This morning I was fortunate enough to attend the UCD Business Alumni Inward Investment Index breakfast briefing, organised by UCD Smurfit School and hosted by Mason Hayes & Curran on Barrow St.
The theme of FDI is one that has become a bit old hat in Ireland of recent years, and why not, we seem to have gotten very good at it. Private intermediaries, like MHC and government agencies, like the IDA, are demonstrating that government and private business can work well together. As a group, those involved in FDI are wondering, what next? Is there a next stage and how will it play out in the future?
The issues discussed today by the panel* demonstrate how focused FDI strategy must be on sustainability and development, not just more of the same.
Talent over Tax
Ireland is world renowned for its favorable corporate tax rate, something we often take a bashing for by our European peers. They say it sets us apart from other EU nations, we say there is more to Ireland. Apparently, this is true. Martin Murphy, MD of HP Ireland, was eager to point out that talent is crucial to their business in Ireland. As attractive as the lower tax rate is, the workforce is central to HP’s continued growth in Ireland. HP work closely with universities in Ireland to ensure the grads produced are in line with their requirements. Brendan McDonagh of the IDA has a sense that once the Tax person arrives in the decision making process, the deal is pretty much there.
US vs RoW
Following from a question on the floor one of the concerns across the panel is the US centric FDI in Ireland. Upwards of 60% of inward investment comes from the US. This is something the IDA is acutely aware of having developed a slightly different approach to developing connecting in RoW vs USA. It seems that we are not quite as well known for FDI outside of Ireland and USA as we thought we were, which was backed by the research of Prof. Eamonn Walsh of UCD.
What have the Banking Inquiry and ICT companies got in common? They are both in the news every day in Ireland! It seems that a new tech company launches in Ireland daily of late (due to the fantastic work of the IDA) but there is more to FDI than ICT. Financial Services is a close second and, although a more conservative industry, international FS companies do still come to Ireland. There is some concern regarding the upcoming Brexit referendum which on a micro level will create jobs in Ireland but ultimately will be detrimental to our economic health as the UK remains our largest trading partner. I think we will see more FS announcement in the coming months.
It is clear the regions are still an issue when looking at FDI. The IDA have adopted the ‘if we build it, they will come’ strategy for property. €150m has been earmarked to develop sites for new companies coming to Ireland, with a strong focus outside of the in-demand Silicon Docks of Dublin.
Overall, it was a great event. The content was fresh, the panel upbeat and the attendees engaged. Philip Nolan and Mason Hayes & Curran played the host to a high standard as ever. Also, it is always good to connect with fellow alumni.