80% of jobs in new foreign firms go to just three cities

Tue, Jun 5, 2012, 01:00

THE NATIONAL Spatial Strategy is not working, with almost 80 per cent of jobs created by new foreign firms in the last decade being located in Dublin, Cork and Galway, a conference at the ESRI will be told today.

With these three cities also accounting for 62 per cent of job gains in existing foreign firms and less than half of job losses, their share of all foreign employment rose markedly, from 49 per cent to 58 per cent, over the period.

In relation to newly-established foreign firms in the last decade, of the eight spatial strategy gateways (excluding Dublin) only Cork and Galway managed to increase their share of inward investment.

The other six, which between them accounted for 15.9 per cent of foreign employment in 2001, only attracted 7 per cent of employment in new foreign plants.

Economic geographers Chris van Egeraat and Proinnsias Breathnacht from NUI Maynooth are expected to tell the conference that this level of concentration in just three cities shows that the objectives of the spatial strategy are not being met.

According to the geographers, foreign firms investing for the first time have a key role to play in meeting regional policy objectives as they are more flexible in choosing locations for new investment compared to existing foreign firms. Indigenous Irish firms also tend to expand in existing locations.

Speaking to The Irish Times yesterday, Dr van Egeraat said: “Existing firms are less influenced by incentives driven by the National Spatial Strategy as they are already in their location. That is why new foreign firms will play a key role.

“You have to create investment in places to make them attractive for foreign direct investment. Places such as Waterford and Limerick have not received that boost.”

He said these cities represented 8.8 per cent of all foreign employment in 2001, but attracted only 2.8 per cent of employment in new foreign firms while losing 40.5 per cent of their existing foreign employment.

The spatial strategy was published in 2002 as a blueprint for economic and social development within the State over the following 20 years.

It designated nine “gateways” – consisting of the State’s cities as well as the towns of Dundalk and Sligo and the linked gateways of Letterkenny/Derry and the midland towns of Athlone/Tullamore/Mullingar – as preferred places for growth.

These gateways were to be supported by “hubs” such as Killarney, Ennis, Tuam and Kilkenny, which would help channel growth to the regions.

The strategy sought to divert investment from Dublin to the gateways and hubs. However, Dublin alone, with 35 per cent of all foreign employment in 2001, has attracted 53 per cent of jobs in new foreign firms since then.