Minister for Jobs, Enterprise & Employment Richard Bruton today published his Department’s latest policy document on foreign direct investment (in Ireland) to cover the period 2015. One of the encouraging elements of the policy is an acceptance that the rules have changed. With the US looking to combat tax inversion practices at home and the rest of Europe either unhappy with or trying to undercut Ireland’s corporate tax rate, the state can no longer claim to be a cost-effective place to locate. If one were to describe Ireland’s traditional FDI pitch as ‘cheap, cheerful and lots of greenery’ only one of them will be applicable within the next five years.
There can be no doubt which industries are being specifically courted by the new policy. Its four tenets of attracting international talent, developing new technology, being a great place to work and establishing sectoral clusters may as well have come from a ‘how to build Silicon Valley’ guidebook.
“As we look over the next horizon we must focus on new areas which can mark Ireland out and support the attraction of the mobile international investment we need,” Minister Bruton said, but the plan to make Ireland distinctive is vague on turning mobile into permanent investments. Focusing on the lifestyle elements will create a ‘bottom-up’ demand where workers will want to come to Ireland to work but this can only work with significant improvements to infrastructure and the provision of new housing.
According to Minister Bruton, the Government has been making progress since coming to office. “The past three-and-a-half years have been extremely successful for Ireland in attracting multinational investment. Following a difficult number of years up to 2010, in the three years 2011-2013 we attracted an average of more than 6,000 extra jobs per year and tributes are due in particular to IDA Ireland for this performance,” he said.
“The indications from the first six months of this year are that investments are up significantly even on the high levels achieved in the same period in 2013. The impact of this is clear when we bear in mind that for every 10 jobs created in multinational companies, an additional seven jobs are created elsewhere in the local economy, primarily in supply and service companies.”
The Minister also pledged to close loopholes in the tax system that allow multinationals to minimise their tax bill.
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