‘All roads don’t lead to Dublin anymore’
The impact of US foreign direct investment is felt in almost every corner of Ireland
Mairead Connolly of PwC: “We are seeing a trend for companies to locate on the western seaboard, from Sligo to Cork, and around to the south-east, because they know it is harder to keep staff in Dublin.”
For Sligo town native David Kenny, the 2013 decision by US furniture ecommerce retailer Overstock to locate its software development team in Sligo town enabled a return home from a career spent working in fintech in the UK and Netherlands.
Kenny was the company’s first hire here. Today, he oversees a team of 45 and recently announced the creation of 100 new jobs, working not just on ecommerce technology but blockchain and machine learning too.
This is because Overstock, which was the first major retailer to accept Bitcoin, has its own venture-capital wing and a start-up incubator, which the team in Sligo can work on.
Locating in Sligo gives the company access to high-calibre software developers, including first pick of talent emerging from Sligo Institute of Technology each year. It also enables the company to attract talent from further afield, particularly those attracted by the opportunity to live in a coastal location with affordable accommodation.
“We’ve been inundated with very high-calibre candidates for our current recruitment drive. What appeals to many of them is the combination of interesting technology, work-life balance and a cost-effective location,” says Kenny.
It’s a story replicated in communities across the country, with IDA Ireland on track to deliver an increase in regional investment of between 30 per cent and 40 per cent by the time its current-five year strategy ends next year.
Over the past 3½ years, it has made 344 investment announcements, 51 in 2018 alone. Currently, 58 per cent of all multinational corporation (MNC) employees in Ireland are based outside of Dublin, worth €2.5 billion annually to the regional economy.
Ireland’s third-level sector plays a major role in this success story, particularly its institutes of technology, which work closely with inward investors to ensure the skills pipeline is fit for purpose.
Having a third-level sector that works with industry to tailor courses in this manner is something that is very attractive to US companies researching locations, says Anne-Marie Tierney-Le Roux, IDA Ireland’s regional director.
Critical mass of population and the presence of a university or institute of technology support investment decisions such as the recent one from medical device company Edwards Lifesciences, which will bring 600 jobs to Limerick.
Very many US FDI investors go on to take sites in multiple locations, says Tierney-Le Roux, citing Abbott, Paypal and Xerox by way of example, as well as pharma giant MSD in Carlow, which recently announced a second plant at its facility in Carlow, which will bring 170 new jobs. It’s a trend seen in services too, including financial services companies such as State Street and BNY Mellon, with sites in locations such as Wexford and Cork, in addition to their Dublin operations.
Biopharmaceutical company AbbVie employs more than 600 people at five manufacturing and commercial sites across Ireland. Last year, it announced the $139 million expansion of its manufacturing facility in Sligo to support the growth of its oncology pipeline, creating about 100 new jobs.
There is a perception that multinationals hoard talent. Not so, says Mark Gantly of Hewlett Packard Enterprise (HPE). In fact it’s the opposite, he says, citing HPE by way of example. It has its origins in early technology pioneer Digital Equipment Corporation, which arrived in Galway in 1971.
Though it ultimately closed, its legacy lives on not just in HPE but in a “digital diaspora” still in evidence across a range of high-tech sectors today.
Digital was “almost like a university”, he reckons, in that it provided very many of today’s key personnel with management skills and industry knowledge. This in turn helped spark entrepreneurship, with very many start-ups spinning out of US MNCs such as Digital and Motorola.
“And when start-ups grow, scale and look to exit, it is very often MNCs that buy them,” he points out. “It’s not just talent that MNCs come to Ireland for, but interesting opportunities and IP too. There is a virtuous circle here between academic research, start-ups and MNCs, which is a nice story.”
HPE employs 300 people in its operation in Galway. Very many MNCs locating outside of Dublin find it provides them with a competitive advantage in the battle for talent in terms of factors such as housing, education, healthcare and outdoor pursuits, he says.
“We are seeing a trend for companies to locate on the western seaboard, from Sligo to Cork, and around to the south-east, because they know it is harder to keep staff in Dublin, where MNCs are so close together, often socialising together, so that there is much more of an opportunity for employees to jump from Facebook to Google, ” says Mairead Connolly, a partner at PwC.
“In the regions, MNCs are more spread, so are more likely to get access to a pool of local talent and retain them. Also, the country’s universities and institutes of technology have upped their game – and they were always good – at collaborating even more closely with industry, including providing programmes for students to go on internships, which allows MNCs have access to all that talent at a very early stage.”
Improvements in physical infrastructure are helping too, with better road links from Limerick to Galway and, recently announced, Cork to Limerick. “All roads don’t lead to Dublin anymore,” says Connolly. “There has been a real effort to counterbalance the weight of Dublin.”