Featured Article 05 Apr 2012

April 4th 2012

Eircom for business blog

In the first in a series of guest blogs, eircom invites Emmet Oliver, IDA's Head of Corporate Communications, to explain the features that keep drawing multinationals to Ireland ‒ including Ireland's technology, talent pool, taxation environment and track record. Why have these proven so attractive to multinationals seeking the ideal launchpad into Europe?

The global economy may be facing another difficult year, but when it comes to foreign investment the pace never seems to drop. In reality this is not quite true: foreign investment inflows have fallen in recent years globally, but this does not stop countries ‒ including Ireland ‒ competing as aggressively as ever for what foreign capital is out there.

While Ireland's domestic economy was torn asunder between 2008 and 2011, the foreign direct investment (FDI) segment has remained resilient, albeit with some challenges.

For example, IDA Ireland created over 13,000 new jobs last year in the teeth of a major slowdown in the key European economies. This performance was based on targeting a range of high-growth sectors like social media, pharmaceuticals, cloud computing and high-end manufacturing.

IDA is expecting another strong year in 2012 and announcements have already come from Eli Lilly, Mastercard, Hewlett Packard and of course PayPal, which made the single largest jobs announcement in Ireland for several years during February.  Such was the impact of this large-scale investment, Ireland's national consumer sentiment figures were actually boosted by the formal announcement itself.

While this may have been a one-off, there is little doubt that the type of companies locating here ‒ and the spin-off economic benefits they create ‒ are noticed by the general public, who remain the key drivers of the Irish economy. While some like to reduce Ireland's FDI offering down to one crude element ‒ taxation ‒ the story is far more nuanced.

Here at the IDA we like to talk about the four Ts, which on their own explain why the country still performs so well in the global FDI marketplace.

These four Ts ‒ talent, track record, technology and tax‒ give Ireland unique advantages. For example, the talent refers to the labour pool here which is resourceful and flexible, the track record refers to the 1,004 overseas companies already here, while technology is all about the infrastructure that companies can rely on once they get here.

Increasingly, companies locating here are choosing Ireland as a jumping off point for their European ambitions. Many of them are also using Ireland as a technology hub by placing vital data centres on Irish soil. Ireland has 8 of out 10 of the largest ICT companies in the world here because the infrastructure is at the levels these companies expect.

While Ireland's "natural" advantages ‒ English-speaking and geographical location between east and west ‒ cannot be discounted, a key advantage of coming here is that government, state agencies, local authorities and professional services firms put in a huge effort every year to make sure incoming companies can avail of leading-edge services. If these services weren't available, the companies wouldn't come, no matter how attractive the tax structure.

The IDA continues to remain upbeat about the future of FDI in Ireland. A constant question posed to us as an organisation is: has Ireland simply become too dependent on foreign investment? We prefer to frame the question differently.

FDI cannot power an economy on its own. Instead, it plays a part in a wider economic offering. The domestic economy must have the primary position. But the IDA as an organisation will win for Ireland as much business as it can, whatever the prevailing economic climate, and 2012 looks like being another successful year in that context.

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