A very positive end-of-year report from the Industrial Development Authority (IDA) is likely to sustain public confidence in the economy and underpin future development in the regions. At a time when the number of people engaged in manufacturing has been falling throughout the EU, the State agency has reported the best year for inward investment since 2000, with an increase of more than 4,000 in IDA-supported manufacturing jobs.
The report validates the correctness of a recent change in IDA strategy which shifted emphasis towards research and development and the creation of a knowledge-based economy. Increasing pressure from globalisation will eventually erode our traditional low-cost, low-value and basic assembly jobs, while the future of a successful economy is likely to be built on a foundation of science and technology, involving strong linkages between business and academic institutions.
IDA chief executive Seán Dorgan was anxious that students entering third-level education should be aware of future demand for employees within the science and information technology disciplines. And he felt students should be encouraged to complete their education to Masters and PhD level in order to provide the necessary skills for a modern, front-line economy.
Demand by multinational companies for a highly-educated workforce has begun to favour the regions - nearly two-thirds of foreign investment went outside the Dublin area in search of skilled workers and a cheaper and less congested environment. There was a net gain of more than 4,000 jobs during the year, reflecting strong growth in research and development projects. The prospects for the coming year are equally favourable, with the volume and quality of new business being negotiated by the IDA as strong as at any time in recent years.
The IDA strategy, in positioning Ireland as a global competitor for research and development investment, is working. And providing an educated workforce is an important element in that strategy. But our corporate tax structure is equally attractive to foreign companies. In a world of rapid change, companies have to innovate or go out of business, and profit is the driving force. The IDA represents just one facet of our modern economy. Last year, even as the State agency encouraged the establishment of highly-paid, knowledge-based projects here, successful Irish companies were investing an estimated $21 billion in the US. Many of these same Irish companies had benefited from the management expertise and technological know-how of US companies which set up here in recent years. What goes around comes around.