by Aiken PR
With Ireland’s election less than three weeks away and the World Economic Forum taking place in Davos this week, OCO Global has warned that US foreign direct investment (FDI) in Ireland, which has been a key economic driver with 155,000 people employed in US companies, is now at a crucial juncture.
Ireland’s prosperous US foreign direct investment (FDI) strategy which has seen $446bn total investment to date will be presented with new challenges in 2020, with a number of global factors coming together which will influence economic performance, according to international trade experts OCO Global.
The Belfast and Dublin based company which advises Irish and UK Government organisations such as Enterprise Ireland, the IDA and the UK’s Department for International Trade, on trade and investment, has said that the combination of a volatile global trading environment, a slowdown in the US economy, the potential for rekindled US protectionism in election year and increased FDI competition will require Ireland to work harder to achieve its growth targets.
In 2019, multinationals in Ireland employed 245,000 with 63% of these coming from US FDI with companies including Facebook who recently expanded its staff in Ireland to 5,000 and medical device company Johnson and Johnson Vision investing a further €100m, creating an additional 100 jobs in its Limerick operations.
With IDA finalising its 2020 – 2024 growth strategy, OCO Global has said that this year will be more challenging for Ireland with its innovation ecosystem and regional development being crucial in achieving growth targets.
Commenting on an evolving FDI sector, Kilian Cawley, Director for Trade Ireland at OCO Global said, “Despite the US and China signing a preliminary phase one trade deal, there are considerable hurdles to overcome between the world’s two largest economies who will collectively represent 40% of the global economy in 2020. The outcome of this process will not only impact US business confidence and capital investment but ultimately national and international economic performance as well as other international trade relationships.
“This includes the US’s trade with the EU, with EU Trade commissioner Phil Hogan seeking to reset talks on the future direction of that relationship which had a rocky 2019 with the Boeing /Airbus case prompting US tariffs on specific EU alcohol and food exports.
“With Ireland having the largest exports to the US within the EU, totalling more than $40bn, it has a lot to gain from a positive outcome to this process which would enhance the working partnership and long standing cultural ties between the two countries which is so crucial to Irish inward investment.
“As both the US President and the Irish Government embark on very different election campaign commitments, there is a concern that President Trump could rekindle protectionist policies that played an integral role in his succession first time around.
“However, many of these global issues will be outside the control of the Irish Government whoever is in power post February 8th and as we head towards a general election, we cannot allow national challenges to compound international challenges at this crucial moment.”
OCO has said that Ireland can significantly influence its FDI growth by demonstrably differentiating itself from the growing number of competing countries who are basing their FDI models on Ireland’s success by promoting tax incentives, upskilling labour and investing in targeted infrastructure which supports corporate growth.
Kilian continued, “The IDA has earmarked competition coming from Eastern Europe, but OCO Global is also aware of regions across Europe that are seeking to emulate the Irish model and gain ground on Ireland’s well established FDI principles. It is incumbent on the new government to focus its attention on Ireland’s credentials as a gateway into the EU and, depending on the Brexit process, the UK as an English–speaking country and importantly the sectoral hubs that have been successfully developed in pharma, tech and professional services and are so crucial to FDI.
“Ireland must also maximise on the growing number of US companies that have their EU headquarters located here, which has supported an outstanding entrepreneurial network and eco system fostering new innovations, R&D activities and new business development through innovative start–ups. It is this maturing innovation hub which has seen a 10% increase in start–up funding from 2018 to 2019, that is particularly appealing for US and other global companies.
“In the coming weeks, as a new Irish government seeks to address the risks to future economic growth in housing, office space and high rents, the road, rail and air network it must remain focused on what provides us with our competitive advantage in FDI, its people, culture and its maturing innovative hubs”.
OCO Global is a leading specialist provider of Trade and Investment services including Market Entry Support, business intelligence for Trade and Investment, trade mission support, business development, advisory, trends analysis and software solutions. Headquartered in Northern Ireland, OCO has offices in leading markets globally including Ireland, UK, Germany, France, Japan, UAE and the U.S. OCO’s clients include leading national, state and regional economic development organizations such as The Department For International Trade (DIT), Invest NI, Enterprise Ireland, IDA, Enterprise Florida and The Japan External Trade Organisation (JETRO), as well as private companies seeking to enter new markets or grow their domestic base, including EY, PWC, Siemens, Smiley Monroe, Pepsico and Santander.