In a world where foreign direct investment is down 30pc globally, Ireland’s development agency IDA succeeded in attracting 125 investments to the country – including €500m worth of R&D projects – and generated 4,500 new jobs.
Despite the difficult global economic environment Ireland continues to attract foreign direct investment (FDI) from many of the world’s leading companies.
Companies investing in Ireland for the first time in 2009 included Bentley Systems, Maxim Integrated Products, Big Fish Games, Lumension Security, Vattenfall, Hovione, Everest Reinsurance, Gerson Lehrman, Buy.com and Success Factors.
Globally foreign direct investment decreased by 30pc during 2009 and the average scale of investment was smaller than in previous years. Ireland continued to attract FDI despite challenging global circumstances with the number of investments decreasing by 4pc on the level achieved in 2008.
During 2009, the agency won a total of 125 FDI projects, out of which 11pc were companies investing in Ireland for the first time.
Investments in Research, Development & Innovation (RD&I) in excess of €500m, and accounting for 49pc of all investments won during the year.
The majority – 69pc – of investments from existing companies.
Overall, more than 4,500 new jobs were created in 2009 and exports from IDA client companies increased to €110bn.
“Ireland’s relative position as a leading international location for value intensive FDI remained strong in 2009 despite challenging economic circumstances, with IDA securing 125 investments,” said IDA chief executive Barry O’Leary.
“Almost 70pc of these were from existing IDA clients further investing in Ireland and reinforcing Ireland’s reputation as a key strategic global business hub.”
Among the existing IDA clients expanding their operations in Ireland were HP, McAfee, Paypal, Abbott, Trend Micro, Merck, Activision/Blizzard, Gilead, Rottapharm, Facebook, Gala, and Bank of New York Mellon.
The number of investments in RD&I increased 10pc on 2008, in keeping with the Government’s Strategy to develop the smart economy.
This equates to 49pc of all investments secured during the year. The level of RD&I investments was in excess of €500m; with IBM, Boston Scientific, Citi, Intel, Pfizer, Helsinn, HP, Paypal, Colgate-Palmolive, Alps Electric and SITA some of the key investors.
The value of these investments is of vital importance in embedding existing operations and helping secure future business from multinationals. Significantly, 73pc of Business Expenditure on Research & Development (BERD) is from IDA client companies.
In 2009 many international companies deferred capital expenditure programmes, focused on re-structuring and re-engineering their business models and were much slower in making investment decisions.
Despite these pressures, significant investments were realised. Although the world economy is going through one of the most dramatic downturns in living memory there are increasing signs of some recovery in North America, Asia and Europe.
IDA said it believes that Ireland is particularly well placed to secure investments during 2010 and beyond with the resumption of global economic growth.
O’Leary said that the IDA’s strategic challenge is to proactively identify future FDI trends and the associated employment opportunities.
Every year an average of 7-8pc of jobs within the IDA portfolio are lost as part of the normal business lifecycle. The reasons for this include competitiveness, market downturn, global economic trends and business model re-structuring, particularly as a result of merger and acquisition activity.
In addition to the normal level of job losses many IDA client companies announced significant reductions in their global workforces.
“Ireland was not immune to these changes with net employment within IDA supported companies falling by 13,400 or 10pc from last year. In excess of 3,500 of these job losses resulted from two high profile companies,” O’Leary explained.
“These losses should be viewed in the context of 183,000 less people in employment in the Irish economy in the past year. It is also noteworthy that 82pc of job losses were as a result of downsizing, not closures.
“Maintaining a large number of existing multinationals here will help position Ireland as a competitive location when the global economy recovers from 2010 onwards.”
In order to maximise the potential for benefiting from the global economic upturn a continuing focus on improving competitiveness throughout the economy is critical, O’Leary said.
“While there have been a number of positive improvements in competitiveness, a firm focus must be maintained. For its part the IDA has been helping its client companies to upskill, invest in technological uplift and new processes and deepen their commitment to Ireland.
“Few economies in the world have gone through such change as Ireland in the last 40 years. IDA too has had to continually adapt and respond to what is needed to win the next wave of investments and technologies”.
IDA Ireland is in the process of completing a strategic review of its business and the intention is to publish a new ‘Strategy 2020’ during Q1 next year
IDA supported companies directly employed 136,000 people and also accounted for €110bn or 70pc of total exports.
These companies were responsible for €19.1bn in direct expenditure within the Irish economy comprising €7.1bn on payroll, €9.7bn on services and €2.3bn on materials from Irish sources.
By John Kennedy
Pictured – IDA’s latest marketing campaign which has targeted top US newspapers, magazines and airports and was recently complemented by the New York Times in an article "When Irish Ads are Dialling"