Nora Owen
Question:30 Mrs. Owen asked the Minister for Enterprise and Employment whether the recent substantial job losses in Irish based foreign industry necessitates a change in strategy.
Written Answers. - Job Losses.
The Culliton report highlighted the need for a greater emphasis on the development of indigenous industry and this is reflected in the priority being afforded this sector in the National Plan 1994-1999. While emphasising that we should, where possible, seek to reduce the cost of attracting mobile industry to Ireland, the Culliton Group also strongly acknowledged the benefits inward investment has brought to the country.
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".
Given the depth of the worldwide recession, multinational companies across the globe have in recent times been rationalising their operations, resulting in job losses not just in Ireland but in many other countries as well. Despite the job losses which have occurred here, Ireland has little choice but to pursue a substantial inward investment programme given the significance of overseas firms in the economy and the fact that new initiatives to develop indigenous industry will take some time to bear fruit. This view has been reinforced in the recent NESC Report on Growth, Competitiveness and Employment.
The focus of strategy for the promotion of inward investment under the National Plan 1994-1999 will be to concentrate on the sector and market niches in which Ireland has the greatest competitive advantage. The establishment of a separate dedicated agency — IDA Ireland — to promote inward investment will ensure this concentrated effort.
A second pillar of the approach to maximising the benefits on inward investment will be to seek to achieve an increased level of linkages between indigenous and foreign-owned firms. The role of Forfás in co-ordinating the work of the different agencies will be vital in ensuring this takes place.
In the Industry Operational Programme 1994-1999, the inward investment sub-programme will comprise a measure targeted at the further integration into the Irish economy of overseas-owned firms already located in Ireland and a measure directed at attracting international mobile investments to generate new job opportunities and to inject new skills and new technologies into the Irish economy.
A range of sectors will be targeted but pharmaceuticals, healthcare, electronics and software will continue to be the subject of a special focus.