The major new investment from Abbott Laboratories, the US medtech company, shows that foreign direct investment continues to arrive despite the economic uncertainties. The investment involves spending of €440 million and will lead to 1,000 new jobs, most of them in Kilkenny and the rest in Donegal.
There are a number of positive points from the announcement. Plants in the pharma and medtech sectors, once established, tend to remain in one location, due in part to the complexities of regulatory approval for production facilities. They have also, over the years, often established in regional locations, a key goal of Government and IDA Ireland policy given the concentration of earlier investment around the Dublin region.
These sectors were crucial supports to the economy through the Covid-19 shutdowns, with stable, well-paid jobs and strong corporate tax contributions. While we do not know the exact identity of the 10 or so firms which account for more than half of all corporate tax paid, it is clear that several pharma and medtech firms must be on this list. Deepening investment from a company such as Abbott Laboratories is therefore welcome.
There have been fears that international reforms in corporation tax and the dangers to the economic outlook could slow the inward flow of investment. And both may have an impact here in the years to come.
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However, IDA Ireland, while cautioning that investment proposals may not remain at the record level seen in the first half of this year, say that the investment pipeline is still relatively strong. To keep it that way, some challenges do face the Government in the years ahead.
One is the perennial question of the cost of accommodation, with house prices back to Celtic Tiger highs and rental costs at record levels. A second is the secure provision of green and reasonably-priced energy. And a third is to ensure the provision of suitably skilled staff, requiring proper funding of third-level education and research. There is much work to do here to continue to attract the FDI projects of the future.