Vol. 570 No. 2
178 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps being taken by her Department to combat relocation of industry to low wage economies; and if she will make a statement on the matter. [18839/03]
The need for the economy to protect and enhance its competitiveness is a high priority on the Government agenda and is the subject of ongoing discussions with policy makers and the social partners. In the context of maintaining Ireland as an attractive and competitive location for investment, my Department and its agencies are continuously monitoring the position of firms in the manufacturing and services sectors to identify both opportunities for, and threats to, employment.
In this regard IDA Ireland is actively looking for new clients to replenish the pool of foreign-owned companies operating in this country. Ireland gains more than we lose from our status as an open economy, and this trend is likely to continue in the coming years with any job losses being counteracted by firms choosing this country as a location for certain higher value added business functions. We have been remarkably successful at attracting long-life investments, with a number of foreign-owned companies successfully operating here for more than two decades.
There are a number of factors contributing to decisions of firms to relocate all or part of an enterprise – consolidation, merger or acquisition, or changes in product or market focus – in addition to relative wage rates and other costs and available incentives. Ireland both gains and loses from such decisions, and this trend is likely to continue in the coming years with losses being counteracted by firms choosing this country as a location for certain higher value added business functions. Recent events internationally indicate that there are significant perils associated with operating in some of these low wage economies, which may impact on decisions to locate in these areas.
The strategy in facing the challenge of job losses to lower cost economies is firstly to focus a major part of our efforts on an embedding programme for the existing overseas-owned companies in this country.
To facilitate enterprise development, we will continue, through active implementation of the National Development Plan 2000-2006, to focus on strengthening our research and development capacity, enhancing our skills base, implementing infrastructural improvements, and shaping the regulatory environment for enterprise. These measures will complement the efforts of capable companies to move up the value chain from basic production subsidiaries to strategically valuable nerve centres of their parent multinationals, encouraging these firms to add strategic functions including research and development, technical support, software development, e-commerce, logistics and shared services.
