IDA Ireland is the agency with statutory responsibility for the attraction of foreign direct investment to Ireland and its regions. In 2003, 32 green field and expansion job creation projects were announced by IDA Ireland with a projected total job content of nearly 5,600 jobs. This result was achieved against the backdrop of two consecutive years of falling global inflows of foreign direct investment, FDI. In 2002, for example, global FDI inflows declined by one fifth to $651 billion, the lowest level since 1998. The main factor behind the decline was slow economic growth in most parts of the world, a phenomenon that had an inevitable impact on a small, open, trade dependent economy such as Ireland.
Looking to 2004, IDA believes that this year will be its best since 2000 in terms of new investments into Ireland and of growth in the value and scale of activities in overseas companies operating here. This view is based on contacts with client companies and strong indications of a substantial recovery in growth in the global economy and consequent increased flows of FDI. The IDA is now competing for some significant, high value investments. I believe vigorous pursuit by IDA Ireland of its main policy objectives is the best response to the current challenging environment.
Key features of this approach include: continuing investment promotion activities to generate new flows of FDI into Ireland, which involves pursuing high quality sustainable projects that are in keeping with the competitive characteristics of the Irish economy today and seeking out niches of business in which Ireland can carve out world market leadership, so as to continue the growth and development of the economy; limiting the immediate impact of the global downturn by working closely with foreign owned companies already located in Ireland, which involves concentrating more resources on helping to underpin the competitiveness of these companies by identifying new investment opportunities and encouraging them to move up the value chain into higher value products and services and into higher order functions, such as R&D; and working to maximise investment levels from sectors less affected by the global economic downturn, such as health care and pharmaceuticals.
As the ultimate decision regarding where to locate a project rests with overseas investors, it is difficult to predict the exact number of IDA supported investment projects announcements that might be made in 2004. However, I am confident that the strategies and policies being pursued by IDA, together with the ongoing commitment of Government to regional development, will bear fruit in terms of maximising new investment and jobs.