Batt O'Keeffe
Question:42 Mr. B. O'Keeffe asked the Minister for Enterprise and Employment his views on whether Ireland has become seriously overdependent on the electronics sector. [22485/96]
Written Answers. - Electronics Sector.
The electronics sector is undoubtedly the predominant force for new industrial investment in Ireland at the present time.
This sector is all-pervasive through life and business encompassing as it does computers, telecommunications, consumer goods, financial services, healthcare, security automative and industrial automation. Given this broad spectrum of segments supporting activity in the electronics sector, I am confident that the current focus on electronics is a positive one.
The electronics sector has experienced rapid growth world-wide over the past twenty years and Ireland has benefited substantially from its remarkable growth. Overall, the electronics sector continues to outperform others both as regards payback to the economy and durability of companies established. In recent years many key players have chosen Ireland as a base and we now have world class examples of success and achievement in the sector. These companies are engaged in a range of sectors, from wafer design and fabrication, systems, components and peripherals to communications, network products and software and are proving to be ideal role models to attract others to follow.
The electronics sector matches well with our competitive strengths. For growing companies our tax structure is attractive, while the demographics of people with skills and a strong work ethic, puts us in a competitive position. In 1995 over a third of the total employment in IDA assisted companies was in the electronics sector. Ireland wins nearly a quarter of greenfield electronic manufacturing investment in Europe. In software, we are clearly the prime location in Europe for new investment.
Ireland's policy for the development of the sector is driven primarily by value for money objectives and we continue to insist on strong payback to the economy for the investment of taxpayer funds. We seek to secure a mix of young, aggressive, fast growth companies such as Gateway 2000 and Dell, and the long established companies such as Intel, Motorola and Hewlett-Packard.
The sector generates expenditures of approximately £2.00 billion per annum in the Irish economy of which purchases of Irish made components and supplies 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.
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, IDA regularly overviews progress in individual companies established in Ireland.
These reviews indicate that the electronics sector is generally buoyant and confirm the overall strength of the sector in this country. Essentially, 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.
There are, of course, some companies in the sector whose operations have been identified as being at risk. This is not unique to the electronics sector. However, the IDA endeavour to persuade companies to add a range of business functions here to supplement their manufacturing operations. It is IDA's aim that more and more overseas companies should deepen their roots in Ireland so that they can survive and grow. Nearly half of the IDA'a resources are dedicated to such development work in the current organisation structure.
In essence, 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. We compete for investments across a broad range of segments in the sector to achieve a balance. The 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.
As in the past, Government policy will aim to ensure that Ireland remains an attractive location for enterprises in the electronics sector through ensuring the continued availability of a well educated workforce and a competitive operating environment.
I am satisfied that our focus on the electronics sector is the correct one and that the sector in Ireland will continue its impressive growth record notwithstanding occasional fluctuations in individual company fortunes, and specific segments, over time.