American Chamber of Commerce chief executive Mark Redmond is optimistic for the future despite the current challenging economic environment. He points out that US investment in Ireland has reached an all-time high, as has investment by Irish companies in the US. Indeed, Ireland is now ranked as the ninth biggest investor in the US.
“In spite of the global turbulence, US confidence in Ireland remains steadfast,” says Redmond. “Last July, we carried out a survey of the leadership of American companies based here and 95 per cent of them reported that their HQ in America had a positive view of Ireland as a location. And 79 per cent said their firms intended to increase employment in Ireland in the next 12 months. "
Political and social stability are key factors underpinning Ireland’s success in attracting US investment, he notes. “Ireland is the only English-speaking country in the EU with a common law tradition. It offers a gateway to the EU for American companies. Also, the country is seen as stable both politically and socially. Our economy and society are underpinned by rule of law. We exhibit all those hallmarks of democracy which are being eroded all over the world.”
Social progress is also important. “We have been on a journey for some years and are now seen as a very enlightened society,” he says “Social attitudes have changed greatly. Ireland was the first country in the world to introduce marriage equality following a popular vote. Social rights which we take for granted are under attack in countries all around the world. All these things contribute to making Ireland a location of choice for US companies.”
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And then there is the trust factor, “We are also hearing leading figures in the US administration like treasury secretary Janet Yellen talking about the concept of friend-shoring. What they are referring to is trusted locations around the world where it is safe for American companies to invest. Ireland demonstrated how it could step up during the pandemic and companies here played a critical role in global supply chains. Ireland is one of those trusted locations for investment.”
Looking to the next phase of industrial development here, Redmond believes innovation will be critically important. “We need policies that will foster and encourage innovation right across society,” he says. “When we look at areas like industry 4.0 and the growing importance of technologies like AI, machine learning, robotics, supply chain integration, smart data analytics and integrated automation – these are all areas of great opportunity for this country. Ireland can be seen as a centre of excellence in these areas and that will help us to continue to attract FDI.”
But there are some areas that require attention. “The Research and Development Tax Credit needs to continue to evolve to remain competitive with other locations,” says Redmond. “We also need to look at what we are doing in the third-level sector. We welcome establishment of the technological universities, for example. The consolidation of the institutes of technology into world leading technological universities of scale is already having an impact on the innovation ecosystem in the regions and engagement with multinationals there is going from strength to strength.”
There is also a need to continue to invest at primary and post-primary levels to foster aptitude in STEM subjects and other relevant areas, he believes. Softer skills are important as well. “The ability to work in teams and collaborate is now more important than ever. That needs to feature in schools. People working in multinationals now need to work as part of collaborative and inclusive teams as they develop solutions to new problems. Ireland is well placed in that regard. We have an extremely diverse talent pool and many US multinationals here have more than 100 nationalities working for them in Ireland.”
Ireland also as a proven capacity to deal with uncertainty. “We have been through the global recession, Brexit, the pandemic, and are now dealing with spiralling inflation and energy costs and the disruption caused by the Russian invasion of Ukraine,” he notes. “We are going to be dealing with an uncertain environment for a long time to come. But for a small country we have an extraordinary impact. Ireland has just 0.06 per cent of the world’s population yet four fifths of the stents used globally are manufactured here. We have demonstrated a capacity to deal with uncertainty and come up with solutions over a long period.”
There are challenges, of course. “In our survey, 100 per cent of the leaders said cost competitiveness was a critically important issue. We have seen a significant increase in inflation and dramatic energy cost increases. For some companies, their energy bill has gone up sixfold. That additional cost pressure means budgets have to be cut elsewhere. It’s very challenging.”
While energy prices may be beyond our control, in the short term at least, there are other areas that can be addressed. “There are difficulties with the planning process, and it is not fit for purpose for a small open economy like ours,” he says. “We are not looking for certainty of outcome, just certainty of timelines and process. The attorney general is looking at the issue and we are awaiting his report.”
On energy, he says the American Chamber sees three phases to the issue. “We are currently in the middle of responding to the immediate problem. After that we need to look at the medium term demands on the system. In the longer term Ireland definitely has the capacity to be fully self-sufficient in renewable energy. If the full potential of the Shannon estuary for offshore wind is harnessed, it could meet the energy needs of a country the size of Germany. That will need significant investment and a careful step-by-step strategy, but the opportunity is there to be grasped.”
And he believes it can be. “We have done this before. The Ardnacrusha hydroelectric scheme cost one quarter of the country’s GDP at the time. That was a phenomenal achievement for the country. We need to adopt that Ardnacrusha mindset now. This could be the medtech of the future. Ireland has established itself as a global centre of excellence for that industry. It led to a lot of spin-off companies here and the development of a very strong industry and research ecosystem. That same opportunity now exists in the renewables space.”