Ireland: The Silicon Valley of Europe

Ireland: The Silicon Valley of Europe

IDA Ireland - Smart CEO Global Cybersecurity Report 2018

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A combination of highly skilled labor, technology, infrastructure, connectivity and 12.5% corporate tax rate has made Ireland one of the most attractive investment destinations for global corporations. In the last two years alone, Ireland has been ranked as the best country in Western Europe to invest in1, the 1st in EU for ease of doing business2, and 1st in the World for inward investment by quality and value3

Let’s begin with an interesting fact. Did you know that the Top 10 companies on the Forbes’ list of The World’s Most Innovative Companies’ have Irish operations? Think Intel, Twitter, Pfizer, Citi, Huawei, Takeda, Fujitsu, Novartis and Trend Micro. So, what makes Ireland a conducive environment for global businesses to thrive in?

To understand this, let’s look at each aspect of the economy. At a broad, economic level, Ireland has been an EU member since 1973, with a labor force of over 250 million people, and with access to over 500 million EU consumers. With a corporate tax of 12.5%, Ireland has recorded a fifth consecutive year of economic expansion, while also being called out for being the fastest growing and most competitive economy in Eurozone in 2017 (for four consecutive years). The country recorded a GDP growth of 4% (in 2017) for four consecutive years, with national and international forecasts predicting that the strong GDP growth will continue in 2018 and 2019 as well. A closer look at Ireland’s growth story indicates that at a broad sectoral level, manufacturing PMI hit record high in December 2017, with services, retail sales and construction also growing strongly. Ireland has also seen a consistently strong consumer sentiment and spending, with personal debt at its lowest since 2005.

Secondly, in terms of education and access to skilled labor, Ireland is the only English speaking country in the Eurozone, and is ranked among the Top 10 educated workforce in the world, with 98% participation rate in education amongst 18 year olds, and 53% aged 30-34 having successfully completed third level studies (amidst the EU average of 39%).

The country also ranks among Top 10 in availability of senior management talent, with access to people with native level EMEA market language skills in a centralized location. Furthermore, 2.06 million people currently work at Ireland, and the country has the 3rd largest international workforce in Europe, In terms of labor costs, it has remained relatively stable since 2012, increasing by just 4% overall, as compared to a 6.6% increase in the EU. In fact, Irish labor cost is ranked 11th in the EU, below countries like UK, Germany and Belgium. That being said, economized labor cost doesn’t translate to lower productivity; statistics indicate that Irish labor productivity is 74% above the EU27 average.

That availability of quality talent at reasonable costs has played an instrumental role in helping MNCs further scale their operations in Ireland is evident from US-based job search engine, Indeed, planning to double its workforce and add 500 new jobs in two years in its EMEA headquarters. Even LinkedIn, the professional networking platform, which initially setup its base in Dublin as a three-member team in 2010, now employs 1,200 people.

Being a collaborative, pro-business environment, some of the activities undertaken by technology companies in Ireland include hardware and software R&D, data centers and cloud services, sales and technical support, finance and legal functions, security operations centers and more.

In terms of investments in the economy, the country has seen 237 investments in 2017, with 76 of those directed towards expansions, 50 towards R&D and the rest being fresh infusions. Primarily, global giants have made the investments from North America, Europe and other growth markets. 

Thirdly, in terms of connectivity, Ireland is the only European country with immigration pre-clearance facilities for flights to the United States, with Shannon and Cork airports having year round direct flights to the US (New York & Boston). There are 54 daily weekday flights between Dublin and London, making Dublin the second busiest international route in the world. All Irish airports also have 70 weekday flights to London. In fact, the airports also connect to all major Asian cities via Dubai, Abu Dhabi, Doha ,Istanbul, with 2018 set to include four flights a week week to Hong Kong.

Corporate Tax: 12.5 %

Ease of Doing Business: 6.71 (Index of 1-10 where 10 is highest)

Overall Productivity: $120,035.92 per person (2015)

Attracting & Retaining Talent: 7.95 (Index of 1-10 where 10 is highest)

Foreign High-Skilled People: 7.53 (Index of 1-10 where 10 is highest)

Quality of Life: 8.79 (Index of 1-10 where 10 is highest)

The Importance of Cybersecurity in Ireland 

Ireland is home to a string of global cybersecurity giants; think Symantec, Trend Micro, VMWare, Veritas and IBM. Across all verticals, the security software sector plays a key role in Ireland. Many leading global security software companies have a significant presence in Ireland across a chain of activities such as R&D, supply chain management, shared services, multilingual tech support and more. For example, let’s look at some recent investments in Ireland; Kaspersky Labs has invested US $5 million in its first R&D lab in Dublin, Hortonworks has opened larger offices in Cork, thus creating 50 new jobs, DocuSign has opened a Cybersecurity Centre of Excellence in Dublin, and Fazzi Healthcare Services has established a healthcare services and coding centre in Limerick, thus creating 300+ jobs over the next five years. 

Creating a Global Business Hub

With Ireland consistently being ranked among the best countries in the World to invest in* and do business in*, IDA Ireland has been playing an instrumental role, since 1949, in providing comprehensive support to companies, walking them through their investment journey; right from awareness and engagement stage, to investor evaluations, implementation and after-care. IDA’s host of support services include introduction to peer companies and access to Government support system, design and hosting of tailored fact-finding site visits, information gathering, analysis and evaluation, and support through IDA funding programmes and incentives, employment permits and visa processing, and public relations and media support, to name a handful.

1Global Best to Invest Report, Site Selection, May 2015

2The World Bank Doing Business

3IBM Global Location Trends Report 2016 – per capita

*As indicated in Global Competitiveness Reports

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