FDI's Contribution to Economic Convergence within Ireland
‘We will win for Ireland, its people and its regions, the best in international innovation and investment’ (IDA Mission Statement)
Dermot Clohessy,
Manager, Regions and Property
A vibrancy in regional Ireland has emerged in recent years with the regions presenting more attractive and enhanced locational options for inward investment supported by two key government programmes – The National Development Plan and The National Spatial Strategy. IDA operates within the framework of both these programmes.
At the core of IDA’s regional strategy is a sustained commitment to contribute to the developing knowledge economy across all regions of the country by increasing the amount and quality of inward investment. In parallel with this, work with the existing base of companies seeks to facilitate their transition to continually higher value activities, and thus their embeddedness in their location in Ireland.
Central to delivering on this commitment is the development of a strong urban base in each region, with critical mass and attraction features supported by infrastructure of international standards, to drive greater economic and social convergence between the East Region and the rest of the country. International experience tells us that proximity to urban environments is more attractive for advanced mobile investments. This underpins the importance of the implementation of the National Spatial Strategy, with its focus on regional gateways, for inward investment to continue its contribution to more balanced regional development.
Reflecting this vibrancy, it is encouraging that 60% of all the investment projects, greenfield and expansions, negotiated by IDA for 2003, were in regional locations outside of Dublin and Cork.
The Best in Innovation
While winning investments is clearly the main work of IDA, the unprecedented changes in the economy and in the global environment for business and investment have resulted in many changes in the way we are involved in regions. IDA has adopted a much more strategic approach to regional development than in the past, an approach based on partnership, to ensure a focus on and delivery of competitive advantage in regional locations.
For example, in building appropriate skills sets we seek close partnership between the third level education sector in the regions, IDA and the work of Science Foundation Ireland (SFI), to raise research capabilities in the Universities and Institutes of Technology, and to integrate some of this activity where appropriate with international companies. The Universities and Institutes can grow their capabilities as leaders in innovative business oriented research and development for new technologies, products and processes through interaction with the outstanding global companies close to them.
With SFI funding, for example, Hewlett Packard’s European Software Centre is partnering with the Digital Enterprise Research Institute at the National University of Ireland in Galway in the development of semantic web technology. Similarly in Waterford, the Institute of Technology has partnered with Motorola, Nortel and Siemens, with SFI funding support, to research the management of services for fixed line telephones and 2G, 2.5G and 3G networks, for distribution systems in telecoms and for internet technologies. University College Cork has arranged a partnership with Procter and Gamble, through its biotech partner – Alimentary Health Ltd. – to work on the development of new therapies for debilitating gastrointestinal diseases. And there are many other examples of such welcome developments and the number is growing. This is how a greater level of innovation and high-level skills can emerge in locations throughout Ireland.
IDA is proactive and supportive in ensuring the delivery of quality broadband infrastructure in regional centres. The current high level of investment by government and local authorities in delivering this infrastructure is a welcome boost to the development of the regions.
High standard property solutions, both business parks and buildings, for inward investors are crucial for regional success. The partnership between IDA, local authorities and private developers is now delivering a wide range of properties to a standard as high as in any international location. This partnership approach is also working to make the necessary long-term provision for the regions to have the solutions for the property and utility requirements of some of the major investors in the key bio-pharmaceuticals and information and communications technologies sectors.
There are many other areas of activity, such as relationships with Chambers of Commerce, business representative organisations and support services and particularly national infrastructure providers, where IDA is playing an active role. At times this involves us in gathering knowledge and developing expertise so as to be able to positively influence action in relation to relevant issues. At other times it sees us strongly representing the views and needs of inward investors, so that appropriate results can be delivered in the regions. We work with the local development partners for the delivery of regional economic development, matched with the regional planning guidelines of each of the Regional Authorities under the implementation plans for the National Spatial Strategy, in a way that continues to attract the best of inward investment to each region.
“We apply science to the manufacturing process to improve cost. We are competitive because we have people who are able to get the cost of production down. This is our knowledge base.”
- Paddy Caffrey, Managing Director, Pfizer Ireland Pharmaceuticals.
The Best in Investment
Over the past number of years the regions have shown their ability to win investments of the highest quality and this trend continued in 2003. In the North West, the positive contributions from the investment decisions by Prumerica, PacificCare and MBNA in recent years are now having a major impact on the transitioning of that region’s foreign direct investment profile from a dependency on traditional manufacturing sectors. The region’s employment growth in 2003 reflects the impact of these investment decisions and 30% of the region’s overseas employment is now in international/financial traded services. These sectors had no footprint in the North West until 2000.
The medical technologies sector’s contribution to regional economic development was further enhanced during 2003. The foreign-owned element of this sector employs over 17,000 people and a notable feature is the strong regional spread and high concentration in the Border, Midlands and West regions, with plants in some 40 different cities and towns throughout Ireland.
In addition to Abbott’s greenfield investment in Longford and expansion in Sligo mentioned earlier in this Report, other companies from this sector already established in the regions also continued to add significant new knowledge based activity in 2003. Olympus Diagnostica committed additional investment to expand its Co. Clare research laboratory for diagnostic reagents and solutions, recruiting a further 22 biochemists and bringing to 60 the number of skilled research staff at its O’Callaghan Mills facility. Harmac in Castlerea added design and further manufacturing activities to its medical devices facility. In Arklow, Inamed invested substantially to establish its Irish facility as the company’s global centre of manufacturing excellence.
Other significant regional investments which are prime models of what we want to achieve were ABB establishing a global R&D and marketing centre for quality control systems, in Dundalk, for managing the technology in the paper and pulp industry. Also in Dundalk Finmatica, a leading Italian provider of business applications software, set up its European licensing and technical support centre to manage all licensing and intellectual property for the Group’s supply chain management software – a quality project requiring skilled multilingual graduates. Taro selecting Roscrea for its state of the art pharmaceuticals manufacturing facility and research and development centre for Europe is another example because of its high research content. Athlone welcomed the arrival of two specialised investments, Mapics establishing a multilingual software technical support and shared services centre which will be driven by graduates in software development and engineering and Alienware, a young aggressive US company targeting the computer games market in Europe with high specification performance machines.
Cigna Benefits Processing added substantially to its Loughrea operation which is responsible for the processing and administration of medical indemnity claims in the US, while ABB in Waterford increased its manufacturing capacity and expanded its marketing and R&D roles within the Corporation’s European operations.
All of these regional investments add significantly to the reference pool of business activities and sectors that are operating successfully from locations throughout the country and underscore an enhanced confidence in regional Ireland’s education, skills and research capabilities, supported by the necessary property and infrastructure to meet the needs of overseas clients and win new investments.
Many others of the 1,054 foreign companies supported by IDA continued to expand and consolidate their operations in Ireland during the year and the specific examples above are detailed to illustrate the continuing development process that is underway in inward investment in regional Ireland.