Attracting International Attracting International

Investment Investment - the Irish Experience- the Irish Experience

Presentation to the 4Presentation to the 4thth GCC GCC Conference, Abu Dhabi, Conference, Abu Dhabi,

May 5, 2004May 5, 2004

Overview of IrelandOverview of Ireland• Population 3.9 million

• Total at Work 1.8 million (was 1.1 million in 1990)

• Area 70,282 sq. km

• Climate Temperate

• Exports / GDP 92%

• GDP per capita $30,000 ( ppp year 2001)

• Over the past seven years, Ireland’s economic performance has been spectacular (International Monetary Fund 2000).

• The average annual rate of increase in Irish GDP has been 8.5% over the 8 year period 1994 - 2001, the highest in the EU and in OECD.

Ireland’s Economic HistoryIreland’s Economic History

• 1922 - 1958– a basic agricultural economy– self-sufficiency and protectionism

• 1958 - 1973– opening up and joining Europe (EEC)

• 1973 - 1987– some success, adjustments, but crises also

• 1987 to date– ‘stunning’ development and growth

Ireland’s Economic GrowthIreland’s Economic Growth

0

1

2

3

4

5

6

7

8

9

1970-79 1980-87 1988-93 1994-2001

EU

US

Ireland

AverageAnnual% RealGDPGrowth

Source: OECD Economic Outlook

Irish Factor and Productivity Irish Factor and Productivity Growth 1990 - 2000Growth 1990 - 2000

0 2 4 6 8 10 12

ManufacturingProductivity

ManufacturingProduction

Total FactorProductivity

LabourProductivity

Employment

% average annual growth

EU

US

Ireland

Source: European Competitiveness Report 2001

Ireland in the 1990sIreland in the 1990s

• Results from development decisions of earlier decades and from EU membership

• European Single Market

• Social partnership and economic stability

• Demographic gains - more young people

• Foreign Direct Investment (FDI)

• Global orientation and openness

Social PartnershipSocial Partnership

• 1987 – Major Challenge– rising unemployment (17%) and emigration– public finance deficits and debt (120% of GNP)– loss of jobs and of national confidence

• National Social Partnership Agreement– employers, trade unions, farmers & government– moderate wage increases and tax cuts– consensus on development priorities– shared efforts to achieve national goals

Education and SkillsEducation and Skills

• Youngest population in Europe – 40% under 26 years; 30% elsewhere in EU

• 57% of graduates are in science, engineering, computer or business studies

• Government initiatives to meet future need

Ireland’s AdvantagesIreland’s Advantages

• Young, vibrant and highly-skilled workforce

• Consistent public policies, including low tax

• Strong developmental focus nationally, with strong, informal network links

• Agility, creativity, flexibility and ‘can do’

• Rapid responses e.g. skills development

• Successful development of high-technology, high-productivity, trade-based FDI

FDI in Ireland - HighlightsFDI in Ireland - Highlights

• Leading European location for electronics

• World’s largest exporter of software

• All top pharmaceutical and medical device companies have plants in Ireland

• Highest return on investment in Europe for US companies (U.S. Department of Commerce)

• >80% of manufactured exports

• >35% of Gross Domestic Product

Key Features of FDIKey Features of FDI• No ownership restrictions in Ireland• No discrimination in operating conditions• Appropriate licensing and regulation• Key sectors:

– Information and Communications Technology– Pharmaceuticals and Healthcare– Internationally Traded Services– International Financial Services– e-business

2 9 5 S ta f f

S ectora l D iv is ions ,R eg ions & O versea s

E xecutive C om m ittee

C hie f E x ecutive

I D A I r e la n dB o a r d (1 2 M e m b e r s)

F orfas(P o lic y A d vic e )

S c ience F ound ationIre land

(R e se a r c h F und ing )

E nterp r ise Ire land(S up p o r t fo r Ir ish -o w ne d

b usine ss a nd tr a d e )

M in is te r fo r E nte r p r ise ,T r a d e & E m p lo ym e nt

G o v e r nm e nt

Marketing ProcessMarketing Process

• Identify and access target companies

• Build relationships and understand needs

• Match our offering to their needs

• Provide ‘one stop shop’ service

• Deliver offering and perform to promises

• Provide top quality aftercare

• Continue and deepen relationships

IDA Worldwide

San Jose

New YorkAtlanta

Chicago Boston

United Kingdom

Germany

Netherlands

Japan

Korea

Taiwan

Australia

Dublin International Financial Dublin International Financial Services CentreServices Centre

• Government decision – 1987• Implementation by committee chaired by

Secretary General to the Prime Minister• 10% Corporate Tax agreed with EU• Local development incentives• Local banks engaged positively to promote• Marketing team engaged with global

Instituutions – attracted role models

Key Background FactorsKey Background Factors

• Open, responsive business environment• Welcome for, and success with FDI• EU and OECD membership and policy continuity• Free access (“passport”) for services throughout

the EU• Free capital movement• Educated population with business orientation• Professional Services with global outlook• Low corporate taxes

Main Activities in Dublin

• Banking, asset financing and securitisation, leasing

• Corporate Treasury Management• Fund and investment

management/administration• Insurance

– Life and non-life/general– Reinsurance, captives and broking

IFSC Statistics

€ billion Bank assets of international banks 207 NAV* of domiciled investment funds 375 NAV* of all funds 558 Cross-border life assurance premiums 5.6 Cross-border gross non-life premiums 10 Assets of international non-life insurers 30Number of domiciled investment funds - 3394Direct Employment – 12,000

International Banks in Dublin

Corporate Treasuries in Dublin

Fund Promoters & Administrators

The Future for FDI in IrelandThe Future for FDI in Ireland

• High value knowledge-based activities

• Education, skills, research and innovation will be key competitive advantages

• New technologies and business models

• Better regional spread sought

• Better integration of FDI and Irish business

• FDI will continue to be of great value to us

Attracting International Attracting International Investment – The Irish Investment – The Irish

ExperienceExperience