Thursday, June 21, 2012

21/6/2012: FDI attractiveness survey 2012

A very insightful, albeit subject to survey data/methods caveats, report from Ernst&Young on 2011 FDI and attractiveness of Europe (including Ireland) to FDI is just out. Link to downloadable report here.

Some (mostly Ireland-centric) highlights:

The good news is - Ireland is in top 10 in the 9th position - same as in 2010. The bad news - 2011 saw a decline in FDI into Ireland (kind of undercutting the Government claims). Now, keep in mind - these stats are based on number of deals, not size of deals, and these cover only Europe.

Here's what Ernst&Young survey had to say about Ireland:
"Securing 106 new FDI projects in 2011, Ireland retained its ninth place in the ranking of European FDI destinations. US investors provided nearly two-third of the projects. During the past three years Ireland’s competitiveness has improved significantly, with a striking reduction in business costs, including those for payroll, energy, office rents and services. A corporation tax rate of 12.5%, one of the lowest in the world, adds to Ireland’s attractions. In addition, Ireland enjoys good access to the rest of Europe and the Middle East and Africa. The country is also emerging as a preferred onshore destination for software firms seeking to establish regional or global headquarters. During the year, companies including Oracle Corp, EasyLink Services and McAfee Inc established or expanded their European headquarters in Ireland. The country also drew more FDI projects from pharmaceutical companies including Eli Lilly, Sanofi-Aventis SA, Pfizer Inc. and Merck & Co Inc."

Ireland didn't make the list of most attractive countries for FDI in the next 3 years

Nor did Dublin make the list for innovation top locations relating to ICT services (our core competency area), suggesting that ICT FDI into Ireland might be more focused on delivery to European markets, rather than innovation:

Interestingly, when asked what Europe can do to improve its innovation capacity, the responses were:
Needless to say, we are not doing much in Ireland to get priority 1, we claim to have good priority 2, but are hardly putting any policies in place to improve that, we have much of tax incentives already in place, but they are patently not working... as per rest... well, same story, really.

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