US investment continues to enjoy growth in Ireland, says IDA chief

The country has become one of the top destinations for Foreign Direct Investment (FDI) in the world and has developed into the gateway to Europe for multinational companies looking to serve and grow their customer base.

Through its direct and indirect impacts, the contribution of Ireland’s FDI base is tangible, substantive and something we do not take for granted. IDA Ireland, as the national investment development agency established almost 75 years ago, partners with over 1,800 companies who have chosen to locate in Ireland. Collectively, they make a sizeable contribution to our economy and society through job creation, opportunity and career progression, innovation, local sourcing, global value chain integration and taxation.

IDA Ireland reported strong annual results for 2023 showing an increased number of investments, steady levels of employment across the FDI sector, robust regional investment, and strong performance across key transformation areas of research development and innovation, sustainability, digitalisation, and talent development.

There was a total of 248 investments into Ireland which are expected to deliver almost 19,000 jobs to the economy. A third of investments won, 83, were greenfield or first-time investments. IDA Ireland’s 1800 client companies employed 300,583 in 2023, holding above the 300,000 jobs mark for the second consecutive year.

The activities of US multinational companies (MNCs) supported by IDA Ireland make a crucial contribution to our FDI success. The bulk of FDI in Ireland in 2023 once again came from the US — 156 of the 248 investments won. 83 of those 248 investments won were new-name companies, investing in Ireland for the first time. Companies such as Dexcom, Kargo and Rippling were among the new investors, while established companies such as AMD, Analog Devices and Verizon numbered among those that announced significant expansion of their activities in Ireland.

A significant number of US headquartered IDA client companies have had operations in Ireland for decades. In that time, they have evolved and transformed to meet the needs of industry. They have continued to provide goods and services to customers in Europe and further afield from their resilient and innovative Irish bases, with many growing and adding to their mandates in Ireland despite the adverse international economic landscape.

For US companies, Ireland is an attractive entry point to the EU — the world’s largest single market with a labour force of 215m. From Ireland, companies gain access to a highly-skilled, English-speaking, flexible workforce that shares many cultural and historic ties with the US. 

Ireland’s attributes include ease of doing business, political stability, a common law legal system, a dynamic R&D ecosystem and an attractive, transparent, and stable tax regime that continues to resonate with overseas investors. In addition, Ireland offers US companies, in particular those in regulated industries such as pharmaceuticals, medical devices and financial services, access to the European regulatory system.

FDI is often measured in terms of job creation, but the benefit of these multinationals’ presence here goes over and above their direct and indirect employment contribution.

Their impact nationally and regionally to public finances, regional development, global value chain integration, spin-off indigenous enterprise, innovation and more, is clear by their level of expenditure in the Irish economy. The recent ABSEI (*) survey shows that expenditure within the economy by FDI companies increased during 2022 despite the prevailing challenging conditions. Payroll was up 12% to €22bn, Irish services and materials spend increased by 16% to €13.8bn and capital expenditure was up 49% to €15.5bn. Exports of €383bn represented an increase of 11% year on year. This resilience and growth from FDI has been an important contributor to our economy and the national finances.

We have experienced much change in recent years from the global recession in 2008 to the global pandemic, and considerable economic and political upheaval across the world. Responding proactively to change has been the hallmark of Ireland and IDA’s success and we will continue to be agile, resourceful, and committed in our aim to continue to attract FDI to Ireland.

The international environment for attracting FDI is increasingly challenging and volatile, and the severe headwinds facing the global economy in 2024 requires us to work harder than ever in the year ahead to win new investment. Ireland’s FDI base of companies is subject to these same headwinds. IDA Ireland will remain close to our clients at this time of uncertainty and support them as they review their global cost base to remain competitive.

Winning new activities and anticipating changes in technology and business models has served Ireland well and will be just as essential as this decade unfolds. While the twin transition of digital and green transformation presents challenges, it is also creating investment opportunities aligned with many of Ireland’s key strengths. 

As Ireland embraces technological change, seeks to become a leader in areas such as AI and Industry 5.0, and sets a path towards net zero emissions, our partnership with US companies can once again be central to our success in promoting growth that is sustainable, resilient, and transformational.

IDA Ireland continues to work with our client companies to support their drive for competitiveness as they move through the twin transition. Transformation focused on research development and innovation, sustainability, digitalisation and talent development, is critical to remaining competitive, reflected in our partnerships and conversations with client companies and our stakeholders.

As we move into 2024, it is important to recognise that we continue to face domestic as well as global challenges. It is acknowledged that Ireland’s carrying capacity and infrastructural development, particularly in housing and energy supply, needs to be accelerated. 

Under IDA Ireland’s current strategy, Driving Recovery and Sustainable Growth 2021-2024, our focus remains on winning investment for Ireland and sustained regional development. During the next 12 months, we will be developing a new strategy to underpin Ireland’s FDI offering. Paramount to that will be the partnerships that we build with our regional and national stakeholders and client companies to support them in their growth and transformation to deliver jobs and broader economic benefit to Ireland.

(*) Source: DETE's Annual Business Survey of Economic Impact (ABSEI) for 2022. The ABSEI provides insights into the impact of IDA Ireland client companies on the Irish economy.