosslare. This region is also home to pharmaceutical and medical technology clusters. In 2008 investments in this region included Coca-Cola's €220 million investment in a new flavour and manufacturing facility in Wexford and a €30 million expansion by GlaxoSmithKline at its pharmaceutical manufacturing facility in Dungarvan Co. Waterford. Genzyme, the leading global bio-technology company, announced a €130 million investment at its operation in Waterford creating 170 high end manufacturing jobs while Teva Pharmaceuticals, the world's largest manufacturer of generic medicines, announced a €65 million investment at its existing Waterford facility creating 165 jobs in a variety of areas including high end manufacturing and research and development. Lancaster Laboratories announced an expansion of its Dungarvan operation with the addition of 100 new high quality jobs.
The Mid-West, consisting of Limerick, Clare and North Tipperary has a combined population of over 360,000. The Region is well serviced by road, rail, port and air transport links and is home to a University and Institute of Technology along with a variety of world-class business and technology parks.
2008 investments in the Mid-West included Zimmer's €50 million investment in the establishment of an advanced manufacturing facility in Shannon with the creation of 250 high-end jobs, Vistakon's €100 million investment in a further expansion of manufacturing operations in Limerick with the creation of 60 new jobs and ON Semiconductor, a premier supplier of high performance energy efficient silicon solutions, announced it is to establish a new Research and Development Centre at Raheen Business Park, Limerick creating 49 high calibre jobs for semiconductor designers and engineers.
Other 2008 investments in the Mid-West region were Cook Medical's €25 million investment in the expansion of its medical device manufacturing and services facility adding 200 jobs to its Limerick operation and Microsemi's announcement of the creation of 315 new jobs in the expansion of its manufacturing facility in Ennis, Co. Clare.
The Border, Midlands and West (BMW) Region includes the towns of Galway, Athlone, Castlebar and Westport. It is home to a number of leading academic institutes and hosts a world-renowned Medical Technology cluster including key global players Boston Scientific and Abbott. Investments in the BMW Region in 2008 included a €50 million R&D investment by Boston Scientific at its Galway operation and a significant investment by PPD, with the establishment of an operation in Athlone. Abiomed, a global leader in heart assist technologies announced the establishment of a global manufacturing facility in Athlone creating 250 new jobs.
Other significant regional investments in 2008 were Satir's establishment of their new European Headquarters and a €12 million expansion by Pauwells-Trafo at its manufacturing facility with the creation of 70 new jobs, both in the North East Region.
In 2008, IDA received advance Planning Permission for two major biopharmaceutical facilities and a Research and Development Park on its strategic site at the IDA Dundalk, Science and Technology Park, Mullagharlin, Dundalk, Co. Louth. This 44.5 hectare site is one of a number of high utility intensive sites developed by IDA under its 'strategic site initiative.' Key benefits of this initiative include the immediate availability of a fully serviced site for potential FDI investors in the pharmaceutical sector along with guaranteed planning permission . The initiative offers companies full confidence in delivering a facility in the fastest possible time frame, whilst accelerating the availability of product to market, and shareholder return.
Ireland's infrastructure is a key element in the value proposition for the attraction of FDI. The Irish Government is committed to the ongoing development of Ireland's infrastructure and IDA supports this mandate. Areas of priority include:
Almost one third of new RD&I investments in 2008 involved collaboration with Irish academic third level facilities and research institutes many of which were supported by Science Foundation Ireland (SFI). IDA recognises the importance of working with a variety of bodies and stakeholders from education to enterprise to government. Success in securing FDI for Ireland is based on strong co-operation and interconnectedness between all stakeholders working together collectively as Team Ireland. This includes the Department of Enterprise, Trade and Employment and other Government Departments, Local Authorities, Universities and Institutes of Technology and sister enterprise agencies SFI, Enterprise Ireland, Forfás, Shannon Development and Sustainable Energy Ireland amongst others.
IDA Ireland wishes to thank these stakeholders and the many others that have aided us in securing new FDI for Ireland. In addition to this we also extend our gratitude to local management in our client companies who work to bring increased investment, moving their operations further up the value chain of their parent companies. The role played by many companies and their executives in supporting site visits by potential clients is also a vital part in the process of securing new FDI and for this support we also extend our thanks.
The key to winning high quality, value enhanced investments clearly lies in the transformation of our economic base so that it is firmly focused on Research, Development and Innovation, High Value Manufacturing and Global Business Services and the emerging potential offered by new business models and new business areas such as Clean Technology, Services Innovation and Convergence.
The pipeline of future FDI investments remains positive despite the global downturn and the measures currently being taken to decrease costs, particularly energy and labour cost, will further enhance Ireland's competitiveness as a location for FDI. It is vital to ensure that labour and energy costs continue to decrease in order for Ireland to maintain and improve its competitive position.
2008 saw Ireland secure a significant number of investments from overseas companies, particularly heartening was the confidence expressed in Ireland as a leading location in the large number of investments made by companies with existing operations here who understand Ireland and the IDA well and who appreciate the uniqueness of our offering. Ireland remains one of the prime locations for complex, high-value FDI. We are well respected for our ''can do' attitude, our motivation to excel, our dynamic response to challenge and our ability to achieve above and beyond the expectations of a small, open economy. By remaining positive and confident in our ability to bring stakeholders together collaboratively we can predict that Ireland's FDI landscape will continue to grow, diversify and exert maximum impact on Ireland's economic recovery as the global economic upturn commences.
The unprecedented level of success achieved by IDA is due to the hard work and dedication of its staff who continue to meet all challenges presented to them with determination and enthusiasm. The Board would like to take this opportunity to thank every member of staff for their contribution and commitment to maintaining and increasing Foreign Direct Investment in Ireland and in particular the leadership provided by our CEO, Mr. Barry O'Leary, who took up this appointment at a very difficult time for the global economy and who has achieved much in his first twelve months in office.