Ireland continues to outperform its competitors in attracting Foreign Direct Investment (FDI) but needs to focus on improving competitiveness if we are to get a bigger slice of the action in the future.
That's according to a report launched by Grant Thornton today entitled Foreign Direct Investment in Ireland: Sustaining the Success. It looks at the factors that have contributed to Ireland's success in attracting FDI and highlights the key measures needed to sustain high levels of inward investment and the jobs it brings.
It finds that Ireland's reputation as a good place to invest is based upon a number of factors including quality of our workforce, a pro-business environment and our record in overcoming the economic crisis.
Ease of access to the broader European market was also an outstanding attraction.
Global FDI is on the rise again and, the report says, if Ireland is to attract more investment, it must tackle a number of impediments such as the skills shortage in key sectors, especially technology.
It also find that the cost competitiveness of Ireland has improved but that Ireland continues to be an expensive place to do business when compared to some other EU destinations.
"As costs of doing business are purely location related, it is vital to ensure that Irelands cost competitiveness improves. Policy makers should aim to improve the cost areas that are directly under their controls," it concludes.
It notes that Ireland has a strong intellectual property regime and the country's substantial R and D support, offering greatly contributes to Ireland's FDI attractiveness. "It is important that any significant changes to the Irish IP regime, such as the introduction of branding restrictions, are thoroughly reviewed from a national and a wider international perspective to determine any potential negative impact on the attractiveness of Ireland as a location for FDI," it said.
Brendan Foster, Grant Thornton Partner for Business Consulting and Advisory said: "It is interesting to note from the survey that tax incentives for investors scored lower than other investment decision factors. Our 12.5pc corporate tax rate continues to be a fundamental pillar in Ireland's FDI offering, but the predictability of the rate is as important as the rate itself. By publishing this report we hope to make a positive addition to the policy debate by highlighting to Government where, in the opinion of international investors, more work should be done such as tackling persistent skills shortages, infrastructure deficits and ensuring the protection of intellectual property."