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R&D, skills and green energy keys to building on US-Irish partnership

Ireland’s R&D tax credit, focus on education and greater renewables investment form the basis for growth of the US multinational sector

Seamus Fives, president of the American Chamber of Commerce Ireland. Photograph: Dylan Vaughan

Seamus Fives
Thu Nov 23 2023 - 05:00

US multinationals are among the most innovative and technologically advanced companies in the world. There are currently more than 950 US multinationals located in Ireland, employing more than 209,000 people directly and a further 167,000 people indirectly.

I believe that to continue to build on this successful partnership we must continue to build our research ecosystem, ensure we are developing world class talent and deliver on the huge opportunity of green energy production.

The recent increase in Ireland’s research and development (R&D) tax credit from 25 per cent to 30 per cent is a clear sign to industry of Ireland’s commitment to becoming a global centre of excellence in research, development and innovation (RD&I).

For almost two decades, Ireland’s R&D tax credit has played an important role in encouraging companies to consider Ireland as an investment location for RD&I. The increase in the tax credit was a key recommendation in the 2024 Budget submission of the American Chamber of Commerce Ireland (AmCham) and is essential in continuing to attract high-value research and innovation investments to Ireland.

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Earlier this year, in AmCham’s FDI Insights survey, 45 per cent of respondents said they have a dedicated research function within their company structure in Ireland. In the same AmCham survey, 52 per cent of respondents said their organisation is currently undertaking one or more research projects in Ireland with AI, sustainability, medtech, cyber, pharmaceuticals and digital manufacturing being among the most popular areas for research.

In supporting this cutting-edge research, AmCham has recommended expanding the scope of qualifying fields for the R&D tax credit to areas including AI, data analytics, digitalisation and emerging technologies to support climate action and digital manufacturing. Increasing the number of PhD graduates and supporting greater research collaboration between academia and industry will be essential in ensuring Ireland is a destination of choice for research.

Strategic research investment decision makers are clear that the continued strengthening of the research ecosystem in Ireland is key to further investment and development. The ongoing collaboration of US multinationals with business and third-level institutions can put Ireland at the centre of global research excellence.

To continue to promote RD&I, it is crucial that we continue to develop world-class talent to meet industry needs. In AmCham’s FDI Insights survey, 69 per cent of respondents said their organisation is currently experiencing a skills gap in Ireland. Thirty one per cent of respondents said their biggest skills gap is in engineering, 24 per cent said digital and data, while 16 per cent pointed to machine learning and AI. Ireland’s third-level sector plays a critical role in the training and development of science, technology, engineering and maths graduates.

AmCham has consistently advocated for the ongoing mapping of skills needs to support the development of skills in line with the pace of innovation and change within industry. AmCham has also called for an expansion of the range of apprenticeships available, with a particular focus on technical skills in software development, AI, engineering, advanced manufacturing, immersive technology and cybersecurity.

When it comes to attracting world-class multinationals to Ireland, we must ensure that this country is a global leader in sustainability. Ireland’s natural resources provide it with the means to be a European hub for sustainability and renewable energy.

The Celtic Sea alone has the potential for the development of up to 50GW of floating offshore wind capacity by 2030. Meanwhile, Germany is due to reach 40GW by 2040 and France is due to reach 40GW by 2050.

In this regard, AmCham has consistently advocated for the execution of a medium to long-term strategy focused on energy self-sufficiency and exports. AmCham has also highlighted the need for increased development of renewable energy sources, particularly focused on the potential of offshore wind, and urgent expansion of the energy grid to provide sufficient capacity levels to cater for both current and future investment and growth.

AmCham has also called for the development of a sustainability roadmap for business, building on the Climate Action Plan, which provides concrete time frames and defined key performance indicators for business. Industry is playing its part when it comes to advancing sustainability initiatives. In AmCham’s FDI Insights survey, 42 per cent of respondents aim to be carbon neutral by 2030, with this rising to 64 per cent by 2040.

Such leadership, together with our research capabilities and our academic network, will provide the foundations for the continuing growth of the US multinational sector in Ireland. As a small open economy, Ireland has been particularly successful in attracting FDI. US multinationals in Ireland have played an integral role in supporting Ireland’s economy, empowering opportunities for talent development and placing Ireland at the centre of key global supply chains. The future provides many opportunities for us, as we continue together to build on these successes.

Seamus Fives is president of the American Chamber of Commerce Ireland.

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