Bank of Ireland’s head of Foreign Direct Investment Kevin Elliott says despite some pressures, Ireland will remain a top global destination for investors.
Ireland’s success in the realm of foreign direct investment (FDI) has been the envy of the world. However, few nations would envy the conditions that the architects of the country’s FDI success – civil servant TK Whitaker and Taoiseach Sean Lemass – were faced with in the Ireland of the 1950s and 1960s; a period of devastating economic circumstances, characterised by mass unemployment and emigration.
But through forward-thinking economic and education policies they had lain the groundwork for one of the greatest economic turnarounds Europe has ever seen.
“Ireland is very fortunate to now be in the middle of the major global investment flows. And that has been built upon decades of goodwill on both sides of the Atlantic”
Zoom forward to 2025 and decades of succesful inward investment later, Ireland is home to some of the world’s largest tech, pharma and financial services players and stands to capitalise on the forthcoming advancements in areas like artificial intelligence and green-powered digital enterprises.
In its latest five-year strategy, the country’s inward investment agency IDA Ireland has revealed that it is targeting 75,000 new jobs and plans to upskill 40,000 existing workers as it endeavours to secure 1,000 new investments and retain 1,800 existing businesses.
In doing so it aims to bring in €250bn to the Irish economy in the form of wages, spending on Irish goods and services and capital investment.
A pro-business environment
For Bank of Ireland’s head of foreign direct investment Kevin Elliott (pictured) while the market for inward investment has changed dramatically post-Covid, Ireland’s pro-business environment remains a selling point for the country.
“FDI into Ireland increased very significantly in the 20-year period from the early 2000s right up until the pandemic, with thousands of jobs being generated in tech, pharmaceuticals, medical devices, engineering, financial services and a whole range of other industries.
“It would be fair to say that over the last couple of years that growth has stabilised and we’re seeing a fairly constant level of FDI inflows without necessarily the major spikes that we would have seen before.
“If you look at how Ireland is performing against other countries, we still continue to punch above our weight.
“If you look particularly at the US market, companies coming from the US are looking at Ireland for its EU market-access and its skilled people. It’s a pro-business environment. And while that environment has come under pressure in recent years, it’s still a very big selling point for Team Ireland overseas.”
Elliott said that when overseas companies compile a short-list of countries to invest in, Ireland is consistently at or near the top of the list.
“It then becomes a focused and intense process to put Ireland’s best foot forward and see if Ireland is still the winner.”
The large-scale job-intensive projects of the past, Elliott says, are harder to come by. “But what we are seeing is Ireland maintaining its market share, maintaining its rank as one of the key countries for US companies to go international. We’re not seeing a drop-off in that regard. What we are seeing generally is a stabilisation of investment flow levels.”
Elliott said that the key changes affecting FDI outflows from the US can be manifold, and one area to watch is the more domestically-focused political environment in the US.
Another factor is the signifcant downturn in venture capital investments into US tech firms over the last two years.
“A major change has been the funding environment for venture-backed tech companies in particular has been tighter in the last couple of years. Many of the companies that we deal with would be venture-backed tech companies from the US and across the board they are being told to do more with less. Companies are being told by their investors to demonstrate a track record of significant sales in the US before they can go international.”
Life sciences are a jewel in Ireland’s FDI crown
One area that Ireland has particularly excelled in has been life sciences and Elliott says this industry is one of the jewels in the country’s FDI crown.
“The life sciences sector in Ireland is often underappreciated and in fact the scale of what has happened over the last 10 years is mind-boggling. The investment from international companies building out manufacturing and high-level skilled services roles across the life sciences industry is better than anywhere else in the world for such a concentrated geographic location.”
He gave the example of Dexcom building a major manufacturing operation in Athenry, Co Galway, that will employ more than 1,000 people. “That’s a live, new greenfield investment that’s happening in Ireland right now.”
He cited the example of Eli Lilly which is spending around $1bn on its operations in Limerick and Cork.
Likewise, established FDI life sciences players like Pfizer and Merck have been investing in their operations in Ireland.
“What is interesting is they can go anywhere in the world. Okay, a pro-business tax environment is a key component of what these companies are looking for but they can get that in dozens of countries worldwide. What they are really looking for is a highly-skilled workforce that has a very credible track record of delivering manufacturing excellence for decades.
“Ireland is held in very high esteem by the US Food & Drug Administration when it comes to regulatory audits, product quality and safety and is second to none in this capacity. We are the largest exporter of pharmaceutical products in Europe and one of the biggest life sciences exporters on the planet.”
Elliott’s assertions are backed up by IDA data which shows there are more than 90 pharma businesses employing 45,000 people on the island. The country is exporting more than €116bn worth of pharmaceutical products annually and is the third largest exporter of pharma products in the world, according to the IDA.
“This comes down to the hard work of the tens of thousands of people right across the country who every day deliver value for these companies and prove that Ireland is the place that deserves this investment.”
On a competitive front, Ireland faces competition from the UK, Switzerland and The Netherlands and more recently Portugal.
“But I think what stands out for Ireland is the stability and certainty that we can deliver, the incredible track record, the talent pool that exists here and the pro-business environment which has been the cornerstone of Irish economic policy for more than 40 years now.”
A place to scale and grow
It’s hard not to mention the elephant in the room: US president Trump and his isolationist policies and trade war saber-rattling. Does Elliott consider the new regime’s policies a threat to FDI in Ireland?
“If you look at the existing base of investors in Ireland, investment is now much stickier than it was in the past. What I mean by this is the scale and depth of what these companies are doing in Ireland means that Ireland has now become a systematically important part of these big companies’ global footprints. The activities and the responsibilities that are located in Ireland are of such an importance that it would be very difficult for these businesses to extricate themselves.”
If changes do happen, they will be incremental changes but Elliott does not envisage significant impact. “American companies are probably the most globalised companies in the world, and they need to win globally and succeed and do business across the world. So, no matter what happens, in five years’ time and in 10 years’ time American companies will need to be selling their goods in Europe, accessing the EU market, accessing people with the language skills to do business across Europe, accessing a skilled talent pool, and they can’t do that from the US. In this regard Ireland will remain in relatively good standing.”
From a Bank of Ireland perspective, Elliott says the ambition is to help companies to scale and grow in Ireland. “We’re providing a more rounded service to these companies to ensure they can scale quickly. This ranges from corporate and commercial banking, to dedicated private banking for the executive management through to personal banking services for employees.
One of the key services being offered is an FDI landing space on Stephen’s Green in Dublin that can help newly arrived FDI investors to get their operations up and running. “Our landing space helps these businesses get down to business quickly and focus on hiring the right people. The space is right in the heart of Dublin and we are offering a free start-up office space for them. They can then take their time and choose the right location and people to grow their business in Ireland.
“Our purpose is to be a sustainable business partner for these companies to grow in Ireland in the years ahead. We have a small, dedicated team who work directly with international companies to meet their needs.”
Another ace in Bank of Ireland’s hand is its membership of the IBOS Association. Membership of the network allows IBOS members to provide local banking services across the globe. This allows businesses to operate across several jurisdictions where they themselves are not present. As a result, IBOS helps customers operate efficiently, avoid exchange rate risks and streamline cash management in multiple regions through its online platform.
“Conversely, this also allows us to provide access to banking solutions all over the world for Irish companies. This has been a pain point for Irish companies over the years as they expand overseas. Now, through IBOS we are able to leverage our partner banks in most major economies and provide banking solutions to Irish companies.”
Supporting Irish companies to access banking in the US is another aspect of the transatlantic trade relationship.. According to the US Bureau of Economic Analysis, Ireland’s FDI into the US stands at $235.7bn. Today, over 700 Irish companies operate across all 50 states, employing 110,000 in the US. Exports to North America from Ireland reached a record €4.8bn in 2023.
“Our NYC Hub in New York has become a thriving space full of innovative Irish companies breaking into the US market and they are leveraging Bank of Ireland’s real estate on a no-cost basis. So what we’re trying to do is provide a broad-based support for businesses coming in both directions,” Elliott said.
“We are very fortunate as a bank to be playing an active role in supporting the FDI industry in Ireland but also Irish companies that are going global,” Elliott concluded.
“It’s an exciting story. Ireland today plays a key role in the global economy and we have strong ties and friendships with our major trading partners in the US, the UK and Europe. Ireland is very fortunate to now be in the middle of the major global investment flows. And that has been built upon decades of goodwill on both sides of the Atlantic.”
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