August 31, 2011
By Joe Leary
Special to the BIR
At least one segment of the Irish economy is doing very well this year -- exports of goods and services are way up, largely due to American companies doing business in Ireland. Some of the largest American corporations in the world and many smaller ones have chosen Ireland as their European base of operations while employing over 100,000 Irish to run their businesses. Another 300,000 Irish are employed by Irish companies to supply and service the 500 American businesses who have located in Ireland.
The Export/Import figures for June and for the first six months of 2011 were released last month. They showed a growing surplus for exports over imports, which are increasing year over year. The surplus for June was 4.08 billion euro and for the first six months of 2011, 38.6 billion euro. And exports were also up a very healthy 9.1 percent for the year. American companies were responsible for roughly 75 percent of that growth.
IDA Ireland in Dublin is primarily responsible for recruiting these companies and assisting them with their decisions. A company that chooses Ireland to help expand its business can rely on the IDA to make the move as easy as possible. IDA, rated as one of the top inward investment groups in the world, has John Conlon, executive vice president of IDA Ireland in New York, heading a team of 21 executives stationed in critical decision making areas of the United States – New York, Boston, Atlanta, Chicago, San Francisco, and Los Angeles. These men and women are all Irish themselves and among Ireland’s best and brightest.
In an interview with the BIR, Conlon said, ”We are up 20 percent over last year in bringing American companies to Ireland. In the first 6 months of this year, Amgen, Google and Intel, just to name a few, have spent hundreds of millions of dollars increasing their investments in Ireland.”
Skeptics should heed the words of American executives on the IDA website if they doubt the appeal of Ireland. Brian Ruane, CEO of Alternative Investment of BNY Mellon in New York, says, “We have 1,700 employees in Ireland. The labor pool is exceptional and Ireland is a very positive place to locate our business.”
Adds John E. Kelley, senior VP and director of IBM research: “We get support from the Government whenever we need it quickly and have an excellent relationship with Irish Universities to assist our research projects. Ireland has wonderful technical people, some of the most talented in the world.”
Cormac MacDonncha of ThermoKing in Galway with 500 employees said, “The quality of life in Ireland is key to attracting talent and, additionally, the Irish are extremely efficient. In terms of hours per unit required to produce a unit they are half of others.”
And Jim Peterson, CEO of Microsemi (close to a billion dollar company), says Ireland is “our European headquarters. If you ask me why Ireland, I’ll tell you it’s because of IDA Ireland. They have become our strategic partner. We work very well with the government.” Richard Finn, managing director of Microsemi, says Ireland has the best-educated talent pool compared with similar operations in the US and Europe.
There is no doubt that Ireland is suffering. Its 14 percent unemployment rate refuses to go down. Taxes are higher and salaries are lower. But there is also no doubt that Ireland is changing for the better. The banking insolvency, the housing foreclosures, the unscrupulous developers have all been revealed. Hard measures have been taken to prevent such risk- taking and opportunism from occurring again. It was Ireland’s tiny size and an unbelieving leadership that made it so vulnerable.
Today, housing prices are way down, business space rental costs in Dublin are down 52 percent, employee salaries are falling, the cost of living is down, electricity costs for manufacturing are lower than in Europe, all of which paints a more attractive picture for American companies seeking to expand their investments in the country.
IDA’s John Conlon is enthusiastically proud of the work his team is accomplishing. “When I go in to talk with a new prospective company I can point to a very successful track record. Nine out of the world’s top ten Biotech companies for instance have located in Ireland. The companies are very pleased with our talent pool. We have the youngest population in Europe with a high degree of computer proficiency and appreciation of technology, including the most cutting edge software applications. Our universities are another valuable asset doing research and advanced biomedical study.
“Our corporate tax rate is important also. At 12.5 percent, it allows companies to reinvest their profits and help them grow.
It’s a big success story. We are up significantly in each of the last three years.”