IDA positive despite heavy job losses

27-06-2007

by Ciara O'Brien

IDA Ireland has downplayed fears over job losses in Ireland in 2006, focusing instead on the contribution foreign direct investment has made to the economy.

Despite heavy job losses in the manufacturing sector, multinational firms are still a strong contributor to Ireland's economy. That's according to the IDA Ireland's annual report, which said that last year multinational companies contributed 135,500 jobs -- a rise of almost 3 percent on 2005 -- new capital investments of EUR2.6 billion, and new research, development and innovation (RD&I) projects.

"Foreign direct investment (FDI) continues to contribute strongly to the Irish economy and to growth, but in a broader way than before," said John Dunne, chairman of IDA Ireland.

The report indicated that investment in research and development (R&D) is also continuing to rise. Some 54 R&D investment projects were supported by IDA Ireland in 2006, representing funding of almost EUR470 million. This compares with EUR140 million in 2004 and EUR260 million in 2005.

Forty-six of these investments were outside of Dublin, as part of IDA Ireland's plan to encourage balanced regional development. Some 89 new investment projects in total were outside the capital.

According to IDA Ireland, Ireland is now "a global competitor for R&D investments from multinational companies", with investment at record levels despite intense globalisation and increased competition.

"Ireland is reaping the results of a concerted effort in government policy to build a substantial foundation of world class science and technology in our academic institutions and with a strong emphasis on business and academic collaborations," said Dunne.

Ireland has established itself as a top destination for medical technology investment, with growth seen throughout 2006, with Cordis in Cashel, USCI in Ballinasloe and Vistakon in Limerick just some of the firms making announcements about investment.

The IDA Ireland report also named digital media companies as part of a burgeoning industry sector in Ireland -- Amazon in Cork and Dublin, Google in Dublin, eBay/Paypal and Yahoo all showing growth in 2006.

In the ICT sector, Ireland's strong position was reinforced in 2006 by new investments from Cisco, IBM, Netgear, Sandisk and Trend Micro, to name but a few. The sector has strong influence from overseas firms, with 210 foreign-owned companies in the ICT sector in Ireland.

Commenting on the report, the Minister for Enterprise, Trade and Employment Micheal Martin said Ireland had performed strongly in 2006 in what was an increasingly challenging global economy.

"The competitive environment in which global companies operate is constantly evolving. While these changes have lead to some transfer of lower value activities out of Ireland, many overseas companies have also greatly expanded their operations," said Minister Martin.

"Companies are continuing to choose Ireland as a base from which they can oversee their operations in Europe, the Middle East and Africa. These activities not only further enhance the activities of foreign companies located in Ireland, they also have important knock-on benefits in other sectors in our economy such as supply, distribution and transport and create further investment/employment opportunities in the services sector."