Ireland is the number 1 destination for US Tech Firms
When it comes to foreign direct investment (FDI) Ireland is the number one choice for US Tech companies. To date $54 billion has been invested in Ireland through FDI. IBM were the first US Tech company to set up in Ireland in 1956. Since then companies such as Google, Microsoft, Intel, Apple and Facebook have all set up operations in Ireland. The presence of such Tech titans in Ireland has resulted in other US Tech companies following suit.
At present Ireland has the following:
- 9 of the top 10 global software companies
- 9 of the top 10 US technology companies
- The top 3 enterprise software companies
- 4 of the top 5 IT services companies
Coming in 2nd place as a destination for FDI is the UK. To date $51.1 billion has been invested in the UK through FDI. In the event that the UK leaves the EU without a deal, we can expect FDI to be drastically affected.
3rd place for FDI investment went to The Netherlands, with a figure of $33.8 billion invested to date.
Tech companies that have chosen Ireland
The first US Tech company to invest in Ireland was IBM when it opened its Dublin office in 1956. Then Ericsson invested in Ireland in 1957. The 1970s saw the arrival of Hewlett Packard, followed by Microsoft, Dell, Oracle, Intel in the 1980s. The 1990s saw more FDI investment in Ireland with the arrival of Symantec, Fidelity, SAP, and Pilz. In the 2000’s Google, Yahoo, Sita, Amazon, Ebay, Cisco, Aon, Facebook, Workday, Mastercard and Citi all set up operations in Ireland.
Why do Tech companies choose Ireland?
Average Return on Investment
To start, the average return on investment for the companies that have invested in Ireland was the 5th highest in Europe, coming in at 11.7%.
Corporation tax - 12.5%
The corporation tax rate of 12.5% is undoubtedly an attraction to companies looking to relocate. However, this is not the only incentive.
Ireland has a 98% participation rate in education amongst 18 year olds (highest in Europe). The Irish Education System is ranked 6th best in the world. Computer science and coding are now secondary/high school subjects.
The Irish government has invested over $700 million in Research & Development (R&D). Ireland has a high level of collaboration between industry, academia, state agencies and regulatory authorities.
Strong talent pool
Ireland is number 1 in the world for attracting and retaining talent according to the IMD Yearbook 2017. Ireland also has the youngest population in Europe, with one third of the population under 25 years of age and nearly half the population under the age of 34. Nearly 10 percent of workers based in Dublin work as software developers, according to Stack Overflow report 2017.
The continued success of Ireland’s FDI has resulted in a cluster effect for businesses as well as employees. This has resulted in Ireland having the fastest-growing tech worker population in Europe for 2017. Source: State of European Tech 2017 Report.
One of the primary reasons that companies look to invest outside of their home markets is to gain access to new markets. A report from the Economist Intelligence Unit found that 58 percent of respondents emphasised market access as one of their top three motivations for setting up international operations.
The report shows that when asked about Ireland’s main competitive advantages, the country's access to European markets was top of the list. 46% of respondents highlighted market access, much more than any other factor.
(see below graph/Figure 1).
Ireland is Pro EU
- Ireland will remain a core member of the EU single market & Euro currency
- Ireland will be the only English speaking country in the Eurozone, post-Brexit
- Ireland is most positive about the EU. 86% in favour of the free movement of EU citizens to live, work, study, do business in the EU (EU average 81%)
- Proportionally Ireland has the 3rd highest international workforce in Europe. Today, 15% of Ireland’s workforce is international.
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