Foreign Direct Investment (FDI) has been, and will continue to be, a key plank upon which Ireland’s economy is built. Its contribution to the economy is far-reaching and it’s estimated that 20% of all private sector employment in the State is directly or indirectly attributable to FDI. It also contributes significant taxation revenue to the Exchequer, generates other commercial activity across the economy and helps to drive investment in research and innovation.
IDA Ireland is the State’s inward investment promotion agency that is tasked with growing and sustaining FDI in Ireland. It achieves this by partnering with potential and existing investors to help them establish or expand their operations here. It also provides a range of supports, including grant assistance, to its client companies.
Ireland’s FDI Policy
Ireland’s ability to attract and retain FDI is the result of a number of factors and consistent policy-making by the Government over many decades. At the heart of this approach has been openness to global markets, competitive taxation rates, investment in education and membership of the European Union.
Ireland’s current approach to winning more FDI is guided by the Policy Statement on Foreign Direct Investment in Ireland. This sets out how the Government’s vision for securing more investment from overseas companies and how it is working to differentiate Ireland’s offering in the following three key areas:
Talent: An internationally competitive location for talent attraction and growth
Ireland will be distinguished internationally not only by having a sustainable supply of world class core competences, but also by the higher order abilities of its workforce and graduate output ‐ in terms of problem‐solving, creativity, design‐thinking, and adaptability. Ireland will be renowned for developing and nurturing talent, and will be an attractive destination for internationally mobile highly skilled people.
Place‐making: Creating competitive, dynamic and globally connected city regions as attractors of investment, and positioning Dublin as the leading European hotbed for start‐ups, fast growing firms and talent
Ireland will deliver a choice of attractive city region locations for investment and will be a leading proponent of urban design and place‐making enabling business and lifestyle opportunities. It will also deliver a vibrant capital city with a smart business and living environment hosting a diverse and busy start‐up community as well as corporate heavyweights.
Connected world leading research: Ireland, one of the most enterprise-aligned science, technology & innovation systems in the world
Ireland’s national innovation system will be globally renowned for its alignment with industry, excellence in research, connecting and collaborating with enterprise, delivering sustainable economic impact, and attracting investment and exceptional talent. A number of research centres in Ireland will be achieving and consistently maintaining world leading positions in key disciplines, acting as beacons for Ireland attracting prospective FDI, and providing a capacity for applied research for firms in developing products and services for markets.
FDI in Ireland today
FDI remains hugely important to Ireland and was instrumental in helping the country recover from its recent economic crisis. IDA Ireland’s strategy for the period between 2015-2019 sets out the key targets that the Agency is working towards in order to sustain and grow investment by overseas companies in the next number of years.
At present, Ireland is now home to over 1,200 overseas company operations that directly employ well over 200,000 people. The country continues to attract businesses from sectors such as ICT, life sciences, financial services, engineering and business services. Many of these companies undertake strategic activities here such as advanced manufacturing and research and development. Ireland’s success when it comes to FDI is partly reflected by the number of the world’s leading companies who have established operations in the jurisdiction (9 of the 10 top global companies in each of the software, pharma, and ICT sectors).
The Government works hard to maintain the country’s attractiveness to FDI in the face of ever-increasing global competition. Nurturing the talented workforce has been especially important in this context. Ireland has been ranked first in the world for the flexibility and adaptability of its workers and also scores highly in international rankings for the availability of skilled labour and productivity. Ireland’s education system has been key to this – it is ranked amongst the top ten in the world and the country has one of the highest percentages of population who have completed third level education. Positive demographics have been important too, with Ireland boasting the youngest population in the EU as 40% are under the age of 30.
While Ireland continues to benefit from FDI, there is a growing focus on ensuring its advantages are spread more evenly across the country. IDA Ireland and the Government have placed a particular emphasis on growing investment in the regions. This has entailed new regional investment targets and also building clusters of investment in parts of Ireland that help then to sustain and attract more overseas companies from particular industries.