Strengthening Ireland’s competitive advantage for businesses is essential in a year marked by an unprecedented number of elections globally. By the end of 2024, half the world’s population will have gone to the polls, including in the United States, Ireland and across the EU, where European parliamentary elections were held in June.

With Ireland already among the five most competitive economies in the world, we now find ourselves at a critical juncture where policy changes could impact international competitiveness. With more than 970 American companies operating here, representing many of the world’s leading innovators, it is essential for Ireland to focus on three key areas to maintain its reputation as a leading investment destination: competitiveness, energy and sustainability, as well as regional development.

Competitiveness: the cornerstone of Ireland’s success

Ireland’s competitive advantage is essential to its economic success. A recent American Chamber of Commerce (AmCham) survey highlights that 97 percent of respondents believe Ireland is competitive compared to other advanced economies, with 45 percent rating it “very” or “extremely” competitive. This competitiveness is rooted in Ireland’s highly skilled and educated workforce, cited by 52 percent of respondents as its main competitive advantage.

According to OECD data, Irish workers are the most productive in the world, with productivity levels twice the OECD average. Ireland also ranks fourth out of 44 countries for the quality of education and first in the world for attracting and retaining international talent. These rankings reflect Ireland’s long-standing commitment to education, training and innovation, and highlight why talent remains a key competitive advantage for Ireland.

Beyond education and productivity, 90 percent of respondents to an AmCham survey said Ireland’s research and development (R&D) landscape was competitive with that of other advanced economies.

While these statistics highlight Ireland’s economic strengths, there are still areas for improvement, with 100 per cent of respondents saying that improving Ireland’s R&D tax credit is essential to maintaining its attractiveness for foreign direct investment (FDI).

Asked about Ireland’s biggest challenges, 19 percent cited cost competitiveness as a concern. This is second only to housing, which remains the top challenge for AmCham members, 40 per cent of whom said it was the number one challenge for their organization in Ireland. Meeting the housing needs of talent also plays a crucial role in Ireland’s competitiveness and AmCham has consistently advocated for an ongoing review of housing targets to meet Ireland’s growing population. State.

Energy: the foundation of sustainable development

To improve its competitiveness, Ireland must also prioritize energy and sustainable development. In the AmCham survey, energy ranks second, after housing, as the most pressing infrastructure area requiring government investment. When asked about priorities for climate action, 59 percent of respondents highlighted the need to invest in renewable energy, while 36 percent advocated tax incentives that would allow companies to implement more efficient practices. durable.

Positive steps have been taken this year, but we must build on them. For example, the energy efficiency grant scheme was revised, doubling the maximum grant from €5,000 to €10,000 and reducing the required contribution from businesses from 50 percent to 25 percent. This change increased adoption; in the first seven months of 2024, 51 requests were approved, bringing to 97 requests since the changes.

While this grant will enable businesses to invest in energy efficient equipment, intelligent control and heat recovery systems, helping them on their journey to net zero, much more can be done. Further progress requires a medium- and long-term strategy focused on energy self-sufficiency and the development of renewable energy sources, particularly offshore wind, waves, solar and green hydrogen.

Achieving this target will ensure a stable and competitive energy supply which will support Ireland’s FDI attractiveness and its environmental objectives.

Regional development: expanding opportunities nationally

In ensuring Ireland’s long-term economic sustainability, AmCham views regional development as an important opportunity to improve the business ecosystem. Ireland’s regional locations provide access to skilled talent, a good quality of life and world-class educational facilities. They are also home to world-renowned research centers such as Cúram, Insight, Advanced Manufacturing Centre, Lero, Confirm, Nimbus and the Tyndall Institute.

While there are many benefits to establishing a presence in regional Ireland, AmCham believes that further regional development is essential to improve Ireland’s competitiveness on the global stage. Consolidating key industries into regional hubs can position these cities as centers of excellence, enabling Ireland to develop competitive advantages in strategically important sectors. This approach aligns with global priorities, such as climate transition and digital transformation.

Moving forward: Ireland’s competitive future

Ireland’s future competitiveness depends on successfully balancing these three pillars: strengthening our competitive strengths, promoting a forward-thinking energy strategy and promoting robust regional development. For Ireland to remain a preferred choice for FDI, particularly against a backdrop of global geopolitical change and potential political shifts, it is essential to invest strategically in these areas.