It is shaping up to be another record year for investment from multinational industry. Today another major project will be announced from IBM, the latest in a series of significant announcements so far this year. Last year the increase in employment in multinational industry was the highest in 21 years and this year looks set to match that achievement.
Two sectors - electronics and services - are responsible for the bulk of the new projects. Ireland has for some years been a centre for the electronics sector and IDA Ireland has successfully built on this over the past couple of years, attracting major investment, mainly from the US. There have also been some casualties in this sector - and there will be more - but overall it has contributed strongly to rising industrial employment and exports.
Multinational investment in the services sector is an important one in terms of job creation. A range of major companies has set up teleservices and telemarketing centres in Ireland. Thirty such projects have now been established, employing over 3,000 people.
IDA Ireland believes that the foundations have now been set for this to become one of the high growth sectors of the future. A trend among European companies to reorganise their international operations and centralise administrative and marketing units in one location can work to Ireland's advantage, according to IDA Ireland managing director Mr Kieran McGowan. To ensure that Ireland continues to win a high share of such projects, continued upgrading of our telecommunications infrastructure is needed. A high level of language skills amongst the workforce will also be essential.
The multinational sector is one of the mainstays of job creation. Now employing almost 90,000 full time employees and a further 11,000 temporary or contract workers, it has not only been a provider of employment directly, but also sustains many thousands of jobs elsewhere in the economy through its generation of wealth.
The Government faces a number of policy issues in its promotion of inward investment. One priority, identified yesterday by Mr McGowan, must be to ensure that the education system turns out a sufficient number of appropriately skilled people. He has warned that in some areas, such as software and semiconductor engineering, shortages of suitably skilled graduates are emerging.
Other issues must also be addressed the Government must decide on the future of corporate taxation, with the 10 per cent tax rate for manufacturing due to expire in 2010; industrial infrastructure in areas such as telecommunications and transport must constantly be improved if Ireland is to remain an attractive location; and Ireland must be ready to face increasingly stiff competition from a whole range of locations for mobile projects.
More rapid development of indigenous industry has long been recognised as essential for the Irish economy. But even if this is achieved, the role of multinational industry as a very significant provider of employment must continue to be recognised by policymakers.