FRIDAY INTERVIEW: Barry O'Learychief executive, IDA
IRELAND’S REPUTATION may have taken a battering internationally but IDA Ireland chief executive Barry O’Leary is not taking the situation lying down. He and his executives are well over halfway through a “proactive campaign” to meet the chief executives and chief financial officers of the top 65 multinationals that have an Irish base – which between them account for about 80 per cent of employment at IDA-backed firms – to reassure them Ireland is still open for business.
“We are not waiting for comments or queries from them. We are very much going out and the conversation is addressing right up front in the first few minutes the banking bailout, the budget deficit, and what caused all of this.”
O’Leary maintains the factors that attracted exporting firms to Ireland in the first place are still in place: the talent pool, tax rate, a strong track record in foreign direct investment (FDI) and our technology capability. Added to that, Ireland’s competitive position has also improved, thanks to a reduction in costs.
The upshot is that the IDA is looking at a stronger flow of investments than at any time since 2002/03. Already this year, household names including Intel, Google and Paypal have announced investments and expansions, while lesser-known names such as Murex, Valeo, Quest Software, Northern Trust and American Medical Systems were attracted here for the first time or added more jobs. That follows a rebound in 2010 when IDA-backed firms created 11,000 new jobs, well in excess of the 4,615 positions generated in 2009.
It must be frustrating for O’Leary, though, that 2½ years on, the banks are still not fixed and the State is labouring under the weight of sovereign debt?
“You would like that volatility wouldn’t be there,” says O’Leary, diplomatically. He admits that Ireland’s competition for investment “wouldn’t be shy about highlighting Ireland’s difficulty”.
“Thankfully it hasn’t impacted on the level of business we are winning,” says O’Leary. “It’s tough in the current environment, but I can’t ever remember it being an easy job attracting foreign investment. ”
Although the agency has added offices in the growth markets of China, India and Brazil in recent years, the US still accounts for 72 per cent of overseas investment by value, and he expects it to be the dominant force for many years to come.
The nature of investments has also changed as Ireland has attempted to move up the “value chain” by attracting research and development-type roles rather than product assembly or basic call centres, which tended to bring larger number of jobs.
“I don’t know if there was ever a time that you got many of those ‘thousands of jobs’ announcements,” says O’Leary. “But in defence of that, when Google came to Ireland, I think it was announced for a couple of hundred jobs; they have two thousand today.”
In a similar vein, such players as Ebay/Paypal, Activision Blizzard, Wyeth and State Street all started with small projects but are now significant employers here.
Despite comments at home about the quality of graduates, O’Leary says the feedback he gets on the quality of Ireland’s workforce is “ exceptionally strong”. Although he believes more could be done to retrain unemployed people for the job opportunities his clients are creating, he says companies set up here in many cases to attract talent from all over Europe.
“The hiring market for skills is Europe rather than the island of Ireland ... so be it. Those you are bringing in are paying their taxes here, renting apartments, they are spending their money, etc. The important thing is that Ireland is a place where you can assemble those teams.”
In the job for just over three years, O’Leary has already had to deal with three different ministers for enterprise (four technically, but O’Leary admits there was no interaction with Mary Hanafin following her appointment in the dying days of the last administration) and must be looking forward to some stability under the new coalition, where Fine Gael’s Richard Bruton has been installed as Minister for Enterprise, Jobs and Innovation.
The IDA regularly brings the Minister for Enterprise on international road trips to meet potential investors, so how important is the choice of that person? “It’s very, very important that companies have a confidence level in who the Minister is and that the person is in tune with the business language,” says O’Leary. “That’s really, really important.”
The Coalition has committed to reducing the number of State agencies and the notion of merging the IDA with its sister agency Enterprise Ireland, which promotes indigenous exporting business, has to be a consideration. Attracting FDI can be a long-term game though – both US networking giant Cisco and German software firm SAP were courted for almost 20 years before committing to Ireland – so O’Leary believes cost-cutting needs to take this into consideration. He concedes there is scope for more sharing of services with Enterprise Ireland and notes that quite a bit happens already in areas such as intellectual property, tax and property services. The two agencies also share some offices abroad.
Despite the IDA’s public-sector status, O’Leary is keen to point out his staff have targets to meet every quarter. He even has a “blue space” team targeting emerging areas of business. He himself is constantly on the move. This year he has already spent three weeks in the US, and will spend next week there as well. He has made two visits to Germany and plans three trips to Asia before year end.
“Face time” with clients is the most important thing for his agency. “You don’t get 100 clients to come to a dinner and have meaningful interaction. Our business has always been one-to-one dealing with key executives.”
What would make the job even more challenging would be a change in Ireland’s low corporate tax rate regime, which is a target of many in Europe. “The 12.5 per cent corporation tax rate is exceptionally important. It’s a brand Ireland has traded on for many, many years and, above all, the certainty that brought. Disproportionately Ireland has way more direct investment than its competitors, so it’s very important.”
O’Leary says it is one of a mix of factors that makes Ireland attractive, but admits he would like to see the debate move on.
“How many times do you have to say we are not for turning?”
ON THE RECORD
Name: Barry O'Leary
Age: 60
Job: Chief executive, IDA Ireland
Background: An industrial engineer by training he did stints with Nestlé and the Smurfit group before joining the IDA in the late 1970s. He worked for the agency in Munich, Cologne, Dusseldorf and Frankfurt, before returning to Dublin in 2002 as IDA's director of Europe. He was appointed chief executive in 2008.
Family: Married with two sons.
Interests: Sport, Italian cooking, walking, holidaying in Ireland.
