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FDI - Ireland’s 50 year overnight success story

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Ireland has become the prime location for US companies who are looking to expand their operations outside North America and has developed an enviable reputation for attracting inward investment or FDI. This has not happened overnight and this skill and national competence has been conceived, developed and honed over many decades, a real 50 year overnight success story. From the very first multinational corporation to locate operations in Ireland, Henry Ford in 1917 to one of the latest arrivals Squarespace. Indeed it’s become hard to keep up with all the announcements from the Industrial Development Authority (IDA), Ireland’s state investment agency. 2013 was a singularly great year for the agency, a record year for multinational companies with 164 projects won for Ireland, 78 from companies investing for the first time in Ireland, an 18% increase on 2012 with an increase of over 7,000 jobs.

The level of investment in Ireland by US companies is phenomenal - more capital invested in Ireland since 1990 ($189bn) than Brazil, Russia, India and China combined. Approximately one-quarter of Ireland’s GDP is from US companies. There is nowhere else in the world (outside the US of course) where there are more US multinationals and emerging companies. 70% of Ireland’s foreign direct investment comes from the US. In the first half of 2013, Ireland emerged as the third largest recipient of U.S. FDI.

Forbes described Ireland in late 2013 as the best country in the world to do business. There was some scoffing at the time in some circles but the proof is pretty evident, further bolstered by Ireland recently topping a global survey on best places to invest in Western Europe.

Some further good news is that Ireland exited the Troika Bailout without a precautionary credit line in December and international markets have reacted very positively to this exit.

Among the companies to invest in Ireland in the past year were Tyco, Amazon, HedgeServ, Deutsche Bank, Twitter, EMC, eBay, Salesforce, Novartis, Vistakon, Facebook, Zurich, Symantec, De Puy, Yahoo, Sanofi and Indeed.com which is a pretty impressive list. 10 of the top born-on-the-Internet companies have operations in the country.

Tech giants Google (Google recently celebrated ten years in Dublin) and Facebook have their international headquarters in Dublin, along with LinkedIn, Twitter, PayPal, Amazon and Zynga.

So what is it about Ireland that makes it such an attractive place to invest? And it is not just the advantageous tax system. While that is an obvious competitive advantage it is only one of many factors in a company’s decision to spend millions or billions of dollars to establish a base in Ireland. Factors such as talent, English speaking, location as part of the EU. So have so many of the world’s top companies chosen to establish bases in Ireland? We asked a few leading executives from Squarespace, Paypal, Intel and EngineYard why they selected Ireland to invest in. 

Jesse Hertzberg COO Squarespace

Why Ireland?

Everything works in Ireland, low bureaucracy, not a lot of red tape, great service from the IDA as well as the government, we marvel at how easy it was. We first moved in February 2013 and 110 days later our first employee started. This is phenomenal. Being able to do this in 4 months is no accident. You don’t build this kind of capability overnight. The IDA were problem solvers for us.

20% of our business is outside the US. We needed to build out our customer care ahead of development and spend money on this. We wanted to have 24/7 global support evenly distributed, so this made it easier to provide. It’s English speaking, easy to get to with a large educated workforce. The Irish are customer service people, the people there are affable, friendly and Ireland already have a track record as a customer service hub

For us it had nothing to do with tax. We went for the people. 70% of our workforce are customer service people, this is central to our brand. 

How big is Squarespace in Ireland now?

There are 35 people employed now, 100 by the end of the year and this is 18 months ahead of schedule. We have very ambitious plans for our base in Dublin. Dublin has excellent infrastructure, diversity of workforce and this diversity of people has been good for the Irish workforce I think, helps give different perspectives. 

Has it been challenging to find the right people?

We had no problem getting people, we are oversubscribed. We have a great culture, flexibility and perks, our people feel lucky to be part of this family. 

Brendan Cannon, Corporate Affairs Director, Intel

What is it about Ireland’s success with FDI?

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