Oireachtas Joint and Select Committees
Wednesday, 26 January 2022
Joint Oireachtas Committee on Jobs, Enterprise and Innovation
Strategy, Targets, Achievements and Future Progress: IDA Ireland
I wish everybody a happy new year. It is our first meeting of this year. I welcome members to this committee meeting, in line with the current exceptional measures that we are taking in relation to public health which, fortunately, we are phasing out. Some members will participate remotely, while others will be here in the committee room. If members wish to participate remotely in the meeting, it must be from within the Leinster House complex, as they are aware. We have received apologies from Senator Paul Gavan.
Members and all in attendance are asked to exercise personal responsibility in protecting themselves and others from the risk of contracting Covid-19. They are strongly advised to practise good hand hygiene. They will notice that certain seating has been removed in order to facilitate social distancing. Hopefully, we will remove that measure shortly. Members should maintain an appropriate level of social distancing during and after the meeting. Masks, preferably of medical grade, should be worn at all times during the meeting except when speaking. I ask for everyone's co-operation in this.
Today's meeting is to discuss with IDA Ireland its strategy, targets, achievements and projected future progress. Since the joint committee last met IDA Ireland, the inward investment, promotion and development agency announced results for its activities in 2021. The year was characterised by significant, high levels of foreign direct investment compared with 2020, with strong gains recorded in both growth and net employment. I am pleased that, today, we have an opportunity to consider this matter. I welcome from IDA Ireland, Mr. Martin Shanahan, chief executive officer, Ms Mary Buckley, executive director, Mr. Denis Curran, divisional manager, and Ms Breda O'Sullivan.
Before we start, I advise witnesses about parliamentary privilege. There are some limitations to parliamentary privilege and the practices of the Houses with regard to reference that witnesses may make to other persons in their evidence. The evidence of witnesses who are physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. However, witnesses are giving evidence remotely from a place outside the parliamentary precincts and, as such, may not benefit from the same level of immunity from legal proceedings as a witness who is physically present. Witnesses have already been advised that they may think it is appropriate to take legal advice on this matter.
Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that may be regarded as damaging to the good name of the person or entity. Therefore, if statements are potentially defamatory in relation to an identifiable person or entity, I will direct witnesses to discontinue their remarks. It is imperative that they comply with any such direction.
The opening statement of IDA Ireland has been circulated to all members. To commence consideration of this matter, I invite Mr. Shanahan to make his opening remarks.
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.
I thank our witnesses for being here. I thank Mr. Shanahan for his presentation, and for not going through the slide deck, because we can go through it ourselves. I am glad to see someone else has my aversion to PowerPoint as well.
Mr. Martin Shanahan:
I thank the Deputy. There is merit to the France 2030 plan. It is a plan, though, that suits France, I suppose. Investment in the economy is welcome, and especially investment in infrastructure that will make it easier for businesses, domestic and FDI, to operate in the economy. Ireland's industrial policy is, essentially, centred around three strands: attracting FDI; growing indigenous enterprises and helping them to scale; and investing in research, development and innovation to help the other two strands. Those three strands are complementary, as I see it, because once we attract FDI, then there are significant spill-over effects into the indigenous economy. Part of our current strategy is to help solidify and to grow those impacts. Those impacts grow in many ways, including through the spending of FDI companies on Irish materials and services and through the transfer of people and know-how.
It is a hugely competitive international environment. All countries, not just France, are investing heavily in their infrastructure and in other aspects of their industrial policies to continue to ensure they are fit for purpose to allow them to compete in the international market. I see it at first hand every day as we are out with investors. There is merit in looking at whatever is being done to see if there are lessons we can learn.
I thank Mr. Shanahan. There is merit in looking at that aspect. It should be examined seriously and in the way that France appears to be doing it. I must confess that I am basing this on news reports. There is significant merit in examining how that can be done and how we can learn from that approach. I accept fully that it is being done.
Turning to Intel's planned expansion and additional investment, it increasingly looks like the State will miss out on it. Some of the reasons put forward to explain why we will not be winning this investment include issues with housing, the cost of energy, transport and education. I refer to the cost of energy in the context of sustainability. I believe, and I think this view is shared by others, that this development is something of a tip of the iceberg regarding such difficulties. We had a session with the National Competitiveness and Productivity Council, NCPC, recently, and those witnesses referred specifically to problems concerning housing, transport and the other issues mentioned. They said that: "The attractiveness of a location cannot be focused solely on it as a place to work, but also on it as a place to live". Does Mr. Shanahan share the view that for us to remain an attractive location for investment that the crisis we have in housing, as well as the one looming in energy and those not far behind in education and transport, must be addressed? If we do not do that, does he believe that this situation will be a significant drag, as it is proving to be in the case of Intel? I say that knowing the final decision has not been made, but the indications are that we will lose out on that investment. There are crippling pressures in this regard. That is certainly the case when we meet with major investors, but also with representatives from industry. They cite housing specifically, but I must be honest and say the other issues are not too far behind. Housing, education and transport come together to contribute to perhaps this not being a great place to live for everybody. Is this context going to hinder our competitiveness and capacity to attract investment in future?
Mr. Martin Shanahan:
As the Deputy mentioned, no decision has been communicated by Intel regarding what its plan is to build its super-fabrication plant in Europe.
Intel is one of the largest investors in the country. It is currently building in Leixlip two of the most advanced semiconductor fabrication plants on the planet. Its investment in Ireland is immense and will continue to be very significant for many years to come. It has decided that its foundry business will commence in Leixlip. We will continue to work with Intel on all its future plans.
I am a member of the National Competitiveness and Productivity Council, so I have contributed to some of those findings that it shared with the Deputy. It is clear that we must continue to improve on all aspects of our offering in order to remain competitive. I do not think there will ever be a day when a CEO of IDA Ireland will appear before the committee and say that all is well and that we are as competitive as we can be. It is clear that we have to continue to improve. The Deputy mentioned certain areas, as has IDA Ireland, in which improvement is required in order for us to remain competitive. Those areas include housing and the availability of utilities, such as energy and water in particular, and others.
Ireland is clearly competitive on many fronts. That is why we had the ability to win the number of investments we won in recent years, particularly in the past year. Employment is increasing in the FDI sector because multinationals have confidence in Ireland. We should not take that confidence for granted. We have to do the things we need to do to remain competitive in all the areas the Deputy mentioned. We have to improve in many of those areas because all our competitors are doing so. Our competitors, however, are not without difficulties. I speak to my peers and investors every day and the locations against which we are competing also have difficulties, many of them in similar areas. We have to do more and continue to do more. These are issues. In many cases, they are not unique to Ireland. Obviously, we have many strengths that allow us to attract investment.
I do not dispute that our competitors have issues too, but there is nobody competing with us in terms of rising house prices and, indeed, other prices. It is not for nothing that this issue is raised with me very regularly. I appreciate the response of Mr. Shanahan and I thank him for it.
I refer to remarks made previously by Mr. Shanahan. He stated:
It is great to see Ireland continuing to attract investment and playing such an important part in the future plans of this global company. Amazon’s ongoing commitment to Ireland is most welcome,
Obviously, in my role I speak to small and medium-sized enterprises, microbusinesses and family businesses. They are probably on the small end of the scale compared with what our guests are dealing with but they are the backbone of many towns and villages nonetheless. They were quite shocked by those comments. Amazon's business model undermines small and local enterprises in many instances. The evidence of that is all around it. We know its record in respect of workers' rights, especially its use of bogus self-employment and other mechanisms. All of those have been well ventilated and reported, specifically in respect of delivery drivers. I raise this issue because I wish to ask whether it is the strategy of IDA Ireland to pursue quality as much as it is to pursue quantity. There are companies that will deliver on quantity - the stack them high, sell them cheap sort of level - but they may not deliver on the quality end. I ask Mr. Shanahan to enlighten us. I refer to the record of this company in particular. I have spoken to colleagues working within the global trade union movement, such as within the International Labour Organization and other organisations, and I know what they would tell Mr. Shanahan in this regard. They do not need to tell him as I am sure he knows anyway. It is that issue of whether it is quality over quantity or vice versa.
Mr. Martin Shanahan:
I thank the Deputy. First, Amazon, and Amazon Web Services, AWS, in particular, are huge investors in Ireland and provide significant employment. Second, we have to be somewhat realistic in respect of where the world is going and the business models that will be deployed. One of those business models is the ability to operate, purchase and sell online. If ever there was evidence needed that that is the direction of travel, we have probably observed it over the past two years. Whether we like it or not, it is going to be a fact of life going forward. The large players, including Amazon, will be key players in this. If there are specific issues relating to a company, there are apparatus of the State to deal with those specific issues.
As regards the Deputy's question regarding our strategy of quantity over quality, it is clear we are attracting high-quality jobs. The evidence for that is probably in the fact that the wage levels in multinational companies, on average, are approximately one and a half times the annual industrial wage. Our strategy has been to target the sectors that underpin the modern economy - technology, pharmaceuticals, medical technologies, international financial services, engineering and food - and to attract the leading-edge activity within those companies, that is, research and development, innovation and high-value manufacturing. That is our strategy. Obviously, that is not to say that every job in multinational companies is at that level. That would be unrealistic. There are sectors that we are likely to transition out of because that activity may not happen in Ireland in the future. All of these companies bring with them jobs at all levels, particularly in the context of support jobs. To be clear, our strategy is to attract high-value and well-paid employment with good terms and conditions. There should be no doubt about that.
As regards Amazon specifically, what is the ratio of the good high-value and high-quality jobs to which Mr. Shanahan refers compared with jobs that are less high quality? Does IDA Ireland encompass issues such as bogus self-employment within its strategy? The company might be paying a good wage to the people who issue the contracts to the poor unfortunates who are doing the delivery. The chief executive might be paid very well and that will always drag up the average but, at the business end of things, there might be workers who are at one remove from the company. I am curious to know what level of discussion there is between IDA Ireland and these companies in advance of investment. I am conscious, as is the Chairman, I am sure, that my time is almost up, but I am sure he will indulge me by allowing Mr. Shanahan to respond.
Mr. Martin Shanahan:
I thank the Deputy. As regards the level of discussions, when IDA Ireland looks at investments, we seek from client companies the breakdown of employment they will create in Ireland - this is where it is supported by IDA Ireland - and what level of pay those jobs will attract. I do not have the detail in respect of a specific company. We have more than 1,700 companies so I do not have that information to hand, and neither would it be appropriate to discuss the pay structures within an individual company.
I thank Mr. Shanahan and his colleagues for attending the meeting. I offer them a sincere "Well done" on their recent accomplishments. To have the highest employment creation figures ever in a single year would be a noteworthy accomplishment at any time, but it is all the more so given that it happened in the midst of a global pandemic.
On the issue of future aims and in the context of job creation, what impact do our guests expect the global minimum tax rate to have? Obviously, there is a host of factors companies consider when deciding in which country they will set up.
Ireland has many other very strong selling points, including, thankfully, a highly educated population, as we are all aware. Notwithstanding that, I presume that the tax changes will reduce Ireland's attractiveness to some extent. In what way does Mr. Shanahan envisage dealing with that?
Mr. Martin Shanahan:
Yes, I think the increase to 15% under the OECD agreement is likely to have some effect in that it decreases our attractiveness on that front marginally, but the Senator pointed out in his questioning that it is but one factor in Ireland's overall offering. I do not believe that Ireland's entering into the global tax agreement and the new rate of 15% will have a significant impact on the flows of FDI into Ireland. That is partly because we are doing this in unison with the rest of the world. The new global minimum will be 15%. Many countries' rates will remain above 15%. The stability and certainty that our involvement in the global agreement will bring will, I think, offset the marginal increase to 15% that we will experience. I therefore do not see it as a significant impact as we go forward. Many of the investments that have been made over the course of the past year, particularly those from March on, were probably made in the knowledge that it was highly likely that this global agreement would come into being and that it was likely that Ireland would participate in it if the circumstances were right. Investors have therefore demonstrated already that they have continued confidence in Ireland in the context of this global agreement.
Prior to the increase to 15% under the tax agreement, we seemed to be in a far stronger position. In what way does Mr. Shanahan envisage we will change? The figures this year have been excellent and those in the previous 12 to 18 months have been brilliant, but does Mr. Shanahan believe we will face other challenges in trying to get new companies to locate here?
Mr. Martin Shanahan:
It is an extraordinarily competitive international market. My colleagues and I go out every day to compete for investments that every other developed country in the world would like to locate in their countries. We are therefore competing against not only other European countries but also, in many cases, other countries globally. We therefore need to continually improve our entire offering, as I mentioned to Deputy O'Reilly earlier. All the factors that make up our proposition, whether housing, the ability to do one's business quickly in Ireland, the availability of utilities, roads and broadband, or the tax offering and other pro-enterprise policies, will be hugely important, as will talent. The availability of talent and our ability to attract it to and to retain it in Ireland will be really attractive. That means that Ireland has to be an attractive place in which to live and work. Those are the things companies are concerned about and the things that will determine whether or not we will be able to win investment.
Mr. Shanahan will be aware that in my home county there have been projects, such as the Apple data centre in Athenry, that have been scrapped or held up while seeking planning approval. Could Mr. Shanahan advise as to whether our current planning system is causing concerns for any companies he speaks to when they are making decisions to set up base here?
Mr. Martin Shanahan:
As the Senator mentioned, the Apple project in Athenry did not go ahead. That was connected to the elongated time it took to receive planning permission. From an IDA perspective and from our clients' perspective, it is important to say that we all understand that there need to be appropriate checks and balances within the system. There is no question about that. What client companies seek is certainty on timelines, that is, a timeline within which they get the decision. That is not certainty of outcome. The outcome is whatever it is, and we should go through the normal processes with the normal checks and balances. The timelines, however, are elongated in Ireland, and anything that shortens those timelines would be helpful. That is the main issue. I would separate the planning process from the ensuing judicial process that happens in respect of many large projects. It is often the judicial stage that takes a long time and that projects are held up in.
I am aware that my time is almost finished but I hope the Chair will bear with me for a moment. I refer to the IDA site in Oranmore, Galway. I am conscious that the witnesses can give us only limited information this morning. Mr. Shanahan highlighted earlier the value and the enormity of the Intel operation in this country. Will IDA Ireland maximise the site in Oranmore in the coming months? At what stage will a decision be made on the Oranmore site? As Mr. Shanahan will be aware, it is a hugely significant site, is very well located and has been idle for quite a while.
Mr. Martin Shanahan:
We share the Senator's view that it is a very attractive site. We are marking it hard and will continue to do so over the coming weeks, months and years. That is not connected to just an individual project. It is an attractive site and we hope we will be successful in attracting investment to it in due course. When that will be I cannot say for certain.
I welcome Mr. Shanahan and his team. I wish to say how much we congratulate and appreciate the team's work throughout the world. The achievement of 129,000 extra jobs in the past decade, going from 146,000 to 275,000 employed in IDA companies, is truly remarkable. Also remarkable is the fact that the IDA has increased the number of projects per year by 100. It has achieved a regional spread far better than was the case at the start of the decade. The average pay of employees in IDA companies, at €61,500, is significantly higher than in the rest of the economy. We owe a significant debt of gratitude to Mr. Shanahan and his team.
I wish to ask a few questions as we look ahead. If this economy continues to sustain full employment, will IDA Ireland's focus change to more spin-out, higher value-added activities, with the creation of more enterprise hubs within these large companies such that one might see growth that would be closer to indigenous growth? Goods and services purchased, at €11 billion, account for less than 4% of the exports IDA Ireland reports. The figure is low. I think there were trade missions within Ireland on which Enterprise Ireland companies sought to increase their purchases from those companies. How is that going, and can we drive it further? Allied to that, can we see greater integration of multinational companies in areas such as apprenticeships? It is a very significant objective of the Government to increase the number of new paths for people rather than relying solely on the higher education path. I do not think there is high involvement of multinationals in that sector.
The issue of power and data centres has been a subject of controversy, and there is a difference of view between the IDA and EirGrid, though I know work is ongoing to reconcile that. Just how significant will that be in the context of the development of the IDA's portfolio of companies?
Finally, regarding climate change, many of these international companies will want to be seen to be moving to net zero.
Is IDA Ireland cultivating that approach? We have set the second most ambitious climate targets in the world for the next decade. How is that being integrated into IDA Ireland's strategy? No doubt we will see border controls applied by Europe to countries that do not apply the same high standards in climate adaptation. Will it have significant bearing on the approach that IDA Ireland takes in the coming years?
Mr. Martin Shanahan:
It is clear that in an economy that is likely to be working close to capacity given the very significant recovery in employment, talent availability will continue to be an issue. Our strategy has been, and will continue to be, to target high-value activity, particularly around research, development and innovation but also corporate functions and high-value manufacturing. That is where we are pitching so that we are maximising the available talent within the economy. Related to the Deputy's last point, multinationals have a role to play in investing in talent and do a lot of that within their own sites. That is where we are going. Within sectors, we have targeted specific activities. For instance, Ireland was very successful at advanced pharmaceutical ingredients and at bioprocessing. We believe the next front in that sector will be selegiline therapy and advanced therapeutic medicinal products. We are working on those types of activities to ensure that we are continuing to capture the high-value activity.
The Deputy mentioned the programme initiative that is connecting multinationals to indigenous companies and trying to increase the amount that is purchased in the Irish economy of both services and Irish companies' products. I think that has been successful. It is reflected in the figures of the year-on-year increase in services and materials being supplied to multinational companies. However, I agree that there is room for more integration. Often these companies are making decisions about entering global supply chains. It is not just for the Irish operation to purchase here but that the whole organisation is able to purchase within Ireland. Our view, and one shared by Enterprise Ireland, is that clusters have a role to play here. It is about setting up clusters where we deepen the integration between indigenous companies and multinational companies at every level, not only in the straightforward procurement channel but how products are developed in the first place, sharing of know-how and about greater integration. We have set up a number of clusters as a pilot in order to do that.
I certainly believe that companies in the IDA Ireland portfolio have a role, or an increased role, to play in apprenticeships. It is something on which we are heavily engaged with all the relevant parties here in terms of the Department of Further and Higher Education, Research and Innovation, SOLAS and the local training boards, to look at opportunities for how multinationals can support their efforts and vice versa. Within IDA Ireland we have set up a talent transformation and innovation department to engage with those stakeholders to ensure that talent lens is brought to what we are doing.
On power and data centres, I think that EirGrid and IDA Ireland's ambitions are aligned on the need for available power for large energy users. We are seeking a reinforced grid and enough generation for large energy users. That is not unique to data centres. It is clear that we are now constrained in Dublin and on the east coast. Where investors seeking significant amounts of energy, regardless of the sector, there is a challenge to supply that. There is an EirGrid plan, "Shaping our Electricity Future", which we support and we would like to see executed as quickly as practicable.
I welcome Mr. Shanahan and his team. I join with Deputy Bruton in congratulating them on the work they have been doing for the last while. It is hugely impressive.
This morning Bank of Ireland announced five remote working hubs or spaces in addition to their existing six. Is there a conversation in the client companies of IDA Ireland and in the authority itself to encourage and support remote working spaces and hubs? Thankfully, many thousands of people are in employment with IDA Ireland companies but many travel long distances where they could actually work in their own towns or areas and rejuvenate them. I am thinking of the town of Youghal in my own area where many people travel every day and spend a lot of time in their cars. It would improve the quality of life enormously if they could be encouraged and supported to work in their own communities in remote working spaces. Is that conversation happening? Is any of the companies looking at that?
I noticed that there have not been many announcements in the Cork area recently. I spoke with Construction Industry Federation recently where it spoke of the lack of serviced sites in the Cork area with respect to the IDA Ireland land bank. Will Mr. Shanahan comment on that?
Between Carrigtwohill and Midleton in my own constituency there is a very large site of around 54 ha, which Amgen was interested in about ten or 12 years ago. That did not happen. That site has been just sitting there. It is fully serviced and extremely valuable but nothing is happening on it. It has been said that the constraints posed by infrastructure, the N25, is making the site less attractive. Most recently Transport Infrastructure Ireland, TII, has decided not to go ahead with a planned upgrade of that site. Is Mr. Shanahan aware of that? Is he concerned about it? Will he comment on the issue?
Deputy Bruton mentioned data centres and Mr. Shanahan covered that. Is the EirGrid ban, which I understand is in place, a constraint in attracting large companies to the east coast in particular?
On diversity and client companies looking after people from marginalised backgrounds, refugees and people from disadvantage, I note that many IDA Ireland companies have signed up to the Open Doors initiative which was established about three years ago. I want to say well done to the companies that have joined it. They are looking at diversity and supporting people from disadvantaged backgrounds to gain employment, training, support and mentoring. I am not sure if Mr. Shanahan is aware of it but it is a very exciting initiative.
Mr. Martin Shanahan:
I will return to remote working in a moment and bring in my colleague Mr. Curran to discuss hub working.
The Deputy said there had been fewer announcements in Cork recently. I would probably beg to differ. During 2021, there were announcements from Convergint, Alter Domas, Boston Scientific, Zazzle, Eli Lilly, Qorvo, Accenture, which announced 500 jobs, Varonis, Tigera, Innowatts, Microchip, Huawei, Logitech, Mediallia, SGS and CH Robinson. That is not all of them, just those I have to hand.
There were a significant number of announcements. There was also a 3% increase in employment in the Cork region during the past year. Cork, as our second city, is probably very well served by FDI.
Regarding the site at Ballyadam, the Deputy's question related to the attractiveness of the site and the road infrastructure leading to it. IDA Ireland markets that site on a regular basis. We believe it is an attractive site. There are developments to the N25. Anything that increases access to strategic sties is extremely important from our perspective and very welcome from the perspective of the companies with which we engage. We are doing some work on access to that site with respect to a slip road that is currently under planning. The application is being considered and once that work is done I hope it will increase the attractiveness of the site. The development of the overall N25 should increase the attractiveness of that site. We will continue to market that site.
On the Deputy's question on attracting large companies to the east coast, as I mentioned, it is clear and has been heavily reported, that Dublin and the east region is constrained from a supply of electricity perspective and that poses a challenge for large energy users that wish to invest in Dublin or the east coast. IDA Ireland will work with client companies with existing operations in that region on their expansions. We are heavily engaged with EirGrid on a regular basis on both individual projects and the overall availability of energy supply. We will also work with investors to target regional locations outside Dublin and the east coast where the energy grid supports both investment in infrastructure and the ability to scale and expand.
The Deputy mentioned the Open Doors initiative. I am familiar with it. IDA Ireland and a number of our client companies are members of it. I agree with the Deputy that it is an excellent initiative.
Returning to the issue of remote working hubs and remote working in general, the FDI base has proved to be very flexible and resilient during the past 24 months. Obviously, many employees such as those working in manufacturing companies, have to go into work. However, many companies pivoted to a completely virtual environment during the period where employees had to work remotely but primarily from home. That has worked very well. It has worked well for individuals and for the companies involved. My expectation is that in a post-Covid environment, and we hope it is post-Covid, with employees, in some instances, potentially returning to the office, many employers will offer flexibility. Some of that will relate to the ability to work remotely at home or in remote working hubs. There are a significant number of remote working hubs across the country. I will ask my colleague, Mr. Curran, to comment on this area.
Mr. Shanahan might wrap up on that note, as the Deputy's time is up. I must move on to the next speaker. The next person who has indicated is Deputy Paul Murphy who has seven minutes and he will be followed by Deputy Flaherty who will also have seven minutes.
I thank Mr. Shanahan for his presentation. I want to explore the issue of data centres and what can be described as the leading role of the IDA Ireland in attracting data centres to Ireland. There is a number of items on the IDA Ireland website about data centres, including one which features a quote from Brad Smith, the president of Microsoft, quite prominently, where he talks about the number of data centres in Ireland and says they have helped to “turn Ireland from a small island into a data superpower”. Does Mr. Shanahan think Ireland is a data superpower and what does that mean?
Mr. Martin Shanahan:
Ireland has developed a technology hub with which many countries would be extraordinarily happy and of which they would be very proud. The IT services sector, of which data centres are a part, account for €52 billion, or 16%, of the gross value added in the economy. The number employed in the sector is approximately 140,000. Those are very significant and high-value jobs. Ireland has moved from a situation where we did not have that kind of technology sector to having that kind of technology sector.
Apologies, I only have seven minutes. I will return to my question. I am not talking about the technology sector in general; I am talking about data centres. Does Mr. Shanahan believe Ireland is a data superpower and what does that mean? Perhaps he could be more precise. How many people are employed in permanent jobs in data centres in Ireland?
Mr. Martin Shanahan:
I am trying to answer the Deputy's question. Data centres are part of an overall technology sector. I cannot speak for what Brad Smith meant by a technology superpower. The Deputy will have to ask him that. The large FDI technology companies that have significant data centres in Ireland employ approximately 20,000 people.
I would argue that far from us being very lucky to have all these data centres investing here that Ireland and IDA Ireland, which is a part of this and it is nothing personal, are dupes of the big tech companies. The talk of Ireland being a big data superpower is about buttering us up. Ireland is simply a dumping ground for data. It brings very few positives in terms of long-term jobs, with which Mr. Shanahan agrees, even if the number employed in them in the thousands, which is a small number of jobs, and more likely the number is the hundreds. Already 17% of our electricity usage goes on data centres and their water consumption is very high. That is incompatible with meeting our climate target. It points to it being in a completely opposite direction. There is a reason other European countries may have decided not to become the dumping ground for the data of big tech, would Mr. Shanahan agree?
Mr. Martin Shanahan:
I do not agree. First, as I understand it, data centres account for 11% of energy usage, not 17%. As I pointed out to the Deputy, data centres are a component of the technology sector and we have benefited greatly from that sector. I have given him some of the employment figures but the spend in the economy is extraordinarily significant, not to mention the very significant tax take from those companies. To focus solely on the jobs within the data centre is not the correct lens to use. I would also point out that many Irish companies are sub-supplying into data centres and are involved in building data centres across the globe as a result of us having these data centres in Ireland. Data is going to be at the centre of just about everything we will need to do from an enterprise perspective into the future. On the Deputy's characterisation of dumping data, from my perspective, data is likely to be a very valuable asset as we move forward in terms of where it is held, how it is processed and what companies do with data into the future.
Attracting more data centres to Ireland still appears to be a key part of the IDA Ireland strategy from 2021 to 2024.
There are many references in the strategy to cloud computing, artificial intelligence, AI, and big data. Are data centres still a key part of IDA Ireland's strategy?
Mr. Martin Shanahan:
Cloud computing, AI and the processing of big data are all part of IDA Ireland's strategy because that is where the world is going, where enterprises are going, and where the valuable jobs will be going. Data centres will be key to underpinning that. Where companies need data-centre solutions, we will engage in that regard. I have already told other Deputies that the centres are unlikely to be located in Dublin and along the east coast; they are likely to be located beyond those regions.
Mr. Martin Shanahan:
It does not include data centres per se, but working with data centres and the operators to reduce their carbon footprint and working with other companies involved in innovations in this regard could be part of it. On working with data centres specifically, it is agnostic. I am referring to anywhere we can achieve improvements through climate action, decarbonisation, reduced energy usage and increased biodiversity. We are agnostic in relation to the sector; we will work with all companies that are trying to contribute to the Government's overall decarbonisation plan.
There are to be no more data centres in Dublin and the east of the country but potentially a bunch more in the rest of the country, regardless of the additional burden owing to the additional electricity demand. The problem is that while the figure of 11% was correct, it is up to 17% at this stage. It keeps rising because we keep adding more data centres to the grid. That is a problem because attempting to move to renewable energy is very difficult if the amount of energy used is being increased. If we continue to use more and more power in data centres, it will make it extremely difficult to achieve our climate targets. Does IDA Ireland not see that? Is it not operating in line with our climate targets?
Mr. Martin Shanahan:
We absolutely are and very much support them. A key pillar of our strategy is sustainability. A part of our long-term energy plan is to develop offshore wind. Offshore wind should become a reality. My prediction is that it will be. There are significant amounts of wind energy required. Stable demand will be required, and data centres provide that stable demand. Data will be key. Without data centres and the ability of data centres to process data, this meeting would not be happening virtually.
Much of what happens in data centres is not necessary. Much of what happens in data centres involves running significant numbers of algorithms to target Mr. Shanahan and me with advertising. We do not know what is happening because it is in a big black box. I thank Mr. Shanahan.
I thank the speakers for attending. They were very informative. I thank Martin Shanahan and all the team for their outstanding work. Theirs is a stellar performance and a stunning endorsement of our country as a place to do business.
I want to hone in on a couple of things. They say all politics is local, so I will keep very local and focus on the real capital, which any Cork members still online should note is Longford. I am aware that the key part of IDA Ireland's future growth involves the advance business solutions. There is one earmarked for Longford. I am anxious to have an update from some on the team on the current position. Maybe they could firm up on the timelines. I raised this matter with the Tánaiste in the Dáil before Christmas. I have to admit there has been huge growth in foreign direct investment, FDI, in Longford, thanks to IDA Ireland. We now have very close to 2,000 FDI-supported jobs in Longford town through Abbott, Technimark, and Avery Dennison. The easy solution is probably to build the advance building solution on land adjacent to one of those companies and let one of them grow. However, there is a huge opportunity for the county and IDA Ireland to acquire a significant land bank and bring in a new FDI company. I hope one of the three aforementioned companies will advance in time. I want to give the witnesses sufficient time to answer that question.
Second, we have benefited greatly from American investment in Ireland. Where does IDA Ireland envisage opportunities regarding emerging economies and FDI investment in Ireland? Those are my two questions. The one on Longford is the priority.
Mr. Martin Shanahan:
I thank the Deputy for acknowledging the increase in FDI in Longford. I believe employment in FDI companies in Longford increased by 16% last year. We hope that increase will continue. As the Deputy has pointed out, it is our plan to build an advance building solution in Longford, along with two others in the midlands, during the lifetime of the strategy, which is in the next three years. We have yet to identify the appropriate site for it. We are engaging with Longford County Council at present to advance the project. My hope is that we can identify a site in the near future that meets everybody's needs, but we have not yet done so.
From our perspective, we want to see happening both of the things that the Deputy mentioned. First, we want to see the existing companies expand. Second, we want to try to attract a new-name investor to Longford. That is what I hope the advance building solution will do. Work is ongoing to identify the site. When that is done, the project will go through the normal planning process and everything else.
Let me address the question on the mix of business and where it comes from. Approximately 70% of investment comes from the United States, about 20% comes from Europe, and about 10% comes from what we term "growth markets", which include the Asia–Pacific region and South America. Within the portfolio, the United States continues to be extraordinarily strong for us. It was very strong during the pandemic, for the past two years, partly to do with US companies' familiarity with Ireland. Ireland was regarded as a very stable investment opportunity during the pandemic, when there may not have been opportunities to do as much due diligence work on the ground. We see a lot of growth from what we term growth markets. The Asia–Pacific region is the main part of that. Within that, China, Japan and India are the main sources. We continue to grow our network of offices in those locations to attract investment.
I thank the witnesses for answering our questions so well thus far. I want to ask about the role IDA Ireland played in the purchase of ventilators by a company known as Roqu Media, a festival management company. I am sure the witnesses are familiar with it. I am not exactly certain what its expertise in ventilators and ventilation is, but perhaps the witnesses can enlighten us on that. The company has no history of trading on these shores. Several red flags were raised during the due diligence process, one of which I understand concerned the fact that the chief executive of Roqu was not dealing directly with the wholesalers but via a third party, which dealt primarily in the products in question. We know what the issues were with the ventilators. My questions are fairly simple. After the red flag was raised, did IDA Ireland break off contact with the chief executive, with whom, I am sure, the witnesses are familiar?
When did it break off contact? Perhaps Mr. Shanahan will give us an insight into what IDA Ireland's role was during this process. I will qualify my questions by saying that I understand that, at the start of the pandemic, there was panic, but some of that panic would have subsided over time. What was IDA Ireland's role in facilitating the purchase of these ventilators that did not work and at what point, if ever, did it feel it was necessary to break off contact?
Mr. Martin Shanahan:
If we telescope back to the beginning of the pandemic in March 2020 when the whole world was looking first for PPE, then ventilators and then masks, IDA Ireland's role was to support the HSE in its endeavours to identify potential sources for those goods. Our primary focus in that regard was on looking at Asian suppliers, in particular from China, so we-----
Mr. Martin Shanahan:
I am answering the Deputy's question. We had no role in procuring ventilators. The job of procuring ventilators is the HSE's. Our job was to make contacts. We reached out to companies which we knew could supply those. Some companies also approached the IDA and the HSE about ventilators.
Mr. Martin Shanahan:
The engagement with Roqu Media was with the HSE, not IDA Ireland.
It was not with IDA Ireland, so the agency had no contact, role or involvement at any point. I thank Mr. Shanahan.
My next question is on a not-dissimilar theme. We all read the stories, particularly in the Business Postbut also elsewhere, regarding the Minister of State, Deputy Troy's meeting, and granting of confidentiality to big tech companies in advance of the meeting, to discuss the European Commission's Digital Markets Act and Digital Services Act. The Business Postreported that the request for this confidentiality came from IDA Ireland. That it would have been sought by big tech companies would not have surprised me. That it would be granted by a Minister of State in this Government might not surprise me either, although it does concern me. Does the IDA make such requests often? How often does it do so? When requests are made, as one appears to have been in this instance - Mr. Shanahan is free to contradict that if he wishes - are they received positively by the Government? I am not referring specifically to the Minister of State, Deputy Troy, but I cannot imagine that this was the only time such a request was made. What reception does the IDA usually get when it asks a Minister for confidentiality regarding these meetings?
Mr. Martin Shanahan:
As I understand this specific instance, the reportage on which I believe the Deputy is referring to, the IDA sought clarification as to what level of reporting there would be on the meeting, rather than that the client had sought confidentiality. That is to say, the client had asked would there be detailed minutes of the meeting and would they be made public. That was in order that the client could judge what level of detail it was willing to share in respect of its activities. I have to be honest, in that I do not believe it is unreasonable that a client would want to know the extent to which its-----
Mr. Martin Shanahan:
Let me be clear. The IDA does not seek confidentiality for its clients in its engagement with Ministers. We did not on this occasion. As I understand it, we sought clarification for the client as to at what level the meeting would be reported.
Regarding the IDA's own engagements with clients and information we host, we are covered by statute to ensure that the information we have is kept confidential because confidential information is shared with IDA Ireland and it is our responsibility to keep it confidential.
In an instance where, as Mr. Shanahan mentioned, the IDA does not ask for confidentiality, it might ask the Government about the meeting's status, whether it will be formal, will formal minutes be taken and where they will go. In this case, assurances were given that the meeting would be confidential and minutes would not be taken. To be straight with Mr. Shanahan, that worries me. He says that seeking confidentiality is not something the IDA does, which is fair enough. This is something that happened, though. Does the IDA have companies that would turn down or refuse meetings with Ministers? Has a company ever refused to meet a Minister on the basis that the minutes would be public or that they would not be confidential? Alternatively, is it Mr. Shanahan's experience that these companies are happy to meet Ministers regardless of whether minutes are taken and published?
Mr. Martin Shanahan:
My experience is that companies are very happy to meet members of the Government. The expectation in all cases is that these meetings are in the public domain because they are in Ministers' published diaries and so on and that information relating to the meeting can be sought.
The IDA sets up engagements with Ministers, often at the request of companies, in order for them to engage on issues that are of interest to those companies. Typically, it is the company that is asking for the meeting on a specific issue. The IDA also sets up meetings for companies, typically more than one at a time, with Ministers so that they can share information with those Ministers about what they see happening from an investment perspective and on topical issues. We always explain to companies in advance the nature of those engagements. Typically-----
I am sorry. I have just one brief question. My understanding is that confidentiality was granted in this instance, but Mr. Shanahan is saying that this was not arranged by the IDA. I want to be clear.
I welcome Mr. Shanahan and his team and thank Mr. Shanahan for his responses so far. I thank him and his staff for the work they have done during what have been difficult times over the past number of years. In light of the results - all extremely positive and successful - they have presented today, one would swear there was no pandemic at all.
I have a question relating to a serviced site in Clonmel, in my county of Tipperary but I might come to it second if I have time at the end. I wish to touch on a matter that Mr. Shanahan did not get to respond to fully when my colleague, Deputy Stanton, spoke about it, that being, remote working. I am from an area in Tipperary where many people travel to Cork, Limerick or even Waterford to work. Before the pandemic, there would be queues of cars parked up on roads just before motorways as people drove together to work. That has not happened during the past two years. There is an opportunity for the IDA and the Government to support the option of living in rural towns and working from remote hubs in Tipperary where a company might be based in Cork, Limerick or Waterford.
Can I have Mr. Shanahan's views on that point and what the IDA might be able to do from its perspective?
There was an announcement this morning where the Central Bank was talking about an expected growth in the economy over the next three years and where some newspapers are talking about it being back to the boom, which is a worrying statement. What is the IDA’ s perspective on its own growth over the next three years if we are looking at the economy improving from all of the predictions being made? Where does that leave the IDA in respect of its selling points for investors coming in to Ireland? Obviously, corporation tax, and I note that the response Mr. Shanahan has given is that it is a level base across the whole world now which is true, was one of of our selling points. When Mr. Shanahan goes to companies to attract them into Ireland, what are the main selling points? I will come back to the more local question after his response to this point, please.
Mr. Martin Shanahan:
I thank the Senator very much for his questions. On remote working and what the Senator has observed during the course of the pandemic, it is the case that the foreign direct investment, FDI, sector and the economy as a whole has performed extraordinarily well. The FDI sector continued to operate during the period while many people worked from home. That had been a proof point for the companies involved so there have been many learnings for companies during this period as to what and how well things could be done during that period. My expectation is that that will not be lost post pandemic, perhaps, because the main issue for most companies that we are engaged with is access to talent. These companies will try to source current talent from wherever it is available which includes regional and indeed rural locations, in some cases within Ireland, but also within other countries and we have to compete for this.
This opens up opportunities and our clients see those opportunities. Many of them are giving very serious thought to how they are going to structure themselves, what type of working model they are going to use, whether fully remote or hybrid and in some cases there is a demand to come back to the office for very specific reasons. This presents opportunities for regional and rural Ireland and specifically for Tipperary and we will certainly be trying to ensure that we work with clients to advise them of those opportunities.
On the projections around the economy, clearly there has been a very robust recovery from the pandemic. FDI was, obviously, very resilient throughout the pandemic but we are now seeing a recovery in the domestically trading part of the economy which is largely down to consumer spend. That will lead to some challenges within the economy as to the availability of resources and the carrying capacity of the economy. The IDA is targeting 50,000 jobs between 2021 and 2024. I see that as realistic and that there is a very high possibility that we will be able to deliver on that but nothing is obviously certain. Again, we operate in a competitive environment.
On a broad level, the issues are around inflation, supply chains, geopolitical issues and if we need a reminder as to how they can arise we can see what is happening now on the eastern border of Europe. Domestically then, the issues are going to be around talent availability, as I mentioned in earlier answers, and supply of utilities such as water electricity, housing and border infrastructure.
I thank Mr. Shanahan very much. On the question of Tipperary, we had positive news back in June, of an extra 200 jobs from Pfizer in Nenagh which was very welcome. The company is now sponsoring the Tipperary GAA team for 2022 which is greatly welcomed.
On Clonmel, there is a serviced site there that the IDA owns along with Tipperary County Council at Ballingarrane. There is a building there already called Questum Acceleration Centre which is full and is very successful. There are companies there that are doing wonderful work, are looking to expand and to remain in Clonmel. This is a serviced site, as I say, that is jointly owned by Tipperary County Council and the IDA and is about 300 acres in size. There is great potential because Clonmel has proven over the past 30 to 40 years that it is a town that can manage and retain multinationals and jobs for a long period of time with good employment. Does the IDA see the Ballingarrane site having the same opportunities and commitment that the local enterprise office and Tipperary County Council, and indeed the Minister who has also been briefed on that site, does? It Is a very significant site for the town of Clonmel. Does the IDA support Ballingarrane going forward in the potential it brings to the region and town of Clonmel?
Mr. Martin Shanahan:
The short answer for Senator Ahearn is yes we do. There are about 50 acres remaining for marketing at Ballingarrane and we will continue to do that. We are also engaged with Tipperary County Council in respect of considering advanced planning permission on a site in Clonmel and that work is progressing at the moment. We know that the more work we do in order to make these sites attractive, the more likely it is that we will have success. The short answer is that we share that commitment to Clonmel.
I thank the Chairman. I welcome Ms Buckley, Ms O’Sullivan, Mr. Curran and Mr. Shanahan to our committee here this morning. I also thank the IDA for the recent engagement I had with it and the confirmation that an advanced business solution is planned for Waterford which is very welcome news. We also had some very good IDA announcements at the end of last year which were also most welcome. I acknowledge what IDA has said about the Clonmel area which all bodes well for the south east.
I have three questions prepared here from Mr. Shanahan and I ask that he might come back to me on them, please. I congratulate him on his 2015-2019 strategy which I believe was entitled Winning: Foreign Direct Investment 2015-2019, which, it seems, the IDA has done.
On the authority’s regional goals, I welcome Mr. Shanahan’s reflection on the appropriateness of these goals, particularly in respect of regional not meaning just Dublin. It appears that the outlying areas of the Border region, the north-west midlands and the south east were relatively weak and if one strips out Cork, Limerick and Galway, I would suggest that the regional accomplishments would not look so stellar in area 1.
I would welcome more granular data on the value and income of IDA by region and sector. A recent report headline I saw showed on average salaries of €66,000 per annum which I presume catches a great deal of variation.
Third, we spoke about this briefly, I again raised the issue of technological universities, TUs. TUs will hopefully strengthen the IDA offering outside of Dublin, Cork and Limerick. I highlighted that in Waterford there are three technology gateways, the South Eastern Applied Materials Research Centre, SEAM, gateway, the Pharmaceutical & Molecular Biotechnology Research Centre, PMBRC gateway and the Walton Institute, which are all performing at a very high level. I also raised the matter of where we could have more intersection with the IDA and TUs. What additional resources and features do Mr. Shanahan and the IDA feel it needs to make this new TU branding meaningful? We may need some specifics here particularly in terms of the Border, midland and, most important to me, the south-east region? Gabhaim buíochas.
Mr. Martin Shanahan:
I thank Deputy Shanahan very much for his questions. On regions and targets, first, on a headline level, the IDA is targeting half of all investments into regions with this strategy. Half of everything that will come into the country will go outside of Dublin. By any stretch that is a very significant target and objective and will be very challenging, particularly given where we have come from.
The reality is, internationally, that investments are flowing increasingly towards larger urban areas and cities rather than to regional locations. We are fighting an uphill battle. Ireland has one city of scale, which is Dublin. It is a plus for the country that we have that because by attracting investment, there is a chance to move investment outside that area and familiarise investors with it.
The Deputy mentioned a couple of locations. Employment in the south east increased by 8% last year in FDI-supported companies, in the Border region by 3%, in the mid-west by 5%, in the west by 6%, in the south west by 3%, but that includes Cork, and in the midlands by 10%. The increases have been widely distributed but we are not starting from the same base. I think that is the point the Deputy is making and I agree. That is the reality of what we have to work with and what various regions have to offer, in terms of population and population distribution. We market regions for a good reason. It is because we need bulk and size in order to compete internationally.
On the breakdown of employment by region, salary levels and sector, I think we can provide that information but I do not have it to hand. My colleagues, Mr. Curran and Ms O'Sullivan, can come back to the Deputy directly on that. I do not have that level of detail with me.
On technological universities, specifically the one for the south east, we see this as a hugely important development. The ability of IDA to engage with clients and point to the fact there is a university in a region is a significant plus. More important than pointing to the moniker it has is that the substance underneath is of a standard. The process all of these technological universities have recently been through to show they are of that standard is welcome.
As I mentioned in response to Deputy Bruton, we have established a unit in the IDA focused on talent, transformation and innovation, which is to help engage with the training, education and research systems to ensure we continue to develop an offering which is attractive to investors and, more crucially, that we have an offering where investors can invest in research and development and innovation in those companies that are already here. There is significant engagement at a local level with the third level institutions led by the regional manager and supported by Mr. Curran to understand the areas where universities can develop capability and where they have capability through IDA. The Deputy mentioned some of that capability. We will continue to engage with clients and universities to matchmake, to some extent. The Deputy can be assured that in our marketing efforts, the technological university will be key in attracting investors going forward.
I have a further question which I brought up with Mr. Shanahan the last day but will flag again. It concerns the issue of Science Foundation Ireland, SFI, funding into the third level sector. The majority of it goes into the national universities. I have been in touch with SFI and it has highlighted the international dimension of its review panels. All of that is well but we need some realignment of that funding into the technological university, TU, sector because it will be hard for research potential to be generated if we are not getting the funding. At present, the majority of large-scale SFI funding goes into national university centres. That is back to Mr. Shanahan's point about doing more for the large urban centres than for the regions.
I thank the witnesses for their time, particularly Mr. Shanahan, who is getting a fair grilling. It is a good job he has resilience. It is interesting. I read the entire 18 pages for my sins.
As Green Party spokesperson for enterprise, trade and employment and for rural development, I will focus on supply chain issues. Larger companies in the private sector are doing really well at reducing their energy and carbon emissions and struggling to find smaller businesses that have done the same because they feed into their carbon footprint. It has been highlighted to me and I would like to hear if Mr. Shanahan has looked at that. How does he support the supply chain also being green? Bigger companies can afford to hire an expert. I have worked with SAP and other companies through a social enterprise I had about greening business, so I have experience in this. Some of them have done amazing work but small businesses do not really have the time or money.
I got a commitment from the Tánaiste of €22 million for helping the small-to-medium enterprise sector decarbonise but I spoke to him on the fact the supply chain was struggling and bigger companies were struggling to find small Irish businesses that could give them carbon figures. I would like to hear about that, if the IDA has any information, or we could talk about it again.
I see the IDA's five pillars and 60 sustainability investments. I would like to hear what exactly that means.
It is time to differentiate between greenwashing and really green businesses. We have seen both. We have seen greenwashing for years and now it is becoming trendy so there is a lot more of it. There is also a lot of genuine greening in industry. It is not just the environmental NGOs that are green. I see deep work and concerns in the private sector in big business. They are not all baddies, as people like to think. As Larry Fink said, "Climate risk is investment risk." It is no longer a little green thing. It is serious business now, economically as well as climate-wise. It should be a central pillar for all business at this stage. I would like to hear more about that from the IDA.
My final point is a local thing and brings up Deputy Paul Murphy's favourite hobby of talking about data centres and how evil they are. Data centres are needed because, as Mr. Shanahan pointed out, we would not be able to have this meeting without them. They help us. It is suggested best practice to have them near green energy sources. Considering the offshore wind coming into County Clare, I wondered if the IDA had engaged with the ESB or whoever is on the east coast dealing with offshore wind on the probability that that is the best location for a data centre. We need them and they can be beneficial in storing energy. I will not go into that as we have had enough about data centres today. The IDA should be looking at data centres and businesses coming to west Clare as part of just transition and with a view to having access to clean, green energy on their doorstep and hydrogen, long term, as well.
Given that Moneypoint is closing down, we need to show west Clare that we have not forgotten it. West Clare should become a hub for businesses because of the offshore wind and there should be a huge focus by the IDA on bringing businesses who want green, care about their carbon footprint and will happily locate to that place. Kilrush and Kilkee are fabulous places with all the amenities people need and will have green offshore wind as well. Is the IDA focusing on that geographic area? I see in the map where it has focused and it is mainly cities and big towns but now we have to focus on putting them near good sustainable energy.
Mr. Martin Shanahan:
I thank the Senator for her comments. I will take them in the order she outlined them. Her positioning is right in that large businesses typically have the wherewithal and the motivation to engage on green issues and decarbonisation. Many of them have to do so, frankly, because their clients demand it, whether that is the end user or another business they are selling to.
A large proportion of the client companies with which we engage have very well developed and sophisticated plans at a corporate level. Increasingly, we see that at the Irish level. Part of our role is to help those client companies to engage in climate action and support the Government's endeavours. The Senator is right. For many of them, when they are procuring goods and services, they are seeking to ensure they come from green sources and are not adding to their carbon footprint.
We support smaller companies within the IDA Ireland portfolio and help them develop their climate action plans. I am aware that our sister agency, Enterprise Ireland, which is responsible for indigenous companies, also does this. Perhaps there is something for us to do together. We are happy to look into that to see if there is something that connects the dots between those two. We have learned a lot from our colleagues in Enterprise Ireland regarding this area and some of the supports it had in place. This is why I am confident it has them.
Regarding data centres and co-locating with green energy sources, I agree with the Senator that this makes sense. Many data centre operators in Ireland are seeking green energy and, in some cases, have secured options or provided the development funding to build wind energy farms and secure the output from those. This increases the renewable energy supply in general and specifically for those companies. Other companies are heavily engaged in this area. Members may have seen Eli Lilly in Cork launching its solar farm, which is a very significant investment. All of these large users are trying very hard to ensure that they are secure green energy. That is what is demanded of them in corporate; therefore, it is what is demanded of them in Ireland.
We are very familiar with Clare and the opportunity relating to offshore wind, to which I alluded earlier. Again, data centres are a consistent demand there should we be able to develop that offshore wind. We will definitely take the Senator's comments on board regarding Clare and west Clare.
I am disappointed that Deputy O'Reilly used her time plus extra time for political point-scoring, particularly when the Minister of State, Deputy Troy, is not on the call. I welcome the 9% increase in employment growth in the west. It is very welcome. I acknowledge the significant work that Catherina Blewitt and her team are doing in the west. I know the lady in a professional capacity. She has done Trojan work in our city and beyond.
I am conscious that the Oranmore site has been idle for a time. If Mr. Shanahan could come back to me when he has more information, I would appreciate it. It is fantastic that the site is in the final ten regarding Intel and the challenges therein. Could Mr. Shanahan confirm that it is part of the three-year IDA Ireland strategy? Is he confident that a company for that site would be identified in the next 18 months to two years?
Mr. Martin Shanahan:
I cannot give the Senator that commitment. We are striving very hard to locate an investment on that site, which is a very attractive site that has lots of things going for it. I cannot give him an assurance that it will be within the next 24 months. It could be sooner than that or a lot longer but he should have no doubt about our commitment to marketing the site.
I thank the Chairman for letting me come in a second time. I want to follow up on the remote working spaces. I am interested in what Mr. Shanahan said about how circumstances have evolved and developed during the pandemic. There are a lot of remote working hubs but many of them are more hot desks. I am looking for us to be a bit more ambitious. I know lots of companies would be very concerned about their security of information and may want their space. Will IDA Ireland have a look at developing remote working spaces so that companies could avail of them if they wished? Bearing in mind the competition for labour and talent, if somebody could work in his or her own town, it could help. Working from home is not always the best option for people. They are on their own at the kitchen table or in the box room. It may not work long term. Having a working space in a regional space such as Youghal, which I mentioned earlier, would mean that people would not have to travel long distances and their quality of life would improve. People might think about going back to work because they are offered that kind of flexibility and, therefore, maybe it is something IDA Ireland might explore with its companies or do something on a pilot basis to see how it would work. Mr. Shanahan is correct. Circumstances have changed dramatically. People may not want to work from their house but may want to work from their town. It would also rejuvenate local towns, many of which have suffered hugely in the recent past.
I return to the N25 because I want to be clear about what is happening there. How much has IDA Ireland invested in the Ballyadam site over the years? I understand that it is fully serviced. I think IDA Ireland purchased the site at one stage. This site has been sitting virtually idle for 12 years. One of the reasons put to me was that access to the site has been very difficult. The N25 is outside the gate but when you come out of there, you must go east to go west. Mr. Shanahan is familiar with this. Most recently, Transport Infrastructure Ireland, TII, decided to abandon fairly advanced plans to upgrade the N25, which would have led to very good access to that site. I am not sure if he is aware of that. If he is, could he tell me whether IDA Ireland has made any comment to TII or the Department of Transport about the decision to abandon the upgrade? TII had spent €1.3 million on plans to upgrade the N25 but decided in December to abandon the whole thing so we do not know where it is. It leaves that site in limbo. I am aware of IDA Ireland's planning application. It has caused a lot of angst locally because it will increase local traffic through Carrigtwohill, which is already chock-a-block.
Has IDA Ireland any involvement in the development of new technology relating to offshore wind and green hydrogen in particular? Is it engaged with supporting companies that may be interested in getting involved with that?
Mr. Martin Shanahan:
Regarding hubs, I will pass over to Mr. Curran. He may also have a figure regarding the amount we have spent on the Ballyadam site. If we do not have the figure, we can come back to the Deputy with it. Regarding the N25 and access to the Ballyadam site, IDA Ireland has been clear that investment in road infrastructure that allows access to these sites and improves connectivity obviously helps us in marketing Ireland.
We engage with TII and others regularly on these issues. The slip road for which we have submitted a planning application is a stop-gap solution. The overall work on the N25 has not progressed at the speed required for us to be able to market the site. We engage with local stakeholders wherever we are undertaking development like this. We would be happy to hear from any parties on the proposed development to try to give assurances and put in place anything we can to meet the needs. The Deputy will understand that this is an effort to try to win investment for that site.
On green hydrogen, we are familiar with the technology. We are engaged with some companies that are working on green hydrogen, which represents an opportunity. There is more work to be done on the technology to make it a viable opportunity for widespread promulgation but we are aware of it. I will pass to Mr. Curran to answer the other two parts of the question.
Mr. Denis Curran:
On positioning regions for investment, we do so across multiple different criteria. One is the promotion of remote working where we have client companies interested in the infrastructure for remote working. They are interested in that when they are looking at growing the talent pool on which they can draw, as Mr. Shanahan mentioned, to populate open roles they may have. We also see it as a strong benefit for people who are living in regional locations that where there are open roles and remote working roles, they are able to access them on an ongoing basis.
We are involved in multiple initiatives. Some are at a national Government policy level and others at local level. At at national Government policy level, we are working with our parent Department on an inter-agency and interdepartmental group on the implementation of the remote working strategy and on best practice, training, education and all operational aspects of remote working, either from home or from a remote working hub. We are also working with the Department of Rural and Community Development on the national hub infrastructure. That working group comprises multiple agencies, including the Western Development Commission, Enterprise Ireland and our Department.
The current position is that the connected hubs platform was launched last year. It brings together the locations of all the connected hubs across every county and region. We are populating that website on an ongoing basis. There is a one-stop shop with regard to the visibility of all the remote working hubs in Cork and any other county. To date, 177 hubs have registered on the connected hubs website. Based on our desk research, there are over 400 hubs in existence across the country. Obviously, they are of varying degrees of quality and scale but as they migrate to the connected hubs website, employers will be able to see in real time the infrastructure across all the regions and how they can tap into that to grow their talent pool regardless of where the talent resides. There are multiple working hubs in east Cork and across the county, including in Skibbereen, Woodgate, Macroom and Blackrock, and these will be part of the connected hubs platform.
Ballyadam is a fantastic site, as Mr. Shanahan said. We are actively marketing the site to potential investors at the moment. As it is the subject of a live planning application, the Deputy will understand if I do not go into too much detail on it. On the conclusion of the planning process, when we are in a position to share the funding requirement for any infrastructure upgrades that may be approved, we will be happy to do so with the Deputy. As Mr. Shanahan said, with any development that we undertake, whether our own business and technology parks speed and infrastructure upgrade or a building programme that might impact on any neighbouring enterprises or community, we have an outreach programme with our neighbours. We will adopt the same practice for any potential development in relation to Ballyadam.
I would not like people listening to get the impression that we all see multinational companies in the way they have been portrayed by some speakers - as though they are secretive, trying to wreck our power system, undermine small businesses and so on. That is a false portrayal of the contribution multinational companies are making to our development.
Will Mr. Shanahan give us an idea of the stickability of multinational investment in Ireland? I see that 58% of IDA Ireland projects last year were from its existing companies and that the rate of job loss was under 4%. Am I correct in viewing that as an indication of very strong commitment to Ireland by these companies? On the corporate tax contribution from multinational companies, what is IDA Ireland's current estimate of these companies to the Irish Exchequer?
On remote working, Mr. Curran spoke about standards being established in the various connected hubs and employers being able to know what they offer. In IDA Ireland's experience, are there significant obstacles to large multinational companies using these smaller hubs or are they close to what would be required by a multinational? As a corollary of that, will there be a time when Irish multinational companies have their employee workforce based outside of Ireland? How does that factor into IDA Ireland's thinking on this issue?
Mr. Martin Shanahan:
On the longevity and stickability of these companies, we deal with companies in the IDA Ireland portfolio which have had more than 60 years' commitment to Ireland as well as the new-name companies that arrived in the last year. From an IDA Ireland perspective, we want to see both. We want to see the companies that are already here reinvesting because that is the best proof. The companies that are here understand the environment and see everything that we all see and they still have confidence in Ireland. The point around reinvestment and the amount of reinvestment from existing companies is probably the strongest endorsement of Ireland as a competitive location for attracting investment.
The point about the low level of job losses within the portfolio is important. There will always be churn and job losses but job losses as a percentage of the overall portfolio, which has continued to grow, have continued to fall. Those companies that we have here are maintaining their employments here and their commitment.
My opening statement alluded to the very substantial impact on the Irish economy from multinationals in terms of expenditure of close to €28 billion, of which €17 billion is payroll and €11 billion services and materials. The average capital investment last year was around €7 billion, having oscillated between €5 billion and €7 billion. That is before we get to the corporate tax take.
While this is a matter for the Revenue Commissioners primarily, my understanding is that approximately 80% of all tax takes come from multinationals. Approximately 66% of that, or two thirds of it, comes from multinationals that are exporting, for example, multinationals that are supported by the IDA. This does not include all multinationals, some of which service the domestic economy. A huge proportion of the increasing corporate tax take comes from multinationals, which allows the State to pay for all the other things we need. These include investments into infrastructure, schools and our health system.
In relation to hubs, as the Deputy pointed out and as Mr. Curran alluded to earlier, we now have many examples of hubs operating around the country. They have developed somewhat organically. Some of them are private sector-owned and some of them are public sector developments by local authorities. Some of them have input from State agencies, such as from the IDA and Enterprise Ireland. Many of them are at the level whereby multinational companies would be happy to engage with them, although maybe not all of them.
We have yet to see - and this probably will only play out over the coming months and next year or two as we come out of the Covid-19 pandemic - whether those who elect to work remotely are more happy working remotely at home or whether they are more likely to work in remote hubs. I am not sure if that will be primarily driven by the companies themselves. While they will have a role to play in that, it will be about what individuals want to do. Do they want remote work at home, or do they want to remote work in hubs? In some instances, a hub may be a requirement, for instance, where individuals do not have an office environment at home, the availability of space or a sufficient Wi-Fi connection. Therefore, a hub might be more attractive. We are engaging with our client companies on this to try to understand what their models will be around the workplace of the future, as well as the extent to which they will be office-based versus completely remote.
Earlier, I said to Deputy Stanton and, I think, to Senator Garvey that this now increases the opportunity for rural and regional prospective employees to access these multinationals. It also means that these companies can now recruit anywhere in the world. The idea that there is a centre around which one coalesces has been somewhat broken by the pandemic. Now companies, given the huge demand for talent, are looking at other models. They can potentially access that talent anywhere. That creates a challenge for IDA Ireland, because it means there are now countries, regions within countries and locations in other countries that are competitors for investment but which had not been previously. It has made it all the more competitive for us going out there to look for investment.
I would like to follow on from some of my colleagues today in saying that multinational companies have many positive things. I do not think that many people - there are certainly very few in Clonmel - who would speak negatively about the role that multinationals play in security of employment, as well as what they give back to the community. At the moment, we have a development with which the IDA might be familiar close to Ballingarrane of a new sports hub. It is being built with support from the Government, as well as by significant financial support from multinationals such as Boston Scientific and Abbot. They also do a lot of work in supporting charity organisations in Clonmel in yearly funding. The employees lead on this on behalf of the companies.
That touches on one point on which I wanted to focus, which is about companies that are already based here and that are looking to expand. I would be interested in getting the IDA’s perspective on this. There seems to be a higher demand from employees going into a workforce. If company like Abbott or Boston Scientific is looking to increase its workforce in Clonmel by 50 or 100 people, the person who is going for employment will not only ask about his or her salary, pay and conditions, he or she will also ask about the town, the region and how that area can support that person and his or her family. That is one of the reasons that a number of the companies are supporting the sports hub in the area, which has an international athletics track and sports facility. Is it the IDA’s view that there seems to be a change in what employees are looking for? Have companies had to change their tack? The salaries are obviously very good. The average salary of €61,000 for those working in an FDI company is good. However, it seems that employees are looking for much more than that nowadays. Where does the IDA see that going into future?
I will go back to Ballingarrane site by noting the general region where I am from, like others, has the road infrastructure of the N24 from Limerick to Waterford. There is a redevelopment and design process under way at the moment of that road project. One of its sections has been taken off. While it was on the national development plan, the Minister for Transport, Deputy Eamon Ryan, decided before Christmas that one of its sections, namely, the Cahir to Waterford piece, is not to be continued in 2022. In the view of the IDA, does it strengthen its argument in respect of the Ballingarrane site or anywhere in the south-east region if there is a proper, improved road network between the two major cities of Limerick and Waterford? This connects Shannon Airport to Rosslare. It seems obvious to me that from a strategic point of view for the IDA, as well as for any business coming into the region, having a good infrastructure network between two major cities is a key selling point to bring them to the region. Is it the IDA’s view that it would be easier to bring companies to the south-east region, in particular to Clonmel and County Tipperary, were this road infrastructure to be continued?
Mr. Martin Shanahan:
On the Senator’s first point about the attractiveness of locations, when investors are considering investment or are considering expanding on their investment, it is hugely important to them. We refer to this as place-making. Place-making is about everything that happens in a location. It is not just about what happens in an industrial park or a business and technology park from Monday to Friday. It is also about what is available downtown on a Saturday night or on a Sunday. It is the entire offering of a region. It is one of the reasons that we work with local authorities to try to ensure that the overall development plan is supportive of foreign direct investment. Largely, what will be positive from a foreign direct investment’s perspective will also be important from an indigenous company’s investment perspective.
The Senator is also correct in his point that it is about more than just salary for employees. It is about many other things, including a company’s values and their corporate social responsibility, CSR, commitments. Many of the companies with which we are involved with have significant CSR programmes, in addition to the other things that they do. Therefore, all those things will be important. Flexibility from companies going forward will also be important and employees will be looking to that. Having all the resources within the region working to make it an attractive place for people to live is the first objective. This is because if people will live there and are happy to move there, it means there will be much more chance of us getting an investment.
On the road infrastructure question, I will again point out that the IDA is not responsible for road infrastructure.
We are not responsible for the policy, nor are we the agency responsible for individual execution on it. That is Transport Infrastructure Ireland, TII. In relation to the Senator's question, it is clear that if we can shrink the size of the country and of regions through good connectivity, including both road and public transport, it absolutely makes it easier for us to win investment. Anything that improves access to strategic sites and business technology sites, anything that shortens commuting distances, opens up access to larger urban areas and connects them is clearly positive from an investment perspective.
I again endorse what Deputy Stanton and Senator Ahearn have highlighted with the N25 and N24. I think Mr. Shanahan, Mr. Curran and I touched on this when we last spoke but it is important we get regional connectivity between the south east and the south west-midlands. That can be achieved with upgrades to both of those roads, which are badly needed. The IDA may be able to apply some pressure there.
I have a couple of other points. Green hydrogen was spoken about briefly. Is the IDA liaising with any companies about looking at biomethane development in the country in terms of FDI players? It is an area that has not been exploited and we have very large food manufacturers here, as the authority knows.
My other point is that people may not be aware the original reason Bausch + Lomb invested in Waterford was a private trade mission where Waterford business people who had connections with Rochester went over and met people there. That was the initial genesis of what is now the largest employer, or one of them anyway, in the south east. Would the IDA support future private trade missions from areas like, say, the south east? It is something I have mentioned before but it would be good to see if that is something the authority would approve of.
I think we also touched on this before but what of procurement opportunities for the SME sector through engagement with FDI companies? This was tried as an initiative in Waterford a number of years ago. Unfortunately, it failed. If a small company tries to ring a pharma company it cannot even get someone to answer the call. If a direct line is needed there is nobody to take the call. It is really difficult for an SME to engage in order to try to market itself or its service. Can anything be done to help with a procurement platform?
As a final point, will Mr. Shanahan or Mr. Curran outline their commitment to the refurbishment of facilities in Waterford they previously mentioned to me? I again extend an invitation to the team to come down for the refurbishment of the authority's office in Waterford. When it is done we would like to host them there with business people in Waterford.
Mr. Martin Shanahan:
I thank the Deputy. I note his comments on the N24 and N25. I have probably already dealt with those.
I am sure we are engaged with client companies in relation to biomethane. I am not specifically aware of that but I can look into it and come back to him on it directly.
On private trade missions, my strong preference is that trade missions from any region are done in concert, that is, both public and private. Then we are bringing the best proposition we possibly can to potential investors. We will work with any private sector companies, or local authorities, that feel they want to undertake some marketing for whatever reason. I should say at this point we are supported by many other bodies, agencies, local authorities and professional services companies, both in Ireland and across the globe, who help us in marketing Ireland. It is very much a team effort in that regard. If there are proposals we are anxious to hear them.
On SMEs and access to procurement pipelines, we have a system in place with Enterprise Ireland, EI, where we ask any new company coming into Ireland what its procurement requirements are. We then ask if we can share that information with EI, which can in turn share it with companies it feels may have a possibility of servicing the new company. That is one aspect of it and captures companies on the way in. We then have, as Deputy Bruton alluded to earlier, the trade mission to Ireland whereby we bring together in several regional locations throughout Ireland on an annual basis, multinational companies that have procurement requirements and SMEs, typically, that are trying to access global supply chains. EI has a programme of work in place where it supports the companies to make those pitches and develop them to the point where they can access those supply chains. We obviously engage with EI around that as well in terms of any specific opportunities that might exist where companies may be seeking access. We are happy to do that. I should point out we have many overseas missions on which we engage with EI throughout the year where companies come and pitch. Many of them have political support.
We are indeed refurbishing our office in Waterford at the moment. Waterford is obviously where our regional manager for the south east is based. I have no doubt I will be in Waterford, as my team are regularly, during the course of the year. I thank the Deputy for that further invite.
I thank the Deputy. That concludes all the contributions for today so I have one or two quick questions of my own.
Does the IDA have a strategy of working with EI? If it does, and I hope that is the case, do the two organisations interact to help SMEs tap into the vast network of climate companies the authority has? Mr. Shanahan referenced that a moment ago in answer to Deputy Shanahan. What sort of strategy is there, or does the IDA have a strategy for working with EI?
Mr. Martin Shanahan:
The IDA and EI work extraordinarily closely together at every level. We look at each other's strategies. The Chairman will be aware EI launched its new strategy in the last couple of weeks. The IDA was heavily consulted on that. We have senior teams that are charged with interacting with each other. We both have point people who interact with each other to ensure there is co-operation. Teams right throughout the organisations work in very close contact, so each of us knows what the other is doing and what we are trying to achieve. As I probably mentioned throughout my contribution today, there are a couple of key things we do together around SME-multinational engagement. First, the trade mission to Ireland is key. That is an annual outing where we bring together SMEs and multinationals, one of which is trying to procure certain goods and services and the other is trying to supply them. We have the capability I mentioned in response to Deputy Shanahan there where we seek the procurement profile of companies coming into Ireland and share it with EI for onward sharing with its companies. We have identified a number of sectors where we are working together to develop strengthened clusters. At the moment these include medical technologies, cybersecurity and connected and autonomous vehicles. They are clusters that both EI and the IDA are working on together in order to foster the relationship between SMEs and multinationals. That is obviously an ongoing effort and it will continue. Part of our own strategy is to increase the impact multinationals have in Ireland. In order to do that, co-operation with EI is key.
I thank Mr. Shanahan. My second question is basically a local one but it would be remiss of me not to put it. I have met Mr. Shanahan a few times in Limerick when he has been there opening companies and the additional jobs are always very welcome. A number of the companies based in the Castletroy industrial estate and the Plassey area are hugely concerned about traffic levels in the area and the long-awaited northern distributor road that seems to have been put on a long hold.
Would Mr. Shanahan agree with me that the north side of Limerick, the south-east Clare area and the area between the north side of Limerick and Shannon Airport have potential for massive growth and that the northern distributor road would deliver additional jobs to the Castletroy and Plassey area? Some of the companies in the area have told me, either through meetings with representatives of IBEC or in one-to-one meetings, that they are concerned about traffic levels in that area, especially coming off the M7 motorway. We have built the Coonagh-Knockalisheen road. It is almost completed. That is critical infrastructure. This part of the northern distributor road has freed up an awful lot of land in close proximity to Shannon Airport. Does Mr. Shanahan consider the next bit of the northern distributor road to be critical infrastructure in delivering jobs in the region?
Mr. Martin Shanahan:
As I have already responded, investment in road infrastructure is critical and that includes the northern distributor road. This road will help us both with some of the challenges existing investors experience and with opening up that area to attract new investment. Obviously, this is not a policy area the IDA is directly responsible for but, on behalf of the client companies we interact with and the investors we represent, I can definitely relay that good road infrastructure is critical in opening up these sites. Where there are traffic management issues, we engage with all stakeholders, including our own clients in industrial parks, to try to put in place plans to mitigate the impact of traffic. Limerick is one of the regions that has benefited very significantly from foreign direct investment, FDI, over recent years. In some respects, FDI has transformed the narrative and that is very welcome. We need to do everything we can to continue that.
As no one else is indicating to speak, that concludes our consideration of the matter. I thank Mr. Shanahan and his team from the IDA for assisting the committee in its consideration of this important matter today. I wish IDA Ireland continued success in its work over the coming years as our economy recovers and we emerge from the pandemic. The committee will continue to devote attention to the progress being made in this regard. In forthcoming meetings, we will be considering different aspects of enterprise promotion and trade. This will include an early engagement with Enterprise Ireland and the local employment offices. Once again, I thank the witnesses for coming before the committee today. We appreciate it.