‘Ireland and the United States have long enjoyed a strong and vibrant business relationship’

It’s almost easy to become complacent about US presidential visits to Ireland with the most recent marking eight sitting presidents arriving on these shores until one realises the first visit was only as recently as 1963 when JFK came to Ireland.

That sojourn was hailed as exciting as having the Beatles visit and certainly created a precedent that was hard to follow. Interestingly, half of the 46 presidents trace some of their roots to Ireland, according to the US census, out of a population where one in 10 claim Irish ancestry. Either way, it’s a good day for the country and for Irish business.

Anna Scally, partner, head of technology and media, KPMG in Ireland, was one of the business leaders to value the economic benefits as well as the cultural opportunities afforded by the presidential visit.

“Ireland and the United States have long enjoyed a strong and vibrant business relationship, and the past year has seen significant developments in this partnership. President Joe Biden’s visit to Ireland earlier this year was a real highlight, further strengthening the bond between the two nations. During his visit, President Biden emphasised the shared values and economic ties between Ireland and the US and the importance of collaboration in various sectors,” she says.

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Ireland Inc

Rich business connections work both ways. It is well recognised that many American multinationals have chosen to base their headquarters in Ireland. What is perhaps less well known is the size of business travelling from Ireland to the US. Ireland is now the ninth biggest investor into the United States with more than 650 Irish companies with operations across all 50 States employing 100,000 people.

Ireland is celebrating the fiftieth anniversary of its membership of the EU, and in that time has become one of the top destinations for foreign direct investment (FDI), the majority of which comes from the US. While early tax breaks may have marked initial decisions, Ireland Inc has capitalised on the presence of American multinationals which now spend more than €14.1 billion on payroll, €7.9 billion on capital expenditure and €8.7 billion on goods and services.

These are not fleeting, transient investments, with a third of all US multinationals here for more than 20 years. Over the years, Ireland has bedded in these companies and post-Brexit offers the only English-speaking, common-law trade and investment gateway to the EU, which in turn is the world’s largest single market with a labour force of 21.5 million.

Ireland has matured into a modern economy attractive to US companies offering a highly skilled, flexible workforce which shares many historic and cultural ties with the US. Irish workers have been named as the most productive in the world by the OECD, as well as Ireland ranking at number four out of 38 counties for education in a country where 63 per cent of 25- to 34-year-olds have attained third-level education (the EU average is 41 per cent).

Also making Ireland attractive is its political stability, a common law legal system, dynamic R&D ecosystem, and attractive, transparent and stable tax regime.

Positive steps

This is not just passive work. Ireland has positively taken steps to attract R&D activity in Ireland offering a 25 per cent R&D tax credit. This has resulted in Ireland being home to 17 world-class research centres and engaged in more than 2,700 research collaborations with more than 75 countries. Ireland is now ranked first in the world for knowledge diffusion and fifth for knowledge absorption.

It is well-publicised that Ireland is home to nine of the top 10 US technology companies, nine of the top 10 pharma companies and 14 out of the top 15 MedTech companies. This is not by chance as Ireland offers US companies, in particular those in regulated industries such as pharmaceuticals, medical devices and financial services, access to the European regulatory system.

Post-pandemic, tech companies announced lay-offs on a global scale and Ireland was not immune to these developments. However, these were seen as right-sizing or readjustment as opposed to an overall downturn.

Scally views these as temporary: “While there have been layoffs in some technology companies, this followed a period of outsized expansion. Given the underlying demand for technology, we expect the technology industry to continue to thrive and make an outsized contribution to the Irish economy.”

Mary Buckley, interim chief executive officer, IDA Ireland, calculates Ireland’s success in attracting US foreign direct investment (FDI), in an annual American Chamber of Commerce Ireland report.

She points to total employment in IDA client companies in Ireland now standing at 301,475, a 9 per cent increase on 2021. Job losses remained at historically low levels with 8,407 recorded in the past year giving a net jobs total of 24,019 for 2022.

“The activities of US multinational companies supported by IDA in Ireland make a crucial contribution to our FDI success. The bulk of FDI in Ireland in 2022 once again came from the US — 167 of the 242 investments won; 103 of those 242 investments won were new-name companies, investing in Ireland for the first time. US companies like Okta, WorkFusion and Gong were among the new investors while established companies such as Pfizer, Workday, Abbott and Citi numbered among those that announced the significant expansion of their activities in Ireland.

“FDI is often measured in terms of job creation, but the benefit of these multinationals’ presence here goes considerably over and above their direct and indirect employment contribution,” says Buckley.