Ireland holding its own in tougher FDI game
“STRONG CLUSTERS” and improved competitiveness mean Ireland is holding its own in attracting foreign direct investment (FDI), IDA Ireland said yesterday at the launch of its 2011 annual report.
With a net gain of 6,000 jobs at client companies last year and the agency on track to secure the same number in 2012, there is a sense that it is doing its bit, even as the economy remains fragile.
But there are challenges for the agency too, not least of which is the fact that high unemployment rates across Europe mean competition for FDI projects is intense.
“What we’re seeing is is actually bringing more countries into upping their game,” IDA chief executive Barry O’Leary said. “In other words, as their own markets are flat, they’re looking for some growth to come from FDI.”
Yet O’Leary was toasting the success of the IDA’s policy in focusing on particular industry clusters, which, if not quite recession-proof, are not completely vulnerable to the economic cycle either.
“I think it’s very, very important to recognise that in Ireland we are in a number of key growth sectors – sectors that are going to grow even in a tight market,” he said, citing the biopharma, medical devices, ICT and internet sectors and noting the naming of Google as Ireland’s top exporter.
The IDA believes Ireland can attract a number of major investments over the next few months, on the same scale as those announced by PayPal, Apple and Mylan – hence its fretting about a possible future shortage in office accommodation in Dublin.
In any one year, the IDA seeks to source a third of jobs from investments by new clients and two-thirds from existing firms.
Happily, right now, key multinationals are engaged in “pretty good hiring”, O’Leary said.
Medical devices and digital media will continue to generate jobs in the second half of 2012, he forecast, while data centres, though not labour intensive, do create jobs in the building phase.
Mr O’Leary seemed undaunted by the “patent cliff” that has seen big pharma companies here shed jobs as patents on lucrative pills expire. In time, valuable new biopharmaceutical products would completely mitigate the loss of recent drug patents, he said.
Journalists from China’s state news agency attended the IDA’s briefing yesterday for the first time. But while China may be more interested in Irish affairs, Ireland is finding it slow going in attracting Chinese companies.
“We’re finding it difficult, certainly challenging, to break into the growth markets of China and India, to get any sort of significant traction,” admitted O’Leary, while Minister for Jobs Richard Bruton said China was “a long-term play”.
However, two of the five biggest telecom companies in the world are Chinese, O’Leary noted, and these are clear IDA targets.