I thank the committee for the opportunity to address it this afternoon.
Foreign direct investment in the Irish economy is export dominated, with few multinationals coming to Ireland to supply the Irish market. Multinationals account for more than 80% of all exports from Ireland. They also account directly and indirectly for the employment of approximately 250,000 people, pay almost two thirds of all corporation tax, spend approximately two thirds of all business expenditure on research and development and spend €19 billion in the Irish economy, of which approximately €7 billion is by way of payroll. Ireland tends to focus on a certain number of key sectors in respect of which it seeks to achieve a high market share and high penetration. For example, nine of the top ten pharmaceutical companies in the world, 17 of the top 25 medical device manufacturing companies and eight of the top ten companies in the technology or IT space are located here. Also the top ten companies born on the Internet, including Twitter and Google, and three of the top five companies in the gaming area are located here. In other words, we pick six or seven key areas, within which we get a high market share, initially starting with the large players such as the multinationals and then moving to the second tier and growth companies.
Within the sectors we target, there are three business models: advance manufacturing, which would tend to be high skilled and high capital intensive - not unusual for this to be approximately €1 million investment per employee; global business services, which could be anything from technical support, shared services, IP management, logistics, supply chain, EMEA, headquarters or European operation centres - in other words, any services that can be bundled together, at least on a pan European basis; and research, development and innovation, the portfolio for which has been growing during recent years.
I will now outline what has happening during the last 18 months in particular. Foreign direct investment in 2011 was the strongest since 2002, with 13,000 new jobs being created and job losses at an all time low at 6,950. As such the portfolio grew by more than 6,000 people. There were 148 new investments of which 60 were from new companies coming to Ireland for the first time. Members may be familiar with some of the company names. Coca Cola opened a €300 million investment in Wexford; Intel commenced a construction project worth $500 million, creating the platform for moving new technology; Twitter set up its European headquarters in Dublin and a subsidiary of the games company Electronic Arts, EA, named BioWare took on 400 people in Cork; and the Sumitomo Corporation, a Japanese bank, set up its western hemisphere IT development centre in Tralee. That flow of foreign direct investment has continued in the first half of 2012. Many of the world's leaders in the IT area, including Cisco, Hewlett Packard, Microsoft, EMC, Amazon, SAP and Salesforce have all decided on significant investments in Ireland. Mastercard established one of its three global technology hubs here, the others being in the US and Singapore. There has also been a particular wave of investment by the pharmaceutical industry, which I will come back to later.
The three highest profile investments were the PayPal project for Dundalk which commenced last Monday with the first batch of 62 employees; the construction by Apple of a new facility in Cork with the addition of 500 jobs, and Mylan, one of the world's largest generics manufacturers committing to 500 jobs and $500 million investment between its Galway and Dublin operations. They were existing companies in Ireland. The names of some of the new companies that have come into Ireland in recent months may not be as familiar to members as is Apple, etc. However, they are the investment house, BlackRock which set up an operation in Dublin, Total Defense, a growing worldwide Internet security company and the International Data Group, IDG, a company which employs approximately 13,000 people worldwide, which set up a centre in Dublin.
During the past 18 months, there have been a number of investments, particularly in regional locations. Members who are familiar with the IDA strategy, Horizon 2020, will know we had committed to land 50% of all new investment coming into Ireland in the non-Dublin and Cork areas, which has proven to be a particular challenge. However, some of the projects which we have backed in the past 18 months include Valeo, the automotive component manufacturing company which located in Tuam, creating 100 jobs; American Medical Systems, a medical device company which located in Athlone; Kelcourt which located in Tullamore; NPD, a market research company which located in Athlone and Harmac, a medical device company which located in Roscommon, creating 100 jobs. Dell has located its research and development centre in Limerick and there has been further investment in Limerick through Teleflex, resulting in the creation of 80 manufacturing jobs. Gilt, the online retailer, has also created employment for 100 people, as has Ericsson in Athlone. Earlier this year, Allergan recruited an additional 200 people in Westport and Abbott in Sligo also recruited a further 100 people. A company called Setra is to locate in Limerick and Cisco, SAP and HP are to invest in operations in Galway. Getting regional spread remains a challenge.
There are a number of things which are helping Ireland in terms of attracting and winning foreign direct investment. A year and a quarter ago, Ireland's reputation as a foreign direct investment location would have been challenged. However, that is no longer an issue in the US or in Europe but remains the case in Asia. There is no doubt but that we are benefiting from certain improvements in competitiveness. Also of assistance is the strong clusters here in terms of the industries we go after, be it medical devices, pharmaceuticals, IT and so on. We are active in many areas that are growing globally. Technology is a long-term growth sector, as are digital media, the IT space and pharmaceutical sectors. Ireland's strong track record assists us in scoring points in terms of locations. Many of the creme de la creme of the multinational community are in Ireland.
We have seen an upturn and recent wave of pharma and biopharma projects. Currently, ten or 11 projects under way are leading to the construction of more than 1.5 million sq. ft. of new space, which will be of benefit to the construction industry. This is dominated by a combination of the pharma, med-tech and IT sectors. It is important to note that the IDA is only one arm of the State in terms of competing for foreign direct investment. We place great value on our partnerships with our near neighbours, Science Foundation Ireland and Enterprise Ireland, with whom we have much commonality and on how our jobs strategy fits in with the Department of Jobs, Enterprise and Innovation. There are many stakeholders involved, including the Department of the Taoiseach which has been very helpful. Team Ireland is most important in terms of our winning business.
I will now speak a little about the outlook for foreign direct investment. We launched our annual report for 2011 and six-month review and outlook for 2012 at a press briefing last Thursday. There is no doubt but that there are some head winds in the global economy taking into account that the European market is pretty flat. That market is the main focus of US investment into Europe, which is through Ireland. The economy in the US is not all that great, with growth this year expected to be only 2%. Growth in China and India is also slowing down. Unemployment in the US is historically high, at 8.2%. In the European Union unemployment is approximately 11.2%, which is not a great environment in which to create jobs. Given the economies of a number of countries are flat, more countries are, in order to obtain growth, trying to attract foreign direct investment, which means the traditional competitors have upped their game and there are new competitors, including from some of the more established European countries.
On the other side, IT, technology, digital medium content and live sciences are all growing. There are unmet medical needs from a medicines and medical devices point of view. The population requiring treatment of medical devices is growing. There are also great innovations and new products coming on stream from the lives sciences sector. That is an area of long term growth. Likewise, the technology sector. Ireland is well placed in those sectors and in other sectors where there is no overall growth. An example would be international financial services. We recently formed a new global institutions group targeting the top 25 financial institutions around the world. Despite that they are probably shrinking head-count throughout the globe a number of them are setting up technology and operations hubs. Technology will play a much more important role than historically in financial institutions. There are a number of sizeable projects in play internationally. That is an example of an area wherein even in an overall slow growth environment there will be opportunities.
About two years ago, we set up a team. Apple, IBM and Pfizer are well known in Ireland. However, in recent years we have been targeting more of the second-tier companies, with revenues of from €100 million to €750 million. Since January 2010, we have been targeting emerging companies - small young companies with a maximum of €30 million turnover and in many cases no turnover - that have been through one or two rounds of VC funding. The Succeed in Ireland initiative is under way, which it is hoped will lead to the generation of more business.
In summary, there are some significant projects in play. There have been a number to date this year, with some to play for notwithstanding the economic head winds. Clearly, there will be much competition for them. IDA is focused on the combination of short-term delivery, medium-term pipeline generation and long-term strategic positioning of going after new areas. Without going into too much detail, every year there are new areas emerging. People will have heard of Big Data Analytics, cloud and business intelligence. It is important we are tuned into all of those moods and we are.
Many multinationals are recruiting, in particular in the key sectors I mentioned. If we were to make a judgment today as to where the projects of scale will be given, in the area of life sciences, the first half of the year was more pharma and biopharma dominated, the second half will be more medical device dominated. There will be definite and continuing growth in the IT and technology sectors for the remainder of the year. There are also some really interesting projects in the area of international financial services, including data centres, digital media and content. Over the long term, foreign direct investment globally will continue to grow. The challenge for Ireland always is to be attuned to and smart enough in the new growth areas and to operationalise how we will land that business for Ireland.