Dáil Éireann debate -
Thursday, 5 Dec 2002

Vol. 558 No. 6

Written Answers. - Job Creation.

Liz McManus

Question:

14 Ms McManus asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the recent reports suggesting that multi-national investment here declined by 40% in 2001; the consequence of this decrease for employment levels; and if she will make a statement on the matter. [24866/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

The issue of job creation through the attraction of foreign direct investment is statutorily charged to IDA Ireland, for which it is a day to day operational issue.

Even at the beginning of 2001, it was clear that the year would be very different to the previous ones, in terms of foreign direct investment markets, including IDA Ireland's work in this area. As the Deputy is aware, global circumstances, particularly in the dotcom and information technology, IT, sectors, had changed investor mood considerably. International business confidence ebbed as 2001 progressed and the awful events of September 11 in the US added to concerns. This exceptional set of circumstances resulted in one of the toughest years in a long time for FDI globally, including IDA Ireland. Overall, as quoted in the World Investment Report 2002: Transnational Corporations and Export Competitiveness, published by the United Nations Conference on Trade and Development (UNCTAD), the value of non-IFSC foreign direct investment inflows into Ireland in 2001 measured €8.2 billion, down from €11.4 billion in 2000. A decrease of 28% in the same period the decline in worldwide FDI flows was more than 50%.

The significant global economic slowdown, especially in IT, impacted on the agency's results for 2001 and it ended the year with a small net loss of 2.8% in IDA assisted jobs in overseas companies – the first such loss in fifteen years – despite the positive performance in other sectors. This was acknowledged in the agency's annual report and accounts for 2001.

In absolute terms the number of jobs created in 2001 was still very high at 13,514, higher than every year prior to 1997. The period from 1992 to 2001 inclusive saw increases of almost 44% in the number of foreign direct investment companies operating in Ireland, and more than 75% in permanent employment in these companies.

Ireland's recent economic success has changed its profile as a location for investment. The IDA is now competing for a different type of business to the labour intensive manufacturing which we so successfully won over the past four decades, because we were a largely low cost location. Basic operative skills are now available at lower cost throughout the developing world. Improving communications facilitate businesses to locate parts of their value chains in distant locations.

The IDA needs to continue with its existing priority work; first, with current clients to move them up the value chain; second, to achieve better regional balance in new investments; and third, to influence improvements in infrastructure and skills. The objective must be to place Ireland at the leading edge of the global economy in some specific competencies or industry niches.

I am confident the measures outlined which are currently being adopted by IDA Ireland, as well as the continuing commitment of the Government to regional development will bring positive results to the country. Along with the industrial development agencies, I will continue to promote Ireland with international firms for suitable industrial development projects.