FDI's Contribution to Ireland's Economic Development and Success Essay

Words: 2632
Pages: 11

How has FDI in Ireland contributed to our economic development and what are the prospects of attracting FDI capable of a making a similar contribution to sustainable economic growth in the future.

Ireland is one of Europe’s leading locations for FDI. “Multinational enterprises are a very significant component of the Irish enterprise sector and will continue to play an important role in our economy” (Houses of the Oireachtas, 2012).

This piece examines the critical importance of FDI in the growth of Ireland. It explains the reasons for Ireland’s success. The analysis is carried out in terms of employment, exports, outputs, Government assistance and advantages and disadvantages of FDI’s investing in Ireland.
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The exports of Organic chemicals increased by €327 million (+25%)” (CSO, 2013). Ireland’s first major FDI success came from Ford Motor Company. They began their tractor production for export in Cork in 1919. They employed over 6,000 employees in 1929 and still employed 1,000 employees by the 1950’s
By the end of 2011, Ireland’s net FDI had fallen by 19.2 billion since 2010, leaving a net inflow of 194.5 billion. The main source of investment in Ireland came from Europe at a figure of €20 billion followed by Asia who invested €3 billion. Decreased of foreign investment of €18 billion came from the USA, €10 billion from Central America. In analysing sectorial breakdown of investment into Ireland from companies based abroad, the largest sector for inward investment is clearly financial intermediation. At the end of 2011 the investment in this sector totalled 83 billion, or otherwise seen as 43% of the total inward investment. Other sectors which were invested in include: 27 billion in insurance and 20 billion in the pharmaceutical sector. As the proportion of the manufacturing sector owned by foreign companies is so large, it has economical wide implications. The overall health of the economy is affected by and dependant on the well-being of the foreign owned portion of the manufacturing sector. Looking at FDI earnings in 2011, an increase to €41 billion from €38 billion in 2010 was recorded. European companies earned €25