Infrastructure must be a priority for Ireland to remain attractive

Ireland is an extremely attractive location for foreign direct investment (FDI) for many reasons, including its track record for innovation and its ability to attract and retain world-class talent.

However, there are other areas that require increased focus and investment to ensure we remain attractive. And it is the firm belief of AmCham, and business leaders generally, that investment in Ireland’s infrastructure and capacity is the best way to support future growth and continue to attract FDI.

With one of the fastest-growing populations in Europe over the last decade, the Republic, in common with other parts of the world, is facing challenges in areas including housing, energy, transport and connectivity.

In response, the Government has increased headline figures for capital expenditure. In Budget 2024, total capital expenditure amounted to €12.8 billion, a 3.2 per cent increase on Budget 2023 levels. This has contributed to an increase in housing construction, the roll-out of the national broadband plan, more energy being generated from renewable sources and improvements in road and rail infrastructure.

It’s chocs away, with a magical escape from the ordinary on the westernmost side of Dingle’s Slea Head

---

The Irish-owned vehicle leasing company beating global giants

---

Why recognition of prior learning works for business

---

In an era of hybrid working, how do businesses unify communications securely?

---

However, while headline figures for infrastructure investment indicate improvement, latest data on the State’s infrastructure spending as a percentage of national income shows that, proportionally, this figure is decreasing.

In 2022 Ireland ranked 15th out of the 27 EU member states for gross fixed capital formation (GFCF) as a percentage of gross domestic product (GDP). Its spending on GFCF totalled 21.6 per cent of GDP, below the EU average. Ireland was the only member in the top 15 to have decreased its spending as a percentage of GDP since 2018, and one of only four states across the entire EU27.

As AmCham’s 2024 president, one of my key priorities is the development of critical infrastructure. It is essential that investment in this area is increased to address current challenges and provide increased capacity to support future development.

In a recent Quarterly FDI Insights Survey, 47 per cent said investment in infrastructure and capacity to support future growth would allow Ireland to build on its FDI success. This made it the top priority for AmCham members, followed by talent and skills, enhancing Ireland’s research ecosystem, accelerating Ireland’s National Digital Strategy and delivering sustainable energy solutions.

When asked to identify which area of infrastructure development requires the most urgent investment from Government, 60 per cent said housing, followed by energy (20 per cent) and transport and connectivity (15 per cent).

In addressing the housing shortage, AmCham has recommended a world-class planning review to examine best international practice for housing delivery. We have also consistently advocated for the ongoing revision of housing targets.

Looking at the importance of further developing Ireland’s transport infrastructure, AmCham has pushed for the delivery of MetroLink and Dart+, the development of vital road infrastructure and the delivery of balanced air connectivity to support Ireland’s regional airports.

Building on this, an additional priority of my AmCham presidency is focused on the delivery of sustainable energy solutions.

The wind energy sector in Ireland could generate enough electricity to exceed domestic demand by 2030 and has the potential to be worth almost €15 billion to the Irish economy by 2050. As such, with the right infrastructural investment, Ireland has the opportunity to become a net exporter of sustainable energy in the near future.

In this context AmCham has advocated for increased development of renewable energy sources, together with a medium to long-term strategy on energy self-sufficiency and exports. We have also called for urgent acceleration and expansion of investment in our energy grid to provide sufficient capacity levels to cater for current and future growth.

It is not only about policy asks, though. AmCham members will continue to do their part. Some 64 per cent of our members aim to be carbon neutral by 2040, while half are supporting SMEs in their value chain to reduce emissions.

We know that US multinationals are committed to Ireland. A third of all US companies here have been in Ireland for more than 20 years, a testament to our attractiveness. With the right strategic investment over the coming years, Ireland can ensure it remains the number one destination of choice for US FDI.