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Dáil Éireann debate -
Wednesday, 12 May 1999

Vol. 504 No. 5

Written Answers. - Competitiveness Report.

Ivor Callely

Question:

51 Mr. Callely asked the Tánaiste and Minister for Enterprise, Trade and Employment the response of the National Competitiveness Council to the way in which business can realise its full potential across a range of critical issues such as human resources, communications, trade and innovation; the best process to obtain maximum competitive advantage; and if she will make a statement on the matter. [11944/99]

The 1999 competitiveness report of the National Competitiveness Council which was published last week contains the following five key messages for Irish enterprise and for Government.

A complex set of interrelated issues, including serious skills shortages, poor transport infrastructure, underdeveloped environmental infrastructure, inadequate housing supply and unbalanced regional development are now working together to threaten the capacity of the economy to fulfil its medium-term economic potential – the basis for future social progress.

Ireland's growth performance has been strongly engineered by a highly successful industrial development strategy based on attracting foreign investment. In aggregate terms, Ireland is far less well-placed in achieving enduring competitive advantages anchored in the indigenous sector of the economy, in par ticular, in terms of overall positioning in key growth sectors, operational scale and capabilities in research and development and innovation.
While recent developments in the sector are encouraging, Ireland lags behind more advanced economies in telecommunications infrastructure – a prerequisite for future success in key growth sectors and in particular e-commerce.
Regulatory reform and competition policy must become more central to efforts to boost the competitiveness of the Irish economy. Market liberalisation has the potential to deliver sustained increases in productivity and living standards in the economy.
In the transformed competitive environment for the Irish economy in EMU, competitiveness policies, particularly those relating to human resources, research and development and innovation, trade and investment, infrastructure and telecommunications, focused on boosting the economy's potential hold the key to closing the wealth gap with other advanced economies.
In assessing Ireland's exceptional recent economic performance, the NCC says it is essential to differentiate clearly between the rapid progress that certainly has been achieved and Ireland's absolute standing in terms of key measures of national well-being. GNP per person in Ireland remains around 10 per cent lower than the EU average and up to one-fifth lower than that of the small high-income EU economies. I share the belief of the council that establishing and maintaining competitive advantage is an issue which straddles all facets of the economy in an ever-changing global environment.
The Government holds the work of the council, which was established in May 1997, on foot of a commitment to the Partnership 2000 Agreement, in the highest esteem and considers its advice to be a valuable input into the continuous process of improving our competitiveness.
As such, the Government has asked the interdepartmental group on competitiveness, set up last year to oversee implementation of council recommendations, to consider this year's report and to prepare a response which will ensure that the council's advice receives appropriate recognition.
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