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News : Irish Economy Last Updated: Jan 16, 2015 - 12:13 AM


FDI - - foreign direct investment - - projects in Ireland in 2010 from existing and new investing companies grew 15%
By Michael Hennigan, Founder and Editor of Finfacts
Feb 25, 2011 - 1:10 AM

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Intel is Ireland's biggest FDI investor in modern times and also the biggest industrial employer.

FDI - - foreign direct investment - - projects in Ireland in 2010 from existing and new companies grew 15% but caution is required with the data.

Ireland retained second place globally for attractiveness to FDI when adjusted for economy size. This is according to the National Irish Bank / fDi Intelligence Inward Investment Performance Monitor for 2010. Launched today, it also shows that Singapore remains the most favoured destination, with Thailand following in third place.

fDi Intelligence, a unit of the Financial Times also provides data for the United Nations Conference on Trade and Development's (UNCTAD) World Investment Report and last July Finfacts queried  the data of 176 greenfield projects in 2009 for Ireland, compared with the 39 detailed on the annual report for 2009 of Ireland's State inward investment promotion agency, IDA Ireland .

Two regional bodies Shannon Development (Shannon Airport freeport zone/Limerick area) and Údarás na Gaeltachta (Gaelic speaking areas) also support inward development but their roles are not significant in FDI. They also promote indigenous companies.

Strangely for the unit of a newspaper, the response to our media query to fDi Intelligence, was to ask us to pay €800 for a report, which would provide a breakdown. UNCTAD's office in Geneva had told us to contact their data provider.

According to IDA Ireland, the annual UNCTAD report uses different measures to record FDI projects. Consequently, there are investment types covered by this report which are not included in IDA data.

These include:

  1. very small sales and marketing projects
  2. investments that do not meet the minimum agency criteria (eg. RD&I investments under €500,000), and
  3. those not falling into IDA target sectors (eg. retail)

There is a big FDI base in Ireland as in the early 1990s, Ireland with 1% of Europe's population, was winning up to 25% of US greenfield investment in Ireland.

The fDi data counts the number of projects and estimates the value of the investment, which is often not disclosed and promised jobs may extend over 5 years.

IDA Ireland-supported companies created almost 11,000 new jobs last year, more than double the number in 2009 and 9,500 jobs were lost during the same period, giving a net addition of 1,312 jobs. Including jobs supported by other State enterprise agencies, the number of jobs in the Irish internationally tradeable goods and services sector is back to 1997 levels.

IDA Ireland said last month that 47 companies invested in Ireland for the first time in 2010, up 20% on 2009. This is a head count on the number of projects and one with a potential of 20 jobs has equal status of a project with a multiple potential.

The key metric for the Irish economy is that full-time jobs level in the international tradeable sector (foreign-owned and indigenous) is now at 268,000  --  the same level as in 1997 when the workforce was 25% smaller.

According to Dr Ronnie O’Toole, chief economist, National Irish Bank, “2010 was another good year for FDI into Ireland, and 2011 has started well. We continue to see a steady flow of mid-sized projects, particularly in services industries such as software and customer support, though also with some high quality manufacturing projects.”

2010 saw the number of new and existing investor projects, increasing 15% on 2009, with a corresponding increase in the rate of job creation. According to Dr. O’Toole, “The quality of these projects was high. Fifteen per cent of projects involved the establishment of headquarters in Ireland, second only to the Netherlands. Ireland was also very successful in attracting R&D projects, coming in fifth in the 100 countries ranked, behind Finland, Taiwan, Israel and Puerto Rico.”

As for R&D projects, there is no information published to credible assess the claim O'Toole makes.

The table below does not include a column for the actual number of projects for each country. It was 141 for Ireland.

It is confusing that the fDi Intelligence annual data used for the UNCTAD report differs from what is supplied to National Irish Bank.

UNCTAD’s greenfield measure includes new FDI projects and expansions of existing projects both announced and realized. IDA Ireland's definition of a 'greenfield' project is what would be expected: a project from a new FDI investor.

What would be more useful than the data here is a ranking of greenfield investments by country, using the narrow and generally understood definition.

It's our view also that National Irish Bank's claim that 'Ireland is the second most attractive country globally for Foreign Direct Investment (FDI)' is misleading.

Is France the most popular destination for foreign tourists or the Maldives?

We think primacy should be given to facts not spin.

National Irish Bank/fDi Intelligence

Inward Investment Performance Monitor

Rank 2010

FDI Index (Adj for size)

Share of Global Flows:

FDI Index

No. of Projects Won

Capital Investment

Jobs

GDP

1 (=)

Singapore

5.57

2.2%

2.7%

2.5%

1.5%

0.4%

2 (=)

Ireland

3.58

0.9%

1.4%

0.6%

0.6%

0.2%

3 (=)

Thailand

2.75

2.2%

1.9%

1.4%

3.4%

0.8%

4 (+5)

Czech Rep

2.08

0.7%

1.1%

0.6%

0.5%

0.4%

5 (+9)

Brazil

2.02

6.0%

3.0%

8.0%

7.1%

3.0%

6 (-1)

Poland

1.62

1.6%

2.0%

1.1%

1.7%

1.0%

7 (+4)

Australia

1.58

1.9%

2.5%

1.9%

1.3%

1.2%

8 (+2)

India

1.48

8.1%

6.3%

7.5%

10.5%

5.5%

9 (-2)

Indonesia

1.34

1.9%

1.0%

2.0%

2.7%

1.4%

10 (+2)

UK

1.32

4.0%

6.5%

2.9%

2.6%

3.0%

11 (-5)

South Africa

1.24

0.9%

0.8%

0.9%

1.0%

0.7%

12 (+3)

Switzerland

1.23

0.5%

1.0%

0.5%

0.2%

0.4%

13 (+9)

Belgium

1.21

0.7%

0.7%

0.7%

0.6%

0.5%

14 (+5)

Russia

1.15

3.5%

2.8%

3.9%

3.8%

3.0%

15 (+1)

Argentina

1.10

1.0%

0.8%

1.0%

1.1%

0.9%

16 (-12)

Mexico

1.10

2.3%

1.9%

2.0%

3.1%

2.1%

17 (+1)

Canada

1.08

2.0%

2.2%

2.4%

1.3%

1.8%

18 (-1)

Netherlands

0.93

0.9%

1.1%

1.0%

0.5%

0.9%

19 (+1)

China

0.93

12.8%

10.2%

12.6%

15.7%

13.8%

20 (-12)

Turkey

0.93

1.2%

1.0%

1.2%

1.4%

1.3%

21 (+2)

Spain

0.83

1.6%

2.0%

1.8%

0.9%

1.9%

22 (+2)

Austria

0.83

0.4%

0.5%

0.3%

0.3%

0.5%

23 (+2)

Taiwan

0.79

0.9%

0.7%

1.1%

0.9%

1.1%

24 (-3)

Sweden

0.62

0.3%

0.5%

0.3%

0.1%

0.5%

25 (-12)

Saudi Arabia

0.56

0.5%

0.6%

0.5%

0.3%

0.9%

26 (+1)

Germany

0.54

2.2%

3.3%

2.1%

1.1%

4.0%

27 (+1)

USA

0.47

9.4%

12.2%

9.3%

6.7%

20.1%

28 (-2)

France

0.43

1.3%

2.3%

0.9%

0.7%

2.9%

29 (=)

Italy

0.41

1.0%

1.2%

1.2%

0.6%

2.4%

30 (=)

South Korea

0.32

0.6%

0.9%

0.5%

0.6%

2.0%

The index is a measure of the total amount of investment received for each country in 2010. Unsurprisingly, large countries tend to attract more inward investment than small countries. The final index is calculated as each country’s share of Global FDI, divided by its share of global output as measured by GDP, based on a PPP currency adjustment.

The idiot/ eejit's guide to distorted Irish national economic data

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