At IDA Ireland’s mid-year results briefing, the agency commended Ireland’s resilience so far, but warned that investment could eventually drop by 40pc as a result of the Covid-19 pandemic.
On Wednesday (8 July), IDA Ireland reported that there has been continued investment in the first half of 2020 despite serious disruption to business caused by the Covid-19 pandemic.
IDA Ireland, which is the inward investment agency of the Irish Government, said that 132 new investments were won with associated employment potential of 9,600 jobs. In the same period last year, there were 140 investments, which marks a 6pc decrease.
The agency said that 53 of these 2020 investments came from new investors and 44 were expansions of existing companies. A total of 48pc of the projects won were for regional locations in Ireland.
Some of the key announcements from the first half of 2020 include the announcement of a commitment of 450 new jobs at HubSpot, 1,500 new jobs at Mastercard and 100 new jobs at Udemy’s expanded Dublin office.
Martin Shanahan, CEO of IDA Ireland, said that it has been “encouraging” to see Ireland secure these 132 significant investments in the first half of the year against a difficult backdrop for business and trade.
Strength and resilience
IDA Ireland said that today’s figures demonstrate the strength of Ireland’s value proposition and the resilience of the foreign direct investment (FDI) sector.
However, Shanahan warned: “There is absolutely no room for complacency. The global economic climate within which we are now all operating remains extremely challenging with international forecasting bodies predicting significant impacts of the Covid-19 pandemic on global growth, trade and on FDI flows.”
He said that Ireland’s “extraordinary” FDI performance over the past five years has put the country in a “strong position” going into the Covid-19 crisis and that the high-value sectors pursued by IDA Ireland provide the agency with a strong base from which to drive recovery.
Going into 2020, employment levels in IDA’s client companies had reached over 245,000, according to Shanahan. This marks the highest ever number employed in the multinational sector, exceeding all targets set by Government in IDA Ireland’s strategy for 2015 to 2019.
While he acknowledged that the FDI sector is resilient, Shanahan emphasised that it is not immune from the impact Covid-19 has had on business. The IDA chief executive said that global investment could be cut by up to 40pc.
“While it is too early to say what the ultimate effect of that will be on the out-turn for this year and next, it will undoubtedly exert downward pressure on job creation and increase job losses,” Shanahan said.
Shanahan pointed out that while the focus is on Covid-19 at the moment, other challenges such as Brexit, increased trade tensions and achieving a global consensus on tax and digitisation have not gone away.
IDA Ireland highlighted that the competition in the pharmaceutical and medtech sectors has intensified as companies focus on self-sufficiency and security.
Ireland’s value proposition for inward investment in these areas is based on offering a safe and stable investment location with access to the EU market, an educated and skilled workforce, and a competitive corporate tax regime.
Shanahan said that this value proposition will continue to remain valid, but notwithstanding the inevitable constraints that will face the exchequer in a forthcoming era of heightened competition for FDI.
The agency’s focus from now until the end of 2020 will be on protecting and growing jobs within its client company portfolio, through stabilisation and recovery.
Some of the key elements of IDA’s plan to retain, transform and position these companies for future growth include responding with appropriate supports and the launch of a €200m targeted Covid-19 fund to drive new business development in 2021.
IDA Ireland also plans to launch a global marketing campaign and engage further with clients on their growth agendas.