Barry O'Leary is determined to convince international companies that Ireland is a great place to do business, even though his country's domestic economy is in turmoil.
The nation's high unemployment rate means companies can pay workers lower wages, said O'Leary, CEO of investment promotion agency IDA Ireland. The country is also offering perks like corporate tax rates that are half or one-third the rate of other countries, he said.
That could open doors for companies in the Twin Cities that want to expand their operations globally. Already medical-technology firms have a huge presence in Ireland. Recently medical device-maker Boston Scientific, which employs thousands in the Twin Cities, announced that it will invest $37 million in its Clonmel facility in southern Ireland.
Like the United States, much of Ireland's troubles stem from a housing crisis, which came to a head in 2009. People who were employed in Ireland's construction industry lost their jobs and the banks suffered massive losses due to bad loans.
O'Leary visited the Twin Cities and spoke with the Star Tribune earlier this month. He talked about the nation's business strategy and its relationships with med-tech firms in the U.S.
Q Some of the medical device start-up companies have expressed concern about the current U.S. Food and Drug Administration regulatory process. Are more start-ups moving abroad as a result?
A Start-up companies are going abroad much earlier. If they get the CE mark [European approval], they can start generating revenues immediately, whereas if they have to wait for FDA approval, then there's all this sunken cost. I think that's why you are seeing more of them, even the small ones, internationalizing earlier.
Q What's the venture capital investment climate in Ireland?
A It's not as well developed in the United States, particularly not as well as the Silicon Valley. It is improving and one of the things we are doing is bringing in a number of foreign VCs into Ireland to help finance Irish companies. What we are seeing is people in Ireland working for multinationals are going out and setting up their own businesses. That has happened particularly in medical devices.
Six foreign medical device companies have bought medical device companies in Ireland in the last six to nine months.
Q What is the business climate like in Ireland?
A We're going through a period of adjustment, with cutbacks in government expenditures and pay levels of government employees. That has led to depressed domestic demand.
The local market is really suffering, but the internationally traded sector has expanded, driven by multinationals. Multinationals account for more than 75 percent of all exports out of Ireland.
Q On your Minnesota trip, what were some issues companies discussed with you?
A I think there's uncertainty in the global economy. There's a little bit more caution than there had been six months ago, because the markets are unsure. The earnings season is out now and some companies are doing very well and some are not.
Q With a challenged domestic market, has it been difficult to recruit companies there?
A The unemployment now is around 14 percent. There is more labor available and therefore the cost of doing business in Ireland has become more competitive. For instance, salaries in Ireland have decreased 8 percent over the last three years. At the same time, (salaries in) central European countries, like Germany and France, increased by about 6 percent.
We were the fifth most expensive in the world (for office rent) in 2006. Today, we are the 45th most expensive. The prices have gone done dramatically. That's helping win a lot of foreign direct investment.
Q What are your goals for the department moving forward?
A We have set out a five-year plan, from 2010 to 2014, to attract companies and create 105,000 jobs in Ireland. We are in the second year of the strategy and so far we're on target. We've [created] about 28,000 direct and indirect jobs.
Wendy Lee • 612-673-1712