US will underpin our wealth for years to come
That might seem an odd question at a time when the US is cutting taxes and prioritising domestic investment, but in fact, it may be an ideal juncture.
The US is at one of its strongest points economically. Employment levels are up, corporate profits are high, and recent tax changes have materially embellished the balance sheets of US companies big and small.
A number of these are already present in Ireland. They picked this country for good practical reasons relating to tax, access to educated staff, entry to the EU market, and the cultural connections between Ireland and the US.
However, now it can be argued there are a new set of reasons why Ireland is optimally placed to capture a coming wave of American expansion.
US companies are hardwired to pursue growth. It is in their nature to employ strategies and develop business models that support expansion.
That growth involves navigating global markets and finding ways to tap new customers for products and services. Apple’s global footprint required decades of investment designed to lay down roots that made Apple products as normal for European and Asian consumers as they are for American customers.
Ireland has played an important role in Apple’s development outside of the US. For every Apple there are numerous US technology and pharmaceutical companies which have also strived to grow abroad.
Alongside those already established on global markets, there are hundreds of companies that are defined as small or midsized in a US context that have not developed outside north America.
Many of these are legitimate targets for the Irish agencies charged with uncovering new investors.
Layer upon this scenario the Brexit trainwreck unfolding in the UK.
Any aspiring US company that does not currently operate outside America would seriously consider Britain as a staging post when moving overseas. It is English-speaking, and has many cultural ties with the US.
However, a Brexit-consumed UK undermines the appeal of that country to foreign investment for two vital reasons; access to the world’s largest consumer market — the EU — will no longer be seamless; and, a supply of highly qualified multilingual graduates from the largest third-level community globally — existing inside the EU — will no longer be easily accessible.
Contrast that with Ireland, which offers unfettered entry to the EU and a pool of potential employees from Spain to Poland and everywhere in between.
Add to that a tax rate which, after all the reviews and changes conducted under the auspices of the WTO, remains materially better than what applies in the UK.
These are key reasons why Ireland remains an important base for roving globally ambitious companies.
We all can agree that Dublin is now having to manage growing pains as it absorbs the benefits of a fast recovering economy and sustained international investment.
The trick now is to keep Dublin open for business but consistently up our game in positioning Cork, Limerick, and Galway, as hubs that can draw investment with satellite operations being established in towns and villages across the State.
I suspect Ireland is set for a wave of new expansion announcements by a wide number of companies.
Some of these will be Asian, and some will be European but the US probably contains the seeds for greatest impact.
Keeping our focus on America as a unique partner for Ireland, something it has been for well over 100 years, will be an investment that pays rich dividends in the decades ahead.
- Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal.
