FDI works both ways: the two-way street between the US and Ireland

In Ireland when we talk about foreign direct investment, we tend to think of US investment here. But it works both ways.

“People are constantly surprised to learn that over 110,000 US citizens across all 50 States work for Irish companies,” says American Chamber of Commerce Ireland chief executive Mark Redmond. “These Irish operations include global leaders in nutrition, infrastructure and life-sciences who have invested billions of dollars in facilities and R&D across the US.”

In fact, despite having just 0.06 per cent of the world’s population, Ireland is the 9th biggest investor in the United States. The reasons for this are manifold and include factors such as language and familiarity, helped by the fact that some 30 million US citizens claim Irish heritage.

There is also the sheer size of the prize. The US remains the world’s number one market, a $22 trillion-dollar economy with an IMF economic growth forecast of 6 per cent, which though slightly down on previous tallies, remains a strong performance for a developed economy.

“It is important to remember the two-way nature of the business relationship between the US and Ireland. The success of Irish investment into the US is now at an all-time high. Ireland is the ninth largest source of FDI into the US. Translated into employment, it accounts for over 110,000 jobs in 50 states. Given the comparative size of the Irish economy that’s impressive by any measure,” says Seán Sheridan, tax partner with KPMG in Ireland

“From English as a common language, affluent consumers, to strong economic and cultural ties, the potential opportunities are obvious – especially in building scale. However, the massive size of the market, varying tastes, and regional differences can also create challenges.”

Taken alone, California’s economy is the same size as that of the UK, and New York’s is the equivalent of South Korea’s.

This year the US has been bolstered by President Biden’s stimulus plan, which is seeing significant investment in infrastructure that includes roads, bridges and ports. There are also growing opportunities to be captured by Irish companies as the US continues to develop green energy, cleantech and renewables.

Despite Covid, Irish companies continued to invest in new offices and teams across the US. According to Enterprise Ireland, last year alone, more than 70 Irish companies opened new offices there, 18 of them representing the expansion of an existing presence to a new State.

For many of the Irish companies currently succeeding in the US, the initial catalyst was the fact that they were already working for one or more of the 800 US MNCs based in Ireland. Leveraging the contacts made at home has enabled umpteen approved suppliers to grow their exports all around the world, including in the US.

Life sciences

Ireland’s PM Group is the perfect example. The business, which is 48 years old, is an international life sciences project delivery firm which employs nearly 3,500 people across the US, Europe and Asia. Much of the work it does throughout Europe and Asia, and indeed in the US, is for US life sciences clients it services here in Ireland.

It has expanded its global footprint on the strength of its capability and reputation. “We are recognised for the quality of the work we do and the expertise we have,” says Allan Schouten, PM Group’s US president.

PM Group is recognised by US industry bible ENR (Engineering News-Record) as a Top Five Pharma Engineering design firm. Turnover in 2020 was $400 million and clients include AbbVie, Bayer, Johnson & Johnson, Merck, Regeneron, Resilience, Sanofi and Thermo Fisher Scientific.

It has had a team in the US since 2010 and has been steadily growing its US-based business ever since, opening offices in Boston and San Francisco. Last month it opened a new office in Philadelphia, which the company sees as an integral part of its strategic plan to grow its US operations.

“The USA is a continent as much as a country and each state has different standards and differences in legislation and in approach to doing projects. For us, the key element in our growth has been our deep relationships with US clients who have invested in Ireland for many years,” says Schouten.

Flexibility

“It means that when we knock on doors in the US, we are already reasonably well known, although of course we have to earn our stripes too. The way we do business is through a blend of our Irish ‘can do’ attitude, and our agility and flexibility.”

Right now PM Group is benefiting from a wave of US investment. “There has been significant investment in the US in life sciences over the past 18 months, both Covid related and also because of increased manufacturing of new cell and gene therapies,” he explains.

The shift to working from home over the past 18 months has brought challenges and opportunities in relation to its US expansion. “Every customer has faced the challenge of not being able to do face-to-face meetings, but it has also made us all realise that we don’t have to travel as much as we used to. In that way, this year of hybrid face-to-face and virtual working has been both a challenge, and an enabler,” he says.

Reputation

PM Group has doubled its US headcount to 150 in the past year and expects that level of growth to continue. “It includes not just Irish colleagues who have moved to the US, and US colleagues who moved back, but the fact that the vast majority are US life science specialists,” he explains.

Its growing reputation in the market helps it secure the talent it needs to expand. At the International Society for Pharmaceutical Engineering awards in Boston this month, for example, the Facilities of the Year overall award winner was Janssen Science Ireland, for BioCork2, the expansion of its biologics manufacturing facility in Cork. It’s a clear indicator of the high standard the sector enjoys here.

“That’s quite a coup for Janssen and for Ireland, and PM Group is so proud to have been part of the team that delivered it. For us, it’s another step up the ladder in the US, not just for clients but also for acquiring talent,” he explains.

“For PM Group it’s all about building relationships, building trust, and delivering on commitments. We are just one of a number of Irish firms that has grown off the back of US investments in Ireland over the past 40 years.”