Thursday 20 September 2018

Dan O'Brien: Global FDI patterns show opportunities arising in east as flows dip again

There are opportunities as firms in cities like Shanghai look to expand globally.
There are opportunities as firms in cities like Shanghai look to expand globally.
Dan O'Brien

Dan O'Brien

Foreign direct investment drives the Irish economy. As exports tend to be where the real value is added in a small economy, the fact that foreign companies account for up to 90pc of all the goods and services that are sold out of this country shows how central they are. Although some do not like to hear it, the hard truth is that this economy would be a backwater without the foreign companies that are located here.

That the world's biggest company bar none decided to pull out of a major investment in Ireland last week was very bad news. That the withdrawal was the result of failures in the domestic planning process, not extraneous foreign factors over which nobody in this country has influence, makes it all the worse. It highlights the continued need for policymakers to get right the things that we can get right if Ireland wants to continue to be a top location for multinationals in Europe.

Given the foundational importance of globalised companies to the Irish economic model, trends in international investment flows need to be watched closely so that the new opportunities, which are emerging all the time, can be taken advantage of. A better understanding of the less favourable trends is also needed, so that threats can be mitigated where possible.

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