Our traditional strengths in attracting and retaining FDI have served us extremely well. To emulate the successes of previous decades, we must look to other areas that can set us apart, writes Celine Fox, Audit Partner, KPMG in Cork.
The areas that have driven our successes in attracting FDI both nationally and locally are well documented and have been a powerful combination. Here in Cork 169 FDI employers employ 39,000 people directly. 8 of the top 10 global Pharma companies are based in Cork, we have a thriving tech hub, boasting names such as Apple, Dell EMC, McAfee, TrendMicro and VMware.
As we know, the dangers of standing still can unravel decades of hard work. To avoid this pitfall, we must look to areas that complement our existing strengths. This will allow us to deepen our relationships with the FDI organisations already here and continue to attract new organisations. I believe three areas can advance our competitiveness namely: Sustainability, transformation and flexibility.
Continued societal demand for action on the global challenges of climate and sustainability have brought these issues to the boardroom. We have seen an extraordinary growth in investment in sustainable assets. In the US last year, 1 in 3 dollars of US assets under professional management were in on sustainable investing assets - $17.1 trillion, up 42% on 2018. Here in Ireland, we were one of the first European countries to issue a green bond, raising €3 billion and in 2018 The Irish state was one of the first countries to divest of fossil fuel investments.
Cork’s strategic importance to Ireland’s energy production, supplying approximately 25% of national requirements, places us in an advantageous position. With the support of Energy Cork, we are seeing the development of a sustainable energy hub, as exemplified by the $190 million investment secured by Amarenco last year. We must continue to position Cork and Ireland as a centre for sustainability excellence. Investing in infrastructure, legislation and incentives is a fundamental requirement. At KPMG we welcome both the IDA’s 2021 – 2024 strategy which includes a sustainability Investment Framework and the Governments Climate Action Plan 2019.
Similarly, sustainability is a key focus area for our firm. Our Sustainable Futures team, a dedicated cross functional team, supports business and the public sector making the switch from brown to green in planning and executing programmes addressing Environmental, Social and Governance topics.
The impact of the Fourth Industrial Revolution on organisations of all sizes, is profound. The opportunities to embed Digitalisation, AI, Robotic process Automation, Machine Learning and Cognitive Platforms into their organisations and processes are enormous. Indeed, COVID-19 has driven a rapid advancement of digitalisation. Detailed in the KPMG CEO Outlook report 2020, 81% of Irish CEO’s reported an acceleration of the digital transformation of their businesses. In line with these findings, our teams are seeing increased demands for support from clients in the areas of digital and operational transformation.
By supporting existing FDI organisations in Ireland to transform and optimise we can we can send a powerful message to businesses considering Ireland. Ensuring we have the right skills to support organisations embrace new technologies is crucial. Co-ordination among government, education and industry is essential. The IDA has taken a positive step in their target of 130 investments in training and upskilling to begin to support FDI clients in this area. We can also see indigenous Irish companies, such as Cork based Teamwork, Workvivo and Poppulo to name just a few, emerging at the forefront of innovation in the digital workplace.
Building on Irelands credentials as a future focused business environment and embedding continuous learning and improvement philosophies in our business culture will advance our reputation globally as a winning business environment for FDI and indigenous companies.
Flexibility and capacity to change are qualities that have been synonymous with our success in attracting FDI, exemplified in the longevity of tenure many FDI organisation have in Ireland.
2020 once more showcased our capacity to embrace change, with COVID-19 bringing about a rapid adoption of remote working practices. With the end of the pandemic, it looks likely a hybrid model will become the norm. Significantly, the publication of the National Remote Working Strategy, reinforcing our capacity to be flexible at a national level, offers employees more flexibility in a cultural shift that will seek to prioritise productivity levels and usher in the end of presenteeism.
Remote work of course presents challenges, with potential implications for Ireland in attracting FDI. However, it also opens opportunities for parts of Ireland where previously there was not. This reinforces the importance of the National Broadband Plan and regional tech hubs such as The Ludgate Hub in West Cork. The flexibility this offers can allow us to maximise our amazing quality of life factors. Cork is a region steeped in natural beauty, culture, tradition and culinary delights. We need to ensure we unlock the full potential of the Cork region to improve its competitiveness.
Unfortunately, some of the traditional barriers to attracting FDI still exist and need to be addressed. Delays on local infrastructure projects such as the Dunkettle interchange, M28 and the M20 Motorways are significant concerns. Housing supply and affordability continue to be key issues. Impacted by COVID-19, it is reported housing supply is unlikely to meet demand until the end of 2023 and resolution of this should remain an important policy objective. Finally, ensuring Ireland’s cost competitiveness should remain a key priority for all stakeholders.
Despite the barriers, we remain in a strong position. We expect the impact of COVID-19 on global FDI investment flows to continue well into 2021. As we emerge from the pandemic, our traditional strengths, combined with our expanding competencies in sustainability, transformation and flexibility can lead us into a thriving roaring twenties for FDI in Cork and Ireland. There is certainly no shortage of vision for Cork. The vision is within our grasp, but we must act now, or we risk losing aspects of our competitive edge and not fulfilling our continued potential in the global competition for FDI. We cannot stand still – we must stay ahead.
This article first appeared in the Irish Examiner and is reproduced here with their kind permission.
Inward investment requires informed decision making. For more on what’s next for FDI, please get in touch with Celine Fox, audit partner at KPMG in Ireland.