Amid concern about worldwide recession it is vital to remember that while jobs are being lost, a lot of business is continuing, says Joanne Richardson

THE ANNOUNCEMENT yesterday that Dell is to cease manufacturing in Limerick with the loss of 1,900 jobs had been widely signalled but is, nonetheless, a shock.

Dell was the last multinational manufacturing personal computers in Ireland despite intense competition and it is a tribute to the management and staff that this investment was retained in Ireland for so long. While the impact of the Dell announcement has understandably been the focus of headlines in the past 24 hours, it is important not to lose sight of the fact that the company remains a significant employer in Ireland - 2,300 people will still be employed in Limerick and Dublin by Dell following these redundancies - and that in the region of 300,000 people remain employed directly and indirectly by multinational companies in Ireland.

Given the global downturn we are now experiencing, there is no doubt that further job losses - in both the indigenous and multinational sectors can be expected in the next 12-18 months.

But Ireland continues to attract foreign investment and it is to be hoped that any job losses will be somewhat offset by the winning of new investment in 2009.

Despite the turbulence, the real economy continues to create wealth, to sustain employment and to create jobs. Foreign direct investment (FDI) to Ireland in 2008 had a good year - a statement that can be made without qualification. An additional €2 billion of investment came into the country; 130 project announcements were made with 65 per cent of this investment coming from US multinationals. US investment in Ireland now exceeds $87 billion.

The reality is that there are projects to be won. But the question for Ireland is how do we attract inward investment in what is now a global market. There is not just the imperative of winning new projects in a downturn and positioning ourselves to take advantage of an inevitable upturn; we have a lot to protect and far too much to lose in terms of the companies and jobs we already have.

The impact of US FDI extends beyond job numbers. US multinationals export €60 billion worth of goods and services a year and pay more than €2.5 billion in corporation tax. Our task is to protect our substantial and hard-won base of FDI and to build on it for the future. In a recession, when clearly jobs will be lost and businesses close, every job sustained and every opportunity gained is worth a multiple of its monetary value.

Now our challenge as a country is to up our game, to gain critical advantage and to be constructively self-critical about the advantage we have let go. American Chamber has strongly lobbied for a platform based on tax, talent and investment policy priorities as the best way Ireland can win FDI against global competition.

Critical pillars of past success need to be preserved including our corporation tax rate of 12.5 per cent. These need to be built upon with a tax policy that synergises Ireland's best advantages which are its people and its capacity to climb up the value chain of research and development. The American Chamber welcomes the more attractive measures for research and development in the Budget and Finance Bill. Together with a more attractive tax regime for foreign executives working in Ireland there are tangible improvements in Ireland's offering.

The Government's recently announced plan to reposition Ireland as a location for innovation and enterprise is an innovative move. The establishment of the €500 million Venture Capital Funds is a distinctive offering that will help create real value and jobs, and deliver real wealth to our economy. This prize will be the commercialisation of research, the creation of intellectual property and the building of a strong base of research-led industry. This is not a short-term fix, but a longer-term game much as the creation of the IFSC in the 1980s.

The talent of our people is central to what Ireland has to offer. Investment in education in general and in science and maths skills in particular is critical if we are to have the people who can deliver added value in the knowledge economy. We currently spend 4.5 per cent of GDP on education, compared to an OECD average of 6 per cent, while we have fewer computers in our schools per student compared to the EU 15. We are no longer a low wage economy but higher wages in a competitive global economy require higher skill levels. If we fail to focus on education, we miss the critical point in the formula for future success.

There has been concern about president-elect Obama's proposals to introduce changes to the US taxation policy. Until the new administration outlines the detail of its proposals it would be previous to try to second guess how any changes might impact on Ireland.

There is no doubt, however, that the US is going to focus on getting a greater corporate tax take from its MNCs. A primary focus is on tackling known tax havens such as Bermuda. Ireland is seen as a low-tax jurisdiction, not a tax haven. We are not listed in the so called "Obama Bill" unlike other European countries such as Luxembourg and Switzerland, and in the Far East, Singapore. Ireland enjoys a strong tax treaty with the US and the Irish Government's policy of transparency and full disclosure protects low-tax status.

And as the significant achievement of "pre-clearance" for Shannon and Dublin show we have the skill and the clout to do business in Washington DC. Shannon and Dublin will be treated like domestic flights in the US.

This is another tangible business toll and another example of how in tough times Ireland can win against the competition.

• Joanne Richardson is chief executive of the American Chamber of Commerce in Ireland