Ireland Update Summer 2014 Notes
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  • 1. Ireland Update Summer 2014
  • 2. © American Chamber of Commerce 2014 Ireland The Republic of Ireland has a population of 4.5 million people. Demographically the country has the youngest population in Europe, with 50% of inhabitants under the age of 35. There is a labour force of 2.1 million. Ireland’s share of population aged 15-34 with third level qualifications is higher than in the US or UK, and above the OECD average. Ireland is a republic with a parliamentary democracy and stable political environment. Ireland is an export-orientated and open economy, and has a pro-business environment. The country has been a member of the European Union since 1973 and has used the Euro currency since its inception in 2002. Ireland’s location in the Atlantic makes the island a gateway between North America and continental Europe. It provides easy access to the European market and its 500 million consumers. Ireland’s main trading partners include the US, UK, Eurozone, Asia and Australia. Major industries in the country include ICT, Life Sciences, Financial Services, Med Tech, Online, Agriculture and Tourism. The economy is composed of: • 69% Services • 29% Industry • 2% Agriculture Major centres of industry include: • Cork • Dublin • Galway • Kerry • Letterkenny • Limerick • Sligo • Waterford Ireland Update Summer 2014
  • 3. © American Chamber of Commerce 2014 The Irish economy today Ireland is continuing to experience economic growth. The government budget deficit has decreased every year since 2008. - 11.3% 2009 - 4.8% 2014 - 2.9% 2015 1 Ireland’s exports reached record levels of €177 billion. Total exports are expected to grow by 4% in real terms this year led by continued growth in service exports. 2 Budget 2014 included over €500 million pro-jobs tax measures. The latest PMI (Purchasing Managers Index) figures indicate a recovery in the manufacturing, services and construction sectors. We have seen a considerable return to growth in our major trading partners (US, UK and Eurozone) on a quarter-on-quarter basis. - Between them, these economies represent approximately 75% of our total export markets Employment growth of 61,000 was recorded for 2013, this represents a 3.2% increase from the previous year. Unemployment levels have fallen for 19 successive months. GDP is forecast to grow by 2.1% during 2014. Ireland was the only country in the EU to experience a decrease in inflation between 2008 and 2012. 3 1 Department of Finance, ‘Exiting the Bailout’ Infograph 2 IDA Ireland, ‘Ireland Q1 2014 Update’ 3 CSO ‘Measuring Ireland’s Progress 2012’ Ireland Update Summer 2014
  • 4. Exiting the Bailout © American Chamber of Commerce 2014 Ireland successfully exited the Troika programme on December 15 th 2013. The Managing Director and Chair of the IMF, Christine Lagarde, said: “Ireland has successfully completed its EU-IMF supported program. Steadfast policy implementation by the Irish authorities has underpinned the achievement of core program objectives: stabilizing the financial sector, significantly improving the fiscal position, and regaining market access. Renewed job creation and a range of positive indicators signal an emerging recovery. As a result, Ireland is now in a much stronger position than when its program began.” As a result of the programme a number of important measures were taken to restore financial sector viability. - The banks have been recapitalised and restructured - The financial regulatory system was transformed - The Mortgage Arrears Resolution Targets set Public finances were put on a sustainable path. - Government deficit has decreased from 11.3% in 2009 to 4.8% in 2014, and is expected to fall to 2.9% in 2015. Ireland is returning to financial market funding. - Significant cash balances of over €20 billion have been raised through successful bond auctions by the NTMA* in 2012 and 2013. GDP is forecast to grow by about 2.1% in 2014 – driven by developments in the domestic economy. The conditions set by the Troika have been delivered. The key objectives of the programme have been achieved. Ireland’s credit rating was raised in January 2014 by the influential credit agency Moody. Ireland’s credit rating outlook was also changed from stable to positive, which indicates the possibility of a further upward re- rating later in the year. In 2012 Ireland passed the Stability Treaty which locks Ireland into a more prudential fiscal path along with the other members of the European Union. Ireland Update Summer 2014 * National Treasury Management Agency – provides a range of asset and liability management services to government. 4 Department of Finance, ‘EU-IMF Programme of Financial Support’ (December 2013)
  • 5. Overall impact of FDI © American Chamber of Commerce 2014 Ireland Update Summer 2014 5 UNCTAD, Global Investment Trends Monitor 6 IDA Ireland, ‘Ireland Q1 2014 Update’ 7 IDA Ireland, ‘Ireland Q1 2014 Update’ 8 Department of Finance, ‘Report Card’ (December 2013) Foreign direct investment in Ireland has a significant impact on the economic and social development of the country. The IDA (Industrial Development Agency) is the Irish Government agency responsible for foreign direct investment. According to their figures: - There are currently 1,033 foreign companies in Ireland - These companies directly employ 161,112 people - And are responsible for the indirect employment of 274,000 In 2013 over 70% of IDA investment announcements were made by US companies. As a host economy Ireland was ranked 10 th for inflow of FDI in 2013; up one place from last year. 5 Foreign companies not only create huge employment opportunities for the Irish workforce but also contribute significantly to the economy. Multinationals spent €20.8 billion in the Irish economy in 2013 - €8 billion on payroll - €2.4 billion on Irish materials - €10.4 billion on Irish services A further €1.3 billion was invested in research and development. Multinationals also contribute €2.8 billion to the Irish exchequer annually in the form of corporate tax. 6 This represents almost 70% of the total corporate tax receipts in 2013. Multinationals were responsible for €120.8 billion worth of exports, accounting for nearly 70% of all Irish exports in 2013. 7 Employment grew at FDI firms by 4% per annum since 2011. 8
  • 6. The Irish-US Economic Relationship © American Chamber of Commerce 2014 9 Irish Exporters Association Ireland Update Summer 2014 Ireland enjoys a very special relationship with the US and nowhere is this more evident than in the business linkages. The US is the single largest source of Foreign Direct Investment in Ireland. There are currently over 700 US companies operating in the Republic of Ireland. Collectively US companies have $204 billion in foreign direct investment in Ireland. - During 2009-2012 Ireland accounted for 14% of US investment in the EU, and on a global basis 8.5% of total US investment in the same period - This equate to more than the total invested in the much hyped BRIC economies (Brazil, Russia, India, China) or all of South America - As of early 2013 Ireland ranked as the third largest recipient of US FDI - In the five years between 2008 and 2012, US firms invested more capital in Ireland than in the previous 58 combined - The US accounted for 72% of all foreign direct investment into Ireland in 2013 and 26% of Ireland’s GDP Ireland now ranks the number one export platform in the world for US affiliates based on the latest available data. - US firms exported products and services worth €93 billion from Ireland into world markets 17 of the top 20 export companies in Ireland are American. 9 The economic and social contributions made by US companies in Ireland is sizable, there are 115,000 people directly employed by US FDI in Ireland. - There are tens of thousands more people indirectly employed as a result of multinationals in Ireland The relationship however is by no means a one way street with Irish companies also making substantial investments in the US. - Irish companies are responsible for the direct employment of over 130,000 - There are 227 Irish companies operating in the US - They have 2,600 locations across all 50 states - Irish investment in the US is worth $25 billion - The US is one of Ireland’s top trading partners with bilateral trade (exports to + imports from the US) between the two countries worth over €28 billion in 2012
  • 7. The Social Impact of US companies © American Chamber of Commerce 2014 Ireland Update Summer 2014 The 700 US companies in Ireland have many benefits beyond the economic. While it is true that they employ 115,000 workers, their exports exceed €100 billion and account for 26% of Irish GDP, they are also responsible for significant social benefits in their local communities and throughout the entire country by providing CSR programmes and other activities. The social impact of American companies is widespread. The American Chamber conducted research which represents over 80,000 employees and revealed in excess of 2,000 projects conducted by US companies. The preferred approach of many businesses is to donate company hours by encouraging employees to become involved in projects throughout their working day. In 2012 American companies donated over 164,000 volunteer hours which combines to an impressive 96 years in total. US companies supported a variety of areas, including: - Education - Health & Environment - Community Support - Overseas Aid - Arts & Sports Education was the destination for the most support, accounting for almost 40% of company donations.
  • 8. FDI Announcements © American Chamber of Commerce 2014 Ireland Update Summer 2014 2014 has started very strongly for FDI in Ireland. In the first six months of the year Ireland won 24 new investment projects from US companies, which will lead to the creation of over 1950 jobs. - 12 first time investments - 12 expansions Company Location Description Aspen Pharmaceuticals Dublin Expansion Irish operations Airbnb Dublin Expansion of Irish operations Alexion Athlone New vialling facility Alexion Dublin Expansion of Irish operations BD Louth Investment in Irish operations BioMarin Cork New manufacturing operations BioMarin Dublin Expansion of Irish operations capSpire Dublin New international office Ethicon Biosurgery Limerick New manufacturing operations Global Review Cork New European HQ HedgeServ Cork Expansion Irish operations IBM Dublin New multilingual operations centre Jazz Pharmaceuticals Roscommon New manufacturing and development facilities KEMP Technologies Limerick Expansion of EMEA HQ Lobo Leasing Dubin New global HQ NeoMed Inc. Dublin New international HQ New Relic Dublin New international office Oxford International Cork Expansion of European HQ SEKO MedTec Solutions Galway New European control centre Sure Power Dublin New Irish operation SurveyMonkey Dublin New international office Tintri Cork New EMEA technical support centre Tyco Cork New business service centre VCE Cork Expansion of international HQ 2013 Announcements Total employment at FDI companies reached new levels and stood at 161,112 by the end of the year. In 2013 the IDA had its highest net job-growth in a decade. Their client-companies created 13,367 jobs, with a net increase in employment of 7,071. In 2013 Ireland won 164 investment projects. - 78 of these were first time investments; which is an 18% increase from the previous year - 59 were Expansions - 27 were Research, Development and Innovation Projects Job gains were evident across all sectors that were targeted by the IDA, but were particularly evident in digital media/content, ICT, international services, life sciences and business services. 2013 was a successful year for foreign direct investment in Ireland. American companies made 118 investments, accounting for 72% of all IDA announcements.
  • 9. FDI Announcements (contd.) © American Chamber of Commerce 2014 Ireland Update Summer 2014 Company Location Description ACI Worldwide Limerick Expansion of software development centre Acorn Dublin New positions as part of an ongoing expansion Adara Dublin New EMEA HQ AdRoll Dublin New European HQ Alexion Dublin New office and laboratory facility AOL Dublin New software engineering roles Aon Dublin Expanding its centre for innovation and analytics Axway Dublin Expansion of R&D centre of excellence Charles River Dublin New managed service centre Citrix Dublin New positions as part of ongoing expansion Dell Dublin Opening of a new Dell Bank Demand Media Dublin New Dublin office DePuy (Johnson &Johnson) Cork Investment in R&D programme eBay, Inc. Louth Expansion of operations centre eMaint Dublin New EMEA HQ EMC Cork Major plant expansion EtQ Limerick New EMEA HQ Etsy, Inc. Dublin New EMEA HQ Facebook Dublin Expansion of international HQ FireEye Cork New EMEA technical support centre Genworth Clare New office base Gilt Dublin New platform innovation centre Groupon Dublin New software development centre Guidewire Software Dublin Expansion of global services centre Indeed Dublin Expansion of EMEA HQ Jaspersoft Dublin Expansion of European HQ Loop1 Systems, Inc. Cork New EMEA customer support, sales and technical centre Marin Software Incorporated Dublin New international HQ McAfee Cork New global R&D centre of excellence Medtronic Galway New customer innovation centre Microsoft Ireland Dublin New positions added Minds + Machines Dublin New core technical operations MongoDB Dublin Expansion of EMEA HQ National Pen Louth New positions at international HQ Nypro Waterford New medical device manufacturing facility ON Semiconductor Limerick Expanded R&D facilities Overstock.com Sligo New software development centre Pearl Street Enterprises Dublin New worldwide HQ Pfizer Nationwide New investment in manufacturing sites Prometric Louth New IT positions Qualtrics Dublin New European HQ Quantcast Dublin New EMEA HQ Regeneron Limerick New biopharmaceutical production facility Salesforce.com Dublin New positions added Squarespace Dublin New EMEA HQ Stream Global Services Dublin New positions added Symantec Dublin New European customer management centre TripAdvisor Dublin New engineering hub Twitter Dublin Expansion of European HQ UPC Limerick New positions to support European competency centre Virtu Financial Dublin New European HQ Vistakon Limerick Expansion of manufacturing operations Whitehouse Analytical Labs Cork New laboratories Worldwide TechServices Limerick New European HQ Yahoo! Dublin Expansion of Dublin operations centre Zendesk Dublin New European data centre
  • 10. Key Sectors There are a number of areas in which Ireland has been successful in establishing durable sectors that continually attract and grow foreign investment in the country. The sustainability of these key sectors is crucial to Ireland’s recovery and growth, and most of these industries are driven by FDI. Ireland is home to: ICT: All of the top 10 ICT companies Born on the Internet: All of the world’s top 10 companies Gaming: 3 of the top 6 gaming companies Pharmaceuticals: 9 of the top 10 pharmaceutical companies Medical Devices: 15 of the top 20 Med Tech companies Engineering: 7 of the top 10 Industrial Automation companies Financial Services: 15 of the top 20 Financial Services firms © American Chamber of Commerce 2014
  • 11. ICT © American Chamber of Commerce 2014 Ireland Update Summer 2014 Ireland is home to: - 10 of the top 10 global ICT companies - 9 of the top 10 global software companies - 3 of the top 3 global security software companies - 3 of the top 3 global enterprise software companies - 4 of the top 5 IT services companies Over 105,000 people are employed in the technology sector in Ireland. Ireland has one of the highest concentrations of ICT activity and employment in the OECD. ICT exports are worth €72 billion per annum which accounts for 40% of total national exports. 10 Computer services accounted for 20% of Ireland’s exports in 2013. 11 Total exports from the sector grew by 12% in 2013, maintaining Ireland’s position as the second largest exporter of computer and IT services in the world. 12 Of the top 20 Irish exporters in Ireland, 10 of them are focused in the ICT arena. 3 of the top 5 exporters are American technology companies: 13 1. Microsoft 2. Google 4. Dell Products Why Ireland? 55,000, that is 28% of third-level students, were enrolled in Science and Engineering courses, and this is continuing to grow. 2013 witnessed a significant uplift in 1 st preference applications for STEM (Science, Technology, Engineering and Maths) subjects compared to 2011. - Science up 7.5% - Computing up 6.6% - Engineering up 4.6% 14 According to the Global Innovation Index, Ireland ranks: - 1 st for communication, computer and information services exports - 2 nd for high & medium-tech manufactures - 4 th for knowledge and technology outputs 15 The government has recognised the importance of this sector in their Medium Term Economic Strategy. “Investment in Science, Technology and Innovation (STI) is an essential component of supporting an innovative and enterprising economy. It assists in creating and maintaining high-value jobs and attracts, develops and nurtures business, scientists and talented people ensuring Ireland is connected and well- respected internationally”. 10 Ibec, ‘The Global Technology Hub’ 11 IDA Ireland, ‘Ireland Q1 2014 Update’ 12 Irish Exporters Association 13 Irish Exporters Association 14 IDA Ireland, ‘Facts about Ireland’ (September 2013) 15 Global Innovation Index 2013
  • 12. Online © American Chamber of Commerce 2014 Ireland Update Summer 2014 16 Forfas, ‘The Games Sector in Ireland: An Action plan for Growth’ 17 Ibec, ‘The Global Technology Hub’ 18 IDA Ireland, ‘Why Ireland for hosting content?’ 19 Ibec, ‘The Global Technology Hub’ 20 Global Innovation Index 2013 Ireland is home to: - The top 10 ‘born on the internet companies’ - 3 of the top 6 gaming companies - The biggest names in social media Ireland’s average yearly growth of internet traffic is 200%. A report entitled ‘The Games Sector in Ireland: An Action Plan for Growth’ was published in 2011 at the request of the Minister for Jobs, Enterprise and Innovation and highlighted the potential of this industry. The report stated that the gaming sector globally is expected to grow to $82.4 billion by 2015. Ireland has the potential to increase employment in core games companies to 4,500 by 2014. 16 Content and application development is currently a global $300 billion per annum business and is expected to grow to $650 billion per annum by 2020. Ireland has the potential to emerge as a dominant player in this space, particularly given the country’s growing high-tech workforce. 17 Ireland has also become a hub for hosting content for companies that serve a global community of users. - Ireland’s data hosting market will grow by 18% a year between now and 2016 18 - US-based content companies must host EU customer data within Europe - Ireland holds 60,000 square metres of net data centre floor space The digital services market is predicted to make up nearly 8% of European GDP by 2015. 19 Ireland has the potential to become the digital hub for SMEs across Europe. Why Ireland? Ireland has the skilled workforce to meet the needs of online companies. Irish workers are known for their innovation and flexibility which is vital to this fluid and fast-paced sector. Ireland was ranked as the 10 th most innovative country in the Global Innovation Index 2013. 2014 IMD World Competitiveness Yearbook ranked Ireland: - 1 st for Flexibility and Adaptability of workforce - 1 st for Availability of skilled labour According to the Global Innovation Index, Ireland ranks: 20 - 13 th for Online creativity Ireland has a strong track record in a number of high quality skills required by the sector, including customer technical support, software engineering, and the creative arts. There has been considerable growth in the provision of digital media and online related courses at post Leaving Cert (PLC), undergraduate and postgraduate levels, from which a sizable number of graduates have begun to emerge on an annual basis. 21 Universities and institutes of technologies have recorded considerable increases in the uptake of computer science courses in recent times. The government has recognised the importance of this sector and has set itself a target of doubling the annual output of honours degree ICT undergraduate programmes by 2018. 22
  • 13. Pharmaceuticals © American Chamber of Commerce 2014 Ireland Update Summer 2014 23 IDA Ireland, ‘Ireland Q1 2014 Update’ 24 Eurostat 25 IBEC/Pharmaceutical Ireland, ‘Ireland: The location of choice for scientific investment’ Ireland is home to 9 of the top 10 pharmaceutical companies in the world. Approximately 120 overseas companies have plants in Ireland. 24,500 people are directly employed in the sector - Over half of which are third-level graduates 24,000 people are indirectly employed providing support services. Ireland is the 8 th largest producer of pharmaceuticals in the world. Pharmaceuticals and Chemicals accounted for 30% of Ireland’s exports in 2013. 23 Pharmaceutical exports have shown continuous growth over the past decade. In the face of the severe global economic crisis, pharmaceutical exports grew by 42% – from €36.6 billion in 2006 to €52.1 billion in 2011. Ireland manufactures 5 of the world’s top 12 medicines. Ireland is the largest net exporter of medicines in the world. The sector has invested over €7 billion in Ireland over the decade and according to IDA the replacement value of the investment by pharmaceutical sector in the Irish economy is over €40 billion. Why Ireland? Ireland is the No.1 location for US FDI in chemicals, which includes pharmaceuticals. There are 33 FDA approved pharmaceutical/biopharmaceutical plants located in Ireland. Ireland has an exceptional record in terms of FDA inspections; they rate Irish facilities extremely high. Irish plants have put in place modern management practises such as lean and six sigma as well as multi-skilled and process-oriented organisational structures. Such initiatives are yielding excellent economic dividends on the investment through reduced levels of waste and improvements in productivity. Ireland has the highest proportion of science graduates in the European Union. 24 Irish universities are now in the top one percent of research organisations in the world for 17 fields of science, from immunology to engineering. 25 The Irish Government has committed €8 billion in research funding under the Strategy for Science, Technology and Innovation, and offers a competitive R&D tax credit to encourage companies in Ireland to conduct research. Science Foundation Ireland (SFI) was established in 2000, and plays a key role in facilitating collaboration between industry and academia in R&D. SFI collaborates with over 350 industry partners and is engaged in almost 2,000 academic collaborations across 56 countries. Ireland has established a number of centres for research and development. - The National Institute for Biotechnology and Training is a collaboration between four leading Irish academic institutions. Its purpose is to deliver state-of-the-art training/learning facilities and research solutions for the advancement of the BioPharma sector.
  • 14. Medical Devices © American Chamber of Commerce 2014 Ireland Update Summer 2014 26 IDA Ireland, ‘Ireland Q1 2014 Update’ 27 Global Innovation Index 2013 Ireland is home to 15 of the top 20 Med Tech companies in the world and 12 of the top 15 global medical device companies. The industry directly employs 25,000 workers. This is the highest number of people working in the industry in any country in Europe, per head of the population. There are 250 Med Tech firms in Ireland. Irish Med Tech exports have an annual value of €7.2 billion. Medical devices accounted for 6% of Ireland’s exports in 2013. 26 Exports of medical devices and diagnostics products now represent 8% of Ireland’s total merchandise exports. Ireland is one of the largest exporters of medical technology in Europe, second only to Germany. Why Ireland? According to the Global Innovation Index, Ireland ranks: 27 - 1 st for Communication, Computer and information services exports - 2 nd for High & Medium-high-the manufacturing - 3 rd for Knowledge diffusion - 4 th for Knowledge and Technology outputs - 13 th for University/Industry research collaboration Over 50% of MedTech companies have a dedicated R&D function – Ireland is particularly attractive for this as a result of the R&D tax credit, and research capabilities and facilities. Ireland has ascended the international ranking of scientific research capability – from 26 th in 2003 to 20 th in 2010. Ireland has scored a world ranking of 8 th in materials science, and 3 rd in Immunology. Since its inception in 2000, the Science Foundation of Ireland, has secured over €60 million from international sources annually and created a high level of Intellectual Property (IP).
  • 15. Financial Services Ireland Update Summer 2014 28 IDA Ireland, ‘Ireland Q1 2014 Update’ 29 The IFSC – the international financial services sector in Ireland, FSI/Accenture, 2010 15 of the top 20 Financial Services are located in Ireland. Financial services employ 33,000 people in Ireland. There are over 500 financial services firms located in Ireland - 80+ international banks - 60 head office life insurers 50% of the world’s top banks are located in Ireland. Ireland is the 7 th largest provider of wholesale financial services in the EU. Ireland is the 9 th largest international banking market. Financial services accounted for 9% of Ireland’s exports in 2013. 28 The total assets of foreign controlled branches and subsidiaries in financial services in Ireland are €820 billion. According to a survey done in 2010 the financial services in Ireland: - Accounted for 10% of multinational employment in Ireland - Contributed 7.4% of Irish GDP - Contributed approximately €2.1 billion to the Irish Exchequer 29 Aircraft leasing is also a strong industry in Ireland: - 50% of the world’s commercial aircraft are owned or managed from Ireland - 9 of the top 10 global aviation lessor have operations in Ireland - Over 40 aviation finance firms are located in Ireland Why Ireland? Ireland has a talented and skilled labour force. Almost 50,000 students are enrolled in Social Sciences including Business and Law, equating to 25% of total student enrolments. According to the Global Innovation Index, Ireland ranked 3 rd for firms offering formal training. Ireland offers a stable and business friendly environment. According to the Doing Business 2014 Report, Ireland ranked: - 15 th overall for Ease of Business - 6 th for Paying Taxes - 6 th for Protecting Investors - 12 th for Starting a Business - 13 th for Getting Credit © American Chamber of Commerce 2014
  • 16. What is made in Ireland? Ireland Update Summer 2014 30 All the above IDA 31 Love Irish Food 32 Above three are from the Science Foundation Ireland, ‘Discovery to Delivery’ Ireland’s attractiveness as a location for foreign direct investment has resulted in it producing and manufacturing items used by millions across the world on a daily basis, not to mention a host of globally iconic products. 33% of the world’s contact lenses 50% of ventilators used in acute hospitals worldwide 80% of the world’s stents (a medical tube) 100% of the world’s Botox An injectable device that 30 million diabetes sufferers rely on 30 45% of the world’s Tic Tacs – (36 Tic Tacs are produced per second in the Cork factory!) 12 million Jelly Beans annually 31 Sudocrem was invented and still produced solely in Dublin 1 in 5 burgers served in European McDonalds is made with Irish beef Intel Galileo board and Quark X1000 chip were both designed in Ireland and extend Intel’s capabilities in rapidly growing areas Driver vision systems technology is manufactured in Galway which can park your car without you being in it! ‘Microneedles’ – tiny needles etched into a medical patch which can painlessly deliver agents such as vaccines! A ‘speed gene’ test to help match horses with courses and inform breeding and training decisions. 32 © American Chamber of Commerce 2014
  • 17. Living and working in Ireland Ireland Update Summer 2014 33 IBM Global Locations Trends 2013 34 IBM Global Locations Trends 2013 35 Mercer, ‘Quality of Living Survey’ 2012 The country’s talented labour force is augmented by skilled workers from around the world who are attracted to Ireland and who can fill short-term gaps in the skills demands of business. Ireland has a lot to offer those who come to work and live in the country. Ireland ranks seventh in the UN Human Development Indices, which measures development by combining indicators of life expectancy, educational attainment and income into a composite index. Ireland comes ahead of countries such as Sweden, Switzerland, the UK and Singapore. Working: Given Ireland’s success in attracting multinationals there are plenty of opportunities to work in the world’s most reputable and iconic companies. Ireland offers considerable opportunities for well-paid and high-skilled employment. The average Irish salary is higher than the OECD average. Ireland was the top-ranking destination country by estimated jobs – per million inhabitants – in Europe, and second overall. 33 Dublin was ranked 11 th in the top-ranking destination city by projects globally. 34 According to the Irish Times Best 100 Companies – 6 of the top 10 are American companies in Ireland. Irish workers have been recorded as enjoying a good work-life balance. Living: Ireland offers a very good standard of living. - OECD ranked Ireland 15 th in terms of the Highest Quality of Life - High education rates, low levels of pollution, good safety levels and high life expectancy Dublin was ranked in the top 30 in the best places to live in the world. 35 Ireland is a culturally rich and diverse environment with something to offer all interests.   Music – has always been an important part of Irish culture, ranging from traditional to modern genres. Considering its size, Ireland has made a huge contribution to the world of music. U2, Thin Lizzy, Bob Geldof and the Pogues have made a big impact on the rock scene. More recently bands such as the Cranberries, Snow Patrol and the Frames, and up and comers such as The Script and Two Door Cinema Club, have all made their name on the global stage. Ireland has also produced singer-songwriters of a world-class, notably Van Morrison, Paul Brady, Christie Moore and Damien Rice. Ireland has also supplied the world of pop music with bands such as Westlife, Boyzone and one-fifth of One Direction! Gigs, concerts and festivals are on offer to audiences of all tastes and preferences throughout the country. While Ireland hosts acts from the around the world it also promotes local and home-grown talent.   Sport – is a very popular and active part of Irish life. There are a range of sports in which Ireland is competitive. The traditional games of Gaelic football, hurling and camogie, are played almost exclusively in Ireland and in Irish communities abroad. The inter-county games are hugely popular and attract large audiences throughout the summer months, culminating in the finals in Croke Park. Soccer is also well liked around the country, being played at school, senior and international level. Rugby has becoming increasingly popular in recent years, with Irish teams achieving great success on the provincial and international stage. Ireland is known for its beautiful golf courses so it is no surprise that we have produced so many world-class players. These include Paul McGinley, Rory McIlroy, Graeme McDowell, Darren Clarke and Padraig Harrington.   Arts and Literature – form an integral part of Ireland’s cultural fabric. Ireland has a proud history of producing writers, poets, playwrights and artists who are celebrated around the world. For many their birthplace, Ireland, played a central role in forming the basis or inspiration of their work. There is plenty to do and see in Ireland for those with an interest in the arts. The Irish theatre companies, such as the Abbey, the Gate and the Druid, host the work of visiting companies and stage the work of Ireland's most famous playwrights such as O’Casey, Synge, Wilde and Yeats. Museums and galleries in Ireland can satisfy all interests. From natural history to national history, from Celtic manuscripts to modern art and from the Phoenix Park to Croke Park; there is something for everybody! © American Chamber of Commerce 2014
  • 18. Global endorsements Ireland Update Summer 2014 36 In conjunction with Cornell University, INSEAD and World Intellectual Property Organization 37 In conjunction with International Finance Corporation and The World Bank Prestigious financial magazine, Forbes, ranked Ireland number one on their list of ‘The Best Countries for Business’. Ireland was the only nation to score in the top 15% of countries in every one of the 11 metrics examined. 2014 IMD World Competitiveness Yearbook ranked Ireland: - 1 st Flexibility and Adaptability of workforce - 1 st Availability of skilled labour - 1 st Investment Incentives - 1 st Attitudes towards globalisation IMD Global Location Trends 2013 ranks Ireland 4 th for FDI job creation and 1 st with regard to average value of investment projects. - 1 st globally for inward investment by quality and value - 1 st in Europe for the number of investment jobs per capita - 2 nd globally for the number of investment jobs per capita Ireland was ranked as the 10 th most innovative country in the Global Innovation Index 2013. 36 Out of 142 countries Ireland was ranked: - 4 th for Knowledge and Technology Outputs - 6 th for Business sophistication - 8 th for Institutions - 9 th for Human capital and research Ireland is ranked 15 th for Global Ease of Doing Business. 37 Strong performance indicators for Ireland include: - 6 th for Protecting investors - 6 th for Paying taxes - 8 th for Resolving insolvency - 12 th for Starting a business Ireland ranked 12 th in Bloomberg’s ‘50 Most Innovative Countries’ - 7 th for Manufacturing capability - 8 th for Productivity - 9 th for Tertiary efficiency An Ernst & Young index ranked Ireland as the world’s third most globalised economy. Our position was attributed to “outstanding performances in the movement of capital and finance and in cultural integration.” © American Chamber of Commerce 2014
  • 19. Global endorsements Ireland Update Summer 2014 We are considered the top location in Western Europe to Invest. 38 Ireland is ranked as the second best performing country in relation to jobs created from inward investment relative to population. 39 Ireland is ranked as the number one destination country by average value of investment project 2012. - “IBM-Plant Location International has developed an FDI value indicator that assigns a value to each investment project, depending on sector and type of business activity. This value indicator assesses the added value of knowledge intensity of the jobs created by the investment project. On this measure, Ireland continues to be the top performer in the world, resulting from the country’s success in attracting research and development (R&D) activities in life sciences and information communication technology coupled with high value investment in financial services.” 40 The 2014 Index of Economic Freedom ranks Ireland as the 9 th freest country in the world; and the 2 nd in Europe. - Over the 20 year history of the Index, Ireland has advanced its freedom score by almost 8 points, one of the 10 best improvements among developed countries - According to the Index despite recent difficulties, Ireland’s overall level of economic freedom has been consistently competitive, sustained by such institutional strengths as strong protection of property rights, a low level of corruption, efficient business regulations and competitive tax rates Ireland ranked 18 th in the Global Talent Competitiveness Index 2013. 41 Ireland was 20 th out of 122 countries in the Human Capital Index 2013. 42 © American Chamber of Commerce 2014 38 Site Selection, ‘Best to Invest’ 39 IBM Global Location Trends, ‘Annual Report 2013’ 40 IBM Global Location Trends, ‘Annual Report 2013’ 41 INSEAD 42 World Economic Forum
  • 20. Why Ireland for FDI? Ireland Update Summer 2014 The golden pyramid of Talent, Tax and Competitiveness is central to Ireland’s success in attracting FDI. The formula, though simple, has proven effective. © American Chamber of Commerce 2014
  • 21. Tax Ireland Update Summer 2014 43 OECD Global Forum on Transparency and Exchange of Information for Tax Purposes Ireland has a competitive and transparent tax regime which encourages investment. The government has reaffirmed its commitment to maintaining the current corporate tax rates which provides investors with certainty and stability. “The Government remains 100% committed to maintaining the 12.5% Corporation Tax Rate.” - Budget 2013 Speech, Minister for Finance, Michael Noonan, TD Ireland offers a very competitive 12.5% corporate tax rate. - Lowest rate among our competitors, including China, the UK, India, France and the US - 6 th for ease of paying taxes The government introduced a 25% R&D tax credit for companies who engage in research and development. - 70% of companies who conduct R&D activity in Ireland are foreign multinationals - IDA client-companies invested 1.3 billion in research and development in 2013 - A review of the R&D tax credit found it was among the “best in class” internationally - 88% of the €1.96 billion spent on R&D by businesses in 2012 was incurred on current expenditure (such as R&D staff) - Such investments go beyond the direct employment it creates and acts as an anchor, embedding Irish operation of foreign multinationals at the heart of global operations An Intellectual Property (IP) regime provides a tax write-off for broadly defined IP acquisitions. Ireland has a transparent tax and legal system. The country has an EU-approved stable tax regime, with access to extensive treaty networks and EU Directives. - One of 120 members of the OECD Global Forum on Tax Transparency - Have signed 69 Double taxation treaties - 80% of world trade is covered by these treaties - Ireland has also concluded over 20 Tax Information Exchange Agreements Ireland received a very favourable report by the Global Forum when it volunteered to have its Tax System Peer-Reviewed in 2010. 43 Ireland has demonstrated its commitment to working with the international community to combat tax avoidance and evasion. - Ireland is one of the first countries to sign the Agreement to Improve International Tax Compliance with the US - Implements the Foreign Account Tax Compliance Act with the US - Signed (2011) and ratified (2013) the OECD/ Council of Europe Convention on Mutual Assistance in Tax Matters - Along with France, Japan and the United States is a bureau member of the OECD’s Forum on Harmful Tax Practices © American Chamber of Commerce 2014
  • 22. Talent Ireland Update Summer 2014 44 Eurostat EU Labour Force Survey 2013 45 Economist Intelligence Unit ‘Benchmarking Global City Competitiveness 2012’ 46 PwC 47 Sigmar Recruitment Ireland has developed a reputation for having a skilled and flexible workforce. The country’s English- speaking labour force has proved itself one of the most attractive features of Ireland for investors. 50% of population is under 35 years old. - Has one of the youngest populations in Europe Ireland is ranked 1 st for availability of skilled labour. Ireland was ranked 1 st for flexibility and adaptability of workforce. - Particularly important in terms of the fast-pace and changing nature of modern business Ireland is ranked 1 st in Europe for attaining third level education. 44 - 60% of students go on to higher education - Ireland’s share of population aged 15-34 with third level qualifications is higher than in the US or UK, and above the OECD average - There are approximately one million students in full-time education and roughly 196,000 students in third- level education. The country is ranked in the top 5 for quality of education system. - Ireland was ranked 5 th in the IMD Yearbook for having an educational system which can meet the needs of a competitive economy. The Human Capital Index 2013 ranked Ireland as follows: Education - 5 th for quality of the education system - 12 th for tertiary education attainment - 20 th for quality of math and science education Workforce and Training - 5 th for ease of finding skilled employees - 10 th for capacity to attract talent Dublin city was ranked 1 st in the world for human capital. 45 Ireland scored ahead of Western Europe, and on par with the US, for human capital return on investment. The Irish results show that for every euro spent on employees the return to the organisation is €1.36. 46 Ireland’s total investment in knowledge (including investment in public and private spending on higher education) increased by an average annual rate of over 10% over the past decade compared with averages of around 3% by the EU and the OECD. 47 © American Chamber of Commerce 2014
  • 23. Talent Ireland Update Summer 2014 Our workforce is consistently accredited across all sectors for attracting investment into Ireland: - Cisco: “The quality and professionalism of the people we employ and the business community we work with in Ireland is more than a match for any of our locations worldwide.” - Dropbox: “By opening our international headquarters in Dublin and tapping into the large talent pool that exists there, we’re better positioned to serve even more people locally while we continue to grow.” - HedgeServ: “We are delighted with the results that HedgeServ is achieving in Cork. The Cork area is rich with highly educated, talented industry professionals. The quality of talent available in Ireland has enabled HedgeServ to deliver the highest quality of service to our clients.” - LogMeIn: “Dublin represents a great location for our continued European expansion, given the unique combination of a highly educated, mobile savvy workforce, and a growing innovation scene made up of some the biggest names in technology.” - Regeneron: “Ireland has a highly educated work force and a strong biopharma industry…We see Limerick as a good place to do business – the area has excellent educational institutes, a strong community spirit and a solid transport infrastructure.” - SEKO MedTec Solutions: “Galway is our preferred location because of the talented pool of well-educated people with a deep knowledge of the Medical Technology industry sector.” - TripAdvisor: “As a global and growing company, we need to expand the places where we can find best- in-class talent. Given the robust roles we are looking to recruit, we felt it was important to base our new engineering hub in a location that had a history of supporting technology and innovation, and had a talent pool to recruit from, and in that respect Dublin fits the bill perfectly.” - Virtu: “We selected Dublin as our European HQ because of the available talent pool of well-qualified and highly-educated people. We have further expanded our business in Ireland because of the success we have had doing business in Ireland.” © American Chamber of Commerce 2014
  • 24. Competiveness Ireland Update Summer 2014 48 IDA Ireland, ‘Ireland Q1 2014 Update’ 49 Eurostat 50 CSO, ‘Measuring Ireland’s Progress 2012’ 51 Forfas, ‘Consumer Costs and Inflation’, (February 2014) 52 IDA Ireland, ‘Ireland Q1 2014 Update’ Ireland has made considerable progress in regaining its cost competitiveness. Cost reductions are being experienced by business in Ireland in a range of areas such as labour and property costs. Ireland ranks 15 th in the IMD Competitiveness Yearbook 2014 - Moved up 9 places in ‘Overall Competitiveness’ since 2011 - ‘Economic Performance’ improved from 37 th in 2009 to 19 th in 2014 - ‘Government Efficiency’ improved from 30 th in 2011 to 4 th in 2014 - ‘Business Efficiency’ improved from 18 th in 2011 to 13 th in 2013 Ireland’s productivity is approximately 40% above the EU27 baseline. 48 Ireland is one of only three countries in the EU where nominal labour costs have fallen. 49 * Ireland was the only country in the EU to experience a decrease in inflation between 2008 and 2012. 50 Ireland’s annual average inflation rate (0.6%) for the 2008-2012 period was amongst the lowest in the EU and significantly below the euro area inflation rate (2.1%). This is in stark contrast to the period 1998-2008, when annual inflation in Ireland averaged at 3.4%, compared to 2.1% in the euro zone. 51 Office rents have fallen by more than half. The country was ranked in the top 10 for ‘Ease of starting a business’. * By 2014 unit labour costs, which measures the unit labour costs (ULCs) output in the economy, will have improved 22% versus the EU27. 52 The European Commission has noted that Ireland has recorded “a rather steep fall in ULC and this is expected to continue through 2014”, which compares favourably to the small decreases that are forecast for the EU and Euro area. © American Chamber of Commerce 2014
  • 25. Conclusion Ireland Update Summer 2014 The Irish economy is returning to growth. Ireland has successfully exited the bailout, with the key objectives achieved, and Moody’s has raised the country’s credit rating. Foreign direct investment into Ireland has been at the core of her recovery and growth. - Total employment at FDI companies reached new highs last year of 160,000+ - The IDA had its highest job growth in a decade in 2013 - Multinationals spent €20.8 billion in the Irish economy and contributed €2.8 billion to the exchequer through corporate tax receipts - FDI firms also accounted for nearly 70% of exports. The US is the single largest source of foreign direct investment in Ireland - Accounted for 73% of all FDI in Ireland – worth $204 billion - Responsible for 26% of our GDP - Employ over 115,000 people directly The key sectors of ICT, Online, Pharmaceuticals, Medical Devices and Financial Services continue to attract and grow investment in Ireland. There are three pillars at the core of Ireland’s success in securing FDI: Tax – Ireland’s headline corporate tax rate of 12.5%, R&D tax credit, and competitive and transparent tax system is attractive to investors. Talent – Ireland’s young workforce is known for its flexibility and adaptability. The country has a reputation for the availability of skilled labour and innovative and entrepreneurial thinking. Competitiveness – Ireland has made progress in regaining cost competitiveness in recent years. It was the only country in the EU to experience a decrease in inflation between 2008-2012. The naming of Ireland by Forbes magazine as ‘The Best Country to do Business’ is a testament to the enduring attractiveness of Ireland as a place to invest. © American Chamber of Commerce 2014
  • 26. For Further Information American Chamber of Commerce Ireland Tel: +353 (0)1 661 6201 | www.amcham.ie | Twitter: @AmericanChamber | info@amcham.ie | Disclaimer: The information contained in this document is meant for general information purposes only. The information contained in these notes is not guaranteed, although the American Chamber has aimed to ensure its accuracy. Any expressions of opinion are subject to change without notice.