“Continued evolutionary growth in our knowledge economy in 2007 with substantial investments in manufacturing and development combined with quality R&D projects won.”

Merck's principal Irish plant at Ballydine, County Tipperary - - US pharmaceutical company Merck & Co Inc., the seventh largest pharmaceutical company in the world, announced in November 2007, plans to establish a new €200 million ($280 million) strategic vaccine facility at Carlow Town, with the support of IDA Ireland, where Merck has acquired the 65 acre IDA Business and Technology Park. Merck has two existing operations in Ireland employing a total of 460 people - Merck, Sharp & Dohme (Ireland) Ltd, at Ballydine, Co. Tipperary, producing active pharmaceutical ingredients; and Merck, Sharp & Dohme Ireland (Human Health) Ltd, at Leopardstown, Co. Dublin, which is the corporate platform for a number of strategic activities for the company in Ireland.

Despite concerns faced by  the pharmaceutical sector in the US, which accounted for 47% of Irish merchandise exports in 2006, coupled with the credit crisis challenged financial sector, IDA Ireland today in  statement rich with superlatives, sees 2008 as a year of further opportunities.

Ireland's inward investment agency says that Ireland's knowledge economy in 2007 will propel it to further greatness in the current year even though given the fragile state of the Irish-owned tech and biotech sector, some people with reason question the reality of the world class knowledge economy where Ireland has still to reach the OECD average in one metric - broadband penetration.

Over 9,000 new jobs were created in the foreign-owned sector in 2007 - the fifth year of the best five year period for the world economy since the 1950's.

At the launch of the IDA’s End of Year Statement for 2007 the recently appointed CEO, Barry O’ Leary said “Ireland is very well positioned to win further leading Foreign Direct Investment (FDI) in 2008”. In an upbeat assessment based on the agencies first-rate performance in 2007, he further commented “The excellent investment achievements accomplished in 2007 in conjunction with a cohesive national strategy of collaboration among all stakeholders, continue the economic transformation of Ireland into a leading 21st century knowledge economy and so I am confident we can look forward to securing new projects, investments, R&D operations and some broader research collaborations for Ireland again in 2008.”

Based on a healthy pipeline of prospective new projects, IDA has a sense of optimism and confidence that Ireland is well placed to secure significant investment during 2008, from key target sectors such as Pharmaceuticals, Biopharmaceuticals, Medical Technologies, International Services, Information and Communications Technology (ICT), Financial Services and Digital Media.

“Proof of our national evolution as a significant 21st century knowledge economy is evidenced in the sophistication and complexity of the investments secured from leading corporations into Ireland and reflect our positive standing and the advancements in Ireland’s economic ecosystem”, O’Leary added “Investments such as Microsoft’s €360m EMEA Data Centre in Dublin, Merck Sharpe Dohme’s €200m new strategic vaccine operations in Carlow, a new pharmaceutical development centre by Wyeth Medica in Newbridge, a global research, development and innovation centre for Merrill Lynch and an additional €75m investment by Baxter in its two facilities in Mayo all bear testament to this fact”

As Ireland continues the transition into a leading 21st century knowledge based economy the significance of foreign direct investment (FDI) to Ireland’s future growth and economic prosperity should not be underestimated.  Employment in IDA companies directly accounts for over 136,000 jobs or 42% of Industrial and Financial employment in the economy. The average salary from IDA supported investments in 2007 was almost €44,000 or 19% above the average industrial wage of €36,800, reflecting the higher quality and related higher skills of the new positions to be created by these investment. IDA supported companies paid €3bn in Corporate Tax in 2007 accounting for 47% of the total corporate tax take of c.€6.7bn. They also accounted for c.85% of manufacturing company’s exports and spent €15.87bn in direct expenditure within the economy comprised of €6.74bn on Payroll, €5.71bn on services and €3.42bn is on materials from Irish sources.

Highlights for 2007

• IDA successfully concluded negotiations for 114 new investments in 2007 of which : 
- 26 % were secured from clients new to IDA 
- 40% were R&D investments
- 34 % were expansions to existing facilities

• A total of €2.3bn+ future capital investment secured

• 33% of investments came from non US corporations, demonstrating the global appeal of Ireland as an FDI location of choice

• 60% of new jobs in IDA supported projects in 2007 have wage and salary levels in excess of €40,000 pa  

• Over 9,000 new jobs were created in 2007 with total employment in excess of 136k jobs in IDA supported companies.

• In keeping with IDA strategy of enhanced regional development 64% of investments in 2007 were located outside of  Dublin

R&D

“Particularly pleasing has been the continual investment in R&D projects and in the last twelve months the results of a determined national policy to establish a substantial foundation of world class science and technology has come to fruition in a series of significant industrial and academic research collaborations that would not have been possible in the not so distant past.” added O’Leary.

GlaxoSmithKline initiated a research and development collaboration on Alzheimer’s disease with the Institute of Neuroscience in TCD and NUIG. Smith and Nephew united with NUIG REMEDI Centre to develop pioneering new treatments for orthopedic joint diseases and Intel established the Technology Research for Independent Living (TRIL) Centre focused on the use of technology to support independent living for the elderly in consortia with TCD, UCD and NUIG.  Genzyme invested in new process development facilities in Waterford and 2007 also saw new R&D investments for Galway by Nortel and a new R&D centre proposed by Fidelity Investments.

Overseas Operations

IDA Ireland says Ireland competes at the highest level globally to win foreign direct investments, reflecting this broadening geographic nature, IDA has increased its international presence in recent years through the expansion of existing facilities and opening a number of new overseas operations including - Paris, France; - Shanghai, China and Mumbai, India.

Key Sectors

IDA Ireland says that it has continued to focus on seeking inward investment from top-tier corporations and companies within a number of high potential business sectors including Pharmaceuticals and Biotechnology, Medical Technology, Financial Services, International Services, Digital Media and Information Communications Technologies (ICT).

• Pharmaceuticals and Biotech ~ In 2007 Wyeth Medica and Wyeth Biotech added pioneering state of the art investments to existing operations. GlaxoSmithKline invested €250m in its existing facilities in Cork; Merck Sharpe Dohme have taken over the 65 acre IDA Business and Technology Park in Carlow to develop a €200 million strategic vaccine facility.
• Medical Technology ~ Kinetic Concepts Inc. established a global manufacturing centre of excellence in Athlone; Integra LifeSciences opened a global manufacturing facility in Tullamore and Teleflex established a European HQ in Athlone.
• Financial Services ~ Apex Funds established a regional HQ in Middleton and Decare Systems invested in strategic expansion also in Cork. Daiwa Securities complemented their Dublin operation with a new Hedge Fund Administration facility in Dundalk. Meanwhile in Letterkenny, Pramerica Systems added a software development and testing centre to its existing operations.
• International Services ~ Paragon Global Resources, the international relocation and HR services specialist set up an International HQ and Fincad established its European HQ both in Dublin; System Label of Germany added R&D in Roscommon and Equifax announced a major expansion in Wexford.
• ICT ~ VMware opened an EMEA Technical Support Centre in Cork; Microsoft announced a €360 million EMEA Data Centre and Novell established an EMEA TeleWeb Operation in Dublin; IBM chose Cork and Galway for new software development labs. Solar Winds established its European HQ in Cork. Celestica expanded its Galway operation. Sanmina-SCI, committed €30 million to the transformation of its Fermoy facility
• Digital Media ~ Gala Inc, an on-line games company choose Dublin’s Digital Hub as the location for its European HQ; Vivendi’s Blizzard selected Cork for its European Customer Support Centre where earlier in the year Amazon opened a new regional Customer Service Centre.

IDA is confident that there are further FDI opportunities for Ireland in these key sectors which will be augmented in the future by a number of emerging technologies and new business models. 

Regional Development

IDA Ireland has demonstrated it’s commitment to achieving the very best regional balance in its portfolio of investments. In 2007 circa two thirds of projects were located outside of Dublin resulting in an extensive reach of highly valuable investments across a wide variety of business sectors.

National policy outlined in the National Spatial Strategy (NSS) aims to achieve a better balance of social, economic and physical development across Ireland, in order to drive development in the regions; it proposes that areas of sufficient scale and critical mass will be created through a network of gateways and hubs.

As Ireland competes for investments at the highest end of the value chain the concept of scale is crucial to our economic destiny. Leading corporations require a significant population of highly qualified talent, effective physical and digital infrastructure coupled with availability of sophisticated professional support services. If we are to continue being successful in realising a large proportion of our investments outside of the larger cities, all economic and social stakeholders will need to adhere to the framework on which the NSS is constructed. Future thinking and action must have a regional rather than a local bias and this requires a significant change in mindset.

IDA in the past has increased the local potential for winning FDI through a national program of strategic investment in critical infrastructure, properties and large sites. This continued through 2007 while commencing activities to realign our portfolio of critical investments along regional lines in support of the NSS.

Economic Ecosystem

The 2007 Business Environment Ranking of the Economist Intelligence Unit placed Ireland 10th globally out of 82 countries, naming it as one of the most attractive business locations in the world. The National Development Plan 2007-2013 allocation of €184 billion by the Irish Government, three times the amount allocated in the previous plan, to heavily invest in science and innovation, infrastructure, transport, enterprise, and human capital continues to improve our attractiveness to overseas investors and to sustain Ireland’s projected levels of economic growth.

This metric was not highlighted by IDA Ireland. Nevertheless, it says that it is essential that investment in physical and digital infrastructure capacity continues unabated if we are to improve our global ranking and continue to win high quality investments into Ireland.

Team Ireland

Winning FDI requires focussed co-operation and collaboration between all key stakeholders including Institutes of Technology, Universities, Research Institutes, Local Authorities, Government Departments, Employers/Industry Organisations, Chambers of Commerce, Utility Providers (e.g. Eirgrid / Bord Gáis etc.), Infrastructure Providers (e.g. NRA), Service Providers, Construction Industry, and Sister Agencies such as SFI, Enterprise Ireland, Forfás and FAS.

IDA Ireland acknowledges the contribution made by all the above and various other organisations in helping Ireland win FDI. In particular IDA recognises and appreciates the crucial role played by strong local management in IDA supported companies who actively position Ireland for further FDI within their parent corporations and the role many executives play in supporting visits from potential new clients and key IDA companies.

Future Outlook

The focus of the transformation this year and in the future must shift from pure employment numbers to take account of the job scope and value-add to the Irish economy. IDA Ireland launched a strong international marketing campaign in 2006 using the theme of “the Irish mind” conveying the unique characteristics of Ireland which mirror the fundamental characteristics vital for global business success. The concept of the campaign focuses on:

• TALENT ~ the correct people and skills
• ENVIRONMENT ~ a supportive ecosystem and infrastructure
• VISION ~ a positive and forward looking attitude

“Through a cohesive national approach with the commitment of business and regional communities to work together towards a shared goal of economic development, combined with the focus and dedication of IDA Ireland to its published objectives, we will continue to secure new investment and support both Ireland’s economic evolution and balanced regional development.” O’Leary concluded, “IDA has performed particularly well during 2007, as evidenced by our results; we can be confident that Ireland is well positioned to secure leading new investment projects during 2008”.

SUMMARY OF IDA IRELAND ACTIVITIES 2007

ECONOMIC IMPACT OF IDA SUPPORTED COMPANIES

Note 1:  The Survey is based on manufacturing and internationally traded services companies with 10 or more employees (excluding regulated financial services companies).

Note 2:  Results are based on companies responding to the survey in 2007 (grossed-up to reflect non-respondents).  Results can vary from previous estimates due to revisions made by companies and differences in the base of respondents from one survey period to the next