Thursday 22 February 2018

Interview: Joanne Richardson - The businesswoman with a direct line to our US investors

Joanne Richardson has helped oversee a four-fold rise in US investment here, but she tells Colm Kelpie that we must not rest on our laurels

Joanne Richardson
Joanne Richardson
Colm Kelpie

Colm Kelpie

JOANNE Richardson will take to the podium today for her 12th and final Thanksgiving lunch as head of the American Chamber of Commerce Ireland. And she has a lot to be thankful for.

Foreign direct investment by US companies into Ireland has surged four-fold in her 12 years on the job, even if some of those years included the darkest in the State's financial history.

She's also had access to people most of us can only dream of: presidents Obama, Clinton, George Bush Snr and no less than four US ambassadors to Ireland.

But ever the diplomat, she shrugs it all off.

"You have to be able to manage that in the most professional way and not lose the run of yourself," she says.

"It's the consciousness of just remaining grounded as well."

The Chamber's modest Georgian office in Dublin's leafy Wilton Place belies the significance of its remit. Today, more than 115,000 people are directly employed in over 700 US firms in Ireland accounting for more than 70pc of all IDA supported employment.

Collectively, US companies have $204bn (€150bn) in FDI in this country representing 9pc of all US investment in the EU and 4.5pc worldwide.

To put it in context, the scale of the investment here equates to more than the total invested by America in the so-called BRIC economies of Brazil, Russia, India and China.

And the companies are all familiar: Facebook, Google, Twitter, PayPal, Pfizer and Accenture to name just a few of the heavy hitters.

But while the Government has successfully managed to woo key multinationals, largely because of our much vaunted and criticised corporation tax rate, some have expressed concern about the quality of our graduates.

PayPal's Louise Phelan, a vice-president of the Chamber, has been particularly vocal. The outspoken Irish head of the global online payments giant has repeatedly praised Ireland as a destination for investment but worries that younger generations aren't hungry enough to get ahead in their careers and are woefully underprepared when they enter full-time employment.

She's also pointed out that graduates simply don't have the language skills that her company desires.

Richardson believes the criticism is founded. As the former head of Delta Airlines in Ireland, she's spent many a year "swimming around in that corporate American pool" and knows well the attributes sought by US employers.

"There definitely is a skills deficit and that's not something that has just occurred in recent times," she says.

"One of the first reports I launched when I came in here was an education report and US companies flagged up that we need to have stem skills, science, maths, tech skills and language skills.

"It is improving but it's not where it should be. What we don't want is any investment to decide that they cannot get the skills here and they should have gone to London."

She points to a gap in advanced technology skills and concerns about the language capability, saying the Government needs to do more to attract staff from outside of Ireland and beyond Europe to plug that hole.

"We need a proper green card system to bring those people in."

Despite the concerns, she says Ireland continues to be ranked at a high level for the availability of skills and our flexible workforce.

And while she's pointed in her criticisms, she makes sure not to lay it fully on the Government's doorstep, again relying on those diplomatic skills honed so finely during her corporate career.

"You will hear commentary around skills, but by and large the Government does get it," she says. We'd be deluding ourselves, however, if we believed a lot of the palaver spun by companies about why they want to invest in Ireland. Yes we're English speaking, yes we have access to the European market, but it's no secret that the favourable tax regime makes it particularly appealing. And the revelations of recent months go to show just how attractive Ireland can be as companies seek to manage their tax liabilities.

"The international tax discussion has been a dominant discussion for this whole year, both within our own internal meetings, in the media and international media and I would suggest unfairly the spotlight has been on Ireland," Richardson says.

"All of these companies are doing business globally. They would be sued by their shareholders if they were not managing their tax affairs to the most efficient way that they can manage them and to give the best return back to the shareholder."

Rightly or wrongly, she says, tax management, or minimisation as I point out, is the way of global business and Ireland can't tackle it on its own.

But some will likely question the morality of allowing big corporates to pay little tax at a time when ordinary citizens are suffering significant austerity. But as Richardson deftly signals, perhaps that's a naive take on the realities of global business.

"On any of their profits and their activity here in Ireland, they'll pay tax in Ireland," she says.

"They contribute about €4bn in corporation tax a year, directly to the Irish exchequer. On products and activity sold in Ireland, they're paying €4bn corporation tax a year. That's a fact. I'm not going to comment on Apple, or comment on Google.

"Whether it's right or wrong, it's the way of global business and Ireland by itself is not going to be able to fix that."

Whether you agree or disagree about the morality of it all, it's a fact that Ireland's 12.5pc corporation tax rate is being keenly watched abroad, and Richardson warns that any "knee jerk" reaction by the Government to the international criticism, most recently from Germany, may prove counterproductive.

"Our 12.5pc is transparent. We are not a tax haven by the technical definition of a tax haven," she says.

"It's very critical for Ireland that we remain a competitive global location for foreign direct investment and a big part of that is our total corporate tax offering and that's very critical. It's important that whatever amendments come, that Ireland doesn't have knee jerk reactions for the wrong reasons, or the wrong pressures."

And that's especially important as we face pressures of a slightly different hue from our nearest neighbour, with the UK Chancellor George Osborne steadily reducing Britain's corporation tax rate to boost the country's ability to attract FDI.

Richardson says Ireland hasn't yet lost any US companies to London, but vigilance is needed. And it's a fair warning.

"Our biggest competitors are the UK and Netherlands for US investment. They're serious competition and they have been very actively reducing their corporate tax options," she says.

"They have a huge skill base and, yes, it is competition. Ireland needs to be very nimble and flexible. We can't be staying on a back foot because of all these international discussions at the risk of losing competitiveness. They're (the British government) specifically targeting the IP stuff, all of that high-end activity and they are making it attractive to go to the UK."

And against this, Ireland has been without a US ambassador for almost a year since Dan Rooney left. Richard Hass may have been sent to Northern Ireland to deal with legacy issues from the Troubles, but the inference is that Ireland's political influence in Washington may not be as strong as it once was.

Richardson disagrees.

"I don't see it as an immediate problem. We would anticipate that over the next couple of months we would have an ambassador appointed to Ireland. To be fair it's taking quite a while and in my 12 years I've never known it to take as long," she says.

Richardson lauds her time at the Chamber's helm as the most "fantastic personal and professional experience for anyone".

She's remaining tight-lipped on her future plans, simply saying she'll be taking some "me time" and highlighting her broad background in tourism, airlines and FDI.

She did confirm that Ryanair's Michael O'Leary hasn't sought to snap up the smooth-talking former airline executive for his new customer-friendly strategy.

"Isn't it very brave to change strategy and direction," she says, when asked about the new cuddly Ryanair approach.

"You build a reputation, you build a product, you build one of the most successful airlines in the world in a certain way, on a certain model. And in any business, you get to a point where you have to listen, and by listening you have to change.

"I think it's a brave business corporate decision. I'm very proud of Ryanair. I think it's fantastic."

How could Mr O'Leary resist that pitch?

Irish Independent

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