Ireland remains one of the world’s leading destinations for international investment, with business confidence remaining exceptionally strong, but the priorities of the investment decision makers have evolved significantly in recent years. That’s the view of American Chamber of Commerce (AmCham) Ireland chief executive Paul Sweetman.
“The challenges shaping investment decisions today are different to those that existed just three years ago,” he says. “The next phase of our success will depend on our ability to strengthen competitiveness, talent, infrastructure and innovation, while we respond to a rapidly changing global trading and geopolitical environment.”
The changing nature of those challenges is evident in AmCham surveys. “We do member surveys every three or four months and we’ve been able to track how those challenges have changed over time,” he says. “For example, in our Q1 survey in 2023, housing was the top challenge to expansion, with 58 per cent of members identifying it. Skills shortages came in at 14 per cent and talent attraction came in at 3 per cent.”
The Q1 2026 survey results were quite different. “Cost competitiveness came in as the top issue, at 27 per cent, then housing at 24 per cent. What’s interesting here is that in 2023, no respondents identified cost competitiveness as the number-one challenge to expansion. But three years later, it had become the leading challenge identified by members. Housing, while remaining a significant challenge, declined from 58 per cent to 24 per cent.”
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This suggests that the competitiveness agenda is broadening beyond housing alone and increasingly encompasses cost competitiveness, talent and productivity, he adds. “Business leaders are increasingly focused on cost competitiveness, talent attraction, specialist skills and infrastructure when making investment and expansion decisions.”
While these issues can’t be dealt with overnight, it is important that Ireland is seen to be doing something about them. “We must remain a step ahead of competing jurisdictions, recognise where the problems are, and then move quickly on them,” says Sweetman. “Companies investing in Ireland will recognise whether we’re moving on them at speed or at a pace that’s slower than competing jurisdictions. And that in itself can be a decision point for investors.”
He believes Ireland’s presidency of the Council of the European Union offers an opportunity to shape the European competitiveness agenda. “We can do that by focusing on regulatory simplification, on innovation and productivity. They must be central themes of our presidency. And we can also play a very strong role in strengthening transatlantic economic co-operation. Being a bridge between the EU and the US has been a long-held policy pillar for the American Chamber and the EU presidency provides an opportunity to double down on that.”
That focus on competitiveness and innovation must continue beyond the presidency, he adds. “The momentum we build over the coming six months must be maintained into the coming years.”
Talent remains Ireland’s greatest competitive strength, says Sweetman. “Interestingly, while talent is our number one competitive advantage, the availability of skilled talent is now considered the greatest risk to continued FDI attractiveness over the next five years by our members.”
He points out that Ireland is a victim of its own success in this respect, at least to a certain extent. “The skills gap is a product of growth. As a growing economy, as a growing sector, there will be increased demand for available talent and skills. When you look at US companies’ employment base in Ireland, it has been growing steadily and now stands at 245,000 people, up from 210,000 just 12 months ago.
“There is a skills gap that inherently exists because of the growth within the sector. But talent is incredibly important, and companies need to be able to have certainty over the talent pipeline. We have all of the elements in place to maintain talent as a top competitive advantage, but Ireland must continue investing in education, skills development, apprenticeships and industry collaboration.”
The skills profile required by investors is also changing rapidly. “Demand for AI, machine learning and advanced digital skills has accelerated significantly. When we surveyed our members back in 2023, 16 per cent identified a skills gap in machine learning and AI, that had doubled to 32 per cent in Q1 this year.
“By investing in those skills, we have an opportunity to position ourselves within Europe as a leading hub for AI-enabled growth. We can be a leader in AI adoption – not simply the development of AI but how to use it at a practical level within businesses and organisations across all sectors, from financial services through to advanced manufacturing, as well as the technology sector itself.”
Other risks to Ireland’s attractiveness for investment identified by AmCham members include housing, infrastructure deficits, global tax policy and geopolitical instability.
“We’re managing risks in a more uncertain world, the global investment environment has become more complex and there are a lot more countries competing for investment,” says Sweetman. “It all boils down to focusing on what we can control. We need to keep our shoulders to the wheel in terms of dealing with domestic challenges like housing and infrastructure whilst also bolstering our strongest competitive advantages in areas like talent.”
He concludes by noting that in addressing these challenges and risks, Ireland is starting out from an exceptionally strong position.
“We asked our members in our most recent survey if they would choose Ireland today if they had the opportunity to make their initial investment decision again, and 95 per cent said that they would. Nine out of 10 companies reported a positive view of their investment in Ireland at headquarters level while 88 per cent expect to increase or maintain employee numbers over the coming 12 months.
“There is positive business sentiment and confidence there, but we must continue to focus on bolstering our competitive advantages while we address the challenges facing us.”
