Global investors positive on Ireland’s attractiveness as a location for Foreign Direct Investment
Ireland’s attractiveness as a location for Foreign Direct Investment (FDI) remains strong according to the latest EY Attractiveness Survey Ireland. Almost eight in ten (79%) key investment decision makers expect to establish or expand operations here in the next 12 months, and two in three (66%) expect that Ireland’s attractiveness as an FDI location will improve in the coming three years. Investors have highlighted that the right mix of skills in the workforce, together with continued focus on improving geographic balance and infrastructure are important areas for Ireland to bolster its appeal as a location for FDI. They also recommended supporting high-tech industries and innovation.
These are some of the key findings of the latest EY Attractiveness Survey Ireland, which surveyed FDI decision-makers globally in Q1 2024 to understand their sentiment towards Ireland and their view of the drivers to ensure continued attractiveness. This research builds on the wider EY European Attractiveness Survey which was published in May.
Following a challenging 2023 for FDI across Europe, a large majority of business leaders (79%) surveyed said they plan to expand or establish their operations in Ireland in the next 12 months, up significantly from just over half (53%) in 2023. Two-thirds (66%) say they expect Ireland to become more attractive to FDI over the next three years – up from 46% in the previous survey. Positive investment intentions were particularly strong amongst Financial Services (95%), Pharmaceuticals and Chemicals (90%) and very large company (89%) investors.
On a geographic basis, the survey showed a broad regional spread with some investors considering more than one location as an attractive location for future investment. Dublin ranked highest (47%), with the Southeast (41%) and Mid-East (38%) also performing strongly.
Feargal de Freine (pictured), Assurance Partner and Head of FDI at EY Ireland, says: “While 2023 was a subpar year for FDI projects across Europe and in Ireland, investor sentiment remains positive. Ireland’s FDI model has been highly successful for decades, centred on talent, business-friendly policies, stability and access to Europe’s single market. However, the global FDI landscape is changing and becoming more challenging. It is therefore important to understand investor perspectives and competitor offerings to ensure the continued relevance and attractiveness of the Irish proposition.”
Focusing Policy on Skills, Regions and Infrastructure
Many factors investors consider when choosing where they should invest – such as financial market conditions and interest rates – are external and outside of Ireland’s control. The EY survey respondents said that domestic policy should focus on improving the skills of the workforce (36%), geographically rebalancing the economy (32%) and investing in transport (29%), energy (27%) and connectivity (23%).
Dr. Loretta O’Sullivan, EY Ireland Partner and Chief Economist, says: “The turning interest rate cycle bodes well for an uplift in international investment. While geopolitical and electoral uncertainty is a headwind, businesses are undertaking digital and sustainable transformation programmes and exploring AI technology. To attract the drivers of next-generation economic growth, Ireland should leverage its traditional strengths, hone its new capabilities and stay agile.”
A digital front-runner, Ireland should capitalise on its AI credentials
Ireland is well regarded when it comes to technology and is seen as having strong AI credentials, including opportunities to invest in start-ups, a supportive policy framework, a strong ecosystem, and an AI-ready workforce. Positively, the vast majority of multinational companies currently located here rate their Irish workforce better or as well as other countries in areas such as innovativeness, autonomy, problem solving and proactiveness meaning there is a real ‘AI-opportunity’ for Ireland to seize.
Feargal de Freine adds: “Ireland is a hub for organisations that specialise in technology, cyber, digital and AI, with our ability to communicate, collaborate and be creative differentiating us from other locations for AI. Strong leadership and focus at the highest levels of policymaking is also essential for the realisation of Ireland’s AI strategy.”
