Ireland has the potential to become a distinguished centre for research excellence on the global stage. In an AmCham Survey, 90 per cent of respondents said Ireland’s research and development landscape was competitive when compared to other advanced global economies.
Some 57.6 per cent of respondents also said they are currently undertaking one or more research projects in Ireland, with artificial intelligence, cyber and sustainability among the most common areas for research.
However, 100 per cent of respondents also said the further enhancement of Ireland’s R&D tax credit is important to maintain competitiveness for foreign direct investment.
The increase of the R&D tax credit from 25 per cent to 30 per cent in budget 2024 was seen as crucial in maintaining Ireland’s competitiveness as an attractive destination for FDI, while there was some disappointment that the credit was not further increased in Budget 2025.
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“For R&D investment, Ireland is one of the most attractive locations internationally. It offers a robust and sustainable R&D ecosystem that is underpinned by several factors,” says Cathal Noone, partner in tax and law at Deloitte.
“It has a strong, innovative and internationally competitive enterprise base, growing employment, sales and exports, a highly educated, skilled and productive pool of talent, and a coherent joined-up innovation ecosystem that is responsive to emerging opportunities, delivering enhanced impact through the creation and application of knowledge.”
A major part of Deloitte’s work is in assisting multinational clients to assess global locations for international expansion, Noone points out.
“Rarely if ever do we see companies considering foreign direct investment in R&D and not have Ireland very high up on the list of suitable locations,” he says. “The only factor that is potentially limiting investment is a difficulty in accessing housing, which is a particular concern when companies are trying to attract new talent to Ireland.”
In the 20 years since the R&D tax credit was introduced about 1,600 companies have claimed more than €1 billion in R&D tax credit incentives for activities that meet Revenue’s strict requirements, Noone adds.
During this period, the State’s population increased by just over one million, from four million in 2004 to 5.2 million in 2024. GNI grew from €128.6 billion to €375.8 billion, in 2023.
“The R&D tax credit has played an important role in economic growth, driving job creation and innovation,” says Noone. “It has also opened new opportunities for Ireland by positioning the country as a prime location for R&D in Europe. Moving to a 30 per cent incentive represents one of the most attractive R&D tax incentives internationally and forms a cornerstone of Ireland’s FDI incentives offering.”
The importance of the scheme was evidenced by how quickly the Government implemented changes to it to ensure compliance with US foreign tax credit regulations and OECD Pillar 2 rules.
“This means that Ireland’s R&D tax credit was one of the first schemes that is fully compliant with these rules, with many regimes internationally still struggling on this front,” says Noone. “This type of swift action demonstrates how important the regime is to Ireland, which provides significant security to companies that continue to invest in innovation and R&D capabilities in Ireland.”
However, in a rapidly developing global context, where new challenges are arising in terms of digitalisation and sustainability, Noone believes the definition of qualifying R&D activities is restrictive.
“To ensure that Ireland remains a competitive location for investment, it must develop new incentives that can support broader innovation, especially in supporting the development of our digital and green economy, for which enhanced supports are available in other jurisdictions,” he says.
Our experience has been a very positive one since locating here in 2008. And as each global company has located here, I feel it has further strengthened the ecosystem: more knowledge, more talent, more innovation
— Graham Abell, Workday
“The work completed by successive Irish governments in developing a best-in-class R&D tax credit regime should not be overlooked, but now is the time to take dynamic action to ensure that Ireland’s incentives regimes can continue to drive investment in innovative in Ireland.
“Changes to the regime to facilitate subcontracting to related global partners, broadening the definitions of R&D to support digital transformation and sustainability, and other enhancements will be key to retaining Ireland’s attractiveness as an international location for R&D.”
Workday is a good example of the kind of innovative US MNCs that have chosen to locate here. It is a leading enterprise platform that helps organisations manage their most important assets – their people and money.
Workday brings finance, HR, planning, and analytics together on one platform, augmented by AI. It first located in Ireland in 2008 and today employs 2,000 people here.
“Some 16 years ago Workday purchased a small but dynamic Irish software company called Cape Clear and this gave our growing global company a springboard for product and technology innovation in EMEA,” says Graham Abell, Workday vice-president, software engineering, and site lead.
“Flash forward to today, with over $2.3 billion spent globally for R&D in our financial year 2023. Ireland is the region with one of the largest R&D spends in the company, second only to the US. It is central to our R&D efforts globally.”
Around 80 per cent of Workday’s employees in Dublin work in product development and software engineering, contributing significantly to the company’s success.
“For example, global products including Workday Learning and Workday Help were incubated and launched from here,” says Abell. “We have senior people leading global teams for analytics, trust, information security, financials, customer success platform, sales, infrastructure, and integrations, all right here in Dublin, which shows how central we are to Workday’s progress globally.”
Abell believes Ireland’s focus on education and, by extension, research, has led to deep expertise in pharma, tech, financial services and emerging industries, and ensured its competitiveness.
“Our experience has been a very positive one since locating here in 2008. And as each global company has located here, I feel it has further strengthened the ecosystem: more knowledge, more talent, more innovation,” he says.
“Ireland sits at a very strategic location between the US and Europe – and that can have huge benefits in terms of R&D. That location and the talent it attracts has resulted in true depth and breadth of diversity across language, culture and know-how – which is of huge benefit for us.
“We have over 70 nationalities represented across our 2,000-strong team. That means we can tap into the best ideas, have robust discussions, get feedback quickly and arrive at collaborative solutions for our customers – all from Dublin. That helps us stay both innovative and competitive in terms of R&D.”
Darach McGrath, senior director of R&D (vascular) at medical device company Cook Medical, believes Ireland is just as competitive as other countries in terms of R&D, if not more.
“One big advantage Ireland may have is the number of leading companies in the medical device space that we have concentrated here. As a result of that, there is a supportive ecosystem that has built up around those companies in terms of suppliers, technology companies and the robust infrastructure in our third-level institutions,” he says.
“To have a concentration of those in a small country like Ireland definitely gives us an advantage as we have locally available talent that can significantly enhance our ability to excel in medical device development.”
The R&D tax credit is good but similar incentives exist in other European countries and further afield, McGrath points out.
“From that perspective, it’s essential for us to continually explore additional ways to make Ireland the preferred location for investment, ensuring that active research and development remains a core activity here,” he says.
He identifies nurturing talent in all stages of the Irish education system as a key area for improvement.
“I believe one of the most fundamental improvements that can be made is to ensure we are developing the talent right from the start through the education system,” he says. “Key improvements should begin at the primary school level, extending through the entire educational journey, with a strong emphasis and development in Stem subjects for boys and girls.
“Developing third level courses that align not only with the current medtech industry but also with its future needs is vital. Additionally, advancements in artificial intelligence and other technologies will be crucial enablers for maintaining a meaningful impact on the sector moving forward.”
