Cost competitive places: the winners and losers in the global flows of foreign direct investment

Abstract

In the early days of 2009 the city of Limerick in the mid-west region of Ireland was dealt a massive blow by the PC manufacturer Dell. After months, if not years of speculation, the company had finally decided to move all its European manufacturing from Limerick to Lodz in Poland. Amongst the many reasons cited, from the global economic downturn to a shifting market, cost competitiveness became the clear determining factor. The media coverage was extensive with the headline "Dell Closes" bandied about in national and regional press. Though of little consolation to the 1,900 left without a job, the fact remains that Dell has not closed its Limerick operation, where it will continue to employ upwards of 1,000 in sales support and research and development. We use the Dell story as an exemplar of the Irish Foreign Direct Investment (FDI) story. Comparing it to other restructurings by foreign-owned technology companies both in Ireland and beyond we will attempt to uncover the complexity of shifting competitiveness and competencies among branches of global operations. While the case of Dell, among others, may serve to support the political economy view of large multinational corporations, we see the picture as being more complex and in this paper look at a mixture of globalist and localist viewpoints in attempting to uncover the shifting spatial dynamics of cost competitiveness.