Danger Signals For Foreign Investment

American Group Warns Of High Costs And Skill Shortages In Ireland

By Colm Heatley

Ireland must address its high cost base if it wants to continue to attract new foreign direct investment, the American Chamber of Commerce in Ireland has warned.

The chamber, which represents more than 600 US companies in Ireland, says US firms are increasingly looking elsewhere to invest because of the high cost of operating in Ireland.

Dr Fraser Logue, President of the Chamber, said Ireland must also address workforce shortage, improve its infrastructure and invest in the knowledge economy to retain a competitive edge.

"In a recent survey of US firms operating in Ireland some 43% indicated that Ireland was no longer a preferred location for further investment, while 41% indicated that Ireland was not as attractive a location for investment as when companies first set up," said Dr Logue.

Dr Logue also said that around 25% of US firms have indicated that investment in Ireland has already been lost because of either high labour costs or skills shortages.

The chamber is currently preparing a submission on the new National Development Plan which will cover the period between 2007 to 2013 and will be presented to the government next week.

Among its major recommendations are that two hour business access by roads to major airports should be completed by 2010.

Such a deadline would entail a major undertaking by the government to improve Ireland's roads, particularly in the west and south west.

The chamber says this can be done if the National Roads Authority build higher capacity roads to dual carriageway standard ahead of the timeframe envisaged in Transport 21.

The submission also calls on the government to improve broadband access in Ireland.

It calls for 100% coverage by 2008 and the immediate opening up of local loops. On the issue of labour shortages the chamber calls for the use of tax credits to assist up to 30,000 people to secure third level qualifications, with priority attached to science and technology