Stephen Anderson, senior commercial officer with the U.S. Commercial Service in Dublin, explains why Ireland's economic slump makes it an attractive location for U.S. companies.

For overseas investors, the recession brought Ireland back to earth, Stephen Anderson, senior commercial officer with the U.S. Commercial Service in Dublin, told GlobalAtlanta on a recent visit to Atlanta.

In the 1990s, Ireland attracted billions of dollars in foreign investment, thanks to its 12-percent tax rate and the low cost of doing business there.

But the boom led to a bust. Ireland started losing its advantages as the cost of commercial property, housing and wages made it increasingly more expensive to do business there. U.S. computer company, Dell Inc. and Japanese semiconductor manufacturer NEC Electronics Corp. are among the companies that closed manufacturing facilities in Ireland. 

Those losses combined with the collapse of the housing market and a banking crisis, have produced an unemployment rate in Ireland that now tops 13 percent.

That makes Ireland once again an attractive location for foreign investment, said Dr. Anderson.

“What we’re seeing is a second wave,” he said. “It’s because of the rents dropping and the costs going lower.”

U.S. companies Paypal Inc., and Texas Instruments Inc. and French company Alcatel-Lucent are among the large corporations that have announced expansions or have opened new facilities in Ireland in recent weeks.

“This is the time to think about Ireland,” said Dr. Anderson, who spoke at a trade seminar April 30 in Atlanta sponsored by the U.S. Commerce Department and Regions Bank.  

Kevin Conboy, president of the Atlanta chapter of the Ireland Chamber of Commerce in the United States, agreed that Ireland got expensive for overseas investors during the boom.

“It went from a country that attracted investment because of its low costs to a country that attracted investment despite its high costs,” said Mr. Conboy.

The Irish economy is still hurting, particularly its real estate sector, the chamber president said.

“The real estate market there is more difficult than it is here,” he said. “The fall has stopped. The country is recovering. But it’s a difficult and challenging time.”

A result of the down economy is that “the cost issue for Ireland is quickly getting back in line,” Mr. Conboy added.

As its struggles to recover, one advantage Ireland has is membership in the eurozone, the 16 countries that have adopted the euro as their currency, Dr. Anderson said. This allows companies to use Ireland as a launch pad for the rest of Europe.

“When you do your pricing, your calculations, all the work to get set up, you just do it in Ireland and then you’re good for the rest of Europe,” he said. 

Although Ireland is a small country, with only 4.2 million people, it is possible for even small U.S. companies to sell  products there, Dr. Anderson said. The U.S. Commercial Service, through its Gold Key Service, will help companies break into the market, he said.

Companies interested in exporting to Ireland would fill out a questionnaire and submit a business plan. If the Commercial Service deems the company ready to export, it would conduct a survey of the Irish market to evaluate whether it would be valuable for the U.S. company to visit. If so, the Commercial Service would then set up a series of meetings with reliable companies that might be interested in buying or distributing the product.

“We would typically set them up in a business center so that they can have a day-long set of meetings in Dublin,” said Dr. Anderson. “We do a careful screening before we set up meetings. In the best case, the U.S. company comes away with a partner to work with in the Irish market.” 

The Commerce Department offers the Gold Key service in countries across the world.

“It’s really a remarkable service that a lot of smaller businesses should take advantage of,” Mr. Anderson said.

President Obama earlier this year announced a goal of doubling U.S. exports in five years. Currently, only 1 percent of the 30 million companies in the United States export their products, said U.S. Commerce Secretary Gary Locke, speaking in Atlanta in February.

After leaving Atlanta, Dr. Anderson attended a meeting in Florida with 27 other senior U.S. commercial officers stationed in Europe to discuss increasing exports.

Overseas investors are starting to show increased interest in Ireland but the country still has a long way to go toward recovery, said Mr. Conboy, the chamber president.

“I haven’t seen anything I would describe as a wave,” of investment, Mr. Conboy said. “But I am not on the ground there and one can hope for more activity as the U.S. economy recovers.”

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