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IDA Ireland, the inward investment agency of the Irish Government today reported continued investment in the first half of 2020 despite the serious disruption to business caused by the global COVID-19 pandemic.

132 new investments were won with an associated employment potential of 9,600 jobs. 53 were new investors and 44 expansions from existing companies. 48% of the projects won were for regional locations.

At the launch of IDA Ireland’s 2019 Annual Report, The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar said: “Throughout the COVID 19 crisis, the IDA’s extensive client base has shown real grit and resilience in responding to the economic shock caused by the pandemic and many have been to the fore in helping with the COVID 19 emergency.

“Medtronic in Galway increased the production of ventilators to meet worldwide demand for the life-saving devices, from 200 ventilators a week at the end of February to more than 1,000 a week by the end of June, while Mallinckrodt Pharma in Blanchardstown and Intel are among the many firms who have donated tens of thousands of items Personal Protective Equipment to frontline staff.”

“Today, as we mark the IDA’s mid-year results, we recognise the important role that the Agency has already played – and will continue to play – in enabling our country and our economy to bounce back. The IDA has a track record of delivery and high performance for the State.

“Despite the record growth achieved in recent years, we are under no illusions that the time ahead will prove more challenging. The global market for FDI will become even more competitive. We will have to fight, harder than ever before, for new investment projects and the jobs that go with them. We are ready for that fight.”

Speaking at today’s media briefing Martin Shanahan, CEO IDA Ireland said: “In the context of the COVID-19 pandemic, it is encouraging that Ireland has been able to secure a significant number (132) of investments in the first six months of the year. These investments were won against a backdrop of our global business being impacted from January in Asia and increased upheaval across all major source markets as the first half of the year unfolded.

132 investments in H1 2020 compares to 140 investments in the same period last year – a 6% decrease. IDA Ireland expects the Investment Approvals in the first half of the year to lead to 9,600 jobs.

The figures IDA Ireland is releasing today demonstrate both the strength of our value proposition and the resilience of the FDI sector. That said, there is absolutely no room for complacency, the global economic climate within which we are now all operating remains extremely challenging, with international forecasting bodies predicting significant impacts of the COVID-19 pandemic on global growth, trade and on FDI flows.

Ireland’s extraordinary FDI performance over the past five years puts us in a strong position going into the Covid-19 crisis and the high-value sectors we have pursued provide us with a strong base from which to help to drive recovery once again. Going into 2020, employment levels in IDA’s client companies had reached over 245,000 – the highest ever number employed in the multinational sector, exceeding all targets set by Government contained in IDA Ireland’s Strategy – Winning: Foreign Direct Investment 2015-2019.

We continue to actively support our client companies through the crisis. The majority of IDA Ireland’s existing portfolio remains functioning either remotely or on-site while adhering to public health guidelines.”

At this point, existing FDI is looking, for the most part, resilient, but it is not immune; it is early days and a prolonged battle against the virus where sectors remain closed here or elsewhere could change this situation. Sectors are dealing with a supply-side and demand-side shock. The pandemic and the subsequent economic shock has impacted on sectors differently with some sectors impacted more than others.

Commenting on the likely impact the economic crisis will have on IDA’s ability to attract new investment in 2020, Martin Shanahan said: “UNCTAD estimates that the impact on FDI flows in 2020 and 2021 will be severe, potentially cutting global investment by up to 40%. While it is too early to say what the ultimate effect of that will be on the out-turn for this year and next, it will undoubtedly exert downward pressure on job creation and increase job losses.

The open nature of Ireland’s economy and deep embeddedness in global value chains means that the speed of Ireland’s recovery will be partly influenced by global factors, which are very negative in the near-term and uncertain in the medium-term.

While the focus is on COVID-19, other challenges, like Brexit, increased trade tensions, achieving global consensus on tax and digitisation/automation of sectors have not gone away.”

Global Competition for FDI

The competition for FDI in our key sectors, specifically Pharmaceuticals and Medical Technologies, is intensifying as countries increase their focus on self-sufficiency and security.

Ireland’s value proposition for inward investment is based on offering a safe and stable investment location with access to the EU market, an educated and skilled workforce, an attractive environment where people want to live and work, a competitive, consistent and transparent corporate tax regime and an excellent return on investment.

“This value proposition will continue to remain valid, but notwithstanding the inevitable constraints that will face the Exchequer in this forthcoming era of heightened competition for FDI, it is critical that investment in productive assets that enhance our competitiveness continues,” said Martin Shanahan.

“It is in this context that IDA would endorse the recent analysis from the National Competitiveness Council that highlights the need for Ireland to focus on productivity-enhancing areas including infrastructure investment, digital enablement and skills and training. Indeed, it is plain to see that targeted investment in skills and training will be a key priority for all sectors of the economy, including FDI, in the coming years given the probable legacy of challenges arising from the pandemic,” he continued.