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Ireland Inc's salesman in chief
Richard Delevan



FIVE years ago, Sean Dorgan must have thought he'd gotten his dream job at the wrong time. After 22 years in the civil service and three as head of the Institute of Chartered Accountants, his appointment to the IDA was announced in September 1998.

The previous IDA chief, Kieran McGowan, had undertaken a good news roadshow that lasted eight years, the final two with then-Tainaiste Mary Harney, pictured together at photocalls for one jobs announcement after another. Even before he was in office, it seemed Dorgan would be destined to preside over job losses, not gains.

Dorgan recalls that one of the first crises he faced at the IDA was a major job loss at Apple, which saw its total of manufacturing jobs in Cork fall from 1,000 to just 400. The by-now familiar shift to lowest-cost manufacturing in Eastern Europe and East Asia and outsourced, constantly shifting global supply chains was a new phenomenon then and quite a shock.

It was a test, Dorgan said last week, of our ability to adapt. For the IDA, the Irish political system and Ireland's reputation with future potential investors. Few countries would fail to welcome jobs as they are created. But most countries wouldn't be so happy to see them go, whatever of niceties about 'moving up the value chain'. Witness trade union reaction to job losses in Belgium, France or even Britain in auto manufacturing or other heavy industry. Global corporations were transforming. Could Ireland transform with them?

"Apple had huge success with iPods and other new products, " said Dorgan. "Today they have 1,500 people in Cork, of whom 400 people are still in manufacturing. The new jobs are in logistics, data support, treasury, things that hadn't been in Cork in 1999, employing a lot of people, usually at a much higher rate of pay. That transformation was happening and Ireland was capable of adjusting."

There were other losses, even before the global downturn exacerbated by the 9/11 terrorist attacks. A loss of 750 jobs at Motorola in Swords, hundreds of jobs at Gateway, 165 at Tellabs in Limerick. And more.

The picture is much different in recent weeks. At the press conference last week announcing the creation of some 200 highly coveted research and development jobs by Cisco in Co Galway, the current minister of enterprise, trade and employment Micheal Martin had a permanent grin as he rattled off the recent spate of IDA jobs announcements . . . French pharmaceuticals firm Servier investing 184 million in a manufacturing plant in Co Kilkenny and expanding its operations in Arklow; Co Wicklow, pharma giant Merck in Clonmel; some 500 new jobs for Google's EMEA headquarters on Barrow Street in Dublin.

And, the minister smiled at Dorgan down the table with an expression like a child who has sneaked a peak into Santa's sack, "more to come before Christmas."

Why the optimism? "The minister had just taken some proposals to Cabinet, " Dorgan explained in his sixth-floor IDA office on Wilton Place overlooking the Grand Canal. He effortlessly dodges questions about what sort of investments they might be.

Dorgan is unfailingly polite but relentlessly on message, qualities that have served Ireland well during his term as chief executive, which is about to enter its ninth year.

He credits the entire IDA team of 270 employees with the string of recent successes . . . brushing aside the notion that he's a globe-trotting closer, seducing investment from the biggest names in technology, pharmaceuticals and financial services with the Ireland story and besting rivals in Israel, Switzerland or accession-state EU countries.

He only spends 4-6 weeks a year on the road, he says, and very rarely is the one closing the deal.

He also credits a larger, unofficial sales force for Ireland Inc . . . the rest of us.

"We had the governor of Arizona here not too long ago. When her team went back home they wrote articles in the Arizona Republic that remarked, 'even Irish taxi drivers understand the need to move into research, '" Dorgan said. "People are asking how we got such a wide level of understanding about what it is we're trying to do."| The short answer, of course, is those very jobs announcements.

Every time the IDA issues an annual report disclosing how many jobs have been gained or lost at IDA grant-supported firms it is reported in terms of net gain or loss. It's a measure that's transparent and understandable to everyone.

But as Ireland moves towards attracting R&D jobs, the total number of jobs created per announcement will be fewer. While the jobs have a cumulative effect of building up a base of high-skilled employment that are less easily transferred than, perhaps, manufacturing jobs, they also may not provide an overwhelming amount of jobs for Irish employees.

A majority of the jobs created at Google, for example, will go to non-Irish employees, sources said. Dorgan doesn't dispute this, but said it's not something to be concerned about. "They'll get well-qualified people in, and that's great. Google needs native speakers for the jobs it's creating."

For the critical mass of PhDs in science and engineering required to staff world-class R&D in IT or pharmaceuticals, it will take a generation to build a generation of Irish graduates with those qualifications. In the meantime, Science Foundation Ireland (SFI) is serving as a sort of uber-recruiter to make Ireland the Real Madrid of R&D, attracting the best and brightest no matter where they're from.

Again, the prospect that many of the jobs the IDA is attracting to Ireland will go to non-Irish employees is seen as a positive.

"It's enriching us in all sorts of ways . . . economically, culturally, socially. We're winning business because of the talent that's here."

There are other issues that add challenges.

The inability to offer a straight grant to Intel to support its 2005 1.6Bn investment in Lexlip was a watershed. The new year will bring the end to the IDA's ability to offer employment-support grants in Dublin, Kildare, Meath and Wicklow.

While they will still be able to offer those grants in the border, midlands and west region and the southeast, Dorgan says the IDA has shifted its focus to R&D supports, which can be offered anywhere in the country.

Elections this month in the US may also be a harbinger of future challenges, if a Democratic-controlled US Congress considers changes to US tax laws that restrict the freedom of US-owned companies to lower their effective rate of tax by taxing revenues in other juridictions . . . i. e. ones like Ireland with its 12.5% corporate tax rate. Ireland's determination to keep Ireland's special tax advantage over its EU neighbours was underscored Thursday by finance minister Brian Cowen, speaking to the American Chamber of Commerce.

Dorgan remains confident, however, that the US . . . as the biggest beneficiary of globalisation . . . won't cut off its tax nose to spite its face.

"Are we concerned about political developments? There's always a threat, always a possibility. Any sensible political system in any advanced country understands that business organises its affairs to minimise tax.

US business in particular needs to operate globally. If the US political system were to say to us companies we will tax you heavily for all your global business, they would be at a competitive disadvantage."

"So if the US were to hugely change its tax rules so that US corporations could not make decisions that benefit themselves overseas, it would be to the disadvantage of the US. We think US corporates have sufficientfimpact in Washington to significantly reduce the potential threats that are always there."

Dorgan's one oft-expressed worry is that Ireland will not be able to improve its infrastructure and skills base fast enough . . . he has criticised Dublin Airport and made warning noises about the educational system . . . but even there his overall tone is upbeat.

With Dorgan now in the job as long as his predecessor, there might be a temptation to ride the current string of positive news and leave on a high note. But Dorgan is, on this as with any other question he doesn't want to answer, amiably indirect.

"Who knows what the future holds?"

You get the sense that if anyone does, it's Dorgan.

CV

The Profile: IDA chief Sean Dorgan
SEAN DORGAN
Age: 55
Education: Cork and Killarney; UCD Bachelor of Commerce and Masters in Economics
Family: Married with four sons aged 17-26. One has followed in his footsteps at the civil service, two are travelling and one is still in school.
Career:1999-present . . . IDA chief executive 1995-1998 . . . chief executive, Institute of Chartered Accountants in Ireland 1976-1998 . . . Civil Service, rising from broadcast section with oversight of RTE at Department of Posts & Telegraphs, rising to top civil servant at Department of Industry and Commerce and Department of Tourism and Trade.
Demeanor: Calm and disciplined Hobbies: Reading modern history. Last read, Fall of Berlin by Antony Beevor




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