The competition among countries to attract foreign direct investment (FDI) is “definitely stronger” than in recent years, as Ireland is up against far wealthier states, IDA Ireland chairman Feargal O’Rourke has said.
Ireland is now competing against countries in the Middle East such as the UAE and Saudi Arabia which he said are “offering huge amounts” to attract companies and are “paying over the odds”.
Adding in European states such as France and Germany who are increasingly looking to secure FDI, the competition is intensifying, he told The Irish Times in advance of receiving the inaugural Trusted Business Leadership award from Chartered Accountants Ireland.
The IDA chairman said there are “more committed players on the pitch” now and that “the competition for FDI is definitely stronger than it was five years ago, and [there are] people with much bigger and deeper pockets than Ireland”.
Ireland does have advantages, however. In addition to describing the IDA as a “world class investment agency”, he said that against the backdrop of international economic volatility, Ireland’s economic stability is finally being appreciated by businesses.
“Maybe a decade ago, you’d be saying ‘Ireland is very stable. Politically, economically, institutionally, policy wise, it is very stable’,” he said, but American companies he was pitching Ireland as a prospect to invest in would largely dismiss the notion.
“People would nod and say, ‘Yes, great’ but it was not a differentiating factor that jumped out to them,” he explained. Over the past five or six years, however, that stability is “suddenly” a factor when meeting clients in his IDA role.
“Ireland is a bit of an oasis of stability in a fairly turbulent sea at the moment.”
While there has been concern of the impact the Occupied Territories Bill could have on Ireland’s attractiveness to multinationals, O’Rourke said it is not high among the concerns raised by companies.
“When companies come to talk about [investing in Ireland …] they are interested in talking about competitiveness, simplification, infrastructure and issues that are directly affecting their balance sheets,” he said. It is not until potential IDA client companies get down to “item eight or nine” that they might ask for an explanation of the Occupied Territories Bill.
“But it is not in the first four, five or six issues that directly affect their companies,” with companies “much more interested in bread and butter issues”.
The IDA saw record levels of investment last year, getting results that Mr O’Rourke would “bite your hand off” for had they been offered to him at the start of the year.
The results came amid a challenging economic climate, with “increasing economic nationalism” a prominent trend in the year, especially from political actors.
“Despite the America First agenda, everybody recognises that you can’t conquer the world from America – global organisations have to branch out a bit.”
Although there has been significant focus on companies who are relocating operations back to the US, primarily among pharmaceutical companies, he said companies are continuing to look to Europe.
The award-giving is set to take place at Chartered Accountants Ireland’s annual dinner, in front of more than 700 people on Friday. Among the crowd will be rugby star Peter O’Mahony, as well as Minister for Public Expenditure Jack Chambers.