- Minister publishes FDI policy looking over next horizon to 2020, with aim of creating over 7,000 net additional jobs per year in multinational companies here
- 12.5% corporation tax rate to remain central to Ireland’s offering - changes to international tax system offer challenges as well as opportunities for Ireland to compete strongly in this area
Ireland must improve its offering to multinational companies in the four crucial areas of talent, technology, sectors and providing great places to live and work if we are to sustain and build on current levels of FDI job-creation over the remainder of the decade, the Minister for Jobs, Enterprise and Innovation Richard Bruton TD said today (Wednesday).
Minister Bruton was speaking as he published his Department’s Policy Statement on Foreign Direct Investment in Ireland, looking at the period 2015-2020, agreed recently by Government.
Today’s publication marks the delivery of an important commitment under the Action Plan for Jobs 2014.
Minister Bruton has requested IDA Ireland to prepare a new strategy on multinational investment in Ireland to 2020, following on from their previous strategy which runs to 2014, outlining a series of targets for jobs, investments and regions and how they will be delivered. Development of this strategy, which will draw on the principles set out in today’s policy statement, has already commenced and will be spearheaded by incoming CEO Martin Shanahan.
The policy statement published today, prepared with the support of Forfás, finds that competition for mobile multinational investment has increased dramatically in recent years. It finds that many more countries now possess the basic conditions to attract investments – in areas like cost competitiveness, competitive taxation regimes and effective investment promotion agencies.
(Forfás will from later this week be dissolved and will form the core of the Strategic Policy Division of the Department of Jobs).
Its key finding is that therefore, in order to compete effectively for mobile investment, Ireland must not only maintain high performance and compete strongly in traditional areas like tax and cost competitiveness, but crucially differentiate itself in other ways. The key areas identified by today’s policy statement are:
1. Talent – Ireland must seek to become renowned internationally for the higher-order abilities of our workforce, in terms of problem-solving, creativity, design-thinking and adaptability. Ireland must be internationally known for developing and nurturing talent at all skill levels, and as an attractive destination for internationally mobile skilled people.
2. Technology – we cannot be world-leaders in all areas, but Ireland must achieve a record of world-leading research and innovation in key areas, in close cooperation with industry.
3. Great places to live and work – we must deliver a choice of attractive locations for investment. We must play to the strengths of our different regions, and provide regional locations that can offer sectoral strengths, collaboration with education institutions and Irish companies, excellent infrastructure and quality of life. A vibrant capital city with a smart business and living environment hosting a dynamic start-up community alongside corporate heavyweights will always be a core element of our offering
4. Sectors – we must effectively identify and pursue opportunities in sectors where Ireland can attract investments and jobs – both adapt quickly and take leadership position in emerging areas and consolidate our strengths in existing areas of strength and; we should implement a more systematic approach to sector development, including the appointment of specific Cluster Development Managers/Teams
Delivery in these areas will depend not only on the performance of the Department of Jobs and its Enterprise Agencies, but crucially on other bodies including education, transport, planning, environment and justice organisations. The Action Plan for Jobs mechanism, which coordinates the delivery of job-creation policy by all 16 Government Departments and a wide range of Agencies, will be crucial in delivering this.
Publishing the statement, Minister Bruton said:
“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. 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 7 jobs are created elsewhere in the local economy, primarily in supply and service companies.
“While things are improving, we still have very high unemployment and we have set ourselves ambitious targets for job-creation, including replacing all the jobs that were lost in the crisis by 2020. Multinational companies have a crucial part to play in this, and the policy statement published today is the first stage in preparing our FDI structures to deliver their part in that.
“The FDI landscape has changed dramatically in recent years. On the positive side, Irish branches of multinationals increasingly play a strategic leadership role within their parent companies. However, international competition has increased dramatically, and many of the tools we relied on previously – cost competitiveness, the high performance of the IDA, competitive corporation tax regime, State support – are increasingly no longer enough to mark Ireland out. Changes will undoubtedly come in the international corporation tax system which will pose challenges as well as opportunities for Ireland and we plan to compete strongly in this area.
“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. This will not be easy, and will require concerted and determined action by Departments and agencies right across Government. The Action Plan for Jobs mechanism, designed to coordinate action on job-creation across Government Departments, will be very useful in delivering this.
“I am convinced that with strategic and determined action across Government and by the IDA we can sustain and beat the record job-creation we have delivered in the past three years”.
For further information, please contact:
Press Office: Department of Jobs, Enterprise and Innovation, 01 631 2200 or email@example.com
NOTES TO EDITORS
The policy statement is available at:
Other key actions identified in the policy statement include:
· Improve collaboration and intelligence-sharing between Agencies, both in-market and in Ireland
· Pursue new FDI source markets, such as emerging economies; re-shoring/next-shoring strategies; opportunities arising from new trade agreements
· Target new forms of FDI, outside the traditional multinational corporation model so successfully targeted up to now – e.g. M&A, joint ventures, sovereign wealth funds, high net worth individuals, investment houses
· Implement a series of actions to position Ireland as a leading location for start-ups and fast-growing businesses
· Target a top-5 ranking for international competitiveness
· Continue to commit to the 12.5% corporation tax rate; continue to take proactive action on multilateral reform of the international tax system; continue to focus on certainty, stability and predictability for investors; and continue to look at ways in which our corporation tax regime can be highly internationally competitive, in the context of the challenges and opportunities provided by changes in this area
Forfás is Ireland’s policy advisory board for enterprise, trade, science, technology and innovation. It provides independent and rigorous research, advice and support in the areas of enterprise and science policy. This work informs the Department of Jobs, Enterprise and Innovation and wider Government.
Forfás will be dissolved on the 1 August 2014 following the commencement of the Industrial Development (Forfás Dissolution) Act 2014. Forfas’ policy functions will be integrated with the Department of Jobs, Enterprise and Innovation (DJEI) from that date and will form the core of a new Strategic Policy Division within DJEI.