28 June 2021
By Roger Jones
Suffice it to say, Cork is a city that punches well above its weight. This is especially true when one looks at the dense concentration of billion-dollar companies that have chosen to set up shop in this humble town.
Apple, Dell, Qualcomm, Amazon, Johnson & Johnson, VMware, Boston Scientific, and Logitech are just some of the globally recognised corporate titans that operate in the rebel city. The presence of these companies, many of which only moved here within the past decade, has profoundly changed the fabric of the city, bringing ideas, culture, and prosperity from across the globe.
But what happens next? Much of the reason why these huge companies moved to Cork in the first place was due to Ireland’s FDI-friendly investor climate and rock-bottom tax rates. However, there are signs on the horizon that this honeymoon between Ireland and big tech is due to end, something that could well put an end to this strange period in Cork’s history.
Two of the main draws for global tech companies setting up shop in Ireland have always been the virtually non-existent corporate income taxes and the famously light-touch regulatory model applied by authorities. However, both of these could change soon.
The European Commission has been making major moves to ensure that Ireland forces big tech to pay more in tax, arguing that Ireland’s regime is undermining EU Competition Policy.
Meanwhile, tech companies like Facebook and Apple, both of which have their EU bases in Ireland, are under increasing pressure from the EU to beef up data privacy, strengthen content moderation, and support digital news outlets. Whatever the EU decides in this regard, Ireland will have to play ball.
Silicon Valley and Wall Street’s fortunes will be key
Of course, the continued presence of some of America’s largest companies in Cork may also depend on how they perform in the coming months and years. While many of these companies have seen their revenues, profits, and share prices explode in the past year, this is not guaranteed in the future.
As the latest US financial news from the market trading and analysis platform 1Market shows, 2021 has seen historically sluggish growth for many of these companies. The S&P 500 and NASDAQ are down, as are many of the US giants that have a home in Cork. If things don’t turn around, overseas offices may well be the first thing to face the chop.
A friendly White House helps
One thing that Cork and Ireland definitely have going for them is the person in the White House. President Joe Biden has made no secret of the fact that he cherishes his Irish roots.
This is something that analysts in both Dublin and in Washington DC have predicted will translate into an investment and FDI boom for Ireland. If the White House decides that Ireland is worthy of special consideration in the realm of investment, then it will be jobs in Cork that will probably benefit from this.
What the future holds for the corporate titans that call Cork home remains to be seen. Although the economic outlook is uncertain, it’s clear that Cork has a lot going for it beyond low taxes, not least the deep pools of local talent.