Ireland is now a knowledge economy – IDA

17 Dec 2004

The successful attainment by IDA Ireland of “quality” investments during 2004 by Intel, Bell Labs, Hewlett-Packard, IBM, Pfizer, Merrill Lynch, Business Objects, Dell and McAfee have proved that Ireland “is now a knowledge economy”, said the IDA chief executive Seán Dorgan at the agency’s end-of-year review.

This year marked the best year the IDA reported since the halcyon job creation days that peaked in 2000. After three to four years of relative decline in job numbers IDA revealed yesterday that it created 10,825 new jobs in IDA-supported companies, bringing total full-time employment in overseas companies in Ireland to 128,946 people in 1,022 companies – an increase of 197 positions on last year.

During 2004, the agency succeeded in securing agreement for some 70 projects, of which 37 were Greenfield projects and 33 were expansions by players such as Intel, IBM and Dell. The total investment secured by IDA during the year amounted to €5.04bn.

2004 was also a notable year on the research and development (R&D) front with the successful acquisition by the IDA of a major R&D project by Bell Labs. The total number of R&D projects approved amounted to 36 with a total investment of €141m reached.

IDA supported companies exported goods worth up to €68bn in 2003, according to figures from Economic Social and Research Institute and Forfás, and spent €15.4bn in the local economy.

Dorgan described 2004 as a “year of quality investment from overseas companies in Ireland” and added: “What has been achieved this year is a major tribute to the ability and professionalism of the Irish workforce and of Irish management.

“This has certainly been the best year since 2000 in terms of the quality, depth and value of the investment decisions won. The results this year have a number of important characteristics that augur well for our knowledge-economy strategy. The quality of the investment and the jobs created in both manufacturing and services have been excellent. There has been buoyancy across all of our business sectors and a noticeable recovery in the ICT sector. Investment in R&D by overseas businesses is becoming increasingly important and Ireland continues to grow as a major location for services to support business activities throughout Europe,” Dorgan said.

He pointed to a survey conducted by multinationals in Ireland and overseas that cited the availability of an educated and professional skilled workforce ranked highest in the advantages of operating in Ireland.

However, despite claims by pundits over the past year or two that the manufacturing sector is dead in this country, Dorgan warned that “manufacturing remains at the heart of overseas investment in the Irish economy”. He cited Intel’s €1.6bn investment earlier this year in new chip manufacturing facilities as well as an expansion by medical technology manufacturing firm Guidant in Clonmell that will create an additional 1,000 high-quality jobs, of which 35pc will go to graduates.

Chronicling a return to health of the ICT sector, Dorgan indicated that the pharmaceutical sector is also thriving and that Ireland has made dramatic strides towards becoming a premier centre in the world for biopharmaceutical manufacturing.

During 2004, the Government awarded the Limerick-based company e-Net the task of managing the State-funded metropolitan area networks, which will see the development of digital infrastructure in 26 towns and cities throughout Ireland. Dorgan said that this initiative is of critical importance for a balanced spread of economic development.

Reaffirming IDA’s commitment to the regions, Dorgan revealed that the agency has been developing business and technology parks in key towns throughout the country and this year spent a further €50m on property developments almost all outside Dublin.

Dorgan concluded by saying that “We expect to see similar advances in quality in 2005 as were achieved this year. Today Ireland competes on a par with the best, most advanced countries in the world for business. We are winning investments of the highest quality, across a wide range of business types and in all the sectors we’ve chosen to compete”.

“But to continue doing this,” he warned “we must constantly innovate by adapting and changing the value proposition we offer our clients. This means exploring new areas and strategies, as outlined in Ahead of the Curve, the report of the Enterprise Strategy Group published in mid-year; remaining dedicated to improving our physical and digital infrastructure; but most importantly investing in our people, through education and in particular research funding, as it is the quality of our people and their skills that will keep Ireland ahead of the rest.”

By John Kennedy