The resilience of the Irish economy to current global economic shocks and seismic shifts has enhanced Ireland’s competitive advantage in attracting multinational investment.
Inward investment in Ireland remained strong throughout the Covid-19 pandemic and Brexit turmoil, with FDI employment reaching record levels in 2021. As the global economy braces itself once more amid the brutal invasion of Ukraine by Russia, Ireland is again proving itself as a safe and trusted partner for US businesses. In a recent survey of our member companies, 95 per cent of respondents said they have a positive view of Ireland as an investment location.
The two-way US-Ireland trade and investment relationship has never been so strong. In 2021 there were over 900 US multinationals with operations in Ireland, employing over 342,000 people directly and indirectly and spending more than €27 billion in the Irish economy each year.
The success of US multinationals in Ireland contributed to the country experiencing one of the strongest economic rebounds globally in 2021, with the economy expanding by 15 per cent. This growth is expected to continue in 2022, with the OECD predicting that the Irish economy will grow by 5.4%, well above the 2.7 per cent growth predicted for both the EU and euro area.
While Ireland’s economy is expected to grow this year, we are conscious that the war on Ukraine will have significant impacts on businesses, particularly around energy security and energy costs. Ireland produces approximately 27 per cent of our natural gas demand domestically and the majority of the rest of our fuel supply is imported from Britain. However, while Ireland is not dependent on fuel from Russia, the heightened demand within other countries for alternative oil and gas sources will put pressure on supply, meaning that Irish fuel prices are likely to remain volatile.
In meeting our energy security needs, it is essential that sufficient capacity exists within our energy grid to cater for both current and future power needs while allowing us to meet our climate targets. AmCham believes that with increased investment in our energy grid and infrastructure, the opportunity exists to increase capacity, deliver energy security, and ensure the development of energy from renewable sources. Given the need for energy security, combined with the current volatile energy market, AmCham believes Ireland must move faster to increase its domestic energy production from renewable sources, including wind, wave and solar power. Such action will play a critical role in achieving our sustainability goals and in enhancing Ireland’s attractiveness for future inward investment.
Quality of life
In addition, Ireland’s skilled and talented workforce is among our top competitive advantages when it comes to attracting US FDI, particularly as countries globally are experiencing skills and labour shortages. Ireland has one of the most highly educated workforces in the world, and proportionally has the fourth most internationalised workforce in the EU. Ireland also has the second highest quality of life globally, according to the UN Human Development Index.
This competitive advantage is further enhanced by our RD&I ecosystem, which enables an exceptional level of collaboration between industry and academia, supporting firms to develop innovative products and services.
Continued investment in physical and digital infrastructure will ensure our regional locations remain attractive for both talent and US FDI. The strength of our regional locations is already reflected by the fact that more than half of all multinational investments in 2021 went to regions outside of Dublin.
Ireland has strong air connectivity links, with connectivity to the US and Europe from Shannon and Dublin airports and connectivity across Europe from Ireland West Airport Knock and Cork Airport. Ireland also has extensive national road, rail and bus connectivity, and ports to serve markets in continental Europe.
AmCham believes the continued investment in the delivery of housing, the roll-out of the National Broadband Plan, advancing digitalisation and cybersecurity, and improving Ireland’s transport infrastructure will be important in ensuring Ireland remains a competitive location for inward investment.
As we approach US Independence Day, and Ireland’s forthcoming 50th anniversary of EU membership, we celebrate the deep US-Ireland trade relationship that continues to grow and flourish. Ireland understands better than most the importance of the EU’s shared values of human dignity and human rights, freedom, democracy, equality, and the rule of law. These shared values enabled the creation of 342,000 direct and indirect jobs by US multinational companies in Ireland and helped us to build a global location of choice for talent and innovation. AmCham Ireland expresses our solidarity with the people of Ukraine who are so bravely defending the liberties and values that have made these achievements possible.