: I move: "That the Bill be now read a Second Time."
The purpose of the Bill is to provide for the further financing of the Shannon Free Airport Development Company Limited by extending the limits contained in existing legislation. Specifically, the Bill provides for:—
(a) an increase from £45 million to £80 million in the aggregate of the amounts which the Minister for Finance may subscribe in taking up shares of the company; and
(b) an increase from £22 million to £40 million in the aggregate amount of grant-in-aid voted annually which may be made to the company.
Share capital subscribed to the company is used for capital expenditure on the Industrial Estate at Shannon and in the mid-west region. The main headings of expenditure are land acquisition, construction of factories and ancillary works. A small proportion of share capital is also expended on tourism projects of a capital nature such as castle restoration.
Grant-in-aid moneys are used to meet the company's running expenses and to provide financial assistance to industries on the Shannon Industrial Estate. A substantial part of the company's running expenses relates to airport traffic development. Expenditure for this purpose is met by a special grant-in-aid for which the Minister for Transport is accountable but which comes within the overall limit now being amended by section 3 of this Bill.
Expenditure by the company under the headings of share capital and grant-in-aid at 30 September 1980 stood as follows:
Share Capital—£45 million.
The existing limit for share capital has now been reached and the limit for grant-in-aid will be reached shortly. It is, therefore, necessary that the statutory limits be now increased to enable the company to continue their operations. On the basis of estimates of expenditure available, the peoposed new limits will be reached towards the end of 1982.
During the Second Reading of the Shannon Free Airport Development Company Ltd. (Amendment) Bill, 1978, I informed the House that I proposed giving SFADCo a special mandate for the intensive development of small indigenous industry in the mid-west region. I will give an assessment of the results of the company's new role later, but first of all I intend to outline SFADCo's achievements over the last two-and-a-half years in their other major areas of responsibility.
ues to grow. The total employment on the estate is now 4,800, an increase of 10 per cent on the 1978 level. The company have managed through the conversion of previous job approvals into actual jobs to achieve a gradual growth in manufacturing employment on the estate. This has occured despite over 300 workers having having been made redundant last year in one of the longer established firms. This growth in employment resulted in an increased value of industrial exports over the period under review. More importantly, perhaps, the favourable trade balance increased by 42 per cent from £49 million in 1977 to £69.6 million in 1979.
Shannon town has shown a steady increase in population, from just over 8,000 at the beginning of 1978 to 9,400 at present. The policy to promote Private home ownership is becoming more successful. Currently over 50 per cent of housing in the town is in private ownership.
Air traffic development has had somewhat mixed results. Although total passenger traffic through the airport last year, at 1,168,000, was 2 per cent up on the 1978 figure, this overall increase consisted of both a 6 per cent growth in terminal passenger traffic and a 1 per cent drop in transit passenger traffic. In fact, it merely represented a recovery to the 1977 traffic level. The renewed industrial growth in the Shannon region contributed to a 6 per cent growth in terminal air freight in 1979. This was a heartening result against the background of a decline in this activity in the previous three years. While terminal air freight continues to expand, with a 36 per cent increase recorded in the first eight months of this year, transit and terminal passenger traffic has declined considerably over the 1979 levels. While this decline is in part attributable to world recessionary conditions and difficulties in the tourism industry, trends in world aviation also militate against growth at Shannon. This situation gives cause for concern.
On the industrial front, the mid-west experienced a significant increase in industrial activity over the past two years. Manufacturing employment in the region increased in this period by about 1,750, which reresented an overall gain of nearly 10 per cent. The region has recovered well from the effects of the Ferenka closure and new dynamism and vitality are evident from the growing number of high technology industries locating there. In 1979, over 8,000 new job commitments were secured through the combined efforts of SFADCo and the IDA. I am confident that the region can look to the future with confidence.
One of the greatest sources of confidence to the region must be the outcome of the SFADCo small indigenous pilot project. In giving this important responsibility to the company, I indicated that I would evaluate its results after a period of 18 months to two years to determine whether such an intensive drive should be extended to other areas of the country.
I recognised that this mandate would require the company to reorient their entire thrust in the field of industrial development. Great credit is due to the chairman, Mr. Frank McCabe, to the directors and to the staff of the company in quickly adjusting to the new challenge. It entailed the formulation and implementation of an extensive and innovative programme as well as the attainment and surpassing of ambitious job approval targets.
The decision to ask the company to embark on this new role stemmed from two widely differing considerations. Firstly, the company had over the years proven themselves capable of both adapting themselves and their policies to changing industrial conditions and capable of coming to grips with the vicissitudes of the air traffic and tourist businesses. I was also confident that the necessary expertise and enthusiasm existed in the company to tackle this exciting venture. Secondly, I was concerned at the composition of our industrial structure where reliance on foreign owned and controlled projects without a growing impetus from domestic industry could in the longer term have serious implications nationally. In March of this year, SFADCo submitted to me a comprehensive report on their activities in the promotion and development of small indigenous industry in the mid-west. This report covered the period 1 May 1978 when the pilot project got under way to the end of December 1979. I can now tell the House that the experiment was successful. The experience gained throughout the pilot role period by the company has and will continue to be of benefit in identifying and solving the problems of this very dynamic and resilient sector of Irish industry.
In going about their job, SFADCo adopted a two-pronged strategy which was based firstly on bringing out through intensive action the full potential of small indigenous industry and, secondly, on the devising and testing of programmes and ideas to stimulate the establishment and growth of native small industry.
As a result of the experiment, SFADCo concluded, correctly in my opinion, that a system for the successful development of small industries must be both comprehensive and simple. Unless a system is geared in all important respects to the environment in which the small firm operates it will not bear fruit. The need for simplicity is related to the fact that small firms generally have just one or two persons on whom responsibility rests for the production, financial, marketing and sales functions.
SFADCo had also to ensure that they did not duplicate the role of other State agencies concerned with small industry development. Where necessary, the efforts of the company were combined with those of one or a number of these agencies in the testing of new initiatives. In all, 47 new, existing or adapted programmes were tried and tested by SFADCo. Not all of the new ones were successful but even in these cases they give direction to possible further avenues of experimentation.
Among the more imaginative and effective new programmes devised by the company were:
the appointment of four field officers serving Limerick city and Counties Limerick, Clare and North Tipperary;
the provision of a business advisory service which was tailored carefully towards the needs of the small industrialist particularly in the critical starting up or expansion phases of the business;
the arrangement of training courses designed to equip the small entrepreneur with the necessary management disciplines and skills.
The field officers played a crucial role in the experiment. They were closely identified with their areas by being readily available. Upon them fell the burden of tapping every source which might lead to the creation of a new small industry or the expansion of an existing one.
The introduction of the business advisory service meant that the small industrialist could quickly enlist professional help in the solution of operating problems which, if unchecked, could threaten the viability of the project.
Two critical areas needing constant attention in Irish industry are management and technological standards. If the people "at the helm" are not equal to the task, the survival of the enterprise is sooner rather than later placed in jeopardy. That is why practical and effective training courses for the small industrialist are so important. In meeting this need in the mid-west, SFADCo joined forces with the IMI and the NIHE.
The technological revolution and advent of the microprocessor can all seem a little daunting for the small industrialist. The establishment recently of innovation and microelectronics applications centres at the NIHE campus in Limerick are the most exciting and challenging programmes introduced by SFADCo. If their potential can be realised, even in part, it will mark a most significant advance in our technological development.
The innovation centre, with its laboratory, computer, work benches and nursery factory is aimed at systematically introducing higher technology to small industry by the introduction of new product opportunities and the up-grading of existing products. The microelectronics applications centre provides industry with the opportunity of availing of expert advice on how to apply this new technology to its products and processes. We simply cannot allow these bold initiatives to fail.
As I have dealt in some detail with the principal focus of the Shannon small industry experiment, I now intend to give some information on the company's job approval and creation performance.
SFADCo exceeded without difficulty the target of 500 manufacturing job approvals which I set for 1978. In 1979, which was the first full year of the experiment, not only was the target of 1,000 job approvals achieved but was exceeded by 100 per cent.
The actual number and spread of jobs created from these approvals are the true test of SFADCo's endeavours. In this respect, about 700 of the 2,500 small manufacturing industry jobs approved in 1978-79 were on the factory floor at the end of last year. This is a most encouraging development. What was also encouraging is that nearly 50 per cent of the small industries approved by SFADCo were outside the Limerick city, Ennis and Shannon triangle. As the jobs approved come on stream, it will help to broaden considerably the geographic base of industry in the mid-west region.
My intention was to give the detailed analysis of the SFADCo experiment to the House during the closing weeks of the last session. This, to my regret, was not realised. On the other hand, I felt it necessary to announce last July that I had decided to extend SFADCo's mandate for small indigenous industry to the area of south-west and west Offaly. This area which includes the towns of Banagher, Birr, Ferbane and Kilcormac, has had a number of industrial set-backs over the years.
SFADCo have already begun the job of their extended role. A field officer has been appointed. While he will operate from the Nenagh office, he will have a regular presence in Birr. This extension of the company's area of responsibility will require amendments to the Shannon Free Airport Development Company Ltd. Act, 1970 and I propose to circulate a Bill incorporating these amendments in the very near future.
I commend this Bill to the House.