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IDA targets US in new ad campaign
25 October 2009
IDA Ireland has launched a €2million advertising campaign in America in a bid to emphasise Ireland’s attractiveness as a place to do business.
Barry O’Leary, the agency’s chief executive, was in the US last week for meetings with senior executives of existing IDA client companies and prospective investors in Ireland.
O’Leary also appeared in several US media to ‘‘get the message out about Ireland’’ after a tough year for foreign direct investment (FDI)an d for Ireland’s international reputation.
‘‘In the first eight or nine months of this year, we got a fair pasting in the international media," said O’Leary.
He acknowledged that Ireland’s economic and financial issues had raised some questions overseas. However, he argued that those issues ‘‘don’t impact on investor criteria’’ such as the quality of the workforce, the tax rate and the ease of doing business.
As an example, he said that investment by financial services firms was holding up well, despite ‘‘the wash through of some negative news’’ in recent months.
‘‘When you’re looking at FDI, companies always have a short-list of ten to 15 items," O’Leary said. ‘‘We have to forget about all the stuff that’s going on, focus on what’s important to the client and satisfy that."
The IDA ad campaign - with the tag line ‘‘Ireland. Innovation comes naturally’’ - is designed to combat that negative news. Designed by McConnells ad agency in Dublin, it features companies such as Google and Facebook, as well as more generic messages.
The campaign is running on the Bloomberg and CNBC television channels and in business-related publications such as the Wall Street Journal, the New York Times, the Economist and Fortune magazine.
O’Leary took over the IDA at the end of 2007 as the economic boom came to an end. He said that the investment environment ‘‘continues to be very difficult’’, with foreign direct investment down by about 30 per cent globally. ‘‘It has been topsy-turvy," he said.
In recent months, thousands of jobs have been lost at IDA backed companies, including some of the biggest employers in the country. Computer maker Dell is laying off 1,900 people as it ceases manufacturing in Limerick, while Intel has cut almost 300 jobs in its first ever round of compulsory redundancies at its high-tech campus in Kildare.
‘‘This is happening around the globe and Ireland won’t be any different," said O’Leary. ‘‘These companies are cutting globally - and that really means globally."
The changed environment means that the IDA has had to alter the way it does business. While the focus shifted in recent years to high-end research projects - which often resulted in a small number of new jobs - O’Leary said the agency had gone back to basics.
‘‘When we had almost full employment, it was all about upping the quality of jobs, the salaries, etc. Now there is a recognition that bringing in actual jobs - and the number of jobs - will again become the key measure for the next number of years," he said.
That has resulted in changes at the IDA, which has about 260 staff in Ireland and abroad. ‘‘We have restructured over the last 12 months and moved about 10 per cent of our staff from non-business generation roles into business generation," said O’Leary.
The agency has also set up a team to target ‘green’ investments, and last week announced an investment by wave energy firm Vattenfall in Mayo. It has also beefed up its overseas presence, with offices in Boston and in Irvine, Orange County, California. Three people now work for the IDA in Mubai in India, and one each in Moscow and Brazil.
With the collapse in the public finances, spending at all government bodies is under scrutiny - and the jobs agencies are no exception. An Bord Snip Nua and the Department of Finance have recommended a rationalisation of the agencies, and IDA is dealing with an increased number of Freedom of Information requests about its spending, according to O’Leary.
The agency has a budget allocation of €137 million this year. About €48 million goes on running the organisation, €75 million is allocated to grants, and the remainder goes on IDA’s property portfolio.
‘‘We recognise 100 per cent that savings have to be made, but if you want to get business, you have to spend money," O’Leary said. ‘‘If we want to win more FDI, it’s going to cost money - it’s not going to walk in the door. If you’re going to convince a company to make a major strategic investment in Ireland, you have to have a voice right at the very top.
‘‘You have to invest, and that incurs a cost in money and people. The bottom line is: is IDA a cost or a profit to the state? If you look at the stock of FDI companies and the payback - one project alone with a couple of hundred jobs would equate to our budget for the year."
While O’Leary hopes to protect the agency’s budget, he does expect some rationalisation of the agencies, including the likelihood of Shannon Development being subsumed into the IDA. ‘‘As a small country with limited resources, we need to do things in as coordinated away as possible.
One FDI agency is enough; we don’t want to confuse the message," he said. It is not all gloom, though - O’Leary expects to have three to four ‘‘substantial’’ investment announcements in the coming weeks, as well as several smaller ones.
Software firm Sajan said last week it would establish its European headquarters in Dublin; this week, Facebook will officially open its Europe, Middle East and Africa headquarters in the capital.
The Facebook opening will be performed by Tánaiste and enterprise minister Mary Coughlan, who works closely with the IDA. While Coughlan has been prone to gaffes and has come in for criticism from some quarters, O’Leary said the agency had ‘‘no issues’’ with the minister, who ‘‘performs very well’’ on agency business at home and abroad.
He met Coughlan in the US last week as he continues to pursue his goal of running ‘‘the most competitive, client focused FDI agency in the world’’, despite the economic environment.
‘‘The level of competition for FDI is absolutely enormous. But business is still winnable and we just have to keep focused on what we’re doing," O’Leary said.
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