Ireland grows foreign direct investment in R&D

Ireland’s inward investment arm, IDA Ireland, gave an upbeat and positive message in its review of 2007, saying the country continues to attract significant foreign direct investment (FDI) despite challenging global economic circumstances.

“As Ireland continues its transition into a leading 21st-century innovation-led economy, FDI will continue to play a significant role in our future growth and economic prosperity” said John Dunne, Chairman of IDA Ireland, at the launch of the report.

“The Irish economy continued its transformation in 2007,” said Dunne. “Since the beginning of the new millennium, the manner in which IDA Ireland does its business has been evolving in line with changes in the global economic environment. Our focus is aligning around significantly increasing investment across three key pillars, namely global services, high technology manufacturing and Research, Development and Innovation.”

Of the 114 new investments in 2007, 26 per cent were by clients new to IDA, 40 per cent were R&D investments, while 34 per cent were expansions to existing facilities. A total of  €2.3 billion future capital investment was secured, with a third of investments coming from non-US corporations,

IDA-supported companies paid almost €3 billion in corporate tax in 2007, accounting for around 47 per cent of the total tax take, and accounted for 85 per cent of manufacturing exports during the year.  

Barry O’Leary, CEO of the IDA, noted that Ireland remains the most FDI-intensive economy in Europe. “We have continued to re-position Ireland and ensure we are viewed as one of the leading innovation led and knowledge-based economies of choice globally for mobile investment.”

Expansion overseas

In the past year the IDA has expanded its overseas activities, opening new offices in France (Paris) and China (Shanghai). New offices in India (Mumbai), the US (Boston and Orange County) and extra personnel in Atlanta, New York, Mountain View and London are planned in 2008

O’Leary said, “IDA has continued to focus on seeking inward investment from top-tier corporations and companies within a number of high potential business sectors including pharmaceuticals and biotechnology, medical technology, financial services, international services, digital media, engineering and information communications technologies.”

“We are confident that there are further FDI opportunities for Ireland in these key sectors which will be augmented in the future by a number of emerging technologies, new business models and sectors such as clean-technology, convergence and services innovation.”

During the past three years, more than €5 billion in FDI projects approved by the IDA Ireland were in manufacturing. In 2007 this included Merck & Co Inc., which chose Carlow town for its €200 million vaccine facility, having acquired the entire 26-hectare IDA Business and Technology Park. KCI, a leading medical technology company, established operations in Athlone, Co. Westmeath, and GlaxoSmithKline (GSK) announced an investment of up to €250 million over five years in its development and manufacturing campus at Currabinny, Co. Cork to manufacture products, including the active ingredient for TYKERB (lapatinib), a new oral treatment for advanced breast cancer, while Baxter announced a €75m investment for Castlebar.

Meanwhile, the government’s goal of establishing Ireland as a location for world-class research and innovation bore fruit in 2007 with investments and academic and business collaborations in 2007 including:

1. Merrill Lynch is establishing a €30 million research, development and innovation centre in Dublin;

2. Smith and Nephew partnering with the National University of Ireland in Galway to develop treatments for orthopaedic joint diseases;

3. Intel established the Technology Research for Independent Living Centre focused on the use of technology to support independent living for the elderly in consortia with three universities;

4. IBM set up the Tivoli software development labs in Cork and Galway with a €24 million investment;

5. GlaxoSmithKline initiated a research and development collaboration on Alzheimer’s disease;

6. Wyeth Corporation said it would invest €24 million in R&D and process development facilities in Dublin.

In addition, Microsoft said it will invest an initial $500 million in its new European data centre in Dublin to provide online services to millions of Microsoft users in the region.

O’Leary concluded, “Despite the economic turbulence currently being experienced, a reasonably strong investment pipeline coupled with our positive reputation in some of the world’s leading companies leads us to be optimistic that we will continue to secure for Ireland the best in innovation and investments from around the globe.” So far this year, IDA has announced 22 investments.