Transcript Document

Presentation by: Jennifer Condon & Doreen Mc
State involvement in Industrial
Development in Ireland
Department of Enterprise Trade & Employment
Forfas
Enterprise Ireland
Development of Irish Owned Industry
IDA Ireland
Inward Investment by MNCs
Agenda
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The “Celtic Tiger Economy”
The environment supporting Industrial
Development in Ireland
Multi-National Industry in Ireland
Irish Owned Industry
Doing Business in Ireland
The “Celtic Tiger” Economy
Historical Perspective
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1922: Ireland achieves independence
1920s - 1950s: primarily agricultural
Late 1950s-1960s: Policy of Direct Foreign Investment
1960s-1970s: Process of industrialisation
1973: Ireland joins EU
1980s: Stagnation
1990s: Rapid growth
Europe’s Fastest Growing Economy
Annual Real GDP Growth 1986-1999
10.8
12.0
10.4
8.9
8.8
10.0
7.7
8.0
%
6.0
4.0
7.0
7.0
4.5
2.6
2.0
0.0
1986-1990 1991-1993 1994-1998
1994
1995
1996
1997
1998
1999 (f)
Average growth in real GDP
1995-1999
9.24
UK
2.34
Ne
t
he
rla
nd
s
3
Source: OECD Economic Outlook, 1999
(1999 projections)
2.3
2.28
1.84
Fr
an
ce
Be
lg
iu
m
G
er
m
an
y
3.14
Sp
ai
n
rtu
ga
l
3.36
Po
US
A
3.42
Ire
la
nd
10
9
8
7
6
% 5
4
3
2
1
0
GDP Growth 1994-2000
Ire
OECD
EU
Swe
Fin
Neths
Den
UK
10.5
3.3
3
2.9
4.4
3.2
3.2
2.9
(Source: OECD)
Export-led Growth
Manufacturing Exports 1991-99
(Annual Volume Rise)
20
20
20
18
16.4
14.5
15
12.5
%
10
7.5
9.3
7.8
5
0
1991 1992 1993 1994 1995 1996 1997 1998 1999
Trade Diversification
Exports
Exports
Imports
Imports
1990
1999
1990
1999
%
%
%
%
UK
34
22
42
32
EU
44
42
27
22
N America
09
16
15
17
Other
13
20
16
29
LABOUR FORCE DEVELOPMENT
1980-1990: lagging behind…...
Population
+105,000
Labour Force
+62,000
-22,000
EMPLOYMENT
+84,000
UNEMPLOYMENT
-100,000
0
100,000
200,000
300,000
LABOUR FORCE DEVELOPMENT
1990-1998: racing ahead…...
Population
+202,000
Labour Force
+273,000
EMPLOYMENT
+293,000
-40,000
UNEMPLOYMENT
-100,000
0
100,000
200,000
300,000
MIGRATION:
the flow reverses…...
30000
20000
INFLOW
10000
0
1980
1990
2000
-10000
OUTFLOW
-20000
-30000
The Environment Supporting
Industrial Development in Ireland
Macro-Economic Policy Framework
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Investment in Education
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Investment in Telecommunications
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Reduction in Tax Burden
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Reduction of Public Debt
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Partnership Process/Negotiated Governance
Ireland’s Demography
Total Population
3.66 million
Labour Force
1.51 million ( 41% )
Full-time Education
0.95 million ( 26% )
Availability of Skilled Labour
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Free Education policy at second level & University
7 Universities & 13 Institutes of Technology
All primary & secondary schools have Internet
connectivity
Education Technology Investment Fund – supported the
development of Technical Degrees
Projected 40,000 per annum new entrants to labour force
to 2006
Over 50% graduates have technical qualification
Close liaison with industry to assess skill & number
requirements
Investment in R&D
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Research & development in Universities & Institutes of
Technology
National MicroElectronics Research Centre – Cork
Science Foundation Ireland
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Informatics
Bio-Technology
Media Lab Europe
Major Advances in
Telecommunications Infrastructure
 U.S.$5bn investment in digital networks
 Full liberalisation of telecoms market
 Major new investment to extend
Broadband access regionally
Broadband backbone
capacity
Current broadband
capacity between
main towns and cities is
2.5Gbit/s
Dublin, Galway, Limerick
and Cork linked
with 40Gbit/s capacity
Taxation Policy
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Corporate Tax
 Profits derived from eligible manufacturing
and qualifying services are subject to a tax
rate of 10% until 31 December 2002 and
12.5% from 1 January 2003.
Capital Gains Tax halved to 20% since late
1990s
Reduction of Personal Taxation (partnership
agreement balance against wage restraint)
General Government Debt
as % GDP
120
110.6
100
93.1
80
% GDP
60
52
39
40
20
0
1988
1993
1998
2000
Partnership process
Five tri-partite programmes of growing
sophistication since 1987
 1987: “National Recovery”
 1991: “Economic and Social Progress”
 1994: “Competitiveness in Work”
 1997: “Partnership 2000”
 2000: Partnership for Prosperity & Fairness
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Other key Factors
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Legislative Framework
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eCommerce Bill
Copyright
Establishment of Independent Telecomms Regulator
Strategic deployment of EU Structural and cohesion
funds through the National Development Plan
Information Society Commission Initiative
Programme for eGovernment
Multi-National Industry in Ireland
The role of IDA Ireland?
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State Agency
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Funded by Government
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Targets Foreign Direct Investment into Ireland as a key
element of Ireland’s economic development strategy
Assists existing companies to build and strengthen
strategic value in Ireland
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Provides incentives for foreign investors
IDA Strategy
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Sectoral Focus (we can’t be good at everything)
Concentrate on our Strengths
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People Skills
EU Access (Euro Adoption – English Language)
10% Corporate Tax Rate (to 31/12/2002)
Excellent telecommunications
Competitive costs
Focus on High Growth Sectors
Key Sectors
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Information Technology
Pharmaceuticals/Healthcare
International Services
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Software
Teleservices/Shared Services
Financial Services - IFSC
eBusiness
Information &
Communications Technology
300 companies - 67,000 employment
Exports: IR£13 billion
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Apple Computer
3Com
Compaq
Dell
Ericsson
Fujitsu
General Electric
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Hewlett-Packard
Hitachi
IBM
Intel
Motorola
NEC
Nortel
Sun Microsystems
Xerox
Pharmaceuticals & Healthcare
No. 1 location in Europe
155 companies - 19,000 employment
Exports: IR£12 billion
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Abbott
American Home Products
Bausch & Lomb
Baxter
Boston Scientific
Bristol- Myers Squibb
Elan
Eli Lilly
Johnson & Johnson
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Leo Laboratories
Medtronic
Merck
Pfizer
Pharmacia & Upjohn
Roche
Schering-Plough
Glaxo SmithKline
Yamanouchi
International Services – including
Software
DEC
Dell
Ericsson
DEC
Dell
Ericsson
SAP
Computer Associates
Accenture
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Gateway 2000
Hitachi
IBM
KAO Infosystems
Lotus
Merrill Lynch
Microsoft
Motorola
Oracle
Philips
Sun Microsystems
UPS
Whirlpool
Financial Services - IFSC
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AGF
American Airlines
AOL Bertelsmann
Apple
Bankers Trust
Bear Stearns
Chase Manhattan
Citibank
Compaq
Credito Italiano
Source of Foreign Investment
222
59
US
UK
Germany
Rest of Europe
Asia/Pacific
Rest of World
60
168
507
188
Unique Importance of FDI
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1,200 IDA-assisted companies
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> 140,000 employed
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> 50% of manufactured output
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> 80% of manufactured exports
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> 35% of GDP
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€15.1b Irish Economy Expenditure
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€1,650m corporate tax paid
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Technology and management skills
Future Focus – eBusiness &
Digital Media
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Most competitive infrastructure/deregulation
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Legislation
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Non-discrimination between electronic/paper transactions
Copyright/Intellectual Property
Business-friendly environment
Digital Media District
Excellent connectivity
National Digital Park
The Development of Irish Owned
Industry
The role of Enterprise Ireland
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Semi-State Agency - funded by Government
Focused on Irish Owned Companies
Identify and assist High Potential Companies in the
process of their business development
Emphasis on companies with potential for
Internationalisation and exports
Foster innovation in companies
Enterprise Ireland Strategy
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To help client companies develop a Sustainable
Competitive Advantage leading to increased profitable
sales, exports and employment
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The client base of Enterprise Ireland will be comprised
of companies which are Irish based and whose
growth and development can be enhanced through
working with Enterprise Ireland
Over 90% of Irish Owned Companies
are SMEs
EmployingCompanies
Sales
Exports
Jobs
Under 10
19%
2%
3%
2%
10-50
63%
25%
21%
33%
50-250
16%
35%
35%
35%
250 +
2%
38%
41%
30%
TOTAL
100%
100%
100%
100%
Current Structure by Sector
Internat'l
Services
£2B (12%)
Consumer
5%
SALES
Industrial
Products
£5B (28%)
Food
£11B (55%)
Current Structure by Sector
Consumer
6%
Internat'l
Services
£1.1B (13%)
EXPORTS
Industrial
Products
£1.7B (19%)
Food
£5B (61%)
Current Structure by Sector
Consumer
6%
International
Services
11%
Industrial
Products
46%
EMPLOYMENT
Food
37%
Exports by Market Region (Growth)
2000
UK
TOTAL
EUROPE
US
ROW
£3.5B
£2.3B
£1.2B
£1.0B
(+10%)
(+17%)
(+25%)
(+18%)
Selected Sectors
Emergence & Growth
Software
I.T
Textile & Clothing
Prepared
Consumer
Foods
Commodity Foods
Decline
Sectoral Trends
Sectors
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Software and International Services (700+ companies)
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Healthcare, Pharmaceuticals, Chemical, Print &
Packaging, Construction (700 companies)
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Electronics and Precision Components (350
companies)
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Engineering (350 companies)
Irish Owned Software
Companies
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Over 640 Irish owned companies
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40-50 new high potential start-ups annually
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Revenue Over £1 Billion
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Revenue growth 20% + per annum (95-00)
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Export growth 25% + per annum (95-00)
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Exports represent 75% + of production (‘00)
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USA largest market for Irish software companies - 36% of
exports
Irish owned Healthcare Companies
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75 companies
Includes 10 of the top 15 Medical Device companies
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Medical Disposables
Opthalmic Products
Orthopaedic implants
Medical Electronics Diagnostics Kits
Niche companies in Medical Devices, Components,
Pharmaceuticals, Diagnostics, Chemicals and Biotechnology
Small Players internationally/no strong proprietory technology
Employment 12,500
Annual Exports US $2bn
Irish owned Biotech Sector
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18 companies / total of 348 people employed
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Key players are Trinity Biotech, Biotrin, Megazyme and
Plant Technology - collectively employ 248
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Trinity Biotech and Megazyme had their origins
overseas
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All companies were established over the past 10 years
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Growth in employment has averaged 26.5% over the
period 1995-1999
Electronics
Company
Focus
Electronics
Subsupply
Telecommunications
Control – particular growth
Instrumentation
Process
Proprietary
Technologies
Niche Markets
Suppliers to MNCs
Sub-contract manufacture
Future focus – Internationally Traded
Services
Software
Electronics
Localisation
Shared Services
Call Centres
Financial Services
Medical & Healthcare
Future Key Opportunity Sectors
Informatics including software
Digital Media
eBusiness – transition & new businesses
Healthsciences – including Bio-informatics
Ireland - Lithuania Trade
IR£m
IR£m
Exports
Imports
1997
11.508
1.997
1998
7.348
4.328
1999
6.302
5.155
2000
9.486
11.332
Doing Business in Ireland
Why companies choose Ireland
Competitive Cost
Environment
Telecommunications
Infrastructure
Highly educated and
flexible workforce
Unique Return
on Investment
EI / IDA
Assistance
Low Corporation
Tax
Supportive Business
Environment
Ireland – a key location in the EU
• EU: 370m Single Market
• EURO implementation
• English Speaking
• Export orientation
• Business friendly environment
• Equal treatment for foreign/Irish businesses
Doing Business in Ireland
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Think Partnership – mutual benefit
Remember the size of the Irish Market
Many Irish Companies are focussed on opportunities in
markets outside of Ireland
High tech companies are particularly export oriented
Agencies can help – BUT they need to be clear about
your requirements!