Ranking for foreign direct investment is on slide
Ireland's foreign direct investment (FDI) ranking fell four places to 14th out of 30 countries in 2007, according to a survey from National Irish Bank and OCO Consulting.
But the index, which is adjusted to take the size of a country into account, also showed that Ireland was one of the leading developed economies, falling below only Australia. The US ranked 21st and the UK 25th.
According to Ronnie O'Toole, chief economist, National Irish Bank, Ireland continues to outperform virtually all major developed economies when adjusted for size.
"This continued strong performance in 2007 was not because we attracted a particularly high level of new jobs, but rather because the investment that firms were making for every job they created was much higher than during 2006," he said.
"This indicates that while the number of jobs was down, the quality of jobs created in 2007 was very good."
Ireland attracted a particularly high share of projects involving research and development (R&D) in 2007, with around 12pc of jobs won involving a significant element of R&D.
According to Mark O'Connell, chief executive of OCO Consulting: "R&D projects are the cream of inward investment projects globally, and investment projects involving a significant R&D content are highly prized amongst governments and development agencies.
"The strong performance of Ireland in this regard in 2007 is particularly notable given the fact that this is an area where historically Ireland has not performed so well.
According to the survey, the fourth quarter of the year was the strongest performer with an index value of 1.1.
The figures also show that Ireland had a relatively high level of churn with its exporting sector, which more resembles the US experience rather than Europe.
"If we manage this process of churn well, we can continually renew our portfolio of foreign multinationals, moving out of those sectors where we have lost competitive advantage, and into sectors with better long term prospects," said Mr O'Toole.
He added that this is the bread and butter of what economists call "moving up the value chain" and is why the improvement in the quality of incoming jobs that we have seen in 2007 is so important.
- Ailish O'Hora
