Apple’s milestone anniversary in Ireland is a moment to reflect on the future of foreign direct investment in what looks like an increasingly challenging environment, writes Elaine Burke.
The story of Apple in Ireland begins and ends with Cork. It was here that the company first landed in 1980 with a manufacturing facility and 60 employees. And it’s here that Apple has grown over four decades to a major campus employing more than 6,000 people.
As Apple’s European headquarters celebrated 40 years in Hollyhill, Cathy Kearney, vice-president of European operations and a member of the Irish team for three quarters of its existence, said: “The Cork campus is more than a place – we’re a family.”
But it’s not simply family ties that keep the world’s most valuable company in an industrial estate just outside Cork city. A favourable tax environment is an obvious draw. And, while the benefits given to foreign direct investment from Ireland’s tax system are often criticised – both within Ireland and elsewhere – the fact is thousands of jobs, such as those in Apple, could well be beholden to this.
That will continue to be a bone of contention in the long term, particularly with the continuing legal case in Europe over a €14.2bn tax bill. So far, Apple and Ireland have won their appeals against the European Commission ruling that this money was owed to the State, but the case is now being appealed in the European Court of Justice, the highest court in the union.
Even without this high-profile court case, Ireland’s corporate tax regime is still a sticky situation that could become more challenging depending on the outcome of reforms from both the European Union and the OECD.
‘Companies want talent, they want the availability of talent’
– MARTIN SHANAHAN
Martin Shanahan, CEO of IDA Ireland, is not outwardly concerned by the challenges on the horizon as he sees that Ireland has more to offer than a multinational-friendly tax regime. “The companies want talent, they want the availability of talent. They want stability and consistency, and that has moved right up in terms of a criterion for investors. They want the pro-enterprise policies which a country like Ireland has operated for many years. So for all of those reasons, Ireland will remain attractive,” he told Silicon Republic CEO Ann O’Dea at Future Human 2020.
Of course, that promise of talent can’t just rely on Irish people, particularly as many FDI businesses in Ireland have developed wide-spanning EMEA headquarters here. We need to be able to attract a workforce into the country too, and that’s facilitated by the promise of a pleasant lifestyle.
On this last point Ireland has been faltering. The cost of living in Dublin in particular has skyrocketed, a situation that is both detrimental to FDI and a symptom of its concentration in the capital. The housing crisis is nowhere near an endpoint and our healthcare system, just about holding it together during the Covid-19 pandemic, hasn’t been up to snuff for the entire lifetime of Apple Ireland.
Thankfully, though, the Government appears to be taking one suggestion for improved quality of life across the country quite seriously. While Covid-19 spurred a dramatic shift to remote working out of pure necessity, the Irish Government seems in no doubt that this transformation is not going to be undone once the pandemic passes.
Just last week, Tánaiste Leo Varadkar, TD, committed to publishing a new remote working strategy by the end of this year. The next day, he announced a funding boost for enterprise centres across the country, a move seen as further support for new ways of working, enabling the possibility of distributed workforces making the most of the quality of life available outside of Dublin.
‘We need to protect and create in-demand jobs fit for our digital age’
– LEO VARADKAR
Meanwhile, Ireland’s reputation as a desirable location for foreign direct investment continues. In EY’s latest European Attractiveness Survey, which surveyed FDI perception across global executives, Ireland came in fourth place behind Germany, the UK and France. Ireland is about to become the only English-speaking nation in the European Union among that foursome, upping its attractiveness to investment from the US.
And it’s the US tech industry in particular that Ireland has held up as its FDI exemplar. Along with Apple, there’s the rest of US Big Tech deeply embedded here in Ireland. This summer, Amazon announced plans to add 1,000 roles in Cork and Dublin. Facebook is still building a new campus in Ballsbridge and Google’s Boland’s Mill development will even come with subsidised apartments for key workers in the local community. And just this morning (23 November), Microsoft announced 200 new roles with the opening of its Dublin engineering hub.
Yet Ireland is not so naive as to seek all its FDI supply from one basket, and US tech is not the only golden goose. Chinese tech has been coming into its own and two of its most exciting multinationals, Huawei and TikTok, have growing Irish bases.
Speaking at the Microsoft announcement today, Varadkar said: “Our focus in the months ahead will be to rebuild Ireland’s economy in a manner that will be sustainable. We need to protect and create in-demand jobs fit for our digital age.” This leaves no doubt that Ireland’s future economic strategy will continue to build on the investment of international tech giants.
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