Brexit sending jobs to Ireland but for how long?

The IDA has reported some results for 2018. The announcement highlights the effects of Brexit on the Irish economy. The IDA and the Minister for Business, Enterprise, and Innovation, Heather Humphreys, have announced that employment levels in the Industrial Development Agency’s client companies have reached 229,057, nationwide. The IDA’s performance, according to itself, has exceeded Government targets contained in its strategy document for 2015 to 2019.  

The report outlines the agency’s response to an ever-changing world of enterprise, giving consideration to everything from regional growth to the effects of Brexit on the Irish business landscape. A notable statistic from the report is that 58pc of employment in IDA companies, in 2018, was outside of Dublin. However, these were, of course, largely created in other urban centres. Many smaller county towns such as those in this region, still lag far behind the national averages. 

Brexit 

A substantial number of companies have chosen Ireland as a base, as a result of Brexit, with some notable exceptions. 55 firms approved for IDA investment, bringing with them more than 4,500 jobs. It is likely that this strategy will be continued by the IDA and Government. The decision to showcase Ireland as a stable investment climate in an increasingly chaotic global environment has undoubtedly served the nation well, however, with these announcements come some serious challenges which must be overcome. Morgan Stanley, Bank of America Merrill Lynch, and Barclays are among those companies which declared a new or expanded presence in Ireland in 2018, as the Brexit fallout continues to accumulate. The government must now act to ensure the environment for the workers they bring with them is up to standard. Housing, healthcare, and transport all pose challenges as we grow Foreign Direct Investment (FDI), particularly in Dublin. 

Humphreys said: “The IDA’s record results for 2018 underline how strongly Ireland continues to perform when it comes to attracting FDI.”  

Gains 

Humphreys emphasized the progress made in areas outside of Ireland’s main cities, with every region seeing employment gains in the last year. She added: “Our ongoing efforts to grow and sustain FDI here are complemented by other actions we are taking to improve the capacity and resilience of enterprise in Ireland.” 

CEO of IDA Ireland, Martin Shanahan, said: “FDI continues to drive the economy with strong employment growth at 7pc, compared to [the] national average of 3pc in 2018. FDI exports, experienced growth of 10pc and an increase of 8pc in the amount spent in the Irish economy on payroll, materials and services – this now stands at over €19.2bn.” He added that IDA client companies account for an estimated two-thirds of corporation tax in Ireland. This too is something that government must watch closely and not become over-dependent on.  

At the end of 2018, total jobs at IDA client firms stood at 229,057, compared to 210,443 at the end of 2017. Job gains in 2018 stood at 22,785, up from 19,851 in 2017. Credit must be given where credit is due in this regard, however, the nation and its people would be well served will more balanced regional development and job creation. 

Risks  

Shanahan also said that while the report is to be celebrated, there are still significant risks facing Ireland in the future, stating: “Ireland is a small, open-trading economy, and increased nationalism and protectionism [are] likely to have an impact on future FDI figures.  

“10 years on from the financial crisis, the global economy continues to grow at a steady pace but the Organisation for Economic Co-operation and Development (OECD) says global GDP growth has peaked and is slowing on the back of weaker trade growth and less-supportive monetary and fiscal policies.”  

He also explained that housing, skills, infrastructural investment, educational investment, and income tax levels at the higher marginal rate were all issues encountered by IDA client firms.  

Shanahan concluded that new and emerging technologies must be embraced by Irish based companies in order to maintain a competitive edge in the global market place, stating: “Ireland must also prepare for a scenario where technology, artificial intelligence, machine learning, and robotics play an increased part in our working lives.” 

Conclusion 

 I think the Government may have missed a trick in not having focused on attracting more Micro businesses from the North and UK mainland to smaller towns and villages, on the head of Brexit. Smaller firms too would like to keep a foot in the EU, and towns such as Roscommon, Athlone, Boyle, Strokestown, Ballaghaderreen, and the likes would be more than capable of facilitating many of these smaller operators. However, credit where credit is due to the IDA on national job creation facilitation.