It would be easy to see the movement of 150 jobs from Philips in Leopardstown to Poland as the start of a trend of jobs moving east from Ireland to the lower cost EU accession states.
In fact, the Philips project may not be typical of the kind of investment which will move eastwards in the years ahead. But it does demonstrate the increasing pressure to hold on to existing jobs, never mind win new ones.
Philips's decision to move its shared service facility to Poland comes as a surprise - and appears to be driven by a need to save money quickly. The operation provided accountancy services to parts of the Philips group and therefore falls into the category of " shared services", the tag used to describe projects which multinationals establish to provide a central service in areas such as human resources, accountancy or technology to their own operations.
These type of projects are on the IDA's target list and it has won some significant investments, particularly from the US. There are currently about 9,000 employed in 50 such operations here, the bulk of which have been established in the last few years.
The IDA believes that Philips does not represent the start of a move of shared service operations to eastern Europe. In Philips's case, the move was driven by the need for quick savings and the presence of a large existing company operations in Poland. In contrast to Philips's Dutch parentage, many of the other shared services operations are US owned and - with high skill levels - would not be in the front line of projects likely to move to lower cost locations.
That said, the Philips decision does show the option provided by lower cost locations to companies in tight financial times. In the words of a company executive: "Poland offers cost advantages that were impossible to ignore," with wage costs half the Irish level.
There is no doubt that other investments will move from western EU countries including Ireland to the accession states, particularly from companies under pressure to rationalise. However, US companies - our main overseas investors - may be slower to move to central and eastern Europe as, unlike companies such as Philips, many do not have existing operations there.
As well as threatening some existing jobs, the accession countries will also compete for new mobile investment. Much of the investment moving into eastern Europe in recent years has related to the privatisation of state assets. But many of these countries have educated workforces and low corporation tax rates. Eastern Europe is already strong in some sectors - automotive components, for example - and countries will try to carve out niches for themselves to attract mobile manufacturing and service operations.
Interestingly, however, a recent research paper from the Economist Intelligence Unit suggested that EU accession will not automatically drive new investment to these countries. The actual move to EU membership will not materially change existing free trading deals with the EU for many. Meanwhile with living standards and wages rising, some accession states may find they lose lower cost projects to the Far East, while not yet having the skills to win higher value investments.
The Republic also faces stiff competition from further east. India is emerging as a big player in the call centre business and many US and British companies have "offshored" operations there. The IDA hopes that existing Irish jobs in this sector will be protected by the language and technical skill levels, but will not now even compete for basic technical support operations, where India is mopping up.
Meanwhile, China is emerging as the new manufacturing powerhouse, now winning more than $50 billion (€39 billion) in new foreign direct investment per annum.
Lower costs will thus pull investment "eastwards" in the years ahead - both to central and eastern Europe and the Far East. As yesterday's news from Philips demonstrates, finding Ireland's place in this changing international picture is far from straightforward.
