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This publication considers a number of indicators which shows that, in terms of FDI, Ireland has been one of the most globalised countries in the world. This section sets out to describe the impact which this globalisation has had on the Irish labour market.
Previous sections of this publication covered data on direct investment flows and associated positions. The next two sections are dedicated to presenting data on the activities of multinational enterprises. This section will present data on employment in foreign-controlled affiliates in Ireland. Where geography is provided as part of these statistics the location refers to the location of the Ultimate Controlling Parent, as opposed to the Immediate Partner Country displayed in the previous section. The subsequent section will present data on the earnings of those employed in foreign controlled affiliates in Ireland.
Although 10% ownership of the voting power is recommended as the lower threshold for FDI, the Benchmark Definition (BMD4) follows the OECD Handbook on Economic Globalisation Indicators in recommending that the Activities of Multinational Enterprises (AMNE) should be compiled for the controlled subset of foreign affiliates. The controlled subset is defined as part of the Foreign Direct Investment Relationship, as the subsidiaries of the parent. Subsidiaries are entities in which a direct investor owns more than 50% of the voting power.
This publication presents employment data based on administrative data sources, namely the Revenue Commissioners' P35L dataset of employment.
Employment, for the purposes of this section, is defined as the number of permanent employees in an enterprise in a given year. This includes both full-time and part-time employees. In order to include temporary employees and employees who commence/finish work during the year, a number of temporary employees whose cumulative insured weeks amount to a full year, are counted as one employee.
Table 3.1 shows the level and growth of total employment by foreign multinational enterprises in Ireland. The table shows modest growth on a significant base.
| Table 3.1 Total Employment in Foreign-Controlled Affiliates operating in Ireland, 2012-2015 | ||||
| 2012 | 2013 | 2014 | 2015 | |
| Numbers in employment | 297,702 | 299,870 | 301,533 | 305,952 |
| Percentage Change | .. | 0.7% | 0.6% | 1.5% |
| .. Data unavailable | ||||
Table 3.2 shows the composition of the ownership of foreign-controlled affiliates in the country. The table shows that most foreign-controlled affiliates have their majority shareholders in Europe. A significant amount of ownership also resides in American countries.
| Table 3.2 Ownership of Foreign-Controlled Affiliates operating in Ireland, 2015 | ||||
| Region of Ownership | Europe | America | Asia | Other |
| % of all Foreign Affiliates | 64.43% | 29.81% | 3.92% | 1.84% |
Figure 3.1 displays the employment which these foreign affiliates generate in Ireland by location of ownership. The graph again shows that European-controlled affiliates employ the most people in Ireland. In 2015, this group of enterprises employed 56% of all employees employed in foreign-owned affiliates. The share of employment in American-owned foreign affiliates is 40%. This share of employment is larger than the share of firm ownership; indicating that American-controlled foreign affiliates employ more per affiliate than European-controlled affiliates.
| X-axis label | America | Asia | Europe |
|---|---|---|---|
| 2012 | 116270 | 6068 | 172448 |
| 2013 | 116554 | 6460 | 174040 |
| 2014 | 117879 | 6759 | 174212 |
| 2015 | 121961 | 7043 | 174317 |
The employment in foreign-controlled affiliates, by country of ownership, is shown in Table 3.3. This table shows the countries which are responsible for the largest amount of employment in foreign-controlled enterprises. When examined on a national basis (Table 3.3), as opposed to the regional classification (Figure 3.2), foreign affiliates with voting rights residing in the United States are the single biggest employer. Employment by firms from the US has also grown steadily. This contrasts with employment by affiliates owned in the UK, which has declined since 2013.
| Table 3.3 Employment in Foreign-Controlled Affiliates by Location of Owner, 2012-2015 | ||||
| 2012 | 2013 | 2014 | 2015 | |
| Canada | 3,642 | 3,553 | 3,467 | 3,287 |
| France | 12,121 | 12,288 | 12,404 | 13,033 |
| Germany | 21,177 | 22,070 | 22,315 | 22,568 |
| Japan | 3,028 | 3,426 | 3,696 | 3,895 |
| Luxembourg | 6,934 | 6,392 | 5,382 | 5,249 |
| Netherlands | 12,992 | 13,465 | 13,426 | 12,877 |
| Sweden | 4,344 | 4,296 | 4,528 | 4,476 |
| Switzerland | 7,809 | 8,087 | 8,879 | 9,396 |
| UK | 82,703 | 83,056 | 81,971 | 80,876 |
| United States | 109,681 | 110,044 | 111,574 | 115,964 |
Table 3.4 shows the composition of the ownership of foreign-owned affiliates in the country. It shows the ownership of foreign affiliates to be well-distributed accross these sectors considered, indicating the well-diversified ownership of affiliates across activity sectors in the country.
| Table 3.4 Activity of Foreign Affiliates operating in Ireland, 2015 | ||||
| Activity of Resident Affiliate | C | G | J | K |
| % of all Foreign Affiliates | 15% | 25% | 10% | 19% |
Table 3.5 summarises the employment which these foreign affiliates generate in Ireland, by activity. It shows that the ICT sector, along with the wholesale and retail trade sector, has seen significant growth in employment.
Furthermore, where manufacturing accounted for 15% of foreign affiliate ownership, it now accounts for almost 25% of the employment in foreign affiliates. This is indicative of the scale of the enterprises operating in the sector.
| Table 3.5 Employment in Foreign-Controlled Affiliates by Activity of Resident Affiliate, 2012-2015 | ||||
| 2012 | 2013 | 2014 | 2015 | |
| Manufacturing (Section C) | 76,043 | 74,123 | 74,596 | 75,459 |
| Wholesale and retail trade (Section G) | 75,266 | 76,457 | 76,051 | 77,987 |
| Information and communication (Section J) | 34,701 | 35,231 | 36,144 | 37,533 |
| Financial and insurance activities (Section K) | 39,226 | 39,714 | 40,383 | 39,574 |
Figure 3.2 shows the accumulated FDI stock in Ireland, alongside the employment which has been created in foreign direct investment enterprises, by sector. The figure shows that manufacturing had the largest FDI stock (LHS) in 2015, and the second highest number of employees (RHS) of any NACE sectors. However, wholesale and retail, which had the lowest amount of FDI, had the highest number of employees employed of any NACE sector.
| X-axis label | FDI (LHS) | Employee Numbers (RHS) |
|---|---|---|
| Manufacturing (C) | 341.342 | 75459 |
| Wholeslae and retail trade (G) | 15.977 | 77987 |
| Information and communication (J) | 21.552 | 37533 |
| Financial and insurance activities (K) | 217.181 | 39574 |
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