Listen to this articleBelow is our recent interview with Brian Conroy, Executive Vice President and Director of North America at IDA Ireland. IDA is the Irish government agency responsible for the attraction and retention of inward foreign direct investment into the country:
Q: Brian, can you tell us about IDA Ireland and what it does?
A: IDA Ireland is the Irish government agency responsible for attracting foreign direct investment to Ireland. About 1,700 multi-national companies have chosen Ireland for global operations, including more than 850 U.S.-based companies and the biggest names in tech, like Apple, Microsoft, AWS and others.
We work with companies every step of the way in their expansion process to answer their questions and help them take full advantage of everything Ireland has to offer, like our skilled talent base, government supports and modern infrastructure. We operate eight U.S. offices, which allows us to work with companies at a time and place that’s convenient for them.
Q: What are the biggest hurdles that tech companies need to navigate when expanding overseas?
A: The biggest challenge is weighing all the factors of the markets you’re considering so you can pick the one that best meets your company’s current and future needs. If you’re eyeing an expansion into the European Union, you have a lot to consider. Because the E.U. may be a single market with the world’s largest single market of 450m people and a workforce of 250m, but it has 27 member countries – and those countries have key differences in their workforce, taxation, business track record, language, and other areas.
For example, if you’re looking to establish a new operational location, does the country you’re considering have a strong pipeline of skilled and diverse talent? And does it have immigration policies that make it easy to bring in additional talent if needed? Does the country’s sustainability efforts and values align with yours? If you’re creating a new R&D site, does the country have supports like tax credits for R&D and innovation that you can leverage? If you’re establishing a new headquarters, is the country a pro-business location? And do companies in your sector have a good track record in the country?
In a sector like tech, things can change quickly. The crucial job that you’re trying to fill today could change in just a couple years. Because of this, you should consider workforce robustness and flexibility.
Q: How is the current economic environment impacting decisions of companies to expand operations?
A: This year has without a doubt been challenging for the tech sector. Companies have had to make staffing changes after increasing hiring during the pandemic and in response to difficult economic conditions. At the same time, the tech sector is still of huge importance in the U.S., the E.U. and elsewhere. Although companies may be in a challenging environment right now, we’re seeing still a reasonable pipeline of investment coming into Ireland. And that’s because companies are still looking at the medium to longer term with their investment strategies.
Q: Why do U.S.-based tech companies find Ireland a favorable location to do business?
A: As many in the industry know, Ireland is well-suited to the needs of tech companies. And that doesn’t happen by accident.
For example, there’s a global need for skilled workers right now, and Ireland is helping fill that need in several ways. The country has the highest level of STEM graduates per capita in the E.U., and its education system works closely with industry to design programs tailored to the skills needed in today’s jobs. In fact, the biggest names in tech helped develop the program for Ireland’s first master’s degree in A.I. The Irish government has partnerships with many industry bodies to meet industry training needs. And Ireland is proudly open to international talent, having among the highest share of international workers in the E.U.
Ireland has established a formidable tech sector over several decades. Today, the largest tech companies in the world operate in Ireland, including nine of the top 10 U.S. technology and software companies. Ireland has a robust start-up community.
Still, it’s not just the strong industry presence that has helped Ireland create a resilient tech sector. World-leading research institutions in Ireland bring together academia, industry, and government, giving companies valuable support and collaboration partners for their innovation efforts.
Another reason tech companies choose Ireland is that it just makes good business sense. Ireland has long had a reputation as being pro-business. It’s the only English-speaking country in the E.U. And Ireland has strong cultural ties and similarities to a country like the U.S.
Q: What kind of support is available to companies that are considering expanding in Ireland?
A: Companies can take advantage of various supports when they invest in Ireland. Those supports include capital and employment grants that companies can access when establishing their business operation centers or manufacturing sites.
For an R&D operation, for instance, IDA Ireland can make a direct grant payment in support of a company’s R&D budget. This grant combined with R&D tax credits that are available from the Irish government can cover about 40% of a company’s R&D costs. And similar training supports can cover about 50% of a company’s training costs.
And again, the world-class research institutions in Ireland can help collaborate with industry to spark new innovations. Science Foundation Ireland (SFI), a sister agency of IDA Ireland, has a network of research centers located across Ireland. And every day, those centers are working in tandem with industry to make advances in core focus areas for tech companies, like the internet of things, artificial intelligence, bioengineering and more.
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Q: What will be the biggest challenges that multi-national companies will face in 2023 and how can IDA Ireland assist them?
A: Companies are going to continue to face risk and uncertainty in their operations as issues like supply chain disruptions, inflation and geopolitical conflicts persist. As a result, companies are looking for a stable, steady, and consistent place to do business. Stability has been a hallmark of Ireland for many years. Companies that are investing and operating in the country appreciate its stable government, commitment to the E.U. and an economy that has remained resilient even through a trying pandemic.
Expansion activity is a significant financial decision, companies today are considering more than the dollar investment. They want to make sure they do business in a market that aligns with their values. For example, companies are factoring sustainability into their decision-making process for where to expand. Ireland not only supports industry’s sustainability efforts through financial incentives, but the country has its own commitment to sustainability. Today, it’s the second highest in Europe for wind and solar energy production per capita. And the country has set a target of generating at least 80% of its electricity from renewables by 2030.
