Minister for Business, Enterprise and Innovation, Heather Humphreys, and IDA Ireland, the Irish Government agency responsible for attracting foreign direct investment (FDI) to Ireland, has today announced that employment levels in its client companies have reached 229,057. FDI’s performance has exceeded targets set by Government contained in IDA Ireland’s Strategy – Winning: Foreign Direct Investment 2015-2019.
For context, IDA clients added two and a half times more jobs under “Winning” FDI strategy than in the first 4 years of IDA’s previous strategy 2010 – 2014. 58% of employment is now outside of Dublin in 2018, which is the highest number of people employed by IDA clients outside of Dublin in the history of the organisation, with more jobs added in the regions than at any time over the past 17 years.
Welcoming the results, Heather Humphreys, Irish Minister for Business, Enterprise and Innovation said:
“The IDA’s record results for 2018 underline how strongly Ireland continues to perform when it comes to attracting FDI. The significant increase achieved in employment is all the more impressive considering the highly competitive global FDI marketplace in which Ireland and the IDA operate. The Government will continue working hard in 2019 to ensure that Ireland remains a destination of choice for overseas firms looking to invest or expand their presence in Europe.
“I particularly welcome the gains made in deepening and growing investment outside of Ireland’s main cities, with the largest regional employment growth achieved in 17 years. 58% of all IDA client-supported jobs are now located outside Dublin, with every region of the country seeing employment gains in 2018. These figures reflect the resources provided by the Government through the Agency to grow investment right across the country. I am determined, together with the IDA, to see this trend continue and we will be doing everything possible in 2019 to encourage more firms to invest further in the regions.”
The Minister added: “Our ongoing efforts to grow and sustain FDI here are complemented by other actions we are taking to improve the capacity and resilience of enterprise in Ireland. This includes the new Future Jobs strategy, a whole-of-Government initiative that will better position our economy to meet the challenges that lie ahead.”
Impact of FDI on Irish Economy
Apart from direct employment and skills transfer, IDA Ireland’s client companies have a hugely positive effect on the local economy with over eight jobs being created for every 10 jobs in an FDI company. Spillovers from Multinational Company (MNC) investment directly into the Irish economy include expenditure on Irish materials and services totalling €7.5bn, an annual payroll spend of €11.7bn and capital investment of €5.7bn on new buildings and machinery and equipment.
A significant part of the record corporation tax takes can also be attributed to the thriving FDI sector in Ireland.
IDA Ireland’s clients are also significant employers; with average salaries at €66,000 in 2017 they are consistently above national averages (€46,402). As a result foreign MNCs account for one third of total Income tax, USC and Employers PRSI paid in the state.
IDA Ireland has continued to secure a substantial number of Brexit-related investments in 2018 with the overall figure now standing at 55+ for investment approved with over 4,500+ associated jobs. For investors, the importance of Ireland’s ability to provide a stable predictable investment climate cannot be overstated. We have continued to engage significantly with our clients on this issue, fighting for any mobile investment that arises.
Ireland’s advantages in a post-Brexit context include English language, commitment to the EU, a common law system in addition to our existing competitive proposition.
Leading companies like Bank of America, Morgan Stanley, Legal & General, Everest Re, Central Pharma, The Standard Club, Coinbase, Citi Group, Barclays, AXA XL, Wasdell Group, EquiLend, Thomson Reuters, BRE Global, Simmons & Simmons, Neueda Technologies and Depository Trust and Clearing Corporation (DTCC) have all declared a new or expanded presence for Ireland in 2018.
Over the course of 2019, IDA Ireland’s Board will be developing the agency’s new five-year strategy. This strategy will take account of the changing nature of work and the impact of technology on specific sectors. Profound changes are occurring in the world of work and this is already reflected in the jobs being created by the IDA Ireland client base. We can see an increasing complexity in the roles being created, technology skills becoming ubiquitous across roles, increasing demand for business professionals and a fall in the number of low-skilled jobs including back office support and basic manufacturing. This shift is likely in response to three key drivers of change: technological change; cost competitiveness and increasing regulation, each is impacting on all IDA sectors but at different speeds and in different ways.
Technology will have a huge impact across all of Ireland’s established sectors and Ireland will have to plan to respond to changes in global value chains, just like Ireland has done many times since the 1950s, and we will be helped in this endeavour by the important work on Future Jobs being carried out by the Department of Business, Enterprise and Innovation. IDA Ireland will be drafting its new strategy in the midst of unprecedented competition amongst other foreign investment agencies and other challenges ahead.
Martin Shanahan, CEO of IDA Ireland said: “While today’s figures are showing strong gains, there are many significant risks facing us in the future.
“Ireland is a small open trading economy and increased nationalism and protectionism is likely to have an impact on future FDI figures.
“10 years on from the financial crisis, the global economy continues to grow at a steady pace but the OECD says global GDP growth has peaked and is slowing on the back of weaker trade growth and less supportive monetary and fiscal policies.
“According to FDI Intelligence, global greenfield investment projects fell 1.1% in 2017, while at the same time investment into Ireland continued to grow. Ireland wins a much larger market share of European FDI than expected for its size. Ireland’s share of all FDI projects to the EU in 2017 was 5.4%, while Ireland’s share of EU GDP was just 1.9%.
“As we said last year, maintaining the competitiveness of the Irish economy remains absolutely essential. Issues that our clients are raising and that the National Competitiveness Council has also identified include: residential housing – availability & cost; skills; infrastructure investment; investment in the education sector and income tax levels at the higher marginal rate.
“Planned responses and initiatives already undertaken by Government in response to these issues and successful delivery of Project Ireland 2040 will assist in convincing investors of Ireland’s continued commitment to maintaining competitiveness.
“Ireland must also prepare for a scenario where technology – Artificial Intelligence, machine learning and Robotics play an increased part in our working lives.”