I should like to welcome this Bill. We are all delighted to welcome the success story of SFADCo, a development company that dates back to the late fifties. They are one of the few of which we can say that they have fulfilled their primary role. The success achieved down through the years is a shining example for other semi-State agencies. It is the sort of success story that we in this House welcome.
This is an enabling Bill to increase the limits in existing legislation and to give statutory authority for SFADCo's small industries promotional activities in west and south-west Offaly. The Bill, according to the Minister's speech, provides for:
(i) an increase from £80 million to £120 million in the aggregate of the amounts which the Minister for Finance may subscribe in taking up shares in the company;
(ii) an increase from £40 million to £60 million in the aggregate amount of grants which may be made to the company;
(iii) an increase from £22 million to £25 million in the aggregate amount of advances which may be made by the Minister for Finance to the company; and
(iv) statutory authority for SFADCo's role in the promotion of small indigenous industry in west and south-west Offaly by the amendment of sections 2 (1) and 4 (1) of the 1970 SFADCo Act.
Deputy Des O'Malley when he was Minister, extended the role of SFADCo into part of Offaly. Some would say he included half of Offaly but Deputies from Offaly will no doubt be able to tell us more about that than I could. This is the first opportunity the House has had to give statutory backing to that extension of the SFADCo role. Deputy O'Malley said that he would come back to the House at the earliest opportunity to do this. It is being done in this Bill.
For a long time SFADCo have fulfilled their statutory role in developing Shannon Airport and making it a worthwhile airport. They have put their full weight behind the development of Shannon. Even in difficult times in recent years when all international aviation has suffered, the generation of business at Shannon is a tribute to all concerned. Something over 600,000 passengers go through Shannon Airport each year. Not alone does that benefit the Limerick and mid-west regions but, as statistics show, the benefits fan out all along the west coast. It has, indeed, a good contribution to make to the economic wellbeing of the entire west coast. It is interesting to look back and see what has been achieved in the development of Shannon Airport itself in its primary role and in the development of small native industries. The philosophy underlying the strategy, the attainment of excellence and quality, deliveries on time and getting the job done, is certainly a philosophy that could be adopted by many other companies both small and large. Indeed, if I may say so, it is a philosophy that could be adopted with advantage by this House.
We are a small country dependent for our bread and butter and our day-to-day living on exports. We are all aware of the fierce competition that exists in world markets. It is fundamental wisdom to look at those markets to find out what ones are available to us. In order to succeed in those markets the job must be well done, the goods must be quality goods properly presented and delivered on time. That is where the strength of Irish exporters lies in the fiercely competitive markets of the outside world. That is a philosophy that has been constantly promoted by the chairman of SFADCo. He is, of course, a very successful businessman and I should like to take this opportunity — it is seldom we get the opportunity — of congratulating the chairman and his staff on the excellent job they have done and are doing.
Last year was a very difficult year. Yet, despite the difficult times, the track record was a good one by and large. I endorse everything that has been done in industrial development there and particularly in the development of Shannon Airport, and I urge them to keep up the good work. As well as having a primary role to play in developing small native industries they also have a secondary role. It is an important one. I refer to the development and testing of concepts and systems which will lead to a dramatic growth of small indigenous industries. Here is an organisation which adopts new concepts and pilot schemes and tests them out to see if projects are worth-while. All this is done with very small overheads. If the test is satisfactory they let some other agency such as the IDA take the project on board. This centre serves not alone the mid-west and the Limerick region but industry right throughout the country. The micro electronic centre is an example of such a pilot scheme. Here is a centre which provides a magnificent back-up service to the expanding electronic industry. It shows clearly what can be done in a pilot scheme by an organisation like SFADCo. When these centres were established it was made abundantly clear that we did not want another bureaucratic organisation. The staff have been kept to a minimum and that minimum staff have done the job they were set up to do. There are no huge overheads, no bureaucracy, and there is an important lesson to be learned from that type of approach.
I think, as I said, the secondary role is a most important one. It will be a very important role in the future. The concept of advance factories was born in the SFADCo organisation and later expanded throughout the country. It was adopted by the IDA. This is the type of forward thinking one needs in an organisation like SFADCo. We are all agreed as to the beneficial results. The advance factory idea has been in operation for quite a number of years now and we are at a stage of national development when it is time to take stock and ask ourselves what will replace the small advance factory concept. There has been difficulty in attracting industrialists to rural areas and it is here the concept of the advance factory has played an important role. That concept has served us well. If an industrialist can be shown a small factory unit in a remote region then industry will be attracted to that region.
The time has come now to examine the whole situation. We must look forward to the nineties and to the end of the century to discover what the new concepts should be. We must ask ourselves what we should be doing now. Some ideas have been tested in the United States and these are worth looking at. Instead of the advance factory concept for the future we shall probably be looking at a more sophisticated type of building. In the environment of the future we will have our very highly skilled welleducated graduates coming out of our schools of technology and our universities, young men and women with creative minds, in whose education we have invested heavily. It will be their job to examine future trends in electronics, computers and telecommunications. That is the area in which there will be growth. The ground work has been laid in electronics, computers and telecommunications. We have made a heavy investment in the infrastructure over the last four or five years. I welcome the change in the curriculum of universities and their adoption of a more extrovert approach to the requirements of industry. As a result of this we will be able to take full advantage of this role in industry in the years to come. These are the new concepts.
More recently in the US, in Denver, I looked at an operation being carried out by Data Corporation. They had taken over an office block and placed computers at the disposal of any student, or anybody with ideas who wanted to sit in to work out projects. Those computers are linked to all the data banks throughout the world and people with ideas about developing projects or programmes have available to them at the push of a button all the information that is necessary to put new projects together. Out of it about 18,000 small enterprises and new business ventures emanated.
That is the type of development we need here, or something along those lines. We have all heard of the Thousand Apples Programme. Computers are made available to young people who want to develop ideas. They can get all the information that is available throughout the world. It is a good marketing strategy by a large computer firm. There are reservations about that type of development in the United States. People feel they are tied to one particular company, but an examination should be carried out to see what the benefits would be for this small country so that we could capitalise on our strength and ensure that in the future we will invest more in people than in bricks and mortar in which there is heavy capital investment.
In Ireland an area that has not been well developed is the software part of the computer industry. We have the ideal population mix to engage in that type of development. The training that is necessary for all that is there. When you are developing the software side of the computer industry you are investing in people. One clear example of that is the project that was secured for the Blanchardstown estate. The initial year's investment in that project was in the development of a product, research in that product and the training of marketing skills — all investment in people. That is the type of new development we need. We need the total business concept: we do not want to be just an assembly line for particular products for which the research and the marketing have been done elsewhere.
It is a new approach and I know SFADCo would be in line with that approach. There are vast opportunities in the software area. The banking and insurance institutions here are moving into the computer era. There has been a complete new development in the banking service. Those financial institutions could make a great contribution towards solving unemployment if they took in so many young people each year and used the hardware they have in the computer area to train those people for computer programming. A great amount of investment is going to waste in this country. A lot of investment has been made but proper use is not being made of the assets we have. We have enormous expertise in that area.
On my last visit to Germany as Minister for Industry and Energy I visited the Nixdorf Corporation. I am glad we have an arm of that corporation in Bray. There we saw that, side by side with production, there is a vast training programme going on. There are 2,300 young people being trained side by side with the production that is taking place. There is an interchange of young people who are there to be trained in the real work environment: they can be moved from their training quarters in one corridor to production in another corridor.
That is the type of new thinking we need here if we are to get to grips with our problem. I asked the head of the Nixdorf Corporation at the time if he would consider the same type of pilot programme in Ireland. "By all means", he said. It is interesting to note that when that philosophy of a self-made man in Germany was initiated, the German authorities frowned on it and the education authorities did not want to know about it. He knew exactly what his requirements were and he was prepared to go ahead, though nobody was prepared to listen. Some few years later the German education authorities came back to him and said they wanted to be part of that development. They were looking for a site in the vicinity of his operation and he put up a temporary building for them. They are now training 600 people on the industrial campus.
He agreed with me that, in conjunction with the IDA and the Irish Government, he would put up a pilot scheme in Bray to accommodate 300, with no ties whatsoever. He was prepared to take in those young people, train them and take his chances on how many of them would join the Nixdorf Corporation. We cannot let red tape and bureaucracy stand in the way of that type of development. Our unemployment problem is too critical. We need action and results. Throughout the country one notices the number of schools that close at three in the afternoon and which are closed altogether for five and a half months each year. Can we afford that at this time?
We will have to come to grips with this. We must use the accommodation that is there. Equipment can be put into those schools to train those young people. That would be genuine training in computer and software programming. As I have said, that is an area that caters for people, not bricks and mortar which requires such heavy investment. Old solutions are no good any more. We must look at our strengths, see where we have to go and decide we will do it, and we cannot afford to let red tape, bureaucracy or anything else stand in our way. We have 70,000 young people on the labour market at the moment, not counting the number of young people who will come out of the schools at the end of this summer, hopelessly looking for work. We have commissioned enough reports on this front and we must now present radical solutions quickly to prepare those young people for something meaningful in life.
I can assure the Government that any such solution brought forward will get the support of this side of the House. Otherwise the House will become more meaningless as the years go on. That type of thinking is part and parcel of the SFADCo board and staff. They have had tremendous success in taking small industries by the hand over the years. When I was Minister I saw the success of their work and I decided it was time to extend it into the IDA operations. For that reason, last October I extended the SFADCo approach into small industrial development under the aegis of the IDA, giving responsibility to the IDA to bring together the county development officers to join hands, as SFADCo had done, to promote and develop small industries. Incubator type factories were begun in association with third-level colleges, technical colleges and the NIHE in Limerick. That is the type of development programme I saw in my short term in office. Taking into account how SFADCo had developed their own system, I felt the IDA should be given the same type of approach and that decision was taken last October.
Small industries should be helped by the secondment of management expertise, whether in the financial or production areas, from larger companies. We all know that a small concern may have a production expert but they might fall short in the areas of marketing, finance control or other areas and they may not be able to afford to employ these experts who are vitally necessary to the proper development and financial wellbeing of the company. A scheme along these lines is being developed by the IDA and it should be successful.
We see the problems that arise in industry. Very often there is a lack of trust between workers and management or there may be a lack of communication between them and industries close. But workers feel that in a co-operative they could do a better job. There is a successful co-operative in Navan. This idea should be promoted further especially if a product is viable. We cannot afford not to explore every avenue open to us.
The secondary role of SFADCo, in the micro-electronic centre and the innovation centre and their success in these areas, is a good example of where we as a nation can go. I subscribe fully to the philosophy of the chairman and hope this House will endorse what they are doing.
Another area which has a significant potential for development is the development of the food industry. Many reports were issued in the seventies. I remember an excellent report, commissioned by the Bank of Ireland on the development of added-value in the food processing industry in Ireland. It is a very interesting document which contains many excellent and worthwhile ideas. That issued in the mid-seventies but nothing much has been done about it since.
The co-operatives have done an excellent job developing their products. Bord Bainne have done an excellent marketing job. However, there are many other areas in the food industry which need to be tackled, decisions made and action needs to be taken. I have always held the view that while responsibility for this area is stretched over many areas we will never see desirable results. The beef industry is a good example. The Department of Agriculture have responsibility for agriculture, but I believe their responsibility should stop at the farm gate; pricing structures in Brussels all finish at the farm gate and a single Minister must take responsibility from there on. For example, in the marketing area CTT do a little, CBF do a little, the co-operatives do a little and there is a range of people doing bits and pieces, some successfully. On the development side, the IDA have their own input. Last year they produced a document which served to focus the mind and attention on the opportunities that exist.
The FEOGA grants are not being fully utilised. The Minister of State knows that as well as I do. Last year and the year before grants went a-begging in Europe. The FEOGA allocations to Ireland were not taken up. Here we are crying about development and unemployment yet we are letting money go by the board. I believe a single Minister or agency will have to take responsibility for this area. I wrote it into the record in the Department before I left that I believe the development of the food industry should be handed to SFADCo as a pilot project for three years. They have the expertise. They are centred in an area where they can come to grips with many of the problems facing the food industry. After three years we could look at the results that can be achieved if nobody puts any blockages in their way, if the bureaucratic problems are removed and if they are given free rein and full responsibility. If they are successful the responsibility can then be given to a national food development corporation, an agricultural development corporation or any other organisation. I hope the Minister will take this opportunity to tell us if he believes in this concept, if he is prepared to run with it and give SFADCo the opportunity to develop our food processing industry.
When the Prime Minister of New Zealand was in Ireland last year I had the opportunity to meet him. He was involved in carrying out a full reappraisal of his industrial strategy and industrial policy. As we all know, New Zealand suffered very heavily during the recession in the seventies when the British joined the EEC, because many of their markets were closed. At that time they were faced with a very difficult challenge. I asked the Prime Minister what the results of his industrial strategy and policy reviews had been and he said he was coming more and more to the conclusion that there were many types of industry which New Zealand should not be in but there was one they should be in. His philosophy was, if you can grow it, New Zealand should be in it. We have the finest grasslands in the world, the best climate for producing food with a flavour which is unsurpassed anywhere in the world, and our biggest asset is under-utilised.
We have the capacity to do the job properly but we need to develop a philosophy of excellence and quality, which is the theme running through this SFADCo operation. That needs to be done at national level so that Irish food can be identified as excellent quality food for the international markets. In recent times the impact that can be made on import substitution has been discussed in this House. Import substitution is not given much attention by many, but there is huge potential for job creation, not alone in food but also in connection with the building construction industry. Again, the job must be well done and we must produce quality products. We must do what we do well. If we focus our minds in that direction we can succeed, just as New Zealand has done, overcoming its problems of the seventies by concentrating its full energies and resources in the eighties on the development of its food industry. Job creation has followed in the area of packaging, advertising, printing and all the spin-offs running right through the economy.
If we cannot develop an industry for which we have the raw materials, we are on the road to nowhere, but I believe we have the capacity for this development. Everybody should know the direction in which he or she is going and be responcible to a particular Minister or agency and, given the wherewithal, that agency can do the job and can also show us the way to import substitution. As a member of the last Government and as Minister I took a decision to set up import substitution units in the Department of the Environment to supervise the purchasing of raw materials and to monitor their importation in order to ensure that Irish suppliers got a fair crack of the whip. However, you must deliver and you must have a quality product. The same goes for the Department of Industry and Energy.
I also set up a monthly reporting system under which a report should come in from every State and semi-State purchasing area. We saw where our purchases were being made and what was being done. That gave us the opportunity of channelling most of our investment within the Irish economy. Many purchases are being made abroad by State and semi-State operations which could have been bought at home.
Within the offices of the Irish Goods Council, we set up a data bank to ensure that the suppliers' names and their products are available at the press of a button. A similar operation is carried on in the Institute for Industrial Research and Standards. A pool of information is available, but it needs to be monitored, co-ordinated and more cohesive. We can produce many more jobs with import substitution, not to mention the thousands of jobs that would be created if we got down to producing quality food to replace all the imports on our supermarket shelves.
An entrepreneurial spirit exists in most Irish people. It saddens me to see today's approach of killing enterprise and initiative and not recognising the need for risk-takers. The man who puts his money at risk should be rewarded for doing so, otherwise we are killing the goose that lays the golden egg. Either we are committed to private enterprise or we are not. If we are, the spirit of enterprise must be helped and fostered. We should not introduce policy measures, whether in budget strategy or Finance Bills which will kill that entrepreneurial spirit. We must produce before we can distribute. If we do not recognise that fact I and many Members of this House know where we will end up.
SFADCo have shown the way in the past and can do so in the future. Like every good organisation, after so many years in operation they are now prepared to have a look at themselves and see where they are going. They are to be complimented for that. If anyone wants to have a look at many of our semi-State agencies all hell breaks loose and the agencies involved adopt a defensive attitude, backing into corners. Every three years, SFADCo look at their operations to see that their overheads are not getting out of line and that they are giving value for money invested. I read a report recently that they intend bringing in a consultancy firm to help them with the investigation into their entire operation over the last three years. I welcome that wise approach. It is also wise not to tie up their own top managerial people where there is another job of work to be done, by bringing in outsiders to help them. We look forward to the results of that in-depth examination.
I also welcome their new approach of looking out for the next 20 years and seeing where they should be going. I admire their chairman, who has capability and ability. He points the way to other semi-State agencies not to be afraid to take a look at themselves and change their route. SFADCo have achieved the role which they set themselves over the last 20 years and why should they not look at their role for the next 20? There will have to be a different approach and perhaps a need for different policies and objectives. That is the correct way to run a good organisation and that is why SFADCo have achieved their success. They will be equally successful over the next 20 years, given the same freedom and opportunity. I fully support the Bill.
