marketing
in associationwith
Retail revolution
One type of foreign direct investment that meritsmore attention in Ireland is that by foreign
retailers.Mary Lambkin takes a look at themini boomin retail FDI in recentmonths
We are all well aware of how much Ireland depends on foreign direct investment (FDI) as a source of jobs. Currently, 133,000 jobs in our economy have been provided by foreign firms and they are also responsible for 90pc of our exports. Almost all discussions about FDI, however, focus on what is known as ‘agency-assisted’ employment, whichmeans that it is supported by the IDA or Enterprise Ireland. Such investment usually pertains to manufactur- ing firms such as Hewlett-Packard, Intel or Wyeth, and internationally traded services such as Microsoft, Google and Facebook. Less attention is paid to those international retailers
who come here to open up new stores or expand their operations. Yet, arguably, these kinds of investors do more for job creation than many of the more highly publicised cases of FDI. They are labour intensive and they hire peo- ple with low levels of skills who find it particularly difficult to obtain employment in other fields. They also bring much-needed capital from their parent firms, which they invest in fitting out their new stores,
56 Irish Director Winter 2010
financing inventory, paying wages and other costs, like advertising. Furthermore, there has been a mini boom in FDI by
major international retailers in recent months, which should be celebrated far more than it has been because it offers considerable employment potential at a time when it is badly needed.
Employment in retailing Retail sales, including the motor trade, account for about half of all consumer spending (the motor trade on its own accounts for 20pc and other retailing for 30pc) and consumer spending accounts for about half of our GDP, making it highly important to the health of the overall economy. Employment in wholesaling and retailing grew steadily
through the years of the Celtic Tiger, up by exactly 100,000 from 1994 to June of this year. At the peak in mid-2008, there were 307,000 people employed in the wholesale and retail sector. This had fallen to 269,000 by June of this year,
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