The head of IBM in Ireland, Peter O’Neill, has been appointed president of the American Chamber of Commerce. He has warned that Eurozone uncertainty is eating into US investment decisions and has called for a genuine strategic focus on investment in education.
The American Chamber of Commerce Ireland represents 600 US companies employing almost 100,000 people directly and many thousands more indirectly.
O’Neill says Ireland continues to punch above its weight in attracting inward investment from US companies. "With 148 investments secured in 2011 creating 13,000 jobs, the IDA has had a record year, and US companies continue to account for three quarters of all foreign direct investment into Ireland.
“The Chamber’s own report, Built to Last: The Irish US Economic Relationship, shows that US companies in Ireland have a total investment $190bn, and account for 26pc of Irish GDP. Amongst the highlights of the year were announcements by Twitter, Gilt Groupe, Google, Pfizer, VMware, and PayPal to either establish new facilities in Ireland or expand operations here," he said.
According to O’Neill, the continued strength of purpose shown by the Government in protecting Ireland’s 12.5pc rate of corporation tax is very important for the international investment community.
However, he warned that continued uncertainty about the future of the Eurozone was impacting the confidence of the financial markets which in turn impacted on investment decisions by global corporations.
“Ireland as an open economy is very dependent on global markets and much of our recovery to date has been export led. While the Government must exert its influence within Europe to ensure a stable Eurozone and the survival of the Euro, we need to focus on the issues within our control at home which can be used to support both a competitive indigenous sector and the multinational companies operating within Ireland."
Warning over investment in education and training
"A competitive tax regime is only one element of our offering to inward investors. Another key component to Ireland’s proposition is its young, talented and flexible workforce. This is very much a trump card in relation to inward investment," he said. "We need to develop and retain talent, as well as attract talent from overseas."
O’Neill warned that competitive progress by Ireland in continuing to win investment is in danger of being eroded by a lack of investment in education and training.
“The scale of the fiscal problems facing the country at present cannot be denied," he said. "This is possibly the greatest fiscal crisis to have faced us since the foundation of the State.
“No sector or area can be immune from what are necessary cuts in expenditure but we have to prioritise some areas above others."
He said the writing is on the wall in this regard. "As recently as last October, we received the very unwelcome news that six of our seven universities had fallen in the world rankings as compiled by The Times Higher Education World University Rankings.
“Both TCD and UCD have dropped out of the top 100 while UCC and NUI Galway are no longer in the top 300. Dublin City University and DIT are now out of the top 400. This is a very worrying trend and the team which put together the rankings attributes it mainly to funding cuts.
“This cannot be allowed to continue," he added. "Already, some of our member firms in the key digital, ICT, life sciences and financial services areas are reporting difficulties in hiring suitable candidates.
“This is borne out by a recent study carried out by Forfas which showed that 55pc of the demand for ICT professionals in Ireland is being met by inward migration. These companies are in Ireland because they are highly mobile and were attracted here by our unique combination of talent, tax, a pro-business environment and our position as the only English-speaking member of the Eurozone, among other reasons. If they can’t find suitable talent here, Ireland will not be considered for future investments and, worse still, the existing operations may choose to move on to a competitor country where they can find qualified staff."
It is not just the third-level sector which requires attention and investment. "Primary and second-level education cannot be ignored," he pointed out. "The science and technology and business graduates of the future are formed in our primary and secondary schools. We need to see a much greater focus on these subjects and to integrate language skills into the broader curriculum in order to prepare the current generation of schoolchildren for the challenges and opportunities of tomorrow. The Minister for Education’s willingness to reform the Junior and Leaving Certificates is very welcome."
O’Neill said the publication of the Action Plan on Ireland’s future high-level ICT Skills Needs, which is being prepared jointly by the Department of Education and Skills, the HEA and the Expert Group on Future Skills Needs, needs to be published without delay and its recommendations acted upon if this vitally important industry is to continue to have confidence in Ireland as a location for future investment.
"We also need to maintain funding to Science Foundation Ireland and the Programme for Research in Third Level Institutions (PRTLI) if we are to develop the professional research and skills base required by the life sciences and other industry sectors where Ireland needs to command a leadership position in the future."