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Experts gather in Dublin to discuss the future of Foreign Direct Investment into Ireland at a seminar hosted by UCD Business Schools

Date: 05 Nov 2008

Dr. Robert Shapiro, economic adviser to the Barack Obama campaign, Wyeth Pharmaceutical executive vice president Dr. Michael Kamarck with model Yomikno Chen pictured at the UCD Business Schools seminar ‘FDI: What’s the Forecast? – part of its Growing Ireland series.

Dublin, Tues 4th November 2008: Senior economic advisor to Barack Obama and former U.S. Under-Secretary of Commerce for Economic Affairs, Dr. Robert Shapiro said “Ireland must wean itself from dependence on FDI” today while addressing a seminar ‘FDI: What’s the Forecast?’ hosted by UCD Business Schools.

Dr. Shapiro along with Irish and international experts from Wyeth, Intel, CRH, Citibank and UCD explored the challenges facing Ireland in its fight to retain FDI and the solutions we must embrace to remain an attractive investment location for international firms.

Shapiro predicted that a highly skilled, English speaking workforce is the key to giving Ireland an advantage over all other states competing for FDI. He said, “Ireland is the greatest economic success story in the last fifteen years and it will continue to be an attractive site for FDI as long as it continues to provide the caliber of graduate that foreign investors have come to expect.

Commenting on what lies ahead for FDI into Ireland, Shapiro said, “Ireland must wean itself from dependence on FDI. A low corporate taxation rate is not the most important factor moving forward, it goes beyond that. The next stage is not FDI but a series of policies that actively promote spillovers from FDI corporations to Irish indigenous firms. The best way forward is for young Irish people to become entrepreneurs and force existing business to compete and become the best in the world. If you look at the Chinese model, FDI is a transitional strategy, not an end game strategy, that creates a lasting impact. The key to Ireland’s next stage is to make the entire economy a modern economy and not one that depends on the success of foreign companies.”

“The ability to develop ideas is the single most critical factor and source of wealth and growth for advanced economies today, replacing physical assets and this is what Ireland needs to focus on.”

Headline interviewee, Executive VP of Wyeth Biotech, Dr. Michael Kamarck said, increased costs are starting to eliminate the advantages of Ireland’s 12.5% business-friendly rate, “Utility costs have increased 100% in the last couple of years. This, plus increased healthcare costs, erode the tax advantages of doing business here and will result in employment being cut. It will be important to make sacrifices to keep Ireland an attractive location for FDI.”

On what Ireland could do to remain a competitive location for FDI, Kamarck said, “You can beat a zero tax rate. If you look at Puerto Rico, it has increased its volume based R&D tax rate to 50%. You can provide tax credits for investment in Ireland and continue to invest in education. We need talent that can increase efficiencies in processes.”

Shapiro forecasted that, “Our society will not tolerate on extended period of stagnant incomes – we are looking at the prospect of very ugly politics unless government can slow the rate of increases in energy and healthcare costs. If limits are not set, no society in the world will be able to meet the fiscal challenge of healthcare and pharmaceutical costs increase in the next 15 years. Government needs to be fair but brave in their policies.”

Kamarck discussed his perspective on R&D in Ireland saying, “You are fighting an uphill battle to bring together research – there is an alphabet soup of agencies working on this in Ireland and to outsiders it may be viewed as unfocused. Ireland needs more focused R&D to put Irish universities in not only the top 100, but the top 25 in the world. We have got to form a world class university. To do this requires more direction and collaboration to generate worldwide academic centres of excellence. This will involve shocking uncomfortable change in choosing an aggressive strategy.”

Paul Haran, Chairman of UCD Michael Smurfit Graduate Business School added, “Ireland must be the solution to other people’s challenges, providing solutions that are superior to those provided by other economies. It has been a team effort; ‘team Ireland’ has made Ireland.”

The interactive panel was chaired by Olivia O’Leary, RTE broadcaster with experts including Jim O’Hara, General Manager, Intel Ireland, Aidan Brady, Country Officer, Citibank Ireland, Kieran McGowan, Chairman, CRH, and Prof. Eamonn Walsh from UCD. 

‘FDI: What’s the Forecast?’ seminar was the most recent talk in the ‘Growing Ireland’ series run by UCD Business Schools. Previous seminars have included ‘IFSC 2.0- The Next Phase’ and ‘Property: The shape of things to come.’