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Major FDI Report Launched

The Irish-US Economic Relationship remains structurally sound and strong despite the deterioration in the global economic outlook over the past 12 months, according to a new report (PDF) commissioned by the American Chamber of Commerce Ireland.  US investment into Ireland in 2011 amounted to $30.5 billion, up 9% on the previous year and was the second highest level of US investment in Ireland on record.
 
Authored by Wall Street economist and strategist, Joseph P. Quinlan, ‘The Irish – US Economic Relationship 2012’ is a comprehensive report on Foreign Direct Investment (FDI) and the US-Ireland Economic Relationship.

 
The Report will be launched at a breakfast tomorrow morning by Minister Richard Bruton TD, Minister for Jobs, Enterprise & Innovation who said:
 
“Deepening and developing our economic ties with the United States will be crucial for our economic recovery and forms a major part of the Government’s plans for jobs and growth. The excellent report published today by the American Chamber shows that our performance continues to improve, with a 9% increase in US investment here in 2011. Challenges remain for Irish companies doing business in the US, but it is important to recognise that such companies employ over 120,000 people there. Measures to assist businesses on both sides of the equation – US companies seeking to invest in Ireland, and Irish companies seeking to expand their operations abroad – are being implemented as part of the Action Plan for Jobs, and I am determined to ensure that we can build on these achievements to create the jobs we need.”
 
Mr. Peter O’Neill, President of the American Chamber of Commerce Ireland said; “The economic output of US multinationals in Ireland is estimated to be $57.5 billion, accounting for 26.5% of Ireland’s GDP.  That is a remarkable metric of the value and importance of the economic links between our two countries”. 
 
Joseph Quinlan, author of the report said; “Despite the stiff headwinds, the ties that bind Ireland and the United States together have generally become stronger, not weaker over the past year.  Ireland has done an admirable job of differentiating itself from other financially impaired countries within Europe and this has not gone unnoticed by the US investment community”.
 

Highlights from the Report include:

  • The stock of US investment in Ireland soared by nearly 20% in 2011, rising to $188.3 billion (on a historic cost basis).  Behind this surge: more investment in Ireland’s so-called ‘information sector,’ which rose nearly 30% in 2011
  • Combined US inflows of $58.5 billion in 2010 and 2011 represent the strongest two-year period of inflows on record, a surge in capital and confidence from the US
  • The relationship is two-way.  While Ireland’s foreign direct investment stock in the United States dropped roughly 4% in 2011, to $25 billion, Irish affiliates remain the 10th largest foreign employer of US workers, employing 120,000 people.

“Ireland might not have much control over the ultimate end game of the sovereign debt crisis but we do have the wherewithal to determine our own economic future.  We cannot rest on our laurels. We need to maintain and develop our favourable tax regime, robust R&D climate, government support for innovation and other pro business policies that set the country apart from our competitors in Europe”, said Peter O’Neill.
“Ireland might not have much control over the ultimate end game of the sovereign debt crisis but we do have the wherewithal to determine our own economic future.  We cannot rest on our laurels. We need to maintain and develop our favourable tax regime, robust R&D climate, government support for innovation and other pro business policies that set the country apart from our competitors in Europe”, said Peter O’Neill.
  

Building on Strong Foundations

Protecting and strengthening this powerful economic relationship is central to Ireland as an open, trading economy.  The Report says the challenge for Ireland is to build on its already strong foundation of its talent pool, increasingly competitive cost base and its pro-business environment.
 
The report states that Ireland needs to ensure its niche in the global value chains of US multinationals.  This is critical given the increasing numbers of ‘technology and manufacturing capable’ nations, giving more multinationals more opportunities to spread and leverage their global operations.  As part of this effort, Government policies must continue to fund and support investments in education and research, development and innovation, with clear initiatives designed to enhance the country’s capabilities in the industries of the future; life sciences, including molecular manufacturing, robotics, nanotechnology, bio-manufacturing and various clean energy sectors.
 
“Continuous upgrading of our physical infrastructure, retraining and up-skilling our labour force remains critical.  Investment in talent, through an education system which is fit for purpose in the 21st century, is ultimately vital if we are to continue to attract high levels of FDI”, said Peter O’Neill.
 

Positioning for Future Growth

The American Chamber’s Report suggests that some of the best global business opportunities exist in Europe’s extended periphery – defined as Central and Eastern Europe (including Russia), the Middle East, Turkey and North Africa.  This is a massive opportunity for Ireland to capitalise upon. 
 
“Having successfully positioned itself as the beachhead for exports into mainland Europe, the challenge now is for Ireland is to achieve that same strategic positioning for these budding markets. This is a role it has yet to assume evident by minimal trade ties between Ireland and the developing nations in general and developing Europe in particular”, said Mr. Quinlan. 
 
Joseph Quinlan concluded: “The race to remain globally competitive never ends.  Ireland understands this better perhaps than any other state in Europe.  Rising to a challenge is something that Ireland excels at, as we have seen over the past four years of this current economic crisis.  Looking to the future, continued deep linkages with US multinationals, combined with tough internal adjustment measures implemented by the government suggests that Ireland will come out of the crisis stronger and more competitive”.

 

The report was be launched at a breakfast that has been kindly supported by Bank of Ireland Corporate Banking

 

Ends.