Dáil Éireann debate -
Thursday, 8 May 2003

Vol. 566 No. 2

Written Answers. - Job Creation.

Phil Hogan

Question:

37 Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment the action she is taking to deal with the growing number of job losses in County Donegal; and if she will make a statement on the matter. [12239/03]

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

I share the Deputy's concern at the job losses in County Donegal. However, job creation is a day-to-day operational issue for my Department's enterprise development agencies of which I have no direct function. IDA Ireland, Enterprise Ireland, and the Donegal County Enterprise Board are under the aegis of my Department. They are responsible for industrial development in County Donegal.

IDA Ireland has statutory responsibility for the attraction of foreign direct investment to Ireland and its regions. Since 2000 it has assisted in the creation of 812 jobs in County Donegal. Unfortunately, during the period 2000 to 2002, net employment in overseas firms fell by just 78. Recently Unifi's announced that it will reduce its workforce at its Letterkenny facility.

These job losses are largely as a result of the globalisation policies of multinational companies on the one hand. They are also due to the restructuring process which is going on in indigenous companies in Ireland whereby activities, and hence jobs, at the lower end of the value-added scale are being phased out as these activities become uneconomic in an Irish context.

The IDA's overall strategic response to this new competitive circumstance has been towards a broader vision of what constitutes FDI. There is less emphasis on job numbers and a much greater focus on job quality, higher value-added activities and making Ireland a centre for innovation. There is also an emphasis on the strategic management of value chains rather than just a manufacturing or basic service location.

A number of key developments for the area include the construction of a new IDA 80 acre business park in Letterkenny, which is near completion, and the availability of new advanced buildings. This has resulted in an increased level of visits by potential investors. A number of companies are in active negotiation. Successful companies such as Prudential and PacifiCare continue to grow. Both companies are actively recruiting at their Letterkenny locations. Over recent years Letterkenny has been a priority area for job creation agencies. Working together with local authorities, FÁS and the institute of technology, a significant amount of work has been undertaken to improve its attractiveness for investors.

IDA Ireland is also working with Invest Northern Ireland, formerly the Industrial Development Board, to promote the north-west region as a single location for inward investment. A joint website has been compiled to promote the region.

Enterprise Ireland is responsible for indigenous industry. It works closely with existing clients in County Donegal across all aspects of their business to enable them to increase sales, exports and employment. The support of Enterprise Ireland's specialist teams in the region, in Dublin and in 30 overseas locations is used to assist Donegal based companies seeking to grow their businesses in international markets.

Enterprise Ireland provides preferential funding for companies, with detailed export plans, who are expanding or establishing a business in the county as part of the BMW region. Over €1 million was approved for client companies in Donegal during 2002. Supporting new high potential start-up companies is also an important part of the agency's strategy. Since 2000 it has been successful in encouraging and supporting the establishment of new companies in Donegal. It is seeking out new opportunities such as the expansion of east coast based companies to Donegal. It also works in close partnership with other agencies in the region to facilitate growth.

Over the past year significant progress has been made in the provision of seed and venture capital funds with specific targets for investing in regional start-ups, additions to space for community enterprise activities and the development of an innovation strategy for north-west Ireland. To date ten community enterprise centres have been funded in the county. Recently Erne Enterprise Development Limited and Donegal Town Community Chamber Limited received support under the CEC programme for 2002. In addition, the Moville Enterprise Centre, approved in 2001, is due to open in mid-2003. The Letterkenny CEC was approved under the 1999-2000 scheme and opened late last year. It is almost full and has attracted new companies to the county.

At the micro enterprise level the Donegal CEB is actively promoting job creation activities throughout the county. This is being done through the range of supports that it provides to small businesses. In 2002 Donegal CEB approved a total of €719,000 to 27 projects with the potential to create 121 new jobs in the county. In 2002 there was a net increase of 101 jobs in CEB assisted businesses.

In 2002 Donegal CEB ran 14 management and training programmes with 195 participants of which 117 were female and 78 male. The board has also been successful in being approved funding for a number of business development programmes with partners in Northern Ireland. These programmes will be delivered during 2003 in addition to the programmes funded from the board's resources.