This publication considers a number of indicators which show 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 three 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 (UCP), 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 (MNEs) in Ireland. The table shows modest growth on a significant base.
| Table 3.1 Total Employment in Foreign-Controlled Affiliates Operating in Ireland, 2012-2017 | |||||
| Year | Total MNE Employment (in thousands) | Total MNE Employment Growth % | Total Employment (in thousands) | Total Employment Growth % | Share of Total Employment Attributed to FDI |
| 2012 | 297 | .. | 1,894 | .. | 15.7% |
| 2013 | 300 | 1.0% | 1,971 | 4.1% | 15.2% |
| 2014 | 302 | 0.7% | 2,025 | 2.7% | 14.9% |
| 2015 | 304 | 0.8% | 2,085 | 3.0% | 14.6% |
| 2016 | 311 | 2.2% | 2,164 | 3.7% | 14.4% |
| 2017 | 318 | 2.3% | 2,231 | 3.1% | 14.3% |
| .. Data unavailable | |||||
Table 3.2 shows the composition of the ownership of foreign-controlled affiliates in Ireland. 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 in 2017 | |
| Regions | MNE Employment (%) |
| Americas | 40.0 |
| Europe | 56.6 |
| Asia | 2.5 |
| Other | 0.9 |
Table 3.2 shows the share of employees by global regions. 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 the country which employ more people relative to their amount of FDI (see Figure 3.4).
| Americas | Europe | Asia | |
| 2012 | 115.512 | 172.348 | 6.068 |
| 2013 | 116.554 | 174.04 | 6.46 |
| 2014 | 118.075 | 174.481 | 6.76 |
| 2015 | 119.645 | 175.105 | 7.047 |
| 2016 | 123.851 | 177.238 | 7.57 |
| 2017 | 127.319 | 180.262 | 8.029 |
Figure 3.1 illustrates steady employment growth in business from these regions.
| Table 3.3 Numbers Employed in MNEs by Country | thousands | |||||
| 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
| United States | 108.9 | 110 | 111.7 | 113.5 | 117.4 | 120.8 |
| United Kingdom | 82.6 | 83.1 | 82.1 | 80.9 | 80.6 | 80.9 |
| Germany | 21.2 | 22.1 | 22.3 | 22.6 | 23.9 | 24.9 |
| France | 12.1 | 12.3 | 12.4 | 13 | 13.3 | 13.6 |
| Netherlands | 13 | 13.5 | 13.4 | 12.9 | 12.9 | 12.9 |
| Switzerland | 7.8 | 8.1 | 8.9 | 9.4 | 10.3 | 11 |
| Luxembourg | 6.9 | 6.4 | 5.4 | 5.3 | 5.5 | 5.7 |
| Sweden | 4.3 | 4.3 | 4.5 | 4.8 | 4.8 | 5 |
| Canada | 3.6 | 3.6 | 3.5 | 3.4 | 3.7 | 3.7 |
| Japan | 3 | 3.4 | 3.7 | 3.9 | 4.2 | 4.6 |
In Table 3.3, the top ten employer countries in Ireland are ranked by the amount of people they employ in the country. The United States has a large lead as the biggest employer of people in Ireland. While the United Kingdom's, the Netherlands' and Luxembourg's employment figures have all fallen during the period described, gains have been made in employment from other countries such as the United States, Germany and Switzerland.
| MNE Employment by Country | |
| United States | 120.823 |
| United Kingdom | 80.947 |
| Germany | 24.926 |
| France | 13.601 |
| Netherlands | 12.917 |
| Switzerland | 11.012 |
| Luxembourg | 5.733 |
| Sweden | 5.024 |
| Canada | 3.733 |
| Japan | 4.567 |
The employment in foreign-controlled affiliates, by country of ownership, is shown in Figure 3.2. This graph shows the countries responsible for the largest amount of employment in foreign-controlled enterprises; it shows US firms employ the largest number of people in Ireland. Employment by firms from the US has also grown steadily, as seen in Figure 3.3, employment by US firms is up 10% between 2012-2017. This contrasts with employment by affiliates owned in the UK, which has declined since 2013.
| Table 3.4 Numbers Employed in MNEs by Sector | thousands | ||||||
| 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Change 2012-2017 | |
| Manufacturing | 76.2 | 74.1 | 74.7 | 71.7 | 76.6 | 78.2 | 2.0 |
| Retail | 74.6 | 76.5 | 76.2 | 76.7 | 76.6 | 76.9 | 2.3 |
| Information and Communications | 34.6 | 35.2 | 36.3 | 36.0 | 37.4 | 38.6 | 4.0 |
| Financial and Insurance Activities | 39.5 | 39.7 | 40.4 | 43.7 | 41.2 | 41.9 | 2.4 |
| Scientific and Technical Activities | 11.6 | 13.3 | 13.5 | 13.5 | 14.7 | 14.8 | 3.2 |
| Admin and Support Services | 31.8 | 31.1 | 30.5 | 31.8 | 33.5 | 35.2 | 3.4 |
Table 3.4 shows that the manufacturing and retail sectors employ the most number of workers for FDI associated firms set up in Ireland.
| Table 3.5 Percentage Change in Employment by Sector, 2012-2017 | |
| Industry Activity | Employment (% change) |
| Manufacturing | 3% |
| Retail | 3% |
| Information and Communications | 12% |
| Financial and Insurance Activities | 6% |
| Scientific and Technical Activities | 28% |
| Admin and Support Services | 11% |
Table 3.5 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 lot of jobs at more advanced levels of global value chains: the information and communications sector, scientific and technical activities sector and administration and support services sector all show a double figure percentage change in growth.
| Employment 2012-2017 (% change) | |
| Japan | 50.8256274768824 |
| Switzerland | 41.0167755154309 |
| Germany | 17.7142857142857 |
| Sweden | 15.6537753222836 |
| France | 12.2102136787394 |
| United States | 10.9139479 |
| Canada | 2.49862712795167 |
| Netherlands | -0.454685573366215 |
| United Kingdom | -2.02611926749858 |
| Luxembourg | -17.3204499567349 |
In Figure 3.3, the change in FDI associated employment is shown by investor country. It can be seen that Japan and Switzerland have been increasing their Irish employment levels at a faster rate than most other countries from the period 2012-2017. Luxembourg has decreased its employment in Ireland at the highest rate of any country over the period described.
| United States | United Kingdom | Germany | |
| Manufacturing | 54.714 | 8.591 | 6.683 |
| Retail | 19.370 | 56.610 | 12.802 |
| Information andCommunications | 30.519 | 4.510 | 3.828 |
| Financial andInsurance Activities | 19.548 | 10.171 | 3.760 |
| Scientific andTechnical Activities | 9.919 | 5.053 | 0.629 |
| Admin andSupport Services | 12.613 | 18.678 | 0.733 |
In Figure 3.4, the main three parent countries of employers in Ireland are described via the sectors they predominantly operate in. The United States is by far the biggest employer in the manufacturing sector and the information and communications sector while the United Kingdom dominates the retail sector.
| Share of FDI (left axis) | MNE Employees in thousands (right axis) | |
| Manufacturing | 274.21451586 | 78.192 |
| Retail | 43.303357 | 76.880 |
| Information andCommunications | 36.210639829 | 38.622 |
| Financial andInsurance Activites | 232.66557935 | 41.939 |
| Scientific andTechnical Activities | 96.79036555 | 14.812 |
| Admin andSupport Services | 58.782688746 | 35.160 |
Figure 3.5 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 manufacturing had the largest FDI stock (left axis) in 2017, and the highest number of employees (right axis) of any activity sector. However, the retail sector, which had the lowest amount of FDI, had the second highest number of employees of any sector.
Next Chapter >> Average Wages in FDI Enterprises
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