Dáil Éireann debate -
Thursday, 12 Oct 2000

Vol. 524 No. 1

Written Answers. - Industrial Relations.

Bernard J. Durkan

Question:

63 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has detected any relocation of Irish industry to low wage economies; the extent of such; and if she will make a statement on the matter. [21682/00]

Bernard J. Durkan

Question:

96 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has satisfied herself that the economy is poised to withstand the pressure in some sectors of industry to relocate to low wage economies; the measure or measures to counter such movement; and if she will make a statement on the matter. [21861/00]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

I propose to take Questions Nos. 63 and 96 together.

The dynamic inherent in an enterprise-driven global economy can result in the movement of firms between countries and regions. Ireland has benefited, and continues to benefit, from such movement. Any Irish losses have tended to be in lower productivity firms. Changing market circumstances will challenge both indigenous and foreign firms alike to look at market-driven solutions to business issues. Not only will indigenous Irish firms locate in other economies for reasons of cost but also to be closer to customers or to gain access to relevant distribution networks.

Progressive companies located in Ireland realise that they must continually upgrade the level of their current activities to keep pace with the ever-changing economic environment in which they operate. Part of this forward planning can involve relocating lower value added activities to lower wage economies. I am aware of a number of instances of such relocation, which can be regarded as a sign of our dynamic economy and the achievements of our firms rather than a negative development.

The thrust of enterprise policy is to address the ever more competitive nature of the global economy by providing firms with relevant support to radically improve their productivity and ability to compete. To be competitive, firms must develop the technical capability and management skills to move up the value-added chain into more profitable markets and products. Building Irish firms with competitive scale and strong positions in international niche markets often requires that they not alone build up competence and capability at home but also make strategic investments in other economies. Such investments can be of long-term benefit to Ireland and have not so far been shown to restrict economic or employment growth at home.

A key focus of the agencies' strategy is to raise quality and enhance capability within firms to enable them to compete on ever tighter world markets. Much has been done by the industrial development agencies to ensure that firms are not over-dependent on wage rates and can maintain a strong presence in Ireland if they so wish. Such firms have been encouraged and assisted to move into specialist niche markets, to upgrade their production and design systems to best international standards, to concentrate on research and development and innovation, and to increase their levels of employee training and development. I am confident that this strategy will enable Irish industry to compete and withstand the pressures of globalisation in all sectors in the coming years.