Strengthening Ireland’s competitive edge for business is critical in a year with an unprecedented number of elections globally. By the end of 2024 half the world’s population will have gone to the polls, including in the United States, here in Ireland and across the EU, where European parliamentary elections were held in June.
While Ireland is already ranked among the top five most competitive economies globally, we are now at a critical juncture where political shifts could impact international competitiveness. With more than 970 US companies now operating here, representing many of the world’s leading innovators, it’s vital for Ireland to focus on three key areas to maintain its reputation as a top investment destination: competitiveness, energy and sustainability, and regional development.
Competitiveness: the cornerstone of Ireland’s success
Ireland’s competitive edge is central to its economic success. A recent American Chamber of Commerce (AmCham) survey highlights that 97 per cent of respondents believe Ireland is competitive compared to other advanced economies, with 45 per cent rating it as “very” or “extremely” competitive. This competitiveness is rooted in Ireland’s highly skilled and educated workforce, cited by 52 per cent of respondents as its main competitive advantage.
According to OECD data, Irish workers are the most productive globally, with productivity levels twice the OECD average. Ireland also ranks fourth out of 44 countries for education quality and first globally for attracting and retaining international talent. These rankings reflect Ireland’s long-standing commitment to education, training and innovation, and highlight why talent remains a critical competitive advantage for Ireland.
Beyond education and productivity, 90 per cent of respondents to an AmCham survey said Ireland’s research and development (R&D) landscape was competitive compared to that of other advanced economies.
While these statistics underscore Ireland’s economic strengths, there are areas for improvement, with 100 per cent of respondents saying that enhancing Ireland’s R&D tax credit is essential for maintaining its appeal for foreign direct investment (FDI).
When asked about Ireland’s biggest challenges, 19 per cent pointed to cost competitiveness as a concern. This is second only to housing, which remains the foremost challenge for AmCham members, 40 per cent of whom said it was the number one challenge for their organisation in Ireland. Delivering for the housing needs of talent also plays a crucial role in Ireland’s competitiveness and AmCham has consistently advocated for the ongoing revision of housing targets to cater for the State’s growing population.
Energy: the foundation of sustainable development
To enhance its competitiveness, Ireland must also prioritise energy and sustainability. In the AmCham survey, energy ranked second only to housing as the most pressing infrastructure area needing Government investment. When asked about climate action priorities, 59 per cent of respondents highlighted the need for investment in renewable energy, while 36 per cent advocated for tax incentives that would enable businesses to implement more sustainable practices.
There has been positive action this year but it must be built upon. For example, the Energy Efficiency Grant scheme was revised, doubling the maximum grant from €5,000 to €10,000 and reducing the required business contribution from 50 per cent to 25 per cent. This shift has increased uptake; in the first seven months of 2024, 51 applications were approved, rising to 97 applications since the changes.
While this grant enables businesses to invest in energy-efficient equipment, smart control systems and heat recovery, aiding them on their journey to net zero, much more can be done. Further progress requires a medium- to long-term strategy focused on energy self-sufficiency and the expansion of renewable energy sources, particularly offshore wind, wave, solar and green hydrogen.
Achieving this will ensure a stable, competitive energy supply that supports Ireland’s FDI appeal and environmental goals.
Regional development: broadening opportunities nationwide
In ensuring Ireland’s long-term economic sustainability, AmCham sees regional development as a significant opportunity to enhance the business ecosystem. Ireland’s regional locations offer access to skilled talent, good quality of life and world-class educational institutions. They are also home to globally recognised research centres such as Cúram, Insight, the Advanced Manufacturing Centre, Lero, Confirm, Nimbus and the Tyndall Institute.
While there are many advantages to locating in regional Ireland, AmCham believes further regional development is essential to improve Ireland’s competitiveness on the global stage. Clustering key industries in regional hubs can position these cities as centres of excellence, enabling Ireland to build competitive advantages in strategically important sectors. This approach aligns with global priorities, such as the climate transition and digital transformation.
Moving forward: Ireland’s competitive future
Ireland’s future competitiveness hinges on successfully balancing these three pillars: reinforcing our competitive strengths, advancing a forward-thinking energy strategy and fostering robust regional development. For Ireland to remain a premier choice for FDI, especially amid global geopolitical change and potential policy shifts, investing strategically in these areas is essential.
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Publish date : 2024-11-20 21:07:00
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