Morning business news - May 23

Thursday 23 May 2013 14.32
Morning business news with Emma McNamara
Morning business news with Emma McNamara

IRELAND HAS OTHER ATTRACTIONS FOR FDI APART FROM CORPORATION TAX - Apple and Ireland are still making the news this morning, after Tuesday's US Senate hearing and yesterday's summit in Brussels on tax.

Kevin Gardiner of Barclays - the man responsible for coining the The Celtic Tiger phrase - says that some of Ireland's past economic success was down to foreign direct investment, which was a very big part of the Irish growth story. That was attracted not by the subsidiary taxes that are causing difficulties at the moment, he says, but by the low rate of mainstream corporation tax.

In relation to the current debate about where companies are registered and tax resident, he says that as long as the "centre of gravity" of their economic performance remains within Ireland, the mainstream corporate tax rate is what matters. He says he does think that was going to disappear, adding that FDI will remain a big part of the Irish growth story.

Mr Gardiner says that tax is not the only driver of FDI, pointing out that one of the things that politicians across the rest of the European area often forget is that Ireland has a well-educated, flexible and English speaking workforce - that helps tremendously for a US company hoping to establish a toehold in Europe.

Kevin Gardiner says the Irish economy is probably the best placed for a recovery in comparison to the rest of the euro zone. He says the recovery is going very very slowly, but less painfully than is the case is other peripheral economies. Domestic incomes and consumer spending have not yet felt the benefits, he says, but the inward investing sector and the exporting sector and Irish GDP is creeping up a little, whereas much of the rest of the euro zone's is still shrinking.

He says that calling Ireland The Celtic Tiger had nothing to do with house prices or cheap credit, it had a lot to do with this inward investment. Saying that he has no new name for Ireland, he adds that "Ireland doesn't need any more clichés."

Web Summit founder Paddy Cosgrave says that while tax is certainly one of a range of reasons companies set up bases in Ireland, he also says the"cluster effect" is very important. He says that when Apple came to Ireland all those years ago there was not a huge number of other technology companies here. Fast forward 30 years, he says, and you have dozens of companies.

"If I'm a fast-growing technology company moving from Silicon Valley to a location in Europe, one of the biggest challenges is hiring talent to build out my organisation or my headquarters. In Dublin - because of Google and Facebook and a number of others - there's a huge pool of talent ready to be hired and Dropbox and Twitter have done that,'' he states.

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MORNING BRIEFS - Retail Ireland, which is part of employers group IBEC, says retailers are now focusing more on their online operations. It says the Irish online market spend is €4.1 billion, and that is predicted to grow to €21 billion by 2017. But it says there are barriers to this expansion like delivery costs, set-up costs and poor broadband speeds. Its Online Retailing Survey of 500 stores with 18,000 employees, shows that 84% of them have an online presence and 64% of those intend to upgrade that presence in the next 18 months.

*** A survey by Fastract to IT, or FIT, says firms here are dealing with major skills shortages in areas like mobile technologies, games design, web development, networking and infrastructure, software development and project management. It says there are more than 4,500 immediate vacancies in the ICT sector in Ireland and that the skills for these jobs could be learned through programmes from 6 to 24 months' duration.

*** Twitter is to introduce an optional two-step login for users after recent hacks on high-profile accounts like the Financial Times, Associated Press and the BBC's weather account. One tweet, which was sent from AP's hacked account, said the US President Obama had been injured and this saw American shares plummet in afternoon trade.

*** Amazon has plans to build three giant biodomes in downtown Seattle as the centrepiece of its new headquarters in the city. The online retailer bought three city blocks there for $207.5m last year and plans to build two office blocks as well as the greenhouses. The biospheres will be between 80ft and 95ft high and create a "more natural, park like setting", according to the architects, where workspaces will be surrounded by shrubbery and fully grown trees.