Mr. Martin Shanahan:

I thank the Chairman and the committee for the opportunity to present this morning. As the Chairman mentioned, I am accompanied by Ms Mary Buckley, Ms Eileen Sharpe and Ms Regina Gannon. The focus this morning is the financial statement for 2016. I have submitted a detailed statement but do not plan to go through it in its entirety. Instead, I will pick out some of the highlights.

The Comptroller and Auditor General has already outlined the functions of IDA. To focus on 2016, IDA client companies created just under 19,000 jobs on the ground during the year across a range of sectors, with every region of Ireland posting net gains in jobs. When job losses were taken into account the net increase in employment was just under 12,000. The strong net job creation performance is a result of a very strong pipeline of new investments and lower job losses within the employment portfolio. Losses as a percentage of the overall employment portfolio were at their lowest level in 19 years and IDA Ireland has endeavoured to minimise the impact of job losses through its client transformation programmes.

The number of investments secured during 2016 rose to 244 from 213 in the previous year. The number of new name investments increased to 99 from 94 in the previous year. There were 199,877 people employed in IDA supported companies at the end of 2016, the highest level in the history of the State. In addition to direct employment, IDA estimates that an additional 170,000 jobs are supported indirectly by IDA client companies, representing a significantly wider economic impact. This trades through to the overall drop in unemployment that we have witnessed, from a high of 15.2% to 6.1%, according to the latest figures published by the CSO on Tuesday.

The detailed briefing document makes reference to some significant investments in 2016. Included among these are investments by Oracle, Credit Suisse, HubSpot, Amazon and Paypal. There were also significant regional announcements during 2016. Most important in that regard is the areas involved which included Dunboyne, Nenagh, Drogheda, Galway, Limerick, Cork, Clonee, Waterford and Tullamore, demonstrating a wide dispersal of investments. This performance was produced against a backdrop of unprecedented geopolitical change, an underperforming European economy and intense competition from other jurisdictions for foreign direct investment, FDI. Many of the projects won in 2016 were capital intensive.

FDI has a huge impact on the economy, as evidenced by the exports from Ireland, which totalled €149 billion in 2015, the latest year for which data is available. Expenditure by FDI companies in the Irish economy totalled €18.8 billion, comprising €10 billion on payroll, €5.2 billion on Irish services and €3.6 billion on Irish materials. Significant research and development is also undertaken by these companies, the value of which totalled €1.53 billion in the last year for which figures are available. 80% of corporation tax comes from FDI multinationals and 10% of direct employment in Ireland is now accounted for by multinationals.

IDA has a very ambitious strategy which was set out in 2015. The target is very clear: 80,000 new jobs to be created in the economy over the period 2015 to 2019 and 900 new investments. If delivered, this will bring total direct employment by FDI companies in Ireland to 209,000 people by 2019. Last year, 2016, marked the second year of the implementation of the current strategy and cumulatively, over the first two years, the agency is well ahead of the targets in the strategy. A key element of the strategy is a focus on increasing investment into regional locations. We have set a target to increase investments in all regions outside of Dublin by 30% to 40% while also maintaining the high level of investment into Dublin. This target is extremely challenging given the global trend towards FDI favouring large urban centres. Regions which do not possess urban centres of scale pose a significant challenge in terms of attracting FDI.

Despite this, IDA Ireland is making steady progress in all regions. However, it is important to note that investors ultimately make the decision on investment location. Each region in Ireland posted jobs growth in 2016. A total of 52% of all jobs created by IDA Ireland clients were based outside Dublin while 59% of all employment in IDA Ireland-supported companies is outside Dublin. We continue to work with all regions on their offering through the development and implementation of regional action plans. As the Comptroller and Auditor General mentioned, we have a property programme where we invest in turnkey property solutions to shorten the time it takes investors to set up.

A critical element of our strategy is continued strong focus on key sectors such as technology life sciences, pharmaceutical, biopharmaceutical and medical technologies, international financial services, media and content, engineering, business services, and food. We will continue to target these sectors. I have set out in my submission some of the changes that are happening in these sectors. I do not plan to go through them now but I am happy to return to them later.

Ireland's value proposition is based on offering investors a safe and stable investment location with access to the EU market, an education and skilled workforce, an attractive environment where people want to live and work, a competitive, consistent and transparent corporate tax regime and an excellent return on investment. This value proposition remains valid, but we have to re-emphasise different parts of it and work to improve others to remain relevant in the changing global environment. There are always areas that need attention, including the current pressing issue of residential property supply. The effective and speedy implementation of the Government's action plan for housing is extremely important from our perspective. We have also highlighted some of the areas that the National Competitiveness Council has identified as requiring attention to safeguard Ireland's competitiveness.