Worldwide foreign direct investment is down 30pc, but Ireland is punching above its weight and is capturing significant employee-intensive R&D investments, IDA Ireland chief executive Barry O’Leary told a conference on nanotechnology today.
Speaking at a Nanoweek conference on the economic opportunities that may arise from the convergence of ICT, micro electronics, pharmaceuticals and medical devices, O’Leary said that Ireland is well positioned to capitalise on growth in this space.
“It is an area that’s programmed for absolutely spectacular growth and this is a space that Ireland wants to be playing in. Because of the IT, manufacturing and life sciences track record we have here, we can play to our strengths, and the more expertise we develop here in nanotechnology the more likely we are to win business in this space, which is projected to grow from US$147 billion to over US$3.1 trillion by 2015.
“But like any business area Ireland targets, there is always competition and some of the powerhouses around the world are the US, Japan, Germany, as well as smaller countries, like Israel and Singapore. The race is well under way and we have left the starting blocks behind.”
O’Leary said that globally, foreign direct investment (FDI) is down 30pc but that Ireland is still punching above its weight in terms of the volume of business it is winning and the reputation it has built for itself.
Amount of money generated
In terms of the impact that FDI has had on the Irish economy, O’Leary said that the FDI community last year generated €104 billion worth of exports – 80pc of all Irish exports – which were dominated by IT and life sciences.
Multinationals in the Irish economy contributed to 73pc of all business R&D spend in the country and FDI companies spent €19 billion last year in the local economy, out of which €7 billion was in payroll.
Multinationals employ 150,000 people directly, but overall more than 250,000 people in Ireland owe their livelihoods to FDI.
“Ireland is still attracting the high-end projects and high skills. Traditionally, the growth sectors have been life sciences, biopharmaceuticals, ICT, financial services and an array of globally traded services. Digital media is still showing the most signs of growth at the moment.
“In the same way as investment will flow into nanotechnology, it is very important that we continue to identify new sectors and new platform technologies. Cloud computing and the whole area of services innovation show strong growth potential.
“Globally, FDI is down 30pc but I think that it is important from an Ireland Inc point of view, despite all the negative coverage of the economy, foreign direct investment is still coming to Ireland.”
Investments and job creation
O’Leary cited the fact that HP is hiring 500 people in Ireland in global services delivery as well as investing €10 million in cloud computing R&D in Galway. Intel is investing more than €50 million and is adding 130 research roles in Shannon. Security software player McAfee is establishing a 120-person tech support operation in Cork and the world’s number one games company, Activision Blizzard, has hired 740 people in the last several months in Cork.
“Companies like Facebook are doubling the size of their international headquarters after coming to Ireland only a year ago. Citi is investing up to €100 million in R&D in Ireland and a few months ago Boston Scientific revealed an investment of €140 million at its Galway manufacturing operation.”
He said that manufacturing continues to be a factor in Ireland and that the collocation of R&D and manufacturing is a key trend. Cordis, for example, recently invested €170 million in a new manufacturing facility – €30 million of which will be invested in a development centre.
Jobs, jobs, jobs!
O’Leary said that Ireland is also beginning to benefit from the capture of some large-scale R&D projects. “We are beginning to see the onset of employee-intensive R&D in Ireland. Often people had the feeling that R&D doesn’t create many jobs but that is changing. IBM are adding 100 researchers in areas like the environment and financial analytics and Business Objects/SAP is investing €30 million and creating 100 research jobs – 60 of whom are already on board and Intel is creating 150 R&D jobs.
“These investments are going to have a big impact on the economy and the good news for Ireland is that having these R&D operations here gives the country great exposure within their parent organisations around the world. Boston Scientifics’ €140-million investment in its Galway facility actually underpins 3,000 jobs in manufacturing in Galway – it is extremely important that Irish subsidiaries are well placed strategically in their organisations.”
O’Leary pointed out that research bodies like Tyndall and CRANN are vital to the country’s future, as well as direct industry collaborations, like Bell Labs’ €44 million CTVR at Trinity College as well as the €25-million Intel TRIL operation at St James’s Hospital.
“The SFI-backed CSETs have also emerged as great magnets for attracting multinationals interested in doing collaborative research.
“At a time when there’s lots of negativity around the Irish economy locally and internationally, it is important to look at the positives. Ireland was recently listed number 14 in the Forbes Best Countries for Business out of 127 countries.
“We were listed number one in the world for corporate taxes and fourth in terms of the ease of doing business. We have eight of the Top 10 IT companies in the world and eight of the Top 10 pharmaceutical companies in the world,” O’Leary said.
By John Kennedy
Photo: Multinationals in the Irish economy contributed to 73pc of all business R&D spend in Ireland.