The majority of multinational CEOs in Ireland (77pc) believe Ireland is still a location of choice for investment and will continue to attract investment going forward.
The CEO Pulse Survey by PricewaterhouseCoopers (PwC) found that half of multinational CEOs believe there is a need to introduce more favourable intellectual property (IP) tax rules if Ireland is to continue to win investment.
The survey also revealed that multinational CEOs believe changes in IP taxation rules would further promote Ireland as a place to do business.
Only 22pc believe the availability of existing R&D tax credits helped promote Ireland as a place to do business.
According to the survey, across the board amongst indigenous and multinational CEOs, decisive action is being taken to tackle the downturn head-on.
However, confidence is at an all-time low among the 220 business leaders surveyed, with over 55pc expecting a decline in revenue and net profits this year.
Only 3pc think the outlook for the future prospects of the Irish economy are favourable.
“While cost levels are a clear challenge, the survey suggests that businesses are taking decisive action to tackle this head-on,” said Ronan Murphy, senior partner, PwC.
“There are a number of positive sentiments emerging that can ensure Ireland remains an attractive location in which to invest and do business. For example, the survey highlights the importance of Ireland’s favourable tax regime and, with our strong talent pool, confirms that the fundamentals for continued investment in Ireland remain strong.”
An overwhelming majority of survey respondents (84pc) are unhappy with the overall cost of doing business in Ireland, with the cost of labour being a major concern. However, three quarters of CEOs expect cost levels in their own businesses to either decline or remain the same over the next 12 months, compared to just 17pc this time last year.
The impact of the turmoil in the capital markets is having its greatest impact on investment plans (58pc) and access to finance (55pc).
Motivating employees is the top people challenge in the downturn. The majority (65pc) of Irish CEOs are confident they are effectively managing talent in terms of identifying and retaining high performers.
“The survey shows that business leaders are taking fundamental action to navigate their way through the difficult environment,” said Ann O’Connell, partner, Strategy Advisory Services, PwC.
“This includes reviewing the cost base right across all the areas of business; taking decisions on core and non-core assets; looking at new and more efficient ways of working; and leveraging new technology.
“Having undertaken profound reviews of their cost base, we expect a more cost-effective platform to emerge by the time the year is out. While there will be a lot of pain in getting there, especially on the people side, Ireland will have substantially recalibrated its cost base, and in so doing, will have gone a long way to restoring its competitiveness for the future.”
By John Kennedy
Pictured launching the PWC 2009 CEO Pulse Survey is Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan TD, with Ann O’Connell, partner, strategy and advisory services, PWC, and Ronan Murphy, senior partner, PWC