Recent economic indicators have suggested that the Irish economy is on the upswing. However none has been as encouraging as yesterday's announcement from Intel.
The decision by the world's largest semiconductor company to invest €1.6 billion in a plant to manufacture a new range of computer chips is the most significant industrial development announcement for some years. At a time when commentators are questioning Ireland's ability to attract the next wave of investment, it sends an important signal internationally. Crucially, it should help IDA Ireland to attract further investment in the years ahead.
Intel has been a flagship company on the industrial scene since it established here in 1989. It will shortly officially open a new semiconductor fabrication plant at its Leixlip base. Such is the pace of development in the sector that before this plant starts full production, another one is announced. The new facility, on which work will begin immediately, will bring a new wave of technology to the Irish plant and keep it at the forefront of Intel operations worldwide.
The Tánaiste, Ms Harney and IDA Ireland were understandably thrilled at yesterday's announcement. However much of the credit must go to Intel's Irish management, led by Mr Jim O'Hara, and its 4,700 employees. The decision by Intel to locate the new investment in Ireland, rather than in one of its other locations worldwide, reflects the outstanding performance of the Irish operation to date.
It also indicates Intel's confidence that its Irish workforce can quickly adapt to yet another upgrade in technology. This augurs well for the future, as attracting high level specialised manufacturing operations must form a key part of future industrial strategy.
The expansion of the EU and the emergence of China as a manufacturing centre have understandably raised questions about the future of manufacturing investment here. The Intel announcement does not eliminate these concerns. However it does indicate that there remains considerable opportunity in expanding the existing industrial base here. Cost is not the only factor for multinationals when considering where to invest and the Republic still has much to offer in expertise, an educated workforce, a stable environment and relatively low corporation tax. Intel's expansion and the development of the Wyeth biotechnology plant in south-west Dublin are two high level investments which IDA Ireland can now point to when selling Ireland to other investors.
Much remains to be done, of course. Competitiveness remains an issue; Intel indicated yesterday that costs were a problem for the older established parts of its operation here. Questions also remain about the development of the research and development base, where the Government has been slow to put forward an integrated strategy. However, clearly something is going right when Intel can commit such a significant investment. The news will lift confidence across the economy.