New mission to Silicon Valley aims to attract FDI to Ireland
A guest blog by Michael Kelly and Clare Kelly, originally posted on irishtechnews.ie.
On 26th and 27th September, leading flexible workspace provider Glandore joined a 25 strong delegation of companies visiting San Francisco as part of the privately funded foreign direct investment initiative, Ireland Gateway to Europe.
Established in 2012, Ireland Gateway to Europe is a collective of Irish service providers who showcase Ireland as Europe’s premier investment location through events in the US and UK.
Our mission is to provide companies of all sizes and stages of development with the information and contacts they might need to expand into Europe, using Ireland as a base.
According to Jamie Harnett, Marketing Director, Ireland Gateway to Europe, “This is ‘Team Ireland’ in action. It is a major collaborative business initiative where we all pull together for the common good, which is; attracting that all-important Foreign Direct Investment to our shores.”
Since 2012, the initiative has welcomed over 5,500 US c-level attendees to events in San Francisco, New York, Indiana, Boston, Silicon Valley and Chicago. Speakers at the events have included Congressman Richard Neal of Massachusetts, Pat Ryan, founder of Aon Insurance and former President Dr. Mary McAleese. This year the line up included top representatives from companies including Salesforce, Twitter, Silicon Valley Bank, IDA, Wrike, Asana, Actifio, New Relic, Adroll and former chief talent office of Netflix, Patty McCord.
Glandore’s fellow Gateway delegates included co-founders Sigmar Recruitment, The FKM Group and Eisner Amper in addition to representatives from William Fry, Bank of Ireland and AIB who participated in the panel discussions.
Over the course of two days, a range of topics were discussed including the post-Brexit European landscape, how US policy changes might affect transatlantic trade and the challenges and opportunities of scaling and operating in Europe.
Why US companies choose Ireland
According to the American Chamber of Commerce in Ireland’s figures, today over 700 US companies operate in Ireland with 150,000 people directly employed and a further 100,000 indirectly employed. Since 2008 US firms have invested nearly $280 billion in Ireland and it remains one of the prime locations for US Foreign Direct Investment.
Last year the IDA announced 242 investments into Ireland, of these 74% were US based. Paraic Hayes, SVP West Coast of IDA Ireland confirmed in the first breakfast event in Palo Alto that 2017 marked the third year in a row of record growth with a new company setting up in Ireland every 2-3 weeks.
As US companies internationalise they will continue to locate a base in Europe to grow their business. According to Paraic Hayes, companies are internationalising much earlier with start-ups now needing to be global from day one. IDA have been successful in winning a significant number of emerging US companies to our shores, many with global employee headcount less than 300 people when they landed including gateway panellists, Asana and Wrike.
As IDA figures show, Ireland continues to tick the boxes for US companies choosing their European location.
According to Adie McGennis, CEO of Sigmar Recruitment, the pro-business environment, rich talent pool of people, competitive tax rates and the fact that we are a modern, stable, infrastructurally sound nation contribute to Ireland’s success in winning US investment.
Access to skilled talent is one of the key challenges facing US companies. Ireland has a highly skilled workforce with our education system ranking within the top 10 in the world. Ireland has a strong focus on investment in education and skills and we continually see increases in applicants studying STEM subjects, with a 20% increase in the last number of years.
From a recruitment perspective, Adie McGennis asserts that top talent from overseas are really attracted to come and work and live in Ireland. “Eleven percent of people employed in Ireland are from other EU Countries, compared to five percent in Germany and two percent in France and the Netherlands. Furthermore, Ireland is a great place to live and bring up a family. Commuting in somewhere like Dublin is relatively fast compared to competing cities like Frankfurt, our lifestyle is laid-back and we have so much to offer outside of work.”
The number of location options in Ireland is also a great pull factor for US firms. In Dublin and other major city centres, there is no shortage of office space and demand is such that speculative development has already commenced. Flexible workspaces also provide US firms with landing space to facilitate a swift and seamless set up in Ireland. Providers like Glandore have been supporting US firms for the past 16 years offering maximum flexibility and scalability with the aim of facilitating their growth and success in Ireland. We have been proud to provide the first home and EMEA headquarters for companies such as Facebook, Twitter, Dropbox, Ancestry, Nitro to name a few.
Other parts of Ireland are also seeing the benefits of foreign direct investment. In 2016, more than half of all jobs created by IDA clients were based outside Dublin. While Dublin is the preferred location for financial and technology services, Galway for example, is very attractive for life sciences and medical technology services. Currently, one-third of the country’s medical device employees are based in Galway with Medtronic and Boston Scientific being among the largest MNC companies. The Mid-West experienced the fastest growth rate of 10%, with some 1,500 jobs created during the year.
Companies who chose Ireland
Throughout the two-day event, we were joined by companies who chose Ireland as their European base. Asana, Wrike, Salesforce and Logmein were among some of the companies who provided us with personal accounts of why they chose Ireland.
Asana is a web and mobile project management tool that is designed to help teams track their work. With headquarters in San Francisco, Asana chose Dublin as their first location outside the US. Their decision to expand was driven by the fact 50% of their paying customers were based in Europe.
Ryan Pittington, Head of User Operations stated that Ireland’s track record and his and Asana’s Founder’s familiarity with Ireland through their previous positions in Facebook was a key deciding factor. Similarily, Ryan also mentioned that their choice of Glandore as Asana’s first home in Dublin was due to its strong track record and experience in accommodating Facebook and other similar companies from the US.
All companies highlighted Ireland’s highly skilled indigenous talent pool and its ability to attract overseas talent as key reasons for selecting Ireland as their European base. Jim Kelliher, CFO of Actifio and formerly CFO of LogMeIn also stated that the availability of leadership talent in Ireland experienced in scaling teams and establishing an EMEA headquarters was hugely important to them. Strong local hires with local knowledge were emphasised by several panellists over the two days as being crucial for speed to market.
The ease of doing business in Ireland, helpfulness of government agencies and the supportive business community in Ireland were also mentioned by all panellists as being important factors in the decision process.
From a recruitment point of view, the speed in the processing of work permits in Ireland (within a matter of weeks) compared to other countries where it can take up to 6 months was extremely valuable to Logmein according to CFO, Jim Kelliher.
Lastly, for Julie DeBuhr, Director of New Relic, the AerLingus direct flight from Dublin to San Francisco was a very welcome development in the midst of their decision-making process and “sealed the deal” for their leadership team.
What does the future look like?
With the onset of Brexit, there are some challenges facing US firms expanding into Europe. The United Kingdom is becoming an unreliable destination for US firms; this in time can prove to be beneficial for Ireland.
According to Deirdre Ceannt, Vice President of Foreign Direct Investment at Bank of Ireland, they expect to see further investment into Ireland following Brexit. “With regards the financial services sector, post Brexit BOI expects to see companies move to a more decentralised model whereby they will split their operations across three or four centres of which Dublin will be one.”
The European Medicines Agency is currently located in the UK and will move to an EU member state by 2018. Ireland has made a strong case to host this agency and is hopeful of securing it, if so this would be an added incentive for other companies to set up in Ireland.
One challenge facing Ireland is the shortage and highly priced residential accommodation. The audience was reassured by IDA representatives that the government is urgently working on this issue. It is important significant progress is made quickly so as not to deter any future business expansion in Ireland.
Despite these challenges, Ireland continues to be a prime destination for US foreign direct investment. Deirdre Ceannt of Bank of Ireland emphasises this, “Despite constant economic and political changes across Europe, Britain and the USA, Ireland remains a safe-harbour for US investment. The country continues to attract high levels of foreign direct investment, the largest percentage of which comes from the US”.
Here at Glandore, we have seen continued growth in US firms establishing a presence in Ireland. Recently we were delighted to welcome Kroll Bond Rating Agency (KBRA) as new Glandore members. With their headquarters based in the US, KRBA chose Dublin as the location of their EMEA headquarters and base to expand into Europe.