Ireland eyes Brexit-triggered tech investments

Ireland accepts that it faces huge challenges as the UK leaves the EU trading bloc, but at the same time it will become more attractive to IT firms looking for an EU footprint.

A combination of Ireland’s EU membership, an English-speaking population, the ease of setting up business and a liberal immigration policy is already attracting investment in the country from tech companies, particularly from the US, and Brexit is stoking more interest.

Tech companies, including some unicorns emerging from Silicon Valley in the US, are setting up their European hubs in Ireland, said Shane Nolan, senior vice-president technology at IDA Ireland, which promotes foreign investment in the country.

“Brexit, on the whole, is a bad deal for Ireland from a trade perspective because our trade is orientated to the UK,” said Nolan. “Also, traditionally the UK saw the EU the same way philosophically as Ireland, so we are losing a major positive influence on the future of the EU.

“But where we are going to gain is on investment.”

For example, California-based payments company Stripe has just agreed to set up its European hub in Ireland, and Deloitte is to build its Emea blockchain lab in Dublin.

After Brexit, the UK will lose the benefits of EU membership. The ability to trade friction- and tariff-free with 27 other countries and having access to a wealth of talent are just two examples.

Dublin is the main focus for IDA Ireland, but it also wants to build hubs in Cork, Limerick and Galway. The main competition for Irish tech hubs is cities, said Nolan. “Up until Brexit, it would have been London and Manchester.”

Nolan added that over the last seven years, IDA Ireland’s UK equivalent had raised its game. “It has been very active in promoting the UK as somewhere to invest, but Brexit has undermined that hugely,” he said.

A large part of Nolan’s role is to support US companies entering Europe via Ireland, and there is already a lot of activity in the finance sector, he said.

“Financial services is the most high-profile industry to be affected by Brexit because the re-regulation of banks and financial businesses takes so long,” he said. “They don’t have time to wait and see what the Brexit agreement between the UK and EU is going to be.”

These companies are making moves now, said Nolan. The IDA has brought in about 28 financial institutions of various sizes and profiles since the Brexit vote, and all these were Brexit-driven, he said.

But IDA has no plans to scavenge for business from the UK, he added. “We are sensitive to our long diplomatic relationship with the UK when working with companies around Brexit and would expect them to use Ireland to complement their UK operations.”