Dáil Éireann debate -
Tuesday, 22 Jun 1993

Vol. 432 No. 6

Written Answers. - Industrial Development Agencies.

Jim Mitchell

Question:

43 Mr. J. Mitchell asked the Minister for Enterprise and Employment whether he has satisfied himself with the progress being made by the industrial development agencies in switching moneys from foreign to indigenous industry; and if he will make a statement on the matter.

Minister for Enterprise and Employment (Mr. Quinn)

In framing his question, I am assuming that the Deputy is referring to the implementation of the recommendations of the Culliton Group. The thrust of Culliton was that there needs to be a greater emphasis on the development of indigenous industry while, at the same time, we should seek to reduce the cost of attracting mobile investment to Ireland. Culliton highlighted the fact that the attraction of inward investment was not a sufficient basis for developing a national competitive advantage in advanced industries which will create increased employment opportunities to raise living standards.

In recommending that industrial policy should be more clearly focused on the development of indigenous industry and that the budget for internationally mobile investment should be squeezed further, the Culliton Group also strongly acknowledged the benefits inward investment has brought to Ireland. There are now over 1,000 overseas companies operating in Ireland employing in excess of 90,000 people. Overseas companies spend over £4.1 billion annually in the Irish economy and create significant downstream employment in supplier and service companies. Culliton noted that "while the main emphasis of our recommendations is on creating the environment and the instruments to enable Irish-managed firms to grow in efficiency and help replace a dependency orientation with enterprise it will be important not to lose the ability to attract foreign firms. In order to do this Ireland has to pay the "going rate" in competing with alternative European locations".

State financial support for inward industrial development is not given at the expense of support for the development of indigenous industry which is the primary focus of industrial policy. Provided that support is justified on cost/benefit grounds and adequate security is provided by the promoters, a legitimate economic case can be advanced to seek to gain for Ireland the benefits—in terms of additional output and jobs—resulting from investment by overseas companies.

In so far as indigenous industry is concerned, the Deputy will no doubt be aware that legislative proposals for a restructuring of the State industrial development agencies which will provide for a greater emphasis on the development of Irish industry are currently under discussion in the Oireachtas.