Foreign Direct Investment (FDI) has been, and will continue to be, an integral part of Ireland’s economic development strategy. Foreign‐owned firms contribute substantially to Ireland’s exports, jobs, expenditure in the Irish economy and to Exchequer funds.
FDI plays a key role in stimulating the development of ‘new’ sectors in Ireland, in enhancing our research, development and innovation performance and in accelerating the achievement of critical mass within sectors.
IDA Ireland is the principal agency charged with attracting foreign direct investment to Ireland. IDA Ireland provides a wide range of supports and grants to both new and existing clients.
Foreign Direct Investment (FDI) has been a key contributor to Ireland’s economic development and growth through providing rewarding employment for over 250,000 people directly, knowledge transfer, and transformation of the enterprise base. Global competition for the attraction of FDI has intensified significantly in recent years.
Ireland benefits from its strong relationship with the US and continues to be successful in attracting mobile investments from the States. Ireland’s trade strategy highlights the potential to grow Ireland’s share of investments coming to Europe from a broader range of source markets.
“Ireland’s FDI policy is about competing successfully for the right FDI for Ireland’s economy; it is about ensuring that those investments are sustainable and contribute optimally to job creation and economic growth; and it is about ensuring that the decision to invest in Ireland remains strategically the best choice for the multinationals who are considering many alternatives today.”
The Department’s Policy Statement on Foreign Direct Investment in Ireland, Jul 2014, sets out the strategic FDI policy direction to 2020:
Key areas identified:
- Talent – Ireland must seek to become renowned internationally for the higher-order abilities of our workforce, in terms of problem-solving, creativity, design-thinking and adaptability. Ireland must be internationally known for developing and nurturing talent at all skill levels, and as an attractive destination for internationally mobile skilled people.
- Technology – we cannot be world-leaders in all areas, but Ireland must achieve a record of world-leading research and innovation in key areas, in close cooperation with industry.
- Great places to live and work – we must deliver a choice of attractive locations for investment. We must play to the strengths of our different regions, and provide regional locations that can offer sectoral strengths, collaboration with education institutions and Irish companies, excellent infrastructure and quality of life. A vibrant capital city with a smart business and living environment hosting a dynamic start-up community alongside corporate heavyweights will always be a core element of our offering
- Sectors – we must effectively identify and pursue opportunities in sectors where Ireland can attract investments and jobs – both adapt quickly and take leadership position in emerging areas and consolidate our strengths in existing areas of strength and; we should implement a more systematic approach to sector development, including the appointment of specific Cluster Development Managers/Teams
Other key areas:
- Improve collaboration and intelligence-sharing between Agencies, both in-market and in Ireland
- Pursue new FDI source markets, such as emerging economies; re-shoring/next-shoring strategies; opportunities arising from new trade agreements
- Target new forms of FDI, outside the traditional multinational corporation model so successfully targeted up to now – e.g. M&A, joint ventures, sovereign wealth funds, high net worth individuals, investment houses
- Implement a series of actions to position Ireland as a leading location for start-ups and fast-growing businesses
- Target a top-5 ranking for international competitiveness
- Continue to commit to the 12.5% corporation tax rate; continue to take proactive action on multilateral reform of the international tax system; continue to focus on certainty, stability and predictability for investors; and continue to look at ways in which our corporation tax regime can be highly internationally competitive, in the context of the challenges and opportunities provided by changes in this area
Ireland's inward investment promotion agency, IDA Ireland (Industrial Development Agency) has primary responsibility for the attraction and development of foreign investment by overseas industry in Ireland. Enterprise Ireland has responsibility for Food related FDI.
IDA Ireland has a network of overseas offices and works with the other enterprise agencies and embassy network to promote Ireland as the Best Small country in the World to do business.
IDA Ireland provides a wide range of supports and grants to both new and existing clients. IDA Ireland has a key role in seeking to win high value R&D investments for Ireland, by promoting collaboration between industry, academia, government agencies and regulatory authorities. It also funds in company R&D. Ireland’s strengthened national research ecosystem has enhanced IDA Ireland’s capacity to attract increased levels of high value R&D projects which qualitatively transform and deepen the roots of key multinationals here.
Its targets for the 5 year period 2010 to 2014 are set out in its Horizon 2020 strategy. These high level targets include 62,000 gross new jobs over the period, 25,000 net new jobs and 640 investment projects. In 2013, IDA Ireland reported 13,400 gross new jobs, over 7,000 net new jobs and 164 projects. The 7,000 net new jobs created in 2013 was the largest annual increase in over a decade. Total employment in IDA Ireland client companies now stands at 161,000.
Succeed in Ireland Initiative
In March 2012, the “Succeed in Ireland” initiative was launched to pilot a new way of attracting FDI projects to Ireland. The initiative is carried out by Connect Ireland in partnership with IDA Ireland and uses referral marketing techniques to generate new investment leads and land projects that create new jobs.
Economic Impact of Foreign Direct Investment
At the end of 2013 there were 161.112 people working in 1,098 IDA Ireland client companies. These companies continue to make a significant contribution to the wider Irish economy:
IDA client companies spent €20.818 bn the Irish economy, an increase of 4.9 % on the previous year. The expenditure of €20.818 includes:
- Payroll expenditure of €8,072, Expenditure on Irish sourced materials of €2.364bn,
- Expenditure of €10.381 on Irish sourced services by IDA client companies;