Major Report "Built to Last" launched
Ireland-US commercial linkages stronger than ever according to American Chamber Report
US Investment in Ireland totals $190 billion and accounts for one-quarter of Irish GDP
Read Built to Last Here (PDF)
Thursday, 29 September 2011 A new report commissioned by the American Chamber of Commerce Ireland has revealed that US investment in Ireland is now worth $190 billion and has grown five fold over the past decade. Ireland's share of total U.S. investment in Europe has risen from 5.2% to 8.7% over the same period and now accounts for one quarter of Irish GDP.
Authored by Wall Street economist and strategist Joseph P Quinlan ‘Built To Last - The Irish US Economic Relationship' is a comprehensive report on Foreign Direct Investment (FDI) and the US/Ireland Economic Relationship.
The report was launched today by Minister Richard Bruton TD, Minister for Jobs, Enterprise & Innovation, who said:
"The relationship with the United States is of vital importance to Ireland and this government is determined to work hard to strengthen our links to the benefit of both countries. Since taking office I have led two trade missions to the United States, one with the IDA to visit the dynamic technology companies of the west coast, and one with Enterprise Ireland and 67 Irish exporting companies to the fast-growing markets of the South East."
"It is estimated that US investment in Ireland now accounts for over one-quarter of our GDP", said Gerard P. Kilcommins, President of the American of Commerce Ireland. "And it has also played a significant role in the dramatic growth in that GDP, which we witnessed in the three decades between 1980 and 2010. During that period, our GDP increased tenfold, bringing us from one of the lowest per capita income levels in Europe to one of the highest."
Joseph Quinlan, author of the Report, also pointed out that the relationship is very much bi-directional in nature. "It is not all one-way traffic. Irish companies in the US are making their presence felt as well, with FDI from here to there reaching a record $8 billion last year. That brings total Irish investment in the US to more than $30 billion for the first time. Even more impressive is the jobs total. It is estimated that Irish companies employ some 120,000 workers in the US - another record high."
Minister Bruton added "As the report concludes, this relationship, which was once based entirely around the great success story of US investment in Ireland, is now very much a two-way street. I am determined that government will do everything possible to support our expanding indigenous companies as our recovery will ultimately depend on their success."
Highlights from the Report include:
- US firms have invested more capital in Ireland since 1990 (some $189 billion on a cumulative basis) than the four BRIC nations combined ($159 billion).
- In addition, US FDI to Ireland totalled $17.7 billion in the first half of the year, a rise of 49% from the same period a year ago.
- Globally, only the Netherlands, Canada and the United Kingdom attracted as much US FDI as Ireland in the first half of this year.
- Exports, the bulk of which are from multinationals, continued to expand, underpinned by declining prices at home (energy, office rents, construction, and, in some cases, wages) and by the exporting presence of leading global companies like Boston Scientific, Abbott, Medtronic, Pfizer and MSD in health sciences, tech firms like HP, Microsoft, Google, Intel, IBM, Apple, Dell and services firms such as Bank of America Merrill Lynch, Citi and PayPal .
Ireland was one of the few nations in Europe in 2010 which actually posted an increase in the number of FDI projects. The number of projects in Ireland totalled 147, up 18% from the prior year.
The Report also points to the key challenges confronting Ireland at present. These include maintaining global cost competitiveness in the face of the rise in world commodity prices, keeping pace with the IT advancements of Chinese and Indian labour forces, maintaining attractiveness to global ICT and Life Science leaders and dealing with the impact of today's global tectonic shifts on current or future U.S/Ireland commercial linkages.
Addressing these challenges, Mr Kilcommins said: "To the maximum extent possible investment in education must be maintained. Cuts now will not only make a future generation pay a price for a crisis not of their making but they would also have far-reaching consequences for our ability to attract FDI. Of course this does not mean that we should not critically review the fitness for purpose, quality and efficiency of our overall education system. To put in context the importance of education, even if we had the lowest corporation tax rate in the world, it would not make up for an absence of the qualified workforce required by modern companies."
Mr Kilcommins also noted the threat posed by emerging economies. "These are the countries which possess many of the obvious advantages in terms of low costs and high educational standards which Ireland enjoyed three decades ago. When we look to the future to the knowledge-based industries that we hope to thrive in, these countries are going to be our major competitors."
"Our future prosperity will be critically dependent on our ability to compete with these emerging economies in the areas of alternative and renewable energy, green tech, life sciences and other high-end technologies. And our 12.5% rate of corporation tax; our highly skilled, qualified and flexible workforce and our ability to compete internationally on costs and productivity will again be the foundation stones of our success in this regard."
The Report finds that the continued economic clout of the European Union, Ireland's deep ties with many of the most dynamic multinationals in the world, the nation's strategic focus on developing cutting-edge sectors and the country's proven ability to adapt and remain flexible in the face of shifting global tides will sustain and strengthen commercial linkages between the US and Ireland.
"Built to Last is the best way to characterise Ireland/US relations", says Joseph Quinlan. "It is interesting to note that, since the financial crisis erupted, Ireland/U.S. commercial linkages have become stronger not weaker, deeper not shallower. The mutual dependence between Ireland and the United States has grown, not shrunk over the past three years."
"They say that it is in times of need that you truly know who your friends are; I think we've certainly found that out over the past few years", Mr Kilcommins added.