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In an evolving FDI landscape, international investors have identified policy areas for Ireland to focus on, including supporting high-tech industries and innovation.
In brief
- Ireland drops slightly in the 2023 European rankings but remains appealing for future investment.
- 79% of international investors are eyeing up new or thinking about expanding operations here.
- The country could consolidate its place as a digital front-runner by capitalising on its AI credentials.
Ireland won 100 Foreign Direct Investment (FDI) projects in 2023, placing it 11th on the league table of most desirable investment destinations in Europe, down from 10th position in 2022. Encouragingly, optimism about the future rose with 66% of respondents expecting Ireland’s attractiveness to improve over the coming three years (up from 46%). According to the EY Attractiveness Survey, 79% of international investors are planning to establish new or expand existing operations in Ireland over the next 12 months, up from 53% last year.
The slippage in 2023 comes after a strong performance in 2022. It reflects a softening in FDI at European level, particularly investment from the US. Ireland did comparatively well in Medical Devices, Finance, Software & IT Services, and Pharmaceuticals, ranking in the top 10.
EY Attractiveness Survey 2024
Although the decline in FDI in 2023 is disappointing, Ireland only slipped one place in the annual ranking of European countries. Looking to 2024 and beyond, the improvement in investor sentiment is very encouraging and it is good to see Dublin featuring among the top 10 cities in terms of future attractiveness.
Feargal de Freine
EY Ireland Assurance Partner and Head of FDI
Centred on talent, business-friendly policies, stability and access to Europe’s single market, Ireland’s FDI model has been highly successful for decades. The global landscape is changing, however. Trade and investment policies have become more inward-orientated and competition among jurisdictions has intensified, making for an increasingly challenging environment. Concurrently, sustainability and digitalisation are reshaping economies the world over, with the promise of Artificial Intelligence (AI) standing at the forefront of this transformative wave.
While geopolitical uncertainty is a headwind, businesses are undertaking digital and sustainable transformation programmes and exploring AI technology. To safeguard its status as an inward investment hub and to attract the drivers of next-generation economic growth, Ireland should leverage its traditional strengths, hone its new capabilities, and stay agile.
Loretta O’Sullivan
EY Ireland Chief Economist and Partner
Summary
Our research delves into international investors’ plans and sentiment, considers the areas Ireland should be focussing on domestically to bolster its appeal as a location for FDI, and where it needs to concentrate its efforts to maintain competitiveness on the global stage.