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In 2010, Ireland was in the midst of a meltdown caused by the Great Recession, and 40% of the Irish economy, worth around $70 billion, required emergency bailouts from the European Union and the International Monetary Fund.
Since then, the country's low corporate tax rate has attracted large multinational tech and pharmaceutical companies to the country, and the payments to the government have significantly increased revenue.
Ireland is expected to run a $70 billion budget surplus by 2027, but what will the recovery look like?
The Irish government now wants to expand its operations abroad, particularly in the United States.
Just last week, Irish agribusiness company ClonBio Group announced plans to invest $500 million to reopen a dormant factory in Jefferson, Wisconsin, supporting 1,000 local jobs.
Ireland is the ninth largest source of foreign direct investment into the United States, with $295 billion invested in 2022. Approximately 700 Irish companies employ more than 100,000 people in the United States.
Much of that investment was backed by Enterprise Ireland, an Irish government agency that is also Europe's most active state-run venture capital fund.
Prior to Bell's arrival, he spoke to Enterprise Ireland CEO Leo Clancy. He was in New York last week to meet with business leaders and politicians before heading to Washington to meet with President Joe Biden on St. Patrick's Day.
This interview has been edited for length and clarity.
Before the Bell: Why has Ireland been so successful in creating and exporting businesses?
Leo Clancy: I think this is because Ireland has a global awareness of business. Although we are a small island, we have benefited from huge amounts of foreign direct investment over the past few decades. Most of them came from American multinational companies. And that really gave us confidence and a global business culture from the beginning. Irish companies have to think about whether to enter the domestic Irish market, which is frankly very small, or go global right away.
What are your thoughts on future growth?
Growth has been good for us. Exports have increased over the past few years and there are significant positive tailwinds in most jurisdictions. The US is particularly strong for Irish companies. The US economy held up well. You can see this by looking at employment statistics. So despite the inflation and interest rate headwinds of the past two years, companies are still in business.
We see the euro area and the US as our biggest growth destinations. The opportunity there is a chance to be part of America's Green Revolution, the Anti-Inflation Act, and its green story. I think Irish businesses are very adept at pivoting to what other countries need and being part of the story.
Irish companies appear increasingly to be job creators in the United States.
I think it's very important for American audiences to remember that. Much of that has come from years of mergers, acquisitions, and organic growth. Glanbia Foods, an Irish company that makes American-style cheese, currently produces a quarter of the sliced cheese consumed in the United States. It is made from American dairy products that are not imported from Ireland and are processed in factories that we own in the United States, and two-thirds of our employees are in the United States as well.
I buy Kerrygold butter, an Irish brand.
Currently, approximately 80% of the butter imported into the United States comes from Ireland.
This is an amazing statistic. Why do you think the connections are so strong, especially in the US?
When we think about our connection to America around St. Patrick's Day, we think back to the diaspora we have experienced and the number of people who have had to leave Ireland to find good jobs. When I started college in the early 1990s, I fully expected to emigrate. I was able to get a job at a time when the economy was getting better and better. And I think the same is true for many people. Entrepreneurship has grown over the past 30 years and people have learned from American business culture, especially because of the strong ties to the United States.
There are many people who immigrated to the United States, absorbed the American entrepreneurial spirit, and brought it back with them. People who work in multinational companies and are used to expanding their business. I think there is a stronger connection to American business culture in Ireland than almost anywhere else in the world.
How are you preparing for geopolitical headwinds?
We have offices around the world, so we're embedded in most jurisdictions and can give you early warning of things changing. We are always concerned about matters that affect our clients, and in some cases we may become deeply involved right away. So when he left the EU in 2016, we trained most businesses within his six months on what to expect with customs regulations, for example. In short, Ireland was able to transition through Brexit very smoothly because Irish businesses were well prepared.
We are a small country, so we constantly run into trade barriers. Understanding these early on and leveraging our diplomats and our own staff to predict what the outcomes will be and helping businesses work with them is a key part for us. It would be foolish for a small country like Ireland to think that it could significantly change trade regulations and the winds of change. But what we can control is what we do with ourselves and how we react and respond. The most important thing we can do is promote the value of our business abroad. For Ireland to be a reliable trading partner, we need to do more than just send goods to the United States. We must invest in our communities and add value to the American economy. It must be consistent with U.S. goals. That's true in the US and it's true everywhere.
Federal Reserve Board meeting will be held in the United States this week. What are your thoughts on inflation and inflation at a global level?
It's been a very difficult 18 months. We've seen it become very difficult to get funding for companies, whether it's venture capital or private equity. Companies are still raising money, but it's not easy. The consensus seems to be that interest rates will fall in the future. These reductions are a good thing because our companies take on both debt and equity to grow their businesses. For example, in tax software, one of our companies announced 150 new hires in the US based on her $70 million raised to complete its US expansion. We want to do more of that, but my fear is that if interest rates don't come down, some of those ambitions will be thwarted.
Tesla is the worst performing stock in the S&P 500.Analysts say stock prices need to fall further
Elon Musk's Tesla once represented the future of car manufacturing. The future of the company itself is now in question.
The once-hot electric car maker — known as part of the so-called Magnificent Seven tech giants — is currently the worst performer in the S&P 500 this year, losing 34 points since January. It has fallen by more than %.
The story of Tesla's (TSLA) decline is well documented. The company has been plagued by safety issues and recalls, slowing growth and even being forced to cut prices. But a new report released last Wednesday by Wells Fargo analyst Colin Langan paints a darker picture than previously imagined.
Tesla is a “growth company without growth,” he wrote.
Langan predicts Tesla's growth will remain flat this year and decline in 2025 due to increased competition, disappointing delivery results and the beleaguered auto and technology company being forced to cut prices again. ing.
UBS also lowered its outlook for Tesla last week. Analysts said concerns are growing as demand for electric vehicles slows and Chinese rivals take an increasingly large share of the global market.
According to my colleague Elizabeth Buchwald, the entire U.S. housing market is about to be renovated. The final product could come with the big bonus of lower home prices.
That's the result of a $418 million settlement the National Association of Realtors announced Friday with a group of home sellers.
The settlement, which still needs to be approved by a judge, would eliminate the 6% commission that sellers had been paying for years. However, these fees are often built into the list price of the home. So if fees are lowered, home prices could also go down, experts say.
And at a time when rising housing costs are driving inflation across the country, reining in home prices could help bring price increases back to the levels Americans experienced before the pandemic.
