Dáil Éireann debate -
Tuesday, 21 Nov 1995

Vol. 458 No. 5

Written Answers. - State Agencies.

Helen Keogh

Question:

31 Ms Keogh asked the Minister for Enterprise and Employment the plans, if any, he has to rationalise the number of State agencies engaged in the process of job creation; and if he will make a statement on the matter. [17245/95]

Minister for Enterprise and Employment (Mr. R. Bruton)

The agencies charged with assisting enterprises to improve their competitiveness and job creation capacity which operate under the aegis of my Department are as follows: Forbairt, IDA Ireland, Shannon Development, and the county enterprise boards. In addition, Forfás is responsible for the development and co-ordination of enterprise policy. However, with the exception of its industrial property function, it does not have a direct involvement with firms.

As the Deputy will be aware, the creation of Forbairt and IDA Ireland stemmed directly from the recommendation in the Culliton report that there should be a separate focus on the development of indigenous industry and the attraction of foreign direct investment. It is now clear that the restructuring has achieved this goal of allowing each agency to focus on their distinct missions.

In the case of IDA Ireland, its strong performance in attracting projects from companies like Intel and APC, which were won in the face of ever increasing competition, is a testament to the effectiveness and clarity of mission which the restructuring has brought about.

The creation of Forbairt has brought to the fore the continuing challenge of indigenous development. The fact is that indigenous industry faces huge strategic challenges. Many firms continue to operate in segments and sectors which are increasingly subject to low cost competition and which are more and more dependent on economies of scale for survival. Even those companies who have positioned themselves in more attractive niches face a major challenge in developing the competencies and acquiring the necessary funding to support their growth. The creation of Forbairt has helped to focus on the key developmental issues facing these companies. My Department and Forbairt are working closely together to formulate a new strategy for indigenous development. This will form part of the review of enterprise strategy which I intend to publish shortly.

Both Shannon Development and the county enterprise boards are addressing regional development needs. In addition to its remit for the promotion of the Shannon Free Zone, Shannon Development operates under delegated authority from Forbairt in respect of its industrial development activities in the mid west region. There is thus no duplication of functions between Shannon and Forbairt. The Deputy will be aware that Shannon Development also exercises other regional development responsibilities which fall outside the aegis of my Department.

The county enterprise boards are addressing a need to stimulate enterprise, and the creation of new enterprises particularly. They have a broader remit than Forbairt in terms of the types of enterprise they may assist. This is consistent with, and appropriate to, their mandate to maximise the potential for development of very small enterprises at local level. The establishment of the county enterprise boards is also having the benefit of allowing Forbairt to focus more closely on the developmental needs of its core group of clients in the over ten employees range.

As I said at the outset, the agency structures which I have outlined have addressed the key Culliton recommendation on the need to create a separate focus on the development of indigenous industry and the attraction of FDI. Culliton also recommended that greater attention should be given to indigenous development. The combined resources of Forbairt and the CEBs, with each focusing on different clients and different needs, is ensuring that the more intensive efforts called for by Culliton in respect of indigenous development are being made.

The new agencies have been in operation for less than two years and much remains to be done in terms of refining both strategy and operations. I am, however, fully satisfied that the agencies which I have just described are addressing genuine and distinct needs and I have no plans to rationalise them.