There’s sunshine on the jobs front after rain, but will FDI’s pot of gold keep on giving?

The firm was announcing 150 new jobs at the facility, while elsewhere in the country more than 500 other jobs were being announced by international and Irish companies.

“It’s a day when we are reminded that actually the technology sector in Ireland is stronger than it’s ever been, despite some of the challenges that we’ve seen in the first half of this year internationally in many tech companies.”

‘Ireland has a well-established path for large US tech companies’

Coveney said Ireland is still “seeing strong growth” in foreign direct investment.

But there have been plenty of alarm bells raised about Ireland’s ability to continue to attract bumper foreign direct investment (FDI) deals to Ireland.

There is a growing tide of competition for deals like that of HPE’s – whether with other EU nations, or with the US itself, where the Biden administration has put together a slate of subsidies and incentives to attract industry and manufacturing.

Meanwhile questions regularly pop up about energy infrastructure in Ireland to support large FDI investments, such as in data centres.

Those alarm bells weren’t to be heard in recent weeks as the Government and IDA soaked in some victories, including last month’s opening of Intel’s new €17bn manufacturing facility in Leixlip.

But Ireland is not the only venue for the likes of Intel when scouting investment locations in Europe.

Intel is building a massive new facility in Germany with up to €10bn worth of subsidies from the German government, while other countries are racing to attract chipmakers thanks to the EU’s Chips Act to bolster the industry in Europe.

​It is against this backdrop that Ireland is competing for deals.

The competition for FDI is “intense” says Michael Lohan, chief executive of IDA Ireland.

“What we have seen is a change in the industrial policy landscape and that industrial policy is heavily based on incentives. At one level, you would think that those incentives would be very attractive for certain types of investments,” Lohan told the Sunday Independent.

“The reality of it for investors is they take a long-term view as to where success will be guaranteed – and success alone won’t be guaranteed on incentives.

"Success will be guaranteed on getting the right infrastructure, getting the right talent and innovation and having a pro-enterprise policy base, which we have in Ireland.”

‘For us, investing in current locations is always a better proposition’

Ireland’s existing FDI base will help in fending off competition from other countries, Lohan said.

The country is in an “envious position”, given its established roster of multinationals already operating here.

“I think other nations are looking at that, at the proposition that Ireland has developed over the last number of decades, and they’re wondering how can they replicate that. Replicating that sort of proposition takes time, and has many dimensions in it.”

It is a call echoed by HPE’s chief technology officer Fidelma Russo.

The Cork woman took the senior executive position at HPE two years ago with expansion on the agenda, including the new engineering-focused centre announced this week.

“For us, investing in current locations is always a better proposition,” she said.

“In a new location, you have to put in all the foundational stuff – the HR pieces, the finance pieces – all the pieces that make everything work,” she said.

“If you have engineers coming to a site and you don’t have this, it’s not going to be a great experience – so that’s first and foremost: build around the hubs that we already have today, and then of course make sure that they’re fit for purpose.”

Galway is HPE’s largest site in Ireland, alongside bases in Leixlip and Cork.

“There was a lot of lobbying to put a centre in Leixlip, but we felt that the heritage here in Galway, the skills we’ve got in place, and because of the ability to cross-pollinate between teams – and then the university relationship – we thought this was the right location.”

HPE’s expansion comes despite the tech sector being rocked over the last 18 months by a downturn in fortunes.

This has been typified by mass sackings at major tech firms such as Meta and Google, who all have significant employee footprints in Ireland. Many jobs in this country did not escape the axe.

Such moves added to the alarm bells about Ireland’s ability to attract FDI if companies are tightening their belts.

Russo said that HPE has not adjusted its investment plans since she joined the company.

“We were very prudent in the last number of years,” she said.

“We didn’t over-hire as we went through Covid, and as a result we didn’t have to make any adjustments to our plans.”

Freudenberg Medical, a German medical device company, announced 100 new jobs at its Spiddal, Co Galway, base this week, despite the headwinds globally. For chief executive Dr Mark Ostwald, building on the existing base was a key driver in the decision too.

“Our expansion in Galway was not an either/or decision relative to other Freudenberg Medical locations. We are building upon the success of our overall operations in Ireland where we now employ over 1,000 people,” he said.

​While companies with Irish operations seem happy to grow those operations, how does Ireland fare in attracting first-time investors in today’s environment?

The IDA Ireland said in its half-year report that of the 139 investments secured in the first half of 2023, 52 were new name investors.

Since then, IDA Ireland secured a high-profile win when OpenAI, the multibillion-dollar AI firm behind ChatGPT, announced a Dublin office.

Last week EXL, a US data analytics company, announced 200 jobs at its new European HQ in Dublin, hiring engineers and AI specialists.

‘Foreign direct investment is a central part of our offering’

Rowan McGrath, senior vice- president for international at EXL, said that Ireland remains an attractive location for a US company to build a European base and to expand into that market.

“It is a well-established path for large US-headquartered technology companies. Many have grown significantly in terms of tapping into the talent that’s here, and also using it as a base to expand into European and global markets. That’s very much EXL’s thinking,” McGrath said.

However there are still issues that linger over Ireland’s FDI policy – namely the housing crisis.

“The housing situation is well documented. It hasn’t been a problem for us to date, but I recognise that we’re at the start of a journey,” McGrath said.

“The roles we are hiring are highly skilled and well-paid jobs – so it’s probably a little easier for our people to get accommodation in a supply constrained market.”

That said, he added that he expects to see measures that will “significantly improve the housing stock in Ireland” in next week’s Budget, measures which will help companies setting up in Ireland by benefitting their staff.

Adil Syed heads up the Irish operations of US tech firm Rippling which recently established its EU HQ in Dublin. He relocated to Dublin with his family from the US to lead the business here.

Housing and the cost of living factored into discussions when the company was evaluating European cities, Syed told the Sunday Independent.

“The current challenges that the city might be facing when it comes to housing related to the number of folks that come out here for tech feel like they are being focused on by the Government and well addressed,” he said.

“The version of Dublin that you see 10 or 20 years out will look like one that’s evolved to accommodate many of the high-growth businesses that are looking to expand into Dublin and build a home in Dublin for the business.

“My expectations are that things will get better and better over time. We’re quite optimistic.”

In the longer term, Ireland is staring down a major change with the hiking of Ireland’s 12.5pc corporation tax rate to 15pc for larger companies as part of the OECD’s effort to harmonise how multinationals are taxed globally.

FDI has long been the crown in Ireland’s industrial policy crown with an attractively low tax rate being a key component of that.

The raising of the corporation tax rate will require a greater emphasis on Ireland’s other sweeteners to lure future FDI to these shores.

Finance minister Michael McGrath, speaking at an event last month, said that Ireland will have to “renew” its FDI offering and “keep it fresh”.

“The tax change does mean that our relative advantage has narrowed in tax terms. It means that we have to look at all of the other options that we have available to us to enhance that offering.”

This has drawn calls from Ireland’s startup and SME sectors to strengthen policies for indigenous companies, rather than have any over reliance on FDI.

But FDI shows no sign of taking a back seat any time soon.

“Foreign direct investment is a central part of our offering in terms of economic growth – and you will see that featured as a priority for government in the budget,” Coveney said on Monday.