Ireland must focus on its competitive differentiators

One of the most interesting statistics to emerge from the pandemic relates to Ireland’s role in the global response, with the country being ranked fifth globally for exports of Covid-19-related goods and services by the OECD.

“That was a reminder of how critically important the US multinational sector in Ireland is, not only to this country, but globally,” says American Chamber of Commerce chief executive Mark Redmond. “A great many teams here kept working through the pandemic. They were seen as essential workers. Ireland’s role in the pandemic response speaks to the scale of the medtech and biopharma sectors here. And they kept going throughout. It also speaks to the fact that Ireland is seen as a trusted partner globally for these critically important supply chains.”

The importance of the sector hasn’t gone unnoticed by the Irish public. Earlier this year, AmCham commissioned iReach to carry out a survey of Irish people’s attitudes to US multinationals. It found that 80 per cent of Irish people were proud of the contribution made by US multinationals in dealing with the pandemic.

“That’s very significant,” says Redmond. “It highlights the fact that American companies here haven’t just got a legal licence to operate, they have a social licence as well. There is hardly a community in Ireland – all the way from Letterkenny to Wexford – that doesn’t benefit from the presence of a US multinational locally.”

He also notes the remarkable resilience of exchequer receipts during the pandemic. “The corporation tax and income tax revenues generated by US multinationals were a big part of that. US companies are responsible for 330,000 jobs directly and indirectly.”

Demand

Continuing on the taxation theme, he welcomes Ireland’s participation in the OECD agreement on global tax reform which will see a new global minimum corporation tax rate of 15 per cent introduced for groups with a turnover in excess of $750 million.

“As the world emerges from the pandemic, AmCham is seeing real signs of increasing consumer demand and economic growth but also of an unprecedented intensification in competition for FDI globally. In that context, the resolution of the tax debate is very good news. It will lift the tax monkey off the backs of people working in US multinationals here.”

But with the tax debate effectively ended, Ireland must focus on its other competitive differentiators. "The availability of talent is one of the factors which keeps multinationals here and we need to ensure that people can easily come to live and work here as well as navigate the visa regime," he points out.
Infrastructure must also be addressed, and Redmond lists residential accommodation, air connectivity, energy infrastructure, broadband availability, and gaps in public and private transport as key priorities.

“Support for innovation, digitalisation and sustainability is particularly important,” he adds. “In 2022, we are introducing two new awards to the US Ireland Research Innovation Awards. They are for Sustainability Excellence and Digitalisation Excellence. Those are critical areas for Ireland’s future competitiveness. Last year, we introduced an award for innovation in talent development. We are celebrating excellence in these three key pillars of talent, innovation, and sustainability.”

Ireland has other weapons in its armoury as well. “The boardrooms of America appreciate Ireland’s political stability, certainty for business underpinned by rule of law, and its increasingly diverse and inclusive society.

“While we are unfortunately seeing some other countries stepping backwards in that regard, Ireland is moving forward. Ireland’s commitment to talent and inclusivity will be decisive in future years.”

In order to build on those strengths, AmCham has recommended to the government that it establish a global centre of excellence for the future of work. “We already have NiBRT in the biopharmaceutical training and research area and the new Advanced Manufacturing Centre in Limerick,” Redmond notes.

“A third one focusing on talent would be a great addition to our competitive offering. We have also impressed on Government that Ireland must be best in class in cybersecurity. That speaks to the skills and funding available to the National Cybersecurity Centre. They are critically important.”

Collaboration

Another area of vital importance, according to Redmond, is closer collaboration between Irish SMEs and US multinationals. “AmCham is working with Enterprise Ireland on a masterclass programme to help SMEs improve their productivity,” he explains.

“There is a productivity growth gap between SMEs and multinationals, and we want to address that. We worked closely with Enterprise Ireland on the programme which will see a transfer of skills and expertise from US multinationals to Irish SMEs. We hope it will result in an increase in two-way business between them. We also hope that it will help Irish SMEs to learn how to better navigate US multinationals’ procurement systems.”

He concludes by returning to the topic of diversity and inclusion. “There is great respect for the progress Ireland has made in this vital area,” he says. “AmCham is really delighted with the increase in diversity in the Irish population in recent years. A key area of focus for us in the coming years will be to increase diversity at leadership level in US multinationals. We see that as an area of opportunity for Ireland.”