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Dáil Éireann debate -
Tuesday, 1 Jul 2003

Vol. 570 No. 2

Written Answers. - Industrial Development.

Eamon Ryan

Question:

190 Mr. Eamon Ryan asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on whether lower costs in countries such as India is resulting in companies (details supplied) closing; and if she will focus on developing indigenous enterprise to ensure local markets are first and foremost served by local producers. [18862/03]

The need for the economy to enhance its competitiveness is a high priority on the Government agenda and is the subject of on going discussions with policy makers and the social partners. The drivers of competitiveness that have brought us success in the past are not necessarily those that will bring similar success in the future.

Other countries may be able to offer a better combination of costs, with lower wages and zero taxation in some cases. With reduced scope for competitive advantage in terms of costs, the overall strategy for the Irish economy must now be to move to higher value-added, knowledge-based activities in order to compete. To facilitate this approach, the Government is focusing on strengthening Ireland's research capacity, enhancing the country's skill base, implementing the infrastructure elements of the national development plan and improving the regulatory environment for enterprise.
IDA Ireland is continuously monitoring the position of firms in both the manufacturing and services sectors to identify both opportunities and threats to employment. Foreign-owned firms, like all business enterprises, occasionally engage in restructuring that can lead to smaller operations and sometimes relocation or closure. This is a standard feature of business activity for many firms and impacts on many locations and not just Ireland. However, to reduce the possibility of relocation, IDA Ireland continually works with companies to identify what it can do to ensure that their operations in Ireland remain successful, with particular focus on an embedding programme for existing overseas companies located here. Far-sighted companies, located in Ireland, know that they must continually upgrade the level of their current activities in order to match the ever-changing economic environment in which they operate.
In regard to the indigenous sector, it is often not possible for Irish-owned companies to be dependent on domestic sales, which make the development of the export market necessary. Assisting indigenous firms to achieve this is a central element of Enterprise Ireland's strategy. By developing their export capability, companies become internationally competitive and, as a result, are better able to compete on the domestic market.
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