While pinpointing potentially 40,000 foreign direct investment (FDI) jobs between now and 2020, the Irish Government has stated the 12.5pc corporation tax rate will remain a central part of its investment strategy.
Publishing Ireland’s FDI policy this morning, the Minister for Jobs, Enterprise and Innovation Richard Bruton said the next phase of FDI will hinge upon talent, technology, new sectors and great places to live.
Bruton has requested IDA Ireland prepare a new strategy on multinational investment in Ireland to 2020, following its previous strategy which runs to 2014, outlining a series of targets for jobs, investments and regions and how they will be delivered.
Development of this strategy, which will draw on the principles set out in today’s policy statement, has already begun and will be spearheaded by incoming IDA Ireland CEO Martin Shanahan.
Winning the talent battle
The policy statement, prepared by Forfás, which will cease to exist this week and will henceforth form the core of the Strategic Policy Division of the Department of Jobs, identified the key areas of future strategy.
In terms of talent, Ireland must seek to become renowned internationally for the higher-order abilities of its workforce, in terms of creativity, adaptability, problem solving and design thinking.
As such, the country must be internationally known for developing and nurturing talent at all skill levels, and as an attractive destination for internationally mobile skilled people.
The policy statement acknowledged that while Ireland cannot be a world leader in all areas of technology, the country must achieve a record of world-leading research and innovation in key areas, in close co-operation with industry.
A great place to live and work
To ensure job creation but also balanced investment in all parts of the country, delivering a choice of attractive locations for investment is crucial.
Ireland must play to the strengths of its different regions, and provide regional locations that can offer sectoral strengths, collaboration with education institutions and Irish companies, excellent infrastructure and quality of life.
“A vibrant capital city with a smart business and living environment hosting a dynamic start-up community alongside corporate heavyweights will always be a core element of our offering,” the policy document stated.
The identification of new sectors for investment in an agile fashion has also been highlighted.
By identifying opportunities and adapting quickly, Ireland can take a leadership position in emerging areas and develop clusters and management teams around these opportunities.
The changing landscape
Following the recession, Ireland succeeded in attracting an average of 6,000 extra jobs per year between 2011 and 2013 and Bruton paid tribute to the IDA for its performance.
For every 10 jobs created in multinational companies, an additional seven jobs are created elsewhere in the economy.
Signs indicate Ireland is already ahead of target for 2014. Inward investment companies have created up to 8,000 new jobs in the first half of 2014, according to IDA Ireland’s recent mid-year statement.
“The FDI landscape has changed dramatically in recent years,” Bruton said.
“On the positive side, Irish branches of multinationals increasingly play a strategic leadership role within their parent companies.
“However, international competition has increased dramatically, and many of the tools we relied on previously – cost competitiveness, the high performance of the IDA, competitive corporation tax regime, State support – are increasingly no longer enough to mark Ireland out.
“Changes will undoubtedly come in the international corporation tax system, which will pose challenges as well as opportunities for Ireland and we plan to compete strongly in this area.
“As we look over the next horizon we must focus on new areas which can mark Ireland out and support the attraction of the mobile international investment we need. This will not be easy, and will require concerted and determined action by departments and agencies right across Government,” Bruton said.
“Ireland continues to perform strongly against competitor countries – we are currently ranked as one of the most attractive business locations in the world,” said IDA Ireland chief executive Barry O’Leary.
“As mentioned in our recent mid-year review, Ireland has had a strong FDI performance and is very much competing strongly in the global marketplace for inward investment.
“This is due to the value proposition Ireland offers global corporations. This rests on a complex blend of a strong talent pool, a proven track record, strong technology infrastructure, access to EU markets, a reputation for strong research and development, and a 12.5pc corporate tax rate which continues to resonate strongly with investors.
“Over 100 investments were secured in the first six months of 2014, leading to the creation of 8,000 jobs this year and over future years as the companies roll out their investment plans. The second half of the year looks equally encouraging.
“Even with all the investment we’ve been seeing in Ireland, we should continue to do everything possible to constantly renew the value proposition – that work never stops and Ireland’s 12.5pc tax rate, ability to source talent and emphasis on cost competitiveness will all be vital in the future.
“Infrastructure, tax and talent will continue to be the areas where countries like Ireland compete for international investment,” O’Leary said.