Posted on 10 months ago by Laurentina Kennedy
Steady pipeline of IDA-backed job creation drives Irish growth
IDA Ireland entered 2023 with record results for 2022, achieving the highest FDI employment ever at 301,475 jobs
Ruairí Conroy, site lead, Diligent, Mary Buckley, interim CEO of IDA Ireland, Taoiseach Leo Varadkar, and Brian Stafford, CEO of Diligent, at the opening of Diligent's new European hub at Bonham Quay in Galway in July 2022. A New York-headquartered software firm, Diligent has since hired 275 people in the region.
Mary Buckley, Interim CEO of IDA Ireland, looks ahead to another promising year for US-Ireland trade relations.
Ireland has established its reputation and track record as a trusted partner to companies from all over the world on their investment journeys for decades, providing stability and certainty through periods of adversity, success and constant change.
As we enter 2023, the now evident severe headwinds facing the global economy means we will have to work harder than ever in the year ahead to win new investment.
The activities of US multinational companies (MNCs) supported by IDA in Ireland make a crucial contribution to our FDI success. US companies use Ireland as an entry point to the EU, the world’s largest single market. From Ireland, they gain access to a highly-skilled, English speaking, flexible workforce which shares many cultural and historic ties with the US.
In 2022, IDA clients from the US had almost 950 operations in Ireland, employing over 210,000 people directly. Some 650 Indigenous companies supported by our sister agency Enterprise Ireland client employed 100,000 people, at 2500 locations across the US in 2022. Foreign Direct Investment has been transformative for Ireland for over seven decades. Attracting, retaining and growing FDI remains a key plank of industrial policy.
US investment is crucial to Ireland’s economic success. US companies contribute greatly to the strategic regional focus of IDA Ireland. The bulk of FDI in Ireland in 2022 once again came from the US – 167 of the 242 investments won. 103 of those 242 investments won were new-name companies, investing in Ireland for the first time.
US companies like Gong, Okta and WorkFusion were among the new investors while established companies such as Abbott, Workday, Citi and Pfizer numbered among those who expanded their Irish operations last year.
FDI is most often considered in terms of job creation and that is an obvious benefit, but the additional benefit of these multinationals’ presence in Ireland goes considerably beyond their direct and indirect employment contribution.
Their impact nationally and regionally to public finances, regional development, global value chain integration, spin-off indigenous enterprise, innovation and more is clearly evident in their expenditure in the Irish economy. The recent ABSEI survey shows that expenditure within the economy by FDI companies increased during 2021 despite the prevailing challenging conditions. Payroll was up 9.8% to €19.6bn, Irish services and materials spend increased by 10% to €11.1bn and capital expenditure was up 8% to €9.2bn.
Exports of €315.5bn represented an increase of 8.7% year on year. This resilience and growth in FDI has been an important contributor to our economy and the national finances. A high proportion of this spending was from US companies in Ireland.
With sustainability one of five pillars of our strategy, IDA’s strong focus was evident in the number of sustainability project approvals in 2022 with 21 investments secured, the majority of them focused on climate change mitigation. A focus on transformation is more important than ever if companies are to remain competitive amid an accelerating shift towards a low carbon and high-tech economy. The resilience and longevity of MNCs in Ireland reflects their ability to constantly transform in response to change. IDA is engaging with clients on RD&I, training, digitisation and sustainability-related investments to ensure the FDI base is positioned for continued success in the future.
In implementing the objectives of our 2021-24 strategy, IDA will continue to partner with Ireland’s established base of companies and with the next generation of MNCs. We believe there are opportunities for Ireland to compete to win investment as the global economy digitises and decarbonises at an accelerating pace, new business models emerge and companies consider how to respond to issues ranging from supply chain resilience to the future of work.
In planning for the future, it is essential that we continue to seek to win new activities and anticipate the fast-paced changes in technology and business models. Therein lies challenges, certainly, but the twin digital and green transitions also create investment opportunities that are aligned with many of Ireland’s key strengths. As Ireland embraces technological change; seeks to becomes a leader in areas such as AI and Industry 5.0; and sets a path towards net zero emissions, we anticipate our partnership with US companies once again being central to our success in promoting growth that is sustainable, resilient, and transformational.
The focus on economic resilience and the supply chain risks associated with international production were clearly demonstrated during the Covid-19 pandemic. It is worth noting however that, throughout the pandemic, critical physical and digital supply chains to and from Ireland remained open and largely uninterrupted.
US companies have continued to provide goods and services to customers in Europe and further afield from their durable and innovative Irish bases, with many growing and adding to their mandates in Ireland despite the adverse international economic landscape.
In each corner of the country, our companies of US origin are providing sustainable, resilient jobs in activities driving global growth – from the technology, software and services that are the foundation of the digital economy to leading-edge advanced manufacturing reshaping industry and essential healthcare products for patients around the world. Dublin is a major economic driver for the country and is a well-established technology and financial services hub in Europe.
IDA Ireland entered 2023 in the extremely strong position of having achieved record results for 2022. We announced in December 2022 the highest FDI employment ever, at 301,475. While these record results for 2022 and the staircase growth in Ireland’s FDI performance over the last decade gives us a strong platform from which to sustain that robust growth, we are taking nothing for granted.
As a country, we must continue to focus on what is required to consistently improve Ireland’s attractiveness as a place to live and competitiveness as a place to do business, de-risking investment decisions and building on our stable and consistent pro-enterprise policies. On behalf of IDA Ireland, I want to acknowledge and thank our client companies for their investment in Ireland.