MULTINATIONALS ARE now more likely to base high-end operations in Ireland rather than low value-added production as in the past, new research has found.
According to an annual survey of multinational corporations launched yesterday by National Irish Bank (NIB) and the Irish Management Institute (IMI), 70 per cent of firms operate strategic centres – either for the global company, a region, product or service – in Ireland. Only a quarter of foreign-owned multinationals have basic production operations here.
“Ireland has succeeded in transforming itself over the course of the last decade from a country that was successfully attracting low value-added jobs to one that is now attracting very high quality jobs,” said Dr Tom McCarthy, chief executive of the IMI.
Irish subsidiaries of multinationals were found to be very active in trying to attract new investment, with 60 per cent of respondents saying they had successfully pitched for new mandates from their parent companies.
However, Dr Ronnie O’Toole, chief economist at NIB, noted that this has been affected since the beginning of the current economic crisis. “Irish subsidiaries of multinationals are telling us that the damage to Ireland’s reputation has materially affected their ability to attract new investment.”
Some 11 per cent of firms said that Ireland’s reputation has “radically worsened” , while 42 per cent consider Ireland’s long-term economic stability to be weak. A further 43 per cent expect their employee numbers to shrink over the coming year. Ireland’s cost base emerged as the main drag on competitiveness, with energy costs considered particularly high.
The survey was conducted during August and September among 225 multinational companies with a base in Ireland. A total of 82 senior executives from these companies responded.
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