IDA focuses on quality as €5bn pours in

30 Jun 2005

IDA Ireland acknowledged yesterday it is concerned about a shortage of technology and engineering skills in the Irish economy and called for this to be addressed. In what was a generally flat year compared with previous “bumper” years, the agency revealed while 10,000 jobs were lost in client companies, a further 10,825 high-quality jobs were created in their place.

At the unveiling of the state agency’s 2004 annual report, IDA Ireland chief executive Seán Dorgan said Ireland was now one of the most globalised business centres on the planet with a healthy proportion of Fortune 500 companies satisfactorily conducting business here.

In its results the agency said it had secured some €5bn capital investment in a wide range of projects, most notably in technology, healthcare, pharmaceuticals and international services. Some 37 of these were greenfield projects while a further 33 were expansions by existing overseas companies.

In what was a push in the direction of higher-value research and development-type (R&D) projects the number of IDA client companies that embarked on R&D projects during 2004 was 36, with some seven of these being partnerships between industry and academia. Some flagship R&D projects secured during the year included Bell Labs, IBM and Hewlett-Packard.

Furthermore, IDA revealed that more than 238 client companies were investing in excess of €250k a year on R&D and out of these 139 could be described as having a significant corporate R&D mandate.

The US continued to dominate the foreign direct investment (FDI) league, with more than 478 companies in Ireland employing 90,236 people.

Technology continued to dominate the employment numbers, with some 41,887 employed in IDA-supported technology companies, followed by 44,842 in international and financial services and 19,985 in pharmaceuticals and healthcare.

Dorgan quoted research from AT Kearney that cited Ireland was ranked first out of 62 countries as the most globalised business location on the planet for three consecutive years and, according to the World Competitiveness Yearbook 2004, Ireland was the third most productive location out of 60 countries.

In terms of the pipeline for new projects, Dorgan said: “The pipeline is looking good, but is vastly different to five years ago. There are significant manufacturing projects that we are in play for, which we hope to secure in the next two to six months.”

Dorgan conceded the supply of suitably skilled graduates for extremely technical positions in major companies was a cause for concern, but emphasised that internationally Ireland is top of the league for the supply of graduates. He said: “There are approximately 16 science and engineering graduates per 1,000 of the population in the 20 to 34 year age group. This contrasts with a European average of seven graduates per 1,000 of the population. That would make Ireland the ideal place for these kind of projects.”

He also conceded concerns about cost and competitiveness were high on the agenda but cited the ability Dell’s Irish operations to compete aggressively with China as an example of what can be achieved. “While Dell has to pay a multiple in Ireland for what it can pay in China, the Irish operations are still more productive.”

In response to questions about a recent OECD report that claimed Irish FDI inflows fell by almost half from €26.9bn to €14.1bn, Dorgan said it was not a reflection of IDA’s activities and had more to do with other factors such as interest rates and merger and acquisition activity in the economy. “The OECD figures are apples, oranges and pears, whereas we deal in apples,” he joked.

Another claim by the Economist Intelligence Unit (EIU) and highlighted in the IDA report that Ireland ranked as the most attractive location on the planet to live in terms of quality of life must surely rankle people stuck in tailgate traffic and ‘rip-off’ prices and certainly raised a few eyebrows among assembled journalists. Dorgan defended the claim. “On the whole, Ireland is a much better place to live today than it was 10 years ago. The EIU’s figures are not our own measurement, but I would be happy to endorse them,” he quipped.

By John Kennedy