Written Answers - Electronics Industry Viability.
Dermot Ahern
Question:
249
Mr. D. Ahern
asked the
Minister for Enterprise and Employment
the plans, if any, he has to address the points recently made in a report on the viability of the electronics industry in Ireland; the difficulties in this regard for such industry in County Louth; and if he will make a statement on the matter.
[21108/96]
I presume the Deputy in his question is referring to the recent press reports on the comments made by the chief executive of IDA Ireland concerning companies at risk in the electronics sector. Given the rapidly changing nature of the electronics sector and its increasing importance to industrial development and employment creation in Ireland, all segments of the sector are kept under review both by my Department and the industrial development agencies. In addition, the IDA regularly overviews progress in individual companies established in Ireland.
The IDA's recent comments on the sector were made against the background of its latest review which indicates that the sector is generally buoyant and stable. Overall, the review demonstrates the strength of the electronics sector and the lesson to be learned is that we must continue to move and identify where the growth potential is and make sure Ireland is in a position to exploit that potential. We have built strategic strength in this sector with quality suppliers and we now have more stronger companies with integrated functions based in Ireland than heretofore. In this regard the IDA's review showed that 90 per cent of jobs in the sector were strong and stable.
There are, however, some companies in this sector whose operations have been identified as high risk. This is not something unique to the electronics sector. Doing business means taking risks. But the electronics sector is also characterised by a rapid rate of change of products, design and market conditions which, of course, is an extra risk. But for those who keep abreast of changes it is a rewarding sector of business.
The IDA is endeavouring to persuade such companies that they have identified as at risk to add a range of business functions in order to enhance the strength and depth of their Irish operations. Naturally the identities of those companies cannot be revealed. The IDA's comments were not directed to electronics companies in any specific region, they are relevant to companies everywhere.
Essentially, the IDA's strategy for the sector is built around a number of core criteria so as to maximise the benefit of the sector to Ireland, but minimise the risk of decline. The IDA competes for investments across a broad range of segments of the sector to achieve a balance. The overall objective is to ensure that we have in Ireland the long-term winners while accepting the inevitability that some companies will face difficulties from time to time and may be forced to downsize or even close.
The maintenance of our competitive cost base and infrastructure, combined with the availability of a skilled labour force and the range of financial incentives we have on offer are, of course, critical to the continued success of our electronics sector. Government policy is aimed at ensuring that the main elements of a competitive cost structure are maintained in Ireland.
Ireland has benefited substantially from the sector and it has shown remarkable growth over the past 20 years. In 1995 over a third of the total employment in IDA assisted companies was in the electronics sector. The sector generates expenditures of approximately £2 billion per annum in the Irish economy of which purchases of Irish-made components and supplies, by the sector, are currently worth nearly £600 million per annum. Up to 10,000 jobs in indigenous supplier companies have been generated out of the Irish linkages within electronics.
I am confident that the sector in Ireland will continue its impressive growth record despite experiencing fluctuations in individual company fortunes, and specific segments, over time. However, it should be recognised that, despite the best endeavours of my Department and the State agencies, in the final analysis individual companies themselves must react to market situations and take the action which they consider necessary to remain competitive and to develop their operations. I am satisfied with the IDA's positive response to date in securing increased employment in the electronics sector and look forward to the continued growth of the industry in Ireland.
