Mr. Martin Shanahan:

I thank the committee for the opportunity to meet today. As the Chairman mentioned, I am joined by Mary Buckley, executive director of IDA Ireland, Denis Curran, divisional manager with responsibility for regions, property and enterprise development, and Breda O’Sullivan, manager of corporate strategy and planning.

The last two years have been extraordinarily challenging for the country and its citizens as the Covid-19 pandemic claimed lives and livelihoods. Our thoughts are with all those who have been affected. We acknowledge those who have been on the front line of the public health response and those who have provided essential services to keep the country functioning and in motion, including those involved in the manufacture of critical goods and services. We welcome the recent removal of restrictions as the country emerges from the pandemic.

During this period of dual health and economic crises, IDA Ireland has strived to support the country and our client companies. In reacting rapidly to the impacts of Covid-19 in early 2020, IDA Ireland's priorities were to provide continuity of service to client companies, while ensuring the safety and well-being of the IDA Ireland team in Ireland and across the globe. The agency successfully moved to a virtual working environment in March 2020 and proved resilient and flexible in continuing to deliver on our mission as we adopted a virtual first approach to client engagement, similar to the response of many of our client companies.

These efforts have helped us to achieve excellent results over the course of the pandemic, despite an immensely challenging and volatile international environment. The year 2021 was a record-breaking year for foreign direct investment employment with strong gains recorded in both gross and net employment. Total employment in IDA Ireland client companies in Ireland now stands at a record high of more than 275,000, an increase of nearly 17,000 compared with 2020. Employment growth was particularly strong with over 29,000 jobs created across all sectors. The growth was strongest in life sciences and technology companies as demand for healthcare products remained robust and demand for the technologies and services that enable remote working and the digital economy increased. Job losses remained at a relatively modest level relative to the size of the overall portfolio, resulting in extremely strong net employment growth this year. There are now close to 1,700 multinational operations supported by IDA Ireland, accounting directly for 11% of the workforce. Analysis undertaken, using a modest multiplier, indicates that it amounted to total direct and indirect employment of over 495,000 in 2021.

In 2021, there were 249 investments compared with 246 investments in the same period in the previous year. Some 104 of those investments were from new name investors coming to Ireland for the first time. The high level of new name investments represents a vote of confidence in Ireland and a level of future proofing of foreign direct investment.

Growth in regions was particularly buoyant in 2021 with 53%, which is 133 of the 249 investments won going to regional locations and employment growth recorded in every region of the country. Direct employment by IDA clients in the regions reached 151,676 people in 2021, 55% of total IDA client employment. The strong regional results in 2021 are building on the record levels of regional investment we secured over the course of the last strategy, supported by IDA Ireland’s property programme.

The strength of Ireland’s foreign direct investment base is a core national asset that has a sizeable impact on the Irish economy and on society more broadly. In each region of the country, companies supported by IDA Ireland provide good jobs, support other jobs indirectly, enable labour mobility, purchase Irish goods and services, and promote innovation. The benefit of their presence here to Ireland is obvious in the context of their contribution to employment but it goes far beyond their direct and indirect employment contribution. Their impact nationally and regionally on public finances, regional development, global value chain integration, spin-off indigenous enterprise, innovation and more can be clearly seen in their expenditure in the Irish economy. We now know from the forthcoming annual business survey of economic impact that expenditure within the economy by foreign direct investment companies increased by 8.8% during 2020 to close to €28 billion. Within that, payroll spend was €16.9 billion, an increase of 11%, and the spend on materials and services increased by 6% to €11 billion. Exports were valued at €290.7 billion, an increase of 9.2% compared with 2019. IDA Ireland client exports accounted for 72% of total national exports in 2020.

Capital investment amounted to €7.5 billion, an increase of 3.7% compared with 2019, with the largest spend once again coming from the life sciences and technology sectors. This resilience and growth from foreign direct investment has shored up our economy and the national finances. Their contribution to Ireland is tangible, substantive and something IDA Ireland does not take for granted.

Foreign direct investment in Ireland has experienced staircase growth in employment for over ten years, linked to successful foreign direct investment strategies. Despite the challenges faced by individual companies, foreign direct investment in Ireland has come through the pandemic relatively well.

This is largely down to the sectors that IDA Ireland has targeted over the past decade, namely, technology, pharmaceuticals, medical technology, international financial services, business services, engineering and food.

This year’s results represent a strong start to IDA Ireland’s new Driving Recovery and Sustainable Growth 2021-2024 strategy, which seeks to further enhance FDI’s place at the centre of a strong Irish economy. We launched this strategy in January 2021. In a changed world, our strategy seeks to consolidate, build on and position the impact of FDI as Ireland pursues a jobs-led recovery, that seizes on the opportunities of the green and technological transformations. IDA Ireland will partner with client companies, as we have in the past, to create jobs, locate them in the regions, and invest in research and development, while enhancing our focus on investment in training and upskilling and environmental sustainability.

The ambition of the strategy is framed around five interlinked pillars which include the following key targets: the growth pillar, within which we will target 800 total investments to support the creation of 50,000 jobs; the transformation pillar, under which we will partner with clients for future growth through 170 research, development and innovation, RDI, projects and 130 training investments; the regional development pillar, under which we will target 400 investments to advance regional development; the sustainability pillar, under which we will target 60 sustainability investments; and the impact pillar, under which we will target a 20% increase in client expenditure in Ireland to maximise the impact of FDI.

Delivery of the strategy is being supported by a several initiatives, including: IDA Ireland’s regional property programme to provide property and strategic site solutions to address market failures in regional locations; the completion of the national advanced manufacturing centre, NAMC, in Limerick to provide a space for companies to trial, adopt, deploy and scale digital technologies; the scaling of the national institute for bioprocessing research and training, NIRBT, to build capacity in cell, gene and vaccine therapies, CGVT; and the implementation of a digital transformation programme to make IDA Ireland the most digitally-enabled investment promotion agency, IPA, in the world.

Ireland’s performance in attracting FDI to achieve these record results is testament to the work of the agency’s teams in Ireland and around the world, to the success of the client companies we partner with daily, to the support of Government and those in the public and private sectors that support the work of IDA Ireland. However, we cannot rest on our laurels. Ireland must remain attractive in an extremely competitive global environment for FDI. IDA Ireland's clients are embracing a green and digital recovery, and we must continue to focus on making Ireland an attractive place for talent and to provide the necessary infrastructure and utilities that companies need to make it easy to set up and build their businesses in Ireland.

IDA Ireland is also cognisant of international issues, including: the spread of Covid-19 variants of concern; the varying level of vaccination rates across countries; the future trajectory of monetary and fiscal policies, should current inflationary pressures last longer than expected over the course of 2022, and indeed beyond; supply chain challenges; climate change; and geopolitical developments that will potentially impact on investors’ decision-making.

This is a high-level overview of some of the factors relating to FDI, IDA Ireland’s performance and our strategic focus. I have also provided a slide deck for members’ information. I do not plan to go through the details of that, but I am happy to take questions on it.