Ireland has risen to seventh in the global league of countries attracting foreign direct investment in 2003.
The State rose two places as it bucked the trend of falling investment in developed economies, according to the World Investment Report published by the UN Conference on Trade and Development (UNCTAD).
The Republic secured $25 billion (€20.39 billion) in foreign direct investment in the 12 months, up 4 per cent on 2002. Over the same period, investment in the EU fell 11 per cent and among developed countries as a whole by 25 per cent. For the third year in a row, global foreign direct investment fell.
Dr Karl Sauvant, the director of UNCTAD's Division on Investment, Technology and Enterprise Development and author of the report, said Ireland's performance was "quite an accomplishment", particularly as much of the inflows were in the form of greenfield investment.
Speaking to The Irish Times, he said: "The focus on investment promotion in Ireland compared to emphasis on trade elsewhere has been key for Ireland. IDA Ireland has been extremely successful in spotting trends and getting support from the Government to target them."
While headlines often concentrate on the success in securing manufacturing investment, like Intel, the shift to foreign investment in the services sector has been one of the drivers of Ireland's success in recent years.
Services now account for about 60 per cent of global foreign investment, up from less than a half in 1990, and the UNCTAD says this is expected to continue, reflecting the relative dominance of the services sector in the global economy.
The advance of information and communication technologies has seen Ireland lead the way in "offshoring", the move by corporations to site back-office services where they can most effectively and efficiently be carried out.
The State secured more than half the shared services centres set up in the European Union last year and 14 per cent of the projects announced globally.
"Ireland is well-poised to maintain its lead role in offshoring," said Dr Sauvant. But he warned that this would require a move up the value chain - away from call centres - and investment in infrastructure and skills training.
Irish companies have been slipping behind in the area of investing overseas. Last year, just $1.9 billion was invested directly in other countries by Irish firms, well down on the $3 billion in 2002 and the lowest figure since the mid-1990s.
"Outflows are one signal of international competitiveness of indigenous firms," said Dr Sauvant. "It is something to keep an eye on. However, the Irish figures are small and one big project could turn them around."
