Ireland is now one of Europe’s major financial centres, with over 300 companies in IDA Ireland’s International Financial Services portfolio, employing 45,000 people across investment management, banking, insurance, aviation, fintech and payments. IDA Ireland, the inward investment promotion and development agency of the Irish Government, markets Ireland as a global centre of excellence for financial services across its international networks in the US, Europe and Asia. The sector in Ireland is well-positioned for further growth, a goal which aligns with the vision contained in the Ireland for Finance Strategy 2025.
Continued substantial growth in FDI in 2022 despite economic environment
IDA Ireland reported strong annual results across its entire client portfolio for 2022, with a substantial increase in growth in foreign direct investment (FDI) employment on 2021. Total employment in IDA client companies in Ireland now stands at 301,475, a 9% increase on 2021. 2022 offered the best FDI employment figures in a single year – 24,019 net new jobs, which represented a 43% increase on 2021, which itself was a record year. The numbers directly employed in the multinational sector also surpassed the 300,000 mark for the first time ever.

Sustainability strategy
With sustainability one of five pillars of the IDA Strategy, IDA’s strong focus is evident in the number of sustainability projects approvals in 2022, with 21 investments secured, most of them focused on climate change mitigation. This is a relatively new area for IDA and we are proactively engaging with client companies to see how best we can support them to pursue investment that helps address their environmental sustainability. IDA is supporting clients with the preparation of Climate Action Plans, with funding for consultants to support the reduction of emissions and/or to invest in building renewable capability, e.g., solar panels, biomass, biogas or wind turbines.

IDA is also supporting the development of the new International Sustainable Finance Centre of Excellence (ISFCOE) in Ireland and the implementation of the Sustainable Finance Roadmap, particularly on the development of talent, to ensure the relevant knowledge and capability required to meet future workforce needs is in place.

IDA Ireland’s focus on transformation is now more important than ever if companies are to remain competitive amid an accelerating shift towards a low carbon and high-tech economy. The international financial services sector has transformed significantly in recent years, and this coupled with economic expansion and innovation has led to a demand for talent across all sub sectors. As a result, many Irish based financial services companies are re-evaluating their talent needs.

IDA is supporting client companies with skill needs assessments and with funding towards company-wide training programmes to enhance core competence and automation capabilities and deliver strategic platform investment. These initiatives are future proofing Irish operations and positioning them within the global corporate network as ‘best in class’. The resilience and longevity of FDI companies in Ireland reflects their ability to constantly transform in response to change.

The annual results for foreign direct investment are most encouraging and show that investors commitment to Ireland remains strong and Ireland’s value proposition as a place to do business remains a compelling one. The 2022 figures continue the pattern of sustained, robust growth in FDI investment and FDI-related employment that has been achieved over a continuous period of more than ten years. IDA is engaging with client companies on RD&I, training, digitisation, and sustainability related investments to ensure the FDI base is positioned for continued success in the future.

A turbulent global environment for FDI
Ireland has secured many positive FDI investments over the last 12 months and the Irish economy is well diversified. Ireland continues to maintain a reputation as an excellent location for investment. That said, we are mindful that we cannot become complacent, and IDA Ireland is acutely aware of global challenges and uncertainties. It is evident that the global economy faces serious headwinds in 2023, with the continuing Russia-Ukraine war, inflation, monetary policy, and geo-political developments.

Additionally, trends impacting global FDI flows include the move towards open strategic autonomy, global tax reform, the future of work, the sustainability imperative, and the increased prominence of geopolitics as a factor in the economic outlook.

IDA Ireland is constantly monitoring the impact these factors are having on international financial services companies and we engage regularly with client companies in this regard. Ireland operates in the global and Irish ecosystem; and Ireland’s success, from an FDI perspective, is dependent on our continued partnership with these companies to support them as they grow their presence in Ireland and deepen their impact on the Irish economy.

Positioning well for opportunities
The international financial services sector in Ireland has been growing for four decades and it will continue to grow, despite current challenges. The underlying strength in international finance specialisms, together with the sectors convergence with technology, is positioning Ireland strongly for future success. The increasing use of technology, is driven by several factors, including the pace of digitalisation, and the associated need for new digital infrastructure and services. Ireland has unique strengths in both international finance and technology, with deep capabilities in both sectors now located there.

By embracing technology and operational innovation, companies have the potential to move from resilience to reinvention. The sector has experienced sustained growth and the opportunity for digital transformation in large institutions, together with the emergence of niche providers, positions Ireland favourably as a strategic location for future investment. A focus on innovation across business models including talent management and automation, together with the broadening and deepening of operational mandates will be key for the continued success of the industry in Ireland.

We continue to see opportunities across the Irish based international financial services sector, which we believe remains well aligned to the global economy of today and well positioned to succeed in the transformed economy of the future. At the same time, we continue to seek out and exploit opportunities in new and emerging growth areas in an evolving investment landscape globally.

Ireland has experienced much change in recent years from a national recession in 2008 to a global pandemic, and considerable global economic and political upheaval. Responding proactively to change has been the hallmark of Ireland and IDA Ireland’s success, and we will continue to be agile, resourceful, and committed in our aim to continue to attract FDI to Ireland.

Client companies remain positive about the business environment in Ireland and Ireland’s attractiveness relative to key competitor locations for FDI. This is borne out, as we enter 2023, by a good pipeline of investments for H1 2023. Ireland’s strengths continue to include its track record, skilled and diverse talent base, high quality education and training ecosystem, stable and consistent policymaking, open economy, and collaborative ecosystem.