Today, our colleagues across the US will celebrate Thanksgiving, an important American tradition where they will pause and reflect on what they have been most thankful for this year. As 2021 AmCham president, I am honoured to give thanks and pay tribute to our frontline heroes. The enormous sacrifices they continue to make keep our society and economy going and ensure that many industries continue to operate and thrive during this unprecedented global pandemic.
We also acknowledge the challenges that Government face during this crisis and the decisions they have to make. In addition, the Government, led by the Minister for Finance, had to navigate the complex negotiations with the OECD on global corporate tax reform. Now that the corporate tax issue is “somewhat” put to bed, we must refocus our priorities to ensure that Ireland remains a place where talented individuals want to live. The pandemic has brought into sharper focus the areas where Ireland can improve against competitor nations – such as housing, access to broadband and cost of living.
Impossible
The average rent for accommodation nationwide is just under €1,500, and approximately €2,000 in Dublin. So, to only spend the recommended 30 per cent of salary on rent, a household in the capital would need to be making €10,000 a month, pre-tax.
Over the past eight years, house prices have soared while wages have grown by only 9 per cent, which makes home ownership for many quite simply impossible. Ireland also lags behind most of its European neighbours when it comes to broadband access. The delay in the rollout of the National Broadband Plan is unacceptable considering the amount of people who increasingly rely on a strong, stable internet connection for work and socialising.
As with the rest of Europe, Ireland is facing energy challenges in terms of price and capacity. Without solving our grid problems, we cannot hope to meet our sustainability targets. And without meeting these targets, we cannot hope to overcome the greatest challenge of our time: climate change. The cost of energy and housing significantly increases Ireland’s cost of living, which is among the highest in the world. Moving forward, Government must balance this high cost of living against other policy decisions, such as personal tax regimes.
Creating the right conditions for talent attraction supports our ability to win investment – and the rewards are significant. As AmCham President I have been shining a light on how AmCham members contribute to Irish society in ways beyond the obvious economic benefits. For example, through social impact programmes or their ESG agendas, through additional or spillover economic benefits and through knowledge transfer.
Many US multinationals are thankful to call Ireland their second home, and they have expressed gratitude to their local communities by giving back – from donations to forming strategic partnerships with our higher education institutes. Each year, US companies in Ireland contribute more than 600,000 work-supported volunteer hours to over 7,300 community projects nationwide, 70 per cent of which is education and skills related.
In addition to the social contributions, US companies have made profound economic contributions over many decades. Of course, US companies create jobs – after all, they employ 180,000 people in Ireland – but each year they also spend approximately ¤10bn on payroll, more than ¤6.3bn on goods and services and invest ¤5.3bn on capital expenditure.
Enriched
The presence of FDI has enriched and accelerated Ireland’s knowledge-based economy too. Multinational firms provide domestic businesses with exposure to knowledge, technology, and global value chain know-how, and one out of every four employees in multinational companies either moves to a domestic firm or becomes self-employed, further strengthening the flow of knowledge and skills back into the domestic economy.
The number of multinational leadership roles in Ireland also creates a competitive advantage for Ireland. The many global roles and international leadership teams based here help to future-proof the pipeline of inward investment, and AmCham is grateful to those leaders who fight hard to win and deliver projects for the Irish operations of US multinationals.
We are thankful for many good things, and we have many reasons to be optimistic about Ireland’s future as an investment location. However, we need to be realistic about the challenges on the horizon, or Ireland will risk losing its standing as one of the best small countries in the world for people to live and grow their careers.