Phil Hogan
Question:91 Mr. Hogan asked the Minister for Enterprise, Trade and Employment when the forum on manufacturing will convene a meeting; if there is a timescale for a report; and if he will make a statement on the matter. [8585/07]
Priority Questions.
Manufacturing Forum.
The high level group on manufacturing has been established. The terms of reference for the group, as set out in section 7 of part 1 of Towards 2016, are to review the challenges facing the manufacturing sector and having regard to initiatives currently under way, identify any further measures that would help to meet those challenges. The group, membership of which is in accordance with the standard tripartite model for social partnership, comprises four representatives for each of the three main partners, namely, IBEC, ICTU and the Government. The group is chaired by a senior industry representative who was appointed by me. A full list of the members of the group will be furnished to the Deputy by my office.
The first meeting of the group took place on 9 February and the next meeting is scheduled for 16 March. While my Department is providing the secretariat for the group, it has been established under the auspices of the partnership process and is mandated to report on its deliberations to that forum. In this context, it is a matter for the group to determine its schedule of meetings and timescale for reporting.
Overall, manufacturing continues to be an important and integral part of the economy. It provides inputs to other sectors of the economy and satisfies a broad range of final and intermediate demands. In particular, high value manufacturing is a key driver of innovation and technological advance. It increases opportunities for attracting and embedding research and development activities, collaboration with the higher education sector and stimulating networks.
Many components of the more traditional manufacturing sectors such as engineering have also seen employment growth in recent years, indicating that the manufacturing sector throughout Ireland remains healthy. While employment in some traditional sectors has declined, these jobs have been replaced with employment in higher value activities. For example, the medical devices and pharmaceuticals sectors are thriving with high growth in employment and high levels of productivity.
In the five years from 2000 to the end of 2005, slightly more than 31,000 jobs have been lost in manufacturing. To put the decline in manufacturing employment in context, more than half a million new jobs have been created in Ireland since 1997. The losses in manufacturing have been more than offset by job creation in services. It should also be noted that the latest Central Statistics Office release on industrial employment of 28 December 2006 indicated an increase of 4,000 in the numbers employed in manufacturing in the quarter ending September 2006 relative to the same period in 2005.
I thank the Minister for his reply. Does he agree with the recent statements by the Central Bank and the Department of Finance to the effect that at present, no increase in export growth is taking place in our economy? Moreover, does he agree with Mr. Joe Macri, managing director of Microsoft Ireland, who recently stated the only reason Microsoft was in Ireland was because of its low tax regime?
While I will deal with this question later, there has been and continues to be export growth in Ireland.
I refer to manufacturing export growth.
In the past three years alone, Ireland's merchandise exports have recorded year on year increases of approximately 3% per annum. This was achieved despite adverse conditions in many markets, including currency rate changes. It follows a long-standing trend of many years that was disrupted in the aftermath of the attacks on 11 September, as well as the bubble difficulties associated with the technology sector.
The Minister does not agree.
Ireland continues to have a very healthy trade surplus, which stood at €29 billion on merchandise trade. On the issue to which people are adverting, it is always important to retain a sense of perspective about debate. The Deputy has had a tendency in the past four or five years to predict continually——
The Minister does not agree with his own people.
——doom and gloom. I can quote all his comments to the effect that——
I know the Minister has a communications unit.
——unemployment would rise dramatically and employment would collapse. While I have all such quotations to hand, I will not repeat them as the Deputy is aware of them.
I am.
Thankfully, the Deputy's predictions have not been borne out.
Does the Minister agree or disagree? He should answer the question asked of him.
As a percentage of world share exports have fallen from 1.5% to 1.4%. However, there also have been changes in terms of the volume of world share. Obviously, growth in the past decade has been extremely rapid and the National Competitiveness Council compares Ireland with a number of benchmarked countries. This is important when preparing for the future and in ensuring that we provide the key ingredients to ensure our future competitiveness.
I asked the Minister whether he agreed with those who advise him, namely, the Department of Finance, the Central Bank and Mr. Macri, who chairs the Small Business Forum. He does not agree with them and considers everything to be great.
In recent hours, there have been some rumours in respect of the Proctor and Gamble plant in Nenagh, County Tipperary. If the Minister has any information in this regard, will he take this opportunity to indicate to Members whether there will be changes in the numbers employed there? The workers at least expect clarification on this matter. If the Minister has information available I am sure the House would be grateful.
Regarding these matters generally, is the early warning system operated by the IDA still in place? If so, is there any information we should know about this or rumours circulating about other facilities? How soon will we be able to engage with those companies? Is the Department or the IDA engaging with them to ensure the minimal amount of restructuring takes place in these plants in the context of employment?
Mr. Hogan is correct to state the employees should be the first to be told by the company. The company indicated it will make an announcement to the workers tomorrow morning. We have been aware of the situation. A study on the optimal solution for Procter and Gamble as a company with regard to its future production of cosmetics in the Nenagh region has been ongoing for approximately nine months.
Engagement between the IDA and Procter and Gamble has been ongoing during that period. The Deputy can take it that the input of the IDA is to support the retention of jobs at Nenagh. We do not have specific details on the announcement to be made by the company tomorrow morning. Today, the company indicated to the IDA its first priority is to communicate directly to the workers tomorrow morning. In this situation, several scenarios are possible. It would be unwise to pre-empt the announcement.
What about the early warning system?
The early warning system is in operation. We continue to receive alerts. In some instances they come through and in others they are averted. The IDA has an ongoing programme of interacting with its client companies, particularly where it identifies areas that might be at risk, to see whether it can bring added and increased activities from other areas of a company's operations to Ireland. We had very good success stories in this regard throughout the country. Any decision is made by corporate headquarters at the company concerned. We engage in dialogue with the company where possible and the early warning system alerts us to any potential difficulties.
Industrial Relations.
Ruairí Quinn
Question:92 Mr. Quinn asked the Minister for Enterprise, Trade and Employment if he will make a statement on the Ryanair judgment in the Supreme Court; the implications for Irish industrial relations; and his views on whether corrective legislation will be needed. [8527/07]
Section 2 of the Industrial Relations Act 2001 as amended provides that the Labour Court may, at the request of a trade union or excepted body, investigate a trade dispute where it is satisfied that, inter alia, it is not the practice of the employer to engage in collective bargaining negotiations in respect of the group of workers party to the dispute and the internal dispute resolution procedures, if any, normally used by the parties concerned failed to resolve the dispute.
The Supreme Court judgment in the case referred to by the Deputy arises from judicial review proceedings brought by Ryanair against a decision of the Labour Court in January 2005 to investigate, at the request of the IMPACT trade union, a dispute between the union and Ryanair concerning Dublin-based pilots. Ryanair brought judicial review proceedings seeking to quash the Labour Court's decision on the grounds that the Labour Court did not have jurisdiction in the matter, in essence that the conditions for the investigation of a dispute in the section of the Act I quoted had not been met, and that the Labour Court had adopted unfair procedures in arriving at its decision.
The High Court found in favour of the Labour Court in the matter. However, on appeal the Supreme Court found in favour of Ryanair. It ordered the Labour Court to again hear the case and apply the procedures and law as indicated in its judgment. It is a matter for the Labour Court to proceed as indicated by the Supreme Court, however, I understand the court considered the Supreme Court judgment and arrangements are being made to hear the case again. In the circumstances, it is prudent to exercise caution when commenting on this issue.
Does the Minister regard the Chairman of the Labour Court as one of the most competent persons to hold the office? He has legal qualifications in his own right as well as industrial relations experience. When the Supreme Court judgment emanated, what was the reaction in the Department? Will it in effect render the 2001 and 2004 legislation defunct if the Supreme Court's interpretation of that legislation is to prevail?
The Minister of State indicated through the House that the Labour Court will try the case again. However, it will do so with its hands behind its back based on the judgment of Mr. Justice Geoghegan. He described the Labour Court decision as an impressive document in its structure and the manner in which it identified the issues. He found the document betrayed "an understandable mind set in favour of the way particular expressions are used and particular activities are carried out by trade unions". If that is not right-wing bias what is? Does this ring alarm bells in the Department? What contingency plans does the Minister of State have, if any, if this judgment prevails irrespective of what the Labour Court does outside the Supreme Court?
We now have an interpretation of 2001 and 2004 legislation which completely changes the nature of the meaning of the Acts as passed in this House by the Government and as understood by the Labour Party. The Supreme Court judgment stands independent of any outcome from the Labour Court regarding the specific case. The law has been altered in its interpretation. Whatever the Labour Court may adjudicate on the specific case, it will not change the standing of the judgment of the Supreme Court in interpreting legislation. What are the legislative implications for workers, society and social partnership if the Supreme Court can tear up legislation as we understand it?
I agree with Deputy Quinn that the Chairman of the Labour Court is entirely competent, committed to his work and doing wonderful work on behalf of the State. However, I understand in this instance the Supreme Court did not decide on the substantive issue. It decided on a matter of procedure which I understand related to the manner of hearing evidence, which in essence is an internal matter for the Labour Court. It is not the substantive issue as outlined by Deputy Quinn. Pending the resolution at Labour Court level, which can only happen when the hearing is completed, it would be premature to draw any conclusions particularly those which Deputy Quinn fears may be the upshot of all of this.
Unemployment Levels.
Seamus Healy
Question:93 Mr. Healy asked the Minister for Enterprise, Trade and Employment the action he has taken in view of the continued unprecedented unemployment levels affecting the town of Carrick-on-Suir (details supplied) since his appointment to address this unacceptable situation; the action he will take; the number of site visits to the town in 2006 organised by the various industrial promotion agencies; the instruction he has given to the industrial promotion agencies to prioritise Carrick-on-Suir; if he will establish a joint task force for the town; and if he will make a statement on the matter. [8617/07]
Under the Industrial Development Acts I am specifically precluded from giving directives to the industrial development agencies regarding individual undertakings or from giving preference to one area over another.
IDA Ireland's strategy for achieving a better regional distribution of overseas mobile investment is to work in partnership with other stakeholders to present companies with credible alternatives which go as far as possible towards meeting their demands for critical mass in terms of population, skills and infrastructure. In line with this strategy, and in agreement with South Tipperary County Development Board, IDA Ireland strategy for south Tipperary is to concentrate future economic development in Clonmel and develop the town as a first-class location for overseas investment. Therefore, while no site visits by prospective overseas investors to Carrick-on-Suir were specifically hosted by IDA Ireland in 2006, the agency believes the town is very well located to capitalise on its position between Clonmel and the gateway city of Waterford, which are both approximately a 20 minute drive away.
At present, south Tipperary has 12 IDA Ireland supported companies, employing approximately 2,027 people with a further 1,000 jobs to come on-stream over the next two to three years. The key industry sector in the county is life sciences, which accounts for almost 60% of employment. The presence of foreign direct investment companies within the region has knock-on benefits in sectors such as supply, distribution and transport, thus creating employment opportunities for local people.
During the past three years Enterprise Ireland approved funding of more than €4.46 million and made payments of more than €2.2 million to client companies in south Tipperary. The agency is actively engaged with 96 client companies in south Tipperary which employ a total of 2,717 people.
The development of community based enterprise centres is a crucial part of the drive to create new regional enterprise. Enterprise Ireland provided support of approximately €54,000 in 1998 to set up the enterprise centre in Carrick-on-Suir. The management team of the Carrick-on-Suir community enterprise centre played a very active role in securing the establishment of Blarney Woollen Mills in the Tipperary Crystal facility. This project is a major success and resulted in creating 30 new jobs in the area. Further expansion of this project is now under way, and will result in additional new jobs for the area.
The live register provides data on a county and local office of registration basis but it is not designed to measure unemployment. It includes part-time workers as well as seasonal and casual workers entitled to job seekers allowance or benefit. In the 12 month period to February 2007, the live register decreased by 4.7% in Carrick-on-Suir compared to a decrease of 0.1% in the south-east region and a similar decrease of 0.1% in the nation as a whole. FÁS also provides a range of services for unemployed persons in Carrick-on-Suir and the surrounding areas.
Additional information not given on the floor of the House.
The practice of establishing task forces has changed since the establishment of the county development boards. Rather than creating a further layer by establishing task forces, the relevant CDB is now seen as the body best placed to oversee any additional response that is required over and above the work of the industrial development agencies under the auspices of my Department.
Is the Minister for real? Is he not aware that 890 persons in Carrick-on-Suir are signing on the live register, and this has probably been a consistent figure over the past ten years? The figure reached a maximum of approximately 950 but has hovered around the 900 mark for about ten years. This represents approximately 25% unemployment in the town.
Would the Minister accept that his comments have condemned Carrick-on-Suir to that level of unemployment into the future? That is the meaning of what the Minister has stated. He has traipsed all over south Tipperary and all over the south east but he has effectively said nothing about positive action for job creation in Carrick-on-Suir. If the town was Passage West, in the Minister's constituency, would I have got that sort of reply?
Yes.
I asked if the Minister would accept there is a long-term and unacceptably high level of unemployment in Carrick-on-Suir, and whether a jobs task force consisting of high-profile heavy hitters is necessary to do something for employment in the town.
I plead with the Minister to set up such a jobs task force because the town has done its part over the last number of years. It has become involved in a series of local community endeavours. It is a fine town, well located in a good area and with a good tourism and road infrastructure. It is near ports in Waterford and Rosslare. Yet it is unfortunately an unemployment blackspot in the south east and south Tipperary.
It is very fine to state there are jobs in Clonmel, Waterford, Dungarvan, Limerick and elsewhere, but there are still levels of unemployment in Carrick-on-Suir that are absolutely unacceptable. The figure has remained effectively the same for ten or more years. Will the Minister establish a high-profile jobs task force for the town?
The Deputy asked if I was for real but the Deputy should get somewhat real as well.
There are nearly 900 people unemployed, that is the reality.
I did not interrupt, Deputy.
It is the reality.
The idea that the creation of thousands of jobs 20 minutes from a town does not provide employment opportunities for people in the town is not realistic or valid. In terms of attracting inward investment to the regions, we must move towards gateways and hubs.
Identifying Clonmel and ensuring it becomes a very attractive location for inward investment is a good idea that would provide opportunities for people living within a significant radius of Clonmel. It is likewise for Waterford. That is the overall point.
The year 2006 was very good for south Tipperary in terms of high-quality jobs coming in. Merck, Sharp & Dohme created 120 jobs, Cordis Communications could potentially create 500 jobs in Cashel and Abbott Vascular is looking at 500 life-science jobs in Clonmel. These are high-quality jobs by any standard.
On the other side of the equation there are structural issues which must be addressed, and we have met with representatives from the town regarding a stronger FÁS input to enable those unemployed in Carrick-on-Suir to perhaps access a range of training and skills programmes to access employment in the area. Enterprise Ireland is also anxious to work with people in the town to advance the agenda there. As the Deputy knows, the county manager has set up a number of working groups involving local interests and agencies. Enterprise Ireland will be supporting the county manager in that regard and representatives will attend those meetings. The county development board is also relevant.
In my frank opinion, the last thing we need is another layer of bureaucracy, or a new board, to somehow go over all the existing layers. The key issue is that the agencies, including FÁS, the IDA and Enterprise Ireland, work together with the county manager, the county development board and the enterprise board to try to create an environment for the growth of micro-enterprises in Carrick-on-Suir and locally developed companies. Then they should ensure people can be upskilled to enable them to access employment being created within 20 minutes of Carrick-on-Suir.
The Deputy asked if I would give the same answer if he asked about Passage West in Cork and the answer is "yes." I would, as people are willing to travel 20 odd minutes. Unfortunately, some people around the country are travelling for an hour and a half or two hours to employment, such as those around Dublin.
There is 25% unemployment in the town.
We know the difficulties of commuting in those contexts.
Our priority is to regionalise employment. In its discussions with companies, the IDA endeavours to get them to regional and rural locations. The idea of identifying a place like Clonmel as the magnet to bring significant industry into that particular area is good. It offers the best chance to people who are unemployed in Carrick-on-Suir.
Is it not true that the Minister's comments have condemned Carrick-on-Suir to becoming a dormitory town with high levels of unemployment into the future? Is it not true that the working groups referred to by the Minister have been unsuccessful over the past number of years? Unemployment is unacceptably and stubbornly high in Carrick-on-Suir, so does this mean this Government, in office for 18 of the last 20 years, has effectively abandoned the town? Is it not time for a high-profile and heavy-hitting task force to be put together for the town?
All the key personnel are working for the town, including the respective agencies and the county manager.
They have not been successful.
The numbers on the live register have decreased by 4.7%.
There are 890 unemployed in a population of 5,000.
In addition, it is important to point out the most recent quarterly national household survey, covering September to November 2006, showed that unemployment in the south-east region decreased by nearly 10% in the previous 12-month period.
We are talking about Carrick-on-Suir, not the south east.
This is in comparison to a decrease of 2.8% nationally.
The Minister is talking about everywhere but Carrick-on-Suir.
Employment in the region has increased by 7.5%, equating to approximately 15,000 jobs in the region. That is the context in which we should view the case of Carrick-on-Suir. The challenge is then to figure out how to ensure people can access the increased number of jobs being created in the general region.
Industrial Development.
Phil Hogan
Question:94 Mr. Hogan asked the Minister for Enterprise, Trade and Employment if he will implement any policy initiative that will redirect investment funding to manufacturing and commercialisation of new inventions; and if he will make a statement on the matter. [8586/07]
The Government's primary responsibility on enterprise policy is to ensure the broad environment and essential framework conditions continue to underpin and support the development of a sustainable enterprise sector.
In line with the recommendations of the enterprise strategy group and small business forum, over the period of the next national development plan, 2007-13, financial incentives totalling €1.7 billion, and other supports, will be provided through Enterprise Ireland and the city and county enterprise boards to create more knowledge-based, technologically innovative, sustainable and competitive indigenous enterprises.
This will include specific initiatives to stimulate the establishment and development of high potential start-up companies across a range of high value sectors, including manufacturing; productivity improvement initiatives to support manufacturing companies to improve competitiveness through technology and training; a range of initiatives to develop management and international sales capabilities; supports in accessing early stage and development capital and financial planning and advice and mentoring; and supports for entrepreneurship and micro-enterprises, including the provision of local enterprise infrastructure.
The nurturing of a positive culture of entrepreneurship and promotion of the formation of new, particularly innovative, enterprises with growth potential will remain a key objective over the timeframe of the plan. Based on the development of their existing suite of interventions, the county enterprise boards will promote entrepreneurship throughout society through initiatives such as their Start Your Own Business training courses, schools enterprise programmes, awards schemes and networks, including the Women in Business networks, etc.
As part of the Government's overall policy to develop science, technology and innovation, as set out in its strategy on STI published last June, Enterprise Ireland will also continue to promote industry-relevant research and development and the commercialisation of publicly-funded research. The agency has brought together a range of supports under a commercialisation fund which seeks to support academic researchers in developing their ideas and bringing them closer to commercial realisation. Funding of €25 million was provided to over 150 projects during 2006.
By 2013, the strategy aims to double the number of companies with minimum-scale research and development activity, treble the number of enterprises engaging in significant research and development activity, increase business expenditure on research and development, increase gross expenditure on research and development and double the proportion of sales in indigenous firms of innovative products and processes. The number of new doctorates in science, engineering and technology will almost double from 543 in 2005 to 997 in 2013. The number of new doctorates in the humanities and social sciences will also double.
To compete successfully in the international marketplace Irish companies will need to develop world class management teams. The key focus areas for Enterprise Ireland will include human resource development, management development and mentoring. To encourage and develop international sales capabilities in client companies Enterprise Ireland will provide services and assistance, including market intelligence, in-market technical, legal and financial expertise, targeting potential buyers, buyer introductions and facilitating Irish companies to establish overseas.
The Minister's time on Question No. 94 has concluded.
Recently, Enterprise Ireland launched a €30 million fund to strengthen the technology transfer offices in third level institutions and supports the construction of campus-based business incubation centres in all institutes of technology and universities.
The Minister is time-wasting.
To date, it has approved 25 incubation centres, 16 of which are in institutes of technology or equivalent third level colleges and a further nine on university campuses.
The Minister is a time-waster.
In a previous reply on manufacturing we noted declining productivity levels and higher costs, most of which are directly attributable to the Minister's policy. He disagreed with the Central Bank and the Department of Finance about export growth and the fact that many companies would not be based in Ireland were it not for our tax policy. Future job creation will be based on exploiting the talent of the Irish.
I agree with the Minister in that there has been much investment in research and development in the third level sector, but 16% of all funds, whether private or public, is being invested in property. Does he have initiatives in mind to redirect some of the incentives away from property to manufacturing and employment generation proposals? A figure of some 5% is the European average for investment of private and public funds in property. Notwithstanding the fact that the Minister referred to the Ahead of the Curve report and other initiatives and fora, has he studied specific financial incentives in the context of the Finance Bill or other measures to direct incentives to manufacturing and the commercialisation of research and development activities?
I mentioned the commercialisation fund allocated by Enterprise Ireland to universities. It is substantial and will dramatically increase the capacity of universities and institutes of technology to commercialise their research.
The Deputy is aware that the budget was significant in terms of incentives to invest capital in new companies and businesses. In line with the recommendations of the Small Business Forum which I established and through which I was anxious to set a blueprint for small businesses, we enhanced the business expansion scheme significantly by raising investor limits and the amount of money that could be raised by companies. We did likewise with the seed capital investment scheme. We lightened the regulatory burden in respect of VAT returns for small to medium-sized companies. By developing an innovation voucher scheme for micro-enterprises and knowledge acquisition grant schemes for small to medium-sized companies we are also in line with the forum's recommendations.
Last year we launched the most significant venture capital fund in the history of the State. The Government provided up to €175 million through Enterprise Ireland for a new capital venture round which we hope will leverage a sum of approximately €1 billion in investment in new and start-up companies. In the budget we provided for an enhanced research and development tax credit to provide incentives for more investment, not just by multinational companies, but also by Irish-owned businesses. We want to see a greater participation rate in research and development in the manufacturing and services sectors, in particular. We have tried to switch investment from construction to production. The budget which received a warm welcome among the small to medium-sized business community delivered almost 100% on the forum's recommendations. Married with the venture capital fund and the research and development tax credit, we expect to see higher levels of investment.
In the interests of saving time, I suggest we move to the next question.
Economic Competitiveness.
Eamon Ryan
Question:95 Mr. Eamon Ryan asked the Minister for Enterprise, Trade and Employment his views on the recent National Competitiveness Council’s report, Benchmarking Ireland’s Performance, which warned that the underlying source of economic growth has shifted from exports towards construction activity and consumer demand, that foreign firms are responsible for 92% of exports in 2006 and that productivity levels are falling. [8918/07]
The economy is a remarkable success story. During the past decade we have achieved consistently higher economic growth rates than most developed countries. This is among the better-off countries in the European Union and the developed world. We also score well in international rankings of quality of life. The 2006 UN human development index ranks us in fourth position ahead of countries we have long admired such as Sweden, Canada, Switzerland, Finland and Japan. Our position in this index has increased by 14 places since 2004 based on Ireland's improving levels of wealth, health, life expectancy and education.
For each of the past three years Ireland's merchandise exports have recorded year-on-year increases of approximately 3% per annum. This has been achieved despite adverse conditions in many markets, including currency rate changes, and it follows a long-standing trend, albeit one that was interrupted briefly following the economic shock after 11 September 2001 and the dotcom bubble difficulties in the technology sector.
Ireland continues to have a healthy trade surplus. In 2005 this stood at €29 billion on merchandise trade. Statistics for services exports released recently show a healthy trend in the years 2003 to 2005, with a 14% increase between 2003 and 2004 and a 9% increase between 2004 and 2005. While final data on services exports for 2006 are not yet available, the indications are that the positive trend continued.
In recent years domestic demand, particularly for houses, has been an increasing driver of economic expansion and employment growth. While it is good news that we have the resources to address deficits in our housing, transport and broader social infrastructure, our economic prosperity depends on our ability to sell goods and services abroad. Ireland must offer a high quality, cost-competitive business environment. This is still a strong trading nation and the challenge facing us is to stimulate productivity and export growth and increase international market share as key policy objectives.
These are the issues that the National Competitiveness Council addresses in its latest report, Ireland's Competitiveness Challenge, which outlined policy recommendations across a range of areas. The Government is committed to acting on the recommendations of the council's report which are designed to stimulate productivity growth and improve our ability to sell goods and services abroad. For example, the national development plan proposes a wide range of investments that will improve productivity by removing infrastructural bottlenecks that increase costs. It will enhance the skills of graduates and people already in the labour market and create a more supportive environment for enterprises in developing new products and services. The strategy for science technology and innovation will drive research and development performance and underpin long-term competitiveness.
The Government recognises the need to stimulate productivity growth and improve our ability to sell goods and services abroad. A range of strategies are in place to assist in this regard. I am confident that we can build on our past achievements, while laying the pathways for growth and higher productivity.
I note a similarity in the questions asked. It has become increasingly clear that while no one doubts the economy's success in the past ten to 20 years, there is increasing concern that we have gone through two phases of a boom, the first of which involved genuine growth in productivity, exports and manufacturing, which has been followed in the past five years during the Government's term in office by a phase based on growth in construction and consumption at home which crowds out our ability to develop an economy based on enterprise and exports. While no one doubts that certain sectors such as financial services have continued to grow in recent years, there is a concern that the decrease of 32,000 in the number of manufacturing jobs and the balance of trade deficit, projected to be €6.9 billion this year, paint a picture of an economy heading towards more difficult times and a Government which is not delivering solutions that will have a real impact on the ground. The Minister set out the various ways by which he hopes to address these issues, but we are not seeing any signs of success.
I examined the commercialisation research and development fund and its outcomes in some detail. There may, indeed, be a good deal of money being put into the area of research and development, but it is clear that the outcome in terms of new indigenous Irish exporting companies is not being delivered. One can just count the number of patents and start-ups and look at the detail as regards what is happening in the economy. One could say the Minister for Finance has taken up many of the suggestions of the Small Business Forum and others. However, he is still acting as a Fianna Fáil Minister for Finance in that there are still tax breaks and major incentives in the area of property development, which is crowding out the likelihood of an alternative enterprise economy here.
Has there been discussion in Cabinet about the need to slow down the construction sector in order to free up capacity within the rest of the economy? Has the Minister made the case to the Department of Finance for scaling back some of those other developments? What success has he had with the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, for example, in terms of trying to reduce some of the costs facing new entrepreneurs by taking on what the National Competitiveness Council shows as the dominance of utilities in Ireland in areas such as telecommunications and electricity supply? The main cost factors affecting companies are way out of line. What has the Minister done to change Government policy in that regard to try to help an indigenous enterprise economy?
No one disagrees with the analysis that we need to change and to put the emphasis on research and development. What is becoming increasingly clear on this side of the House, however, is that the Minister is not being effective in delivering change.
I must reject that. We created in the region of 500,000 jobs. The Deputy mentioned the 30,000 jobs lost in manufacturing. Like all developed economies the services sector accounts for a growing proportion of the jobs created. I do not accept the Deputy's view that Ireland is not getting a bang for its buck in terms of research and development. It is early days yet in terms of that evaluation. However, in terms of the numbers of research and development investment projects we are winning from overseas compared to our performance five or six years ago, the picture has dramatically improved. This is because of the emphasis we put in our policy and in our investment on research and development and companies are beginning to see that. We are marketing Ireland strongly and proactively as a country in which to locate research and development activity. Enterprise Ireland has been very successful in terms of its three-year strategic plan, which is now almost two years in operation. Under its transforming agenda, this has helped to orientate indigenous companies in the direction of markets that will open up new export opportunities for them. Enterprise Ireland clients have significantly increased their exports. In any trade missions I have been on all of the successful companies have a research and development or innovation or design house within them, which is a critical factor in their success. Enterprise Ireland client companies' exports in Asia, for example, rose by 14.6% and their figures for the US came in at around 13.6% for 2005; the outlook is looking good for 2006 in that regard also.
In terms of the energy issue, of course we work closely with the Minister for Communications, Marine and Natural Resources. He is preparing a White Paper for publication shortly and we anticipate Green Party support as regards the recommendations and policy proposals that will emanate from it. The Minister for Finance, Deputy Cowen, has already initiated tax reform in terms of the property sector. He is correct to phase out gradually, to ensure stability and continued employment in the sector, as opposed to a sudden sharp change, which is not good. People in any sector of the economy deserve to have a degree of predictability and to know there is an overarching framework and timeframe within which they can operate. The Minister has implemented and followed the spirit of the substantial analysis of our tax reliefs system which all parties in this House supported over the last 22 years in different guises, with the exception, perhaps, of the Green Party, which did not have the opportunity to be in power for most of that period. Nonetheless, other parties, who are not in power now, introduced property tax relief schemes in a different era and for justifiable reasons as well.
On the foreign direct investment side, we continue to attract high end activities into the country, not just in the area of financial services, but in pharmaceuticals, bio-pharmaceuticals, medical devices and some engineering companies as well.
The Green Party, if it had been in Government, would not have voted for tax breaks for multi-storey carparks, holiday homes or hotels, which have skewed enterprise policy in this country. Having worked in the tourism industry for years, I found it remarkable that the Government knew better than I did, as an operator, what should be built. Unfortunately, the Government got it badly wrong. Productivity growth at the moment has not been lower since the early 1980s. What will turn that around?
It is not a fair comparison to compare the 1980s with the present by any standard. It is not to compare like with like. Obviously, in a developing economy the productivity gains we have seen over the past ten to 15 years will, by definition, be more significant than those we can expect in the remaining period. Three issues account for this — investment in research and development I am absolutely convinced is essential for our competitiveness and increased productivity; greater investment in technology and innovation; and in terms of the skills agenda, the upskilling of the workforce. Today we launched the national skills strategy, which aims to upskill half a million workers between now and 2020. These are particularly important factors in ensuring a continued competitive performance by Ireland and, indeed, increased productivity. Another key factor is greater competition within the domestic economy. The Green Party opposed this in terms of the abolition of the groceries order, to cite one example. People keep talking about the need for competition within the domestic economy, but when it comes to taking on vested interests everybody runs away and finds excuses to oppose whatever liberalisation initiatives are being put forward at a particular time. Most of the reports that Deputy Eamon Ryan and indeed, Deputy Hogan, quote, keep pointing to the need for more competition in the domestic market and economy as a way of developing stronger productivity and growth. The FDI side is enjoying greater levels of productivity growth than the domestic side of the economy.