Multinational-heavy sectors such as pharma, tech and media contributed more to the Irish economy than domestic sectors for the first time ever in 2020.
According to figures from the Central Statistics Office, published yesterday, the value of the multinational sector soared last year while domestic firms foundered.
Sectors where foreign multinationals are dominant - including publishing, computing and chemicals – grew by 23.1pc last year, in terms of gross value added (GVA).
Sectors dominated by smaller, domestic companies – including administrative services, construction, agri-food and retail – saw an 8.7pc decline in GVA terms.
GVA measures a sector’s total contribution to the economy in terms of sales and costs, not adjusted for wages, interest, taxes or subsidies.
The CSO figures show that sectors dominated by foreign-owned multinationals accounted for 52.5pc of Ireland’s overall GVA in 2020, up from 45.1pc in 2019 – making up a greater share of the economy for the first time.
That equates to €186bn for the multinational sector and €168bn for other sectors, adding up to more than €350bn in real GVA terms – the first time the economy has reached that level.
The multinational sector is coming under renewed scrutiny as agreement nears on a global deal that could see a share of Ireland’s corporate tax take farmed out to other countries and a new 15pc minimum rate set.
Neil McDonnell, the head of Irish small business association, ISME, told the Irish Independent that domestic firms need a capital gains tax cut to remain competitive.
Caitriona Allis, the head of the Association of Chartered Certified Accountants, told a webinar this week that consumers have a responsibility to shop local.
“Our recent economic confidence survey highlighted the rising economic confidence in the economy which is reassuring as we move through the recovery phase,” she said.
“We all have a significant role to play in the recovery to ensure that we continue our upward trajectory of growth. Society must support local business and thus create the right environment for our business leaders to be ambitious and flourish.”