The introduction of this publication displayed a number of indicators which showed that, in terms of FDI, Ireland is 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 following six sections are dedicated to presenting data on the activities of multinational enterprises (AMNE statistics).1 This OECD explanatory note, details the differences between FDI and AMNE statistics, explaining: "FDI statistics cover both control (>50% ownership) and influence (between 10% and 50% ownership) relationships while AMNE statistics cover only control relationship".
Where geography is provided as part of these statistics the location refers to the location of the ultimate controlling parent (UCP), as opposed to the immediate partner country displayed in the previous section. This section will present data on employment in foreign controlled affiliates in Ireland. The next sections will present data on the earnings of those employed in foreign controlled affiliates in Ireland, their levels of education, their nationalities, the role of gender, and finally a regional analysis of FDI employment in Ireland i.e. where employees of FDI enterprises are located in the country.
| Table 3.1 Irish and FDI Associated Employment | |||||
| Total Employment (in thousands) | FDI Employment (in thousands) | FDI Employment as % of Total Employment | Total Employment (% change) | FDI Employment (% change) | |
| 2012 | 1,894 | 299 | 15.8% | .. | .. |
| 2013 | 1,971 | 308 | 15.6% | 4.1% | 3% |
| 2014 | 2,025 | 321 | 15.9% | 2.7% | 4% |
| 2015 | 2,085 | 340 | 16.3% | 3.0% | 6% |
| 2016 | 2,164 | 352 | 16.3% | 3.7% | 4% |
| 2017 | 2,231 | 366 | 16.4% | 3.1% | 4% |
| 2018 | 2,281 | 383 | 16.8% | 2.3% | 5% |
| .. Data unavailable | |||||
As seen in Table 3.1, FDI associated firms have been employing an increasing number of people in Ireland over the period described. In 2018, employment by FDI associated firms rose by approximately 5%, with around 17,000 new jobs being added to the Irish economy.
| Total Employment (left axis) | FDI Employment (left axis) | FDI as % of Total Employment (right axis) | |
| 2012 | 1893.6 | 298.985 | 15.7892374313477 |
| 2013 | 1971 | 308.064 | 15.6298325722983 |
| 2014 | 2025.2 | 321.387 | 15.8693956152479 |
| 2015 | 2085.4 | 339.755 | 16.2920782583677 |
| 2016 | 2163.5 | 351.701 | 16.2561127802172 |
| 2017 | 2230.8 | 365.903 | 16.4023220369374 |
| 2018 | 2281.3 | 382.549 | 16.7689036952615 |
Figure 3.1 gives a visual representation of the data in Table 3.1. It shows the rising trend of FDI associated employment as a percentage of total Irish employment.
| Table 3.2 Employment Growth by Region of Ultimate Investor, 2012-2018 | % | |||
| Americas | Europe | Asia | Africa | |
| Employment Growth | 37.4 | 20.8 | 58.5 | 43.8 |
Table 3.2 shows the growth in employment by global regions. Asian and African ultimately controlled firms have increased their employment more than American of European firms over the period described. However, Asian and African ultimately controlled firms have a much lower share of the total associated FDI employment as illustrated in Figure 3.2.
| 2018 | |
| Europe | 220.336391593873 |
| Americas | 148.229403405392 |
| Asia | 12.308353216933 |
| Africa | 1.67485178380194 |
Figure 3.2 shows Irish FDI associated employment by the region of ultimate investment. Although the United States contributes the most to Irish FDI, European firms ultimately hire more people; this is due to the higher proportion of European retail firms in Ireland which employ more people relative to their amount of FDI (see Figure 3.6).
| FDI Employment by Ultimate Ownership | |
| United Kingdom | 87.516 |
| Germany | 26.491 |
| France | 20.768 |
| Switzerland | 18.407 |
| Netherlands | 11.462 |
| Sweden | 6.375 |
| Luxembourg | 6.223 |
| Denmark | 4.815 |
Figure 3.3 shows employment by the country of the ultimate controlling parent for Europe. Firms with ultimate ownership in the United Kingdom are a significant employer of people in Ireland.
| FDI Employment by Ultimate Ownership | |
| United States | 132.307 |
| Canada | 8.128 |
| Japan | 4.178 |
| India | 2.377 |
| China | 1.561 |
| Hong Kong | 1.532 |
| South Africa | 1.505 |
Figure 3.4 shows employment by the country of ultimate controlling parent for extra European firms. Firms with ultimate ownership in the United States employ the greatest amount of Irish people as shown between Figure 3.3 and 3.4.
| FDI Employment Growth by Ultimate Ownership | |
| India | 178.990610328638 |
| Hong Kong | 75.4868270332188 |
| Switzerland | 66.8207359071959 |
| Canada | 66.7282051282051 |
| Japan | 46.0328556448794 |
| South Africa | 45.5512572533849 |
| France | 37.2274349147615 |
| Germany | 35.9628413056867 |
| United States | 34.1787941787942 |
| China | 29.4361525704809 |
| Netherlands | 28.1386249301286 |
| Sweden | 26.0628831322919 |
| United Kingdom | 9.48395571401764 |
| Denmark | -3.58430116139367 |
| Luxembourg | -11.4289780814119 |
In Figure 3.5, the change in FDI associated employment is shown by ultimate investor country. Firms with investment from India, Hong Kong and Switzerland have been increasing their Irish employment levels at a faster rate than most other countries from the period 2012-2018. Firms with investment from Luxembourg and Denmark have decreased their employment in Ireland.
| Table 3.3 FDI Employment by Sector, 2018 | ||
| Employment (in thousands) | % Change 2012-2018 | |
| Manufacturing | 93.7 | 20% |
| Retail | 90.8 | 17% |
| Information and Communication | 50.2 | 51% |
| Finance and Insurance Activities | 44.3 | 22% |
| Scientific and Technical Activities | 19.6 | 69% |
| Administrative and Support Services | 39.7 | 31% |
Table 3.3 shows that the manufacturing and retail sectors employ the greatest number of workers among FDI associated firms. It also illustrates the change in employment across the various sectors of FDI firms in Ireland. It can be seen from these figures that Ireland is attracting a greater level of employment at the upper levels of global value chains: the information and communication sector and scientific and technical activities sector.
| Inward FDI Positions (left axis) | FDI Associated Employment (right axis) | |
| Manufacturing | 314.6021416 | 93.715 |
| Retail | 43.830943622 | 90.769 |
| Information and Communication | 116.59437786 | 50.174 |
| Finance and Insurance Activities | 232.25180838 | 44.279 |
| Scientific and Technical Activities | 103.22247764 | 19.626 |
| Administrative and Support Services | 60.619608718 | 39.691 |
Figure 3.6 shows the accumulated FDI positions in Ireland, alongside the employment which has been created in foreign direct investment enterprises, by sector. The figure shows that the manufacturing sector had the largest FDI positions (left axis) in 2018, and the highest number of employees (right axis) of any NACE sectors. However, retail, which had the lowest amount of FDI, had the second highest number of employees of any NACE sector.
Footnotes
1Although 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.
Next Chapter >> Average Wages in FDI Enterprises
