Highest Number Ever Employed in Multinational Sector -229,057

Highest Number Ever Employed in Multinational Sector -229,057 Largest Regional Employment Growth in 17 Years 22,785 Jobs Created in FDI Companies in 2018 IDA Ireland marks 70^th Anniversary 

New Delhi, January 05, 2019: Minister for Business, Enterprise and Innovation, Heather Humphreys, and IDA Ireland, the Irish Government agency responsible for attracting foreign direct investment (FDI) to Ireland, has today announced that employment levels in its client companies have reached 229,057. FDI’s performance has exceeded targets set by Government contained in IDA Ireland’s Strategy – Winning: Foreign Direct Investment 2015-2019.

For context, IDA clients added two and a half times more jobs under “Winning” FDI strategy than in the first 4 years of IDA’s previous strategy 2010 – 2014.  58% of employment is now outside of Dublin in 2018, which is the highest number of people employed by IDA clients outside of Dublin in the history of the organisation, with more jobs added in the regions than at any time over the past 17 years.

Welcoming the results, Heather Humphreys, Irish Minister for Business, Enterprise and Innovation said:

“The IDA’s record results for 2018 underline how strongly Ireland continues to perform when it comes to attracting FDI. The significant increase achieved in employment is all the more impressive considering the highly competitive global FDI marketplace in which Ireland and the IDA operate. The Government will continue working hard in 2019 to ensure that Ireland remains a destination of choice for overseas firms looking to invest or expand their presence in Europe.

“I particularly welcome the gains made in deepening and growing investment outside of Ireland’s main cities, with the largest regional employment growth achieved in 17 years. 58% of all IDA client-supported jobs are now located outside Dublin, with every region of the country seeing employment gains in 2018. These figures reflect the resources provided by the Government through the Agency to grow investment right across the country. I am determined, together with the IDA, to see this trend continue and we will be doing everything possible in 2019 to encourage more firms to invest further in the regions.” 

The Minister added:

“Our ongoing efforts to grow and sustain FDI here are complemented by other actions we are taking to improve the capacity and resilience of enterprise in Ireland. This includes the new Future Jobs strategy, a whole-of-Government initiative that will better position our economy to meet the challenges that lie ahead.” 

Martin Shanahan, CEO of IDA Ireland said: “Foreign Direct Investment has transformed Ireland over the last 70 years. FDI continues to drive the economy with strong employment growth at 7%, compared to national average of 3% in 2018. FDI Exports experienced growth of 10% and an increase of 8% in the amount spent in the Irish economy on Payroll, Materials and Services – this now stands at over €19.2bn. The strength of FDI can also be seen in increasing Corporation tax receipts – IDA Client companies account for an estimated two thirds of Ireland’s Corporation tax and one third of combined Income Tax, USC and Employer PRSI tax. Ireland’s investment proposition continues to resonate with companies across the globe as investors search for stability and certainty.”

 Martin Shanahan, CEO of IDA Ireland said:

“Once again, the 2018 figures show a consistent pattern of extremely strong job creation amongst IDA Client companies in recent years.

“It is important to remember that only ten years ago, across 2008 and 2009, Ireland lost over 35,000 FDI jobs during the Global Financial Crisis. This is a salutary reminder that we can take nothing for granted and we need to be vigilant, particularly in relation to our competitiveness. All jobs are fought for and won against increasing international competition.”

Tanaz Buhariwalla, Director India said:

“IDA has had another stellar year and our performance in 2018 has been in sync with our strategy. Indian companies have shown tremendous interest in Ireland as their EU destination especially in a post-Brexit scenario. Many Indian companies are keenly watching the developments with Brexit and have started conversing with IDA, in confidence, to seek options. I believe 2019 will be an interesting year for IDA in India and our discussions will see conversions very soon. Most of the companies showing interest are from IT, Pharma and Banking sectors.”

IMPACT OF FDI ON IRISH ECONOMY 

* Forthcoming Department of Business, Enterprise and Innovation Annual Business Survey of Economic Impact 2017

Apart from direct employment and skills transfer, IDA Ireland’s client companies have a hugely positive effect on the local economy with over eight jobs being created for every 10 jobs in an FDI company[2].  Spillovers from Multinational Company (MNC) investment directly into the Irish economy include expenditure on Irish materials and services totalling €7.5bn, an annual payroll spend of €11.7bn and capital investment of €5.7bn on new buildings and machinery and equipment[3].

A significant part of the record corporation tax takes can also be attributed to the thriving FDI sector in Ireland.

IDA Ireland’s clients are also significant employers; with average salaries at €66,000[4] in 2017 they are consistently above national averages (€46,402)[5]. As a result foreign MNCs account for one third of total Income tax, USC and Employers PRSI paid in the state[6]. 

BREXIT

IDA Ireland has continued to secure a substantial number of Brexit-related investments in 2018 with the overall figure now standing at 55+ for investment approved with over 4,500+ associated jobs. For investors, the importance of Ireland’s ability to provide a stable predictable investment climate cannot be overstated. We have continued to engage significantly with our clients on this issue, fighting for any mobile investment that arises.

Ireland’s advantages in a post-Brexit context include English language, commitment to the EU, a common law system in addition to our existing competitive proposition.

Leading companies like Bank of America, Morgan Stanley, Legal & General, Everest Re, Central Pharma, The Standard Club, Coinbase, Citi Group,  Barclays, AXA XL, Wasdell Group, EquiLend, Thomson Reuters, BRE Global, Simmons & Simmons,  Neueda Technologies and Depository Trust and Clearing Corporation (DTCC) have all declared a new or expanded presence for Ireland in 2018.

DUBLIN 

Dublin has continued to absorb a significant amount of Foreign Direct Investment in 2018. It is the country’s leading city of international scale and remains an attractive place for investors to locate. In order for the rest of the country to thrive, we must continue to invest in making Dublin a great place to live and work. Other global cities are already doing this and “placemaking” is becoming a real area of competitive advantage in cities across the world. We must also ensure that there is solid vision for Dublin so that it can continue to act as a magnet for investment.

Martin Shanahan CEO of IDA said: “A strong Capital city and strong regions are required to win investment. As IDA has said many times, continued investment in regional Ireland is essential. Our regions are in competition to win investment with the rest of the world, not with Dublin.

“Successful Placemaking can provide a competitive edge when it comes to attracting and retaining the skills and talent on which FDI is reliant. Placemaking and the development of attractive places is a central tenet of Project Ireland 2040 and its effective implementation is necessary to differentiate Ireland’s regional locations and Dublin from competitor locations.” 

REGIONS

During its current strategy, IDA Ireland has shown a clear determination to showcase the many benefits that are to be found for companies locating in regions.

During the last four years, IDA Ireland has focused a huge amount of effort on showcasing cities and towns across Ireland where foreign investment had been low. This was done despite the demographical challenges that exist and international patterns of urbanisation.

Since the beginning of IDA Ireland’s ‘Winning’ Strategy, 407 Investments have been won for the regions and almost 27,000 net jobs have been added on the ground in locations outside Dublin. To put that in context, an average of 102 investments were won annually by locations beyond Dublin, compared to an annual average of 69 under our previous strategy; this a testament to the focus IDA Ireland has placed on regional investment and the whole of government action to enhance our regional offering.

IDA Ireland’s approach of developing strategic sites and developing advanced buildings has proven to be hugely successful. In 2019, IDA Ireland will continue its building programme with construction underway of advance buildings in Sligo, Dundalk, Athlone, Waterford, Galway, Monaghan and Limerick.

NEW STRATEGY 

Over the course of 2019, IDA Ireland’s Board will be developing the agency’s new five-year strategy. This strategy will take account of the changing nature of work and the impact of technology on specific sectors. Profound changes are occurring in the world of work and this is already reflected in the jobs being created by the IDA Ireland client base. We can see an increasing complexity in the roles being created, technology skills becoming ubiquitous across roles, increasing demand for business professionals and a fall in the number of low-skilled jobs including back office support and basic manufacturing. This shift is likely in response to three key drivers of change: technological change; cost competitiveness and increasing regulation, each is impacting on all IDA sectors but at different speeds and in different ways.

Technology will have a huge impact across all of Ireland’s established sectors and Ireland will have to plan to respond to changes in global value chains, just like Ireland has done many times since the 1950s, and we will be helped in this endeavour by the important work on Future Jobs being carried out by the Department of Business, Enterprise and Innovation. IDA Ireland will be drafting its new strategy in the midst of unprecedented competition amongst other foreign investment agencies and other challenges ahead. 

OUTLOOK 

Martin Shanahan, CEO of IDA Ireland said:

“While today’s figures are showing strong gains, there are many significant risks facing us in the future.

“Ireland is a small open trading economy and increased nationalism and protectionism is likely to have an impact on future FDI figures.

“10 years on from the financial crisis, the global economy continues to grow at a steady pace but the OECD says global GDP growth has peaked and is slowing on the back of weaker trade growth and less supportive monetary and fiscal policies.

“According to FDI Intelligence, global greenfield investment projects fell 1.1% in 2017, while at the same time investment into Ireland continued to grow. Ireland wins a much larger market share of European FDI than expected for its size. Ireland’s share of all FDI projects to the EU in 2017 was 5.4%, while Ireland’s share of EU GDP was just 1.9%.

“As we said last year, maintaining the competitiveness of the Irish economy remains absolutely essential. Issues that our clients are raising and that the National Competitiveness Council has also identified include: residential housing – availability & cost; skills; infrastructure investment; investment in the education sector and income tax levels at the higher marginal rate.

“Planned responses and initiatives already undertaken by Government in response to these issues and successful delivery of Project Ireland 2040 will assist in convincing investors of Ireland’s continued commitment to maintaining competitiveness.

“Ireland must also prepare for a scenario where technology – Artificial Intelligence, machine learning and Robotics play an increased part in our working lives.”

[1] Results based on Department of Business, Enterprise and Innovation Annual Employment Survey 2018 conducted in October. Please note that jobs created in Q4 are not included and figures are adjusted to take account of this the following year.  See also note to editor.

[2] Enterprise 2025

[3] Forthcoming Department of Business, Enterprise and Innovation Annual Business Survey of Economic Impact 2017

[4] Source: IDA calculations based on forthcoming Annual business survey of economic impact 2017

[5] Source: CSO Earnings and Labour Costs Annual 2017

[6] IDA calculations based on Revenue analysis of foreign owned multinational employer returns for 2016 of income tax, USC and employer PRSI excluding wholesale and retail trade.

See Report: https://revenue.ie/en/corporate/documents/research/ct-analysis-2018.pdf

Corporate Comm India(CCI Newswire)