The link between U.S. tech firms and Ireland is growing more robust, and St. Patrick’s Day is the perfect time to uncork the reasons for this deepening bond. In 2021, 163 U.S. companies announced expansions in Ireland – 30 of them for the first time. That’s a rate of more than three every week.
With Brexit, Ireland is the only English-speaking country in the European Union, offering a logical gateway to Europe. Last year, companies from Stripe, Workday, TrustLabs and ClickUp to HP and Intel chose Ireland as a springboard to the EU’s largest single market of 550M people and 250M-person workforce.
Hundreds of startups are also benefitting from expanded revenues and the established ecosystem of companies located there. In the cloud computing sphere, from example, every one of the top 10 cloud leaders, according to CIO Insight, has an Irish location. This critical mass of software-related companies attracts new businesses that want to access the brain power, infrastructure and support initiated by these earlier arrivals.
Access to talent is arguably the most important factor when expanding to a new location. Ireland, with a 17% international population and a culture strikingly similar to the US, ranks 8th in the world for workforce productivity, ahead of the U.S., which ranks 12th, according to IMD Rank 2021.
In 2021, this critical human resource gave Bellevue, Washington-based Terawe Corporation, an innovator in AI, IoT, fog, cloud and other solutions, the confidence to establish its European headquarters in Ireland. Steven Duggan, Vice President, International of Terawe, says Ireland met the company’s need for well-educated, well qualified people who deeply understand the company’s core target industries and possess the “charm, communication and soft skills to help us build our business.”
Ireland’s mature R&D framework and generous tax credits were the draw for Dr. Neil Ray, CEO of Raydiant Oximetry, a California-based medical devices company that announced plans in late 2021 to build a team in Ireland. Citing high overheads, speed constraints and IP and patent issues, Ray noted some initial challenges with academic institutions in the U.S.: “They are very expensive and have very high overheads.”
In making the critical decision to expand to Europe, these are important considerations as you decide whether Ireland is the right location for your overseas operations:
The U.S. has fewer native-born science and engineering graduates today than in years past. And new immigration challenges for highly educated workers – along with extreme competition for qualified talent in general – exacerbates the problem.
Ireland is producing a steady pool of qualified candidates, and its labor costs are 10th in the EU, below such countries as Germany, Belgium, Luxembourg, France and Netherlands.
2. Regulatory, Tax and Trade
Ireland offers US companies, in particular those in regulated industries such as pharmaceuticals, medical devices and financial services, easy access to the European regulatory system. Ireland, which is ranked first in the world for FDI, is recognized globally for its ease of doing business, political stability, common law legal system, dynamic R&D ecosystem and attractive, transparent and stable tax regime.
The bilateral trade and investment relationship between the EU and the USA is the largest and most integrated economic relationship in the world. The two economies account for 50% of global GDP and nearly a third of world trade flows. Total EU trade with the U.S. was an estimated $1.1 trillion in 2019.
3. Research & Development
For early-stage companies, costly R&D is needed to create viable technology offerings. With a huge demand for the world’s short supply of skilled researchers, U.S. companies doing business in Ireland can avail of talent and R&D resources available to EU companies such as the €95.5 billion Horizon Europe innovation program. Others, like Raydiant Oximetry, are taking advantage of Ireland's 25% R&D tax credit. Moreover, Tyndall National Institute in Ireland, one of Europe’s leading research centers, co-funded the project, leaving Raydiant to fund only one-third of the cost.
Home to close to 1,700 international companies, Ireland is a business friendly, English speaking gateway to Europe and the ideal location for U.S. companies to serve the entire EMEA region.
Gavin O’Loughlin is Vice President of Technology for the Pacific Northwest for IDA (Investment Development Agency) Ireland, an Irish Government Agency promoting foreign direct investment (FDI) into Ireland.
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