'If the EU wants to subsidise key industries,' argues John FitzGerald, 'any such subsidy should come from the EU, not national governments, and be independent of where a plant is located within the EU.'
The value of Intel’s activity on the ground in Leixlip has been even more important than the corporate tax take
The benefits to Ireland have been very substantial. As with other multinationals, corporation tax has been important. However, unlike some of the other big corporation taxpayers, the value of Intel’s activity on the ground in Leixlip has been even more important than the corporate tax take. The wage bill, with almost 5,000 highly skilled employees, is clearly of great significance.
The indirect benefits for Ireland of Intel’s operations here have also been also very substantial. Today there are more former Intel employees than there are people currently employed at the Leixlip plant. Many of them have gone on to apply the skills that they acquired working for Intel in other businesses, spreading expertise across the economy.
The initial investment by Intel, and the successive massive upgrades, have been largely funded by the company itself. European Union rules on state aid precluded the kind of industrial grants that were normal in the 1980s. When the IDA sought to attract Intel to Ireland in 1990, it was not facing competition from subsidies offered by other EU countries.However, things are changing globally, with certain industries, including computer chips, seen as important strategic assets.
Increasingly, production of chips has been located in South Korea and Taiwan, with Intel being the most important US/European supplier. For security reasons, with the growing global importance of China, the US wants to ensure that computer chips are produced at home. To this end, the US now offers massive government support for such investment.
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