Minister for Finance Michael Noonan’s Budget 2015 speech, when it came to foreign direct investment (FDI), was marked by certainty and ambition. Certainty about our 12.5 per cent corporation tax rate and ambition that Ireland is the destination of choice for the best and most successful companies in the world. The Minister has always been clear in his determination that when it comes to attracting FDI, the Republic will play fair but play to win. Importantly, he has also made it clear that the key elements of our corporate tax road map, including the knowledge development box, will be aligned with OECD and EU best practice.
Ireland continues to win, but the game has become even more competitive. The State has attracted more than 700 US companies, creating 130,000 direct and 100,000 indirect jobs. Our tax policy has been an important element in our success story.
However, tax is only one element in our FDI strategy. The Republic’s success in securing investment from multinationals is also reflective of the pro-business environment, the openness of our economy and our skilled workforce. If we are to continue to attract the best and most successful companies to Ireland we need to examine all aspects of our FDI offering and business environment.
We must keep in mind that these are essentially one and the same. What is good for FDI is good for Irish business. Therefore, when we speak of an FDI offering we are also talking about an enterprise and investment road map that applies to all businesses in Ireland.
Michael Noonan has made clear his intention that the Government’s ambitious corporate tax road map for FDI will be implemented. The same determination should also apply to Ireland’s overall enterprise and investment road map.
Three must-haves
The Government’s FDI policy statement of July this year identifies three “must-haves” in Ireland’s FDI armoury: the creation and attraction of talent; building dynamic and competitive city regions where that talent will thrive; and supporting this talent to deliver connected, world-leading research.
These are extremely ambitions objectives. They will be achieved only if all relevant Government departments and agencies have a clear understanding of them and their role in achieving them. This is critically important because many issues, for example the supply and pricing of energy, cut across a number of departments and agencies. Joined-up thinking by all relevant Government agencies and departments, matched by a dynamic and innovative private sector, has the potential to provide a transformative environment for foreign direct investment and domestic businesses to thrive.
Ireland's talent base and the availability of innovative, skilled people are critical. Our education system must be continually reviewed to ensure it, inter alia, provides our young people with the skills they need to succeed in the global economy.
Our leading universities need to score well in the international league tables. We need a sharp focus on maths and science education at primary level – bonus points at post-primary level and other initiatives are very welcome but the work must start earlier if we are to ensure we have the Stem-savvy (science, technology, engineering and mathematics) workforce required for the smart economy we aspire to create.
Furthermore, if we are to attract skilled workers we must enhance Ireland’s status as a great place to live. This means having well-functioning cities with good physical and virtual infrastructure, affordable and available office and residential accommodation and a good quality of life. Affordable healthcare and access to schools are essential elements. We must be cost-competitive.
Ireland’s ambitious FDI strategy began more than 50 years ago. Imagine for a moment that it started this year and the performance targets we set ourselves included attracting the world’s 10 most successful IT and data companies; nine of the 10 most successful pharmaceutical companies and 15 of the world’s top companies in the financial services and medtech sectors. These objectives would probably be seen as outlandishly optimistic. Well, this is what Ireland has achieved. These achievements present enormous opportunities to build upon. We are perfectly placed to be a global leader in the application of technology in financial services – fintech. With the world’s top medtech, pharmaceutical and data companies we can support collaborations that could save and enhance people’s lives around the world.
Dynamic cluster
The future will be all about data – how it is collected and protected, analysed and commercialised. It will be central to how we live and work – how countries interact with each other and with their citizens. Ireland has developed a dynamic cluster of world-leading data companies.
We have a real opportunity to be a global centre of excellence. We can also focus on linked opportunities such as cybersecurity. But to get there we need the strategic plan, the road map. Among the targets set should be a well-resourced and positioned regulatory authority and research centres of excellence in data analytics.
Just over 50 years ago leaders of vision and courage set out a road map for Ireland to become a world leader in attracting FDI to create jobs of substance and opportunity for our people. The only natural resource they had to work with was our ability to innovate and learn. Over the past 50 years we have succeeded because of these abilities and our ability to get the job done.
We have built a tremendous platform to transform, once again, the quality of life in our country. We need an enterprise and investment road map to guide us – and we need everybody to play their part to get the job done.
Mark Redmond is chief executive of the American Chamber of Commerce Ireland
