IDA Ireland: Continuous investment despite COVID-19

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

246 new investments were won in 2020 and 20,123 new jobs were created. 95 investments were from new investors and 151 investments from existing companies.

128 (52%) of the 246 projects won were for regional locations. Employment growth of 3.6% in IDA Ireland supported companies was achieved in 2020.

Total employment in IDA Ireland client companies in Ireland now stands at 257,394, accounting directly for 12.4% of COVID-adjusted national employment, up from 10.7% in 2019 as a result of the severe impact of the pandemic on certain domestic facing sectors and the employment growth within IDA Ireland’s client base.

Additionally, eight jobs are created in the wider economy for every ten created by IDA Ireland client companies, amounting to estimated total direct and indirect employment of 463,309.

An Tánaiste & Minister for Enterprise, Trade & Employment Leo Varadkar T.D. said: “Despite a year of unprecedented challenges to our economy, these results show that foreign direct investment has been remarkably resilient. We still saw a net increase in FDI jobs of nearly 9,000 in 2020. This is a testament to the attractiveness of Ireland as a destination for companies seeking to invest.

FDI was central to Ireland’s recovery during the last recession and it will be crucial again as we rebuild after the pandemic. As a small open economy, we need both our indigenous and FDI sectors to be strong and built on solid foundations.

Around half of all investments made by FDI companies, this year went to counties outside of Dublin. We will continue to seek out opportunities for all parts of the country, not just our major cities and towns.

The new IDA Strategy being published today was written in the context of continuing uncertainty with the virus and Brexit. It prioritises growing the regional enterprise base, driving productivity, building a sustainable enterprise base, and increasing the spill-over effects from FDI to SMEs. We will continue to keep progress and plans under review over the months and years ahead and adapt to support Ireland’s recovery.”

Martin Shanahan, CEO IDA Ireland said: “In the context of the COVID-19 global pandemic, FDI’s performance is remarkable.  It is encouraging that Ireland has been able to secure such a significant number (246) of investments and grow employment in 2020, a year of unprecedented disruption to global business and adverse impact on global economies.

246 investments in 2020 compares to 250 investments in the same period last year – an excellent outcome, achieved through a focus on our existing client base and on stronger than anticipated new name performance. Job losses were slightly up in recent years at 4.5%.

Sectors such as Life Sciences and Technology were much less affected and, in a number of cases, increased operations in response to demand for COVID related products, mitigating job losses in other sectors. At the end of the year, 52% of employees in IDA Ireland client companies remained working from home, compared to 28% nationally.

The bulk of investments came from North America, delivering 67% of investments, a larger US contribution compared to recent years. This was driven in part by our focus on existing companies and the strong existing base of US corporates and their investments in expansion, R&D, and training activity in Ireland.”

On the launch of the new strategy Driving Recovery & Sustainable Growth 2021-2024, the CEO said: “Ireland’s extraordinary FDI performance over the past five years put 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 Ireland’s client companies had reached 245,096 – the highest ever number employed in the multinational sector, exceeding all targets contained in IDA Ireland’s Strategy – Winning: Foreign Direct Investment 2015-2019.  That has now risen again in 2020, to 257,394.

IDA Ireland’s new strategy has been developed cognisant of the Government’s forthcoming National Economic Plan. The ambition of the new strategy reflects IDA Ireland’s assessment of the opportunities ahead, recognising the centrality of FDI to a resilient and sustainable economic recovery. The targets included in the strategy are ambitious and success will not be easy, nor is it guaranteed in such an uncertain global environment.

It will depend upon the growth potential of our clients, Ireland’s competitiveness, the skills, knowledge and proven tenacity of IDA Ireland teams around the world, on the support of Government, the provision of the required resources, and on collaborative engagement with key stakeholders to maximise the benefit of FDI on communities across the country.”

About the new strategy, IDA Ireland Chairman Frank Ryan said: “They need to focus on sustainability, supporting our client base to innovate and transform in order to not just remain viable, but to develop and grow, has never been more important. It is why we have made sustainability, innovation, and transformation an integral part of our new strategy.”

“IDA Ireland is cognizant and appreciative of the support it receives on an ongoing basis from our parent Department of Enterprise, Trade and Employment and many other Government Departments and Agencies. With the Department’s continued support in these challenging times, the FDI sector can once again help drive Ireland’s economic recovery in the coming years” the Chairman added.

In support of the new strategy’s continued focus on regional development, IDA Ireland will deliver 19 Advanced Building Solutions (ABS) to regional locations.

The planned building solutions have a geographical spread in line with the National Planning Framework, with particular emphasis on the Border and Midlands regions reflecting our strategic focus on supporting the necessary conditions to attract FDI in regions of significant economic need (e.g. with high exposure to Brexit, Just Transition regions.)

IDA Ireland will also partner with the private sector and local authorities to deliver buildings in key locations where appropriate.

They aim to invest in significant infrastructure projects across a wide-ranging portfolio of Business and Technology Parks.

The focus is to upgrade and maintain these key assets in line with the evolving requirements of IDA Ireland and Enterprise Ireland clients and maintain a focus on land banks and utility intensive strategic sites to future proof the ability of their property portfolio to support the project pipeline.

Most notably, this involves large-scale capital-intensive projects which can have significant regional and national economic impacts.

“IDA Ireland’s end of year results for 2020″, the IDA Ireland CEO said, “is further proof of the strength of Ireland’s value proposition, the continued resilience of the FDI sector and the important role FDI has to play in Ireland’s recovery.”

At the same time, he said: “We are acutely aware of the extremely challenging global economic climate we are operating in and note the predictions of continued significant impacts of the COVID-19 pandemic on global growth, trade and on FDI flows. Continued focus on competitiveness is essential.”

Commenting on the number of investments (128) won for regional locations in 2020, Martin Shanahan said: “IDA Ireland has had a relentless focus on winning regional investments, this continued in 2020, despite the upheaval caused by the pandemic. Our focus on regions will continue in our new strategy – our objective is to win half of the 800 target investments for regional locations.”

On FDI’s benefit to Ireland, he said: “The activities of the over 1,600 multinational companies (MNCs) supported by IDA in Ireland make a crucial contribution to employment, the public finances, regional development, global value chain integration, indigenous enterprise, innovation and more.”

The impact of multinational companies (MNCs) nationally and regionally goes far beyond their direct and indirect employment contribution. Irish economy expenditure by IDA Ireland clients in 2019 totalled €25.2bn, an increase of 14.8% on the previous year. Payroll spend was up 11.3% to €15.1bn, Irish materials spend rose by 2.3% to €2.7bn, and Irish services spend was up 29% to €7.4bn. Capital expenditure increased in 2019 by 10% to €7.4bn, the bulk of it concentrated in the Life Sciences and Technology sectors.

As part of the new strategy, IDA Ireland plans to partner with clients for future growth through 170 RD&I and 130 training investments, to embrace the opportunities of a green recovery with 60 sustainability investments and to target a 20% increase in client expenditure in Ireland to maximise FDI impact.

Martin Shanahan said: “IDA Ireland’s ambition is to capitalise on opportunities to provide MNCs with solutions to the challenges they face in this difficult global environment and in the face of accelerating emerging trends that will reshape business models, such as remote working and technology adoption.

We will partner with existing clients to safeguard and enhance their mandates in Ireland, while also attracting the next generation of leading-edge MNCs in our core sectors of focus. IDA Ireland has placed sustainable growth at the centre of our strategy, in line with Government policy, international consensus, the vision of our clients, and the demands of citizens.

We will seek growth that meets the needs of the present without compromising the ability of future generations to meet their own needs while fostering an inclusive, sustainable, and resilient economy and society.”

IDA Ireland intends to review the strategy at its mid-point. Martin Shanahan says: “Given the extraordinarily high uncertainty around the global economic outlook and the resulting impact on FDI, we believe a mid-way review is prudent.

Towards the end of 2022, we will assess progress and make any adjustments necessary to respond to changes in the global or national environment. While IDA Ireland believes the strategy is directionally correct in its current focus and form, we will be as pragmatic and flexible as required in adapting to circumstances as they unfold.”

Link to IDA Ireland strategy Driving Recovery & Sustainable Growth 2021-2024:

https://www.idaireland.com/about-ida/driving-recovery-and-sustainable-growth-2021-2024

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