Dáil Éireann Debate, Wednesday - 30 April 2014
260. Deputy Andrew Doyle asked the Minister for Jobs, Enterprise and Innovation the policy and strategy to develop a more balanced division of foreign direct investment, FDI, to the areas outside the main urban centres; and if he will make a statement on the matter. [18989/14]
View answerThe IDA Ireland Strategy for the period 2010 to 2014, “Horizon 2020”, set an ambitious regional economic development target of 50% of investments in regions outside Dublin and Cork and this has proven to be a challenge. There are many complex factors influencing investor location decision-making such as the increasing preference of investors globally for cities of scale with 1 million plus population, significant challenges from lower cost locations in the UK and Eastern Europe and attractive regional aid. In terms of employment in the regions 72,500 jobs, roughly 44% of the total employment in IDA Ireland’s base of companies including those that were former clients of Shannon Development, are located outside of Dublin and Cork. Similarly, the total employment in Enterprise Ireland’s client companies which are located outside of Dublin and Cork is 89,738 which is just over 51% of total employment.
State aid to enterprises in more disadvantaged areas of the country is an important part of the Government’s jobs strategy. On Friday, I published the new Regional Aid Map, providing details of areas of the country in which the State can provide investment aid to businesses in order to support new investment and employment, under EU rules. This new Map represents a significant win for Ireland in the context of the original proposals from the EU Commission. Under the new Map, areas accounting for 51.28% of Ireland’s population will be eligible for State Aid, aid to large enterprises is permitted for new economic activities, expansions which involve new products or services, and product innovation and aid intensity rates (30% for small enterprises, 20% for medium-sized enterprises and 10% for large enterprises) are maintained at current levels.
It must be acknowledged that some locations outside of Dublin and the main urban centres already facilitate the presence of a large number of multinational companies who have invested over the years, span multiple sectors and employ significant amounts of people. The primary opportunity for regional locations is in respect of the existing client base and potential further investment opportunities from same. Approximately 70% of all FDI investments won by IDA Ireland is from the existing client base.
IDA prioritises the marketing of Gateway locations within each Region as the locations of critical mass and highlights the opportunities provided by Hub locations which are within commuting distances of these Gateways. A key component of a Gateway Economic Region’s value proposition are the existing industry clusters which originated with the arrival of several large multinational companies through the support of IDA Ireland and which, in turn, create the development of an indigenous sub-supply base assisted, in some cases, by Enterprise Ireland. A number of these Irish-owned companies, particularly in the Life Sciences Sector, have since become significant international players in their own right. These clusters are primarily located in Gateway locations.
Under the Action Plan for Jobs 2014, IDA Ireland and Enterprise Ireland are working with my Department to develop a framework for a Regional Enterprise Strategy to better integrate the efforts of enterprise agencies and the other regional stakeholders in building enterprise based on sustainable competitive advantage of the region. This exercise will complement the in-depth analysis of our FDI strategy which is currently being undertaken by Forfás and which will take account of factors such as key trends emerging in FDI best practice internationally, Ireland’s strengths in attracting FDI and the aforementioned changes to the EU’s State Aid Rules, which will come into effect on 1 July 2014. The results of these two exercises will form the basis of IDA Ireland’s strategy from 2015 onwards.
