With the Celtic Tiger experience, Ireland’s economy showed the world the power of foreign direct investment (FDI) as a trigger for development. As a small country, it had traditionally depended on its agricultural output, but its participation in the European Economic Community, and later the European Union, marked a shift in economic policy towards openness and investment, with a business-friendly environment and low-tax policy forming the basis of its first miracle. Today, ten years after the Great Financial Crisis, Ireland is showing the world that it is more than a tiger, it is a phoenix.
As a tiger, in a very short period of time, Ireland went from being one of the poorest countries in Europe to a prime hub for high-value projects with the strategy of building a competitive economic and policy platform to attract as much FDI as possible. Today, after a period of post-recession austerity, the country is making use of its language advantage (it is the only English speaking country in the eurozone) and has nurtured its low-tax business environment. Its highly skilled labour pool, world-class infrastructure and technological expertise ensure its place among the top investable locations for multinationals and global corporations.
Ireland’s capital Dublin is a city where technology and innovation go side by side. It is home to 9 of the world’s top 10 technology companies, 50% of the world’s top banks, 250 global financial institutions,10 of the world’s top 20 insurance companies, 9 of the world’s top 10 pharmaceutical companies, and 17 of the world’s top medical technology companies. With the world becoming increasingly knowledge driven, the availability of talent and competencies is vital. Ireland’s workforce value proposition is top class, having been ranked by the IMD as first in the world for flexibility and adaptability and third for availability of skilled labour.
Dublin is now home of some of the biggest global businesses, acting as an entry gate into the EU. Companies like Facebook, LinkedIn, Apple, Microsoft, Google and Airbnb have settled here along with more than 1,300 multinationals. These have generated thousands of jobs in the past few years. According to the Industrial Development Authority, which promotes FDI in Ireland, investment approved in 2017 is expected to create 11,000 jobs after the 9,100 created in 2016, mainly in life sciences, content and business services, technology and international financial services.
In IBM’S Global Trends Report 2017, the Irish phoenix ranked as the top destination for high-value FDI projects, followed by Denmark and Singapore. Furthermore, it is the third-fastest growing economy in the EU. According to the European Commission, Ireland’s GDP growth rate will close the year at around 4.8% and will come in at over 3% in the next two years. Business opportunities keep growing in the island, and while uncertainty over Brexit remains, Ireland offers a stable and friendly environment for new investment, including business now set to leave the UK.
In the quest to gain and retain investment from companies looking to access the EU, Ireland is now calling the attention of foreign investors to its own gateway to Europe: Dublin Port. With consumer spending growing, Dublin Port has access to more than 500 million customers in the EU, and more than 75% of Ireland’s trade is done through it. It has the potential to sustain the domestic and foreign commerce of goods while having access to an EU-wide workforce of 250 million with the right to live in Ireland.
Dublin Port’s capacity has grown by around 25% in the past four years. It takes advantage of high-tech infrastructure to increase its capacity and trade flows to and from the Irish capital. The Dublin Port Company reported 4.2% growth up to the third quarter of the year, surpassing the record 3.9% reported in 2016. Overall volumes in the port have increased by around 31% in the last five years. Furthermore, the company was due to pay a dividend to the State of over €11.7 million in 2017 and will close the year with record profits.
According to Pat Ward, Head of Corporate Services at the Dublin Port Company, if the growth trend continues, the port’s volumes will double in about 14 years. Moreover, along with the Dublin Port Masterplan, there are plans to dredge the channel and increase the turning circle to make the port more accessible for larger cargo vessels. Plus, with the MP2 project, capacity will be boosted for roll on/roll off freight given several infrastructure developments planned for 2018.
The port is also increasingly attracting cruise tourism and is a very popular homeport for such leading companies as Celebrity, CMV, Norwegian Cruise Lines, Hansa Treuhand, Disney Cruise Line, Holland America Line, Pontant Cruises and Silverseas Cruises. Just last summer, cruise tourism resulted in a €1.6 million profit increase. It is expected that the number of companies adopting Dublin as their homeport as well as a turnaround location will increase over the next five years, having a positive impact on the city’s tourism industry in the form of an extra 600,000 tourists.
With about €600 million of redevelopment in the pipeline, one of the main challenges that the port faces is the creation of a more adaptable infrastructure for cruise ships. In this regard, the Alexandra Basin Redevelopment project will provide better access for larger and longer ships to call at the port by 2020. Furthermore, the development of the Dublin Inland Port and the redevelopment of connections with the airport will expand reception capacity.
Undoubtedly, the Irish phoenix is set to keep growing strong as a top destination for FDI, and Dublin Port will certainly play a major role in maintaining and enhancing commerce and tourism. The bet has been made on FDI, and once more Ireland is showing its immense capacity to be reborn from the ashes with more jobs, better and higher investment and healthier public finances. Now, the sustainability of the FDI bonanza will depend on the ability to remain competitive and retain its advantage as a gateway to Europe.