To put science and technology in perspective, if we want to remain competitive in Ireland, clearly we are not going to return to being a low-cost, low-wage economy, so we have to compete on a different plain at a different level. That means we have to be much more innovative and invest fairly heavily in research and development. A number of years ago, as a result of a technology foresight exercise carried out on behalf of the Government, it was recommended that if we wanted to continue to compete, if we wanted a 2015 vision of where the economy should be, we have to make investments in basic research. Two areas were identified, ICT and biotechnology. We have committed ourselves in the national development plan to spend nearly €700 million on basic research in those two areas. We have established a foundation. The legislation to put it on a statutory basis is currently before the Oireachtas. Essentially we have attracted to Ireland at the moment about 100 different research teams who are carrying out basic research in a number of our universities. Funding on the research side is allocated on the basis of international peer group review, in other words, the best people in the world. It is highly competitive.
The Irish Government is giving among the biggest grants being given by any government in the world for basic research. In addition to that, Enterprise Ireland, as can be seen from the Estimate, has substantially increased its spend on research and development. An analysis of Irish companies in recent years has shown that relatively few of them invest in research and development and, while we are good at making other people's products or acting as sub-suppliers to the multinational sector, we will not be able to succeed unless we are constantly innovating. A large proportion of the support that we give to our companies now in order to expand and develop is towards developing the capability and capacity of their research and development.
Forfás has the function of advising and co-ordinating policies for the different State agencies and advising the Minister regarding industrial policy generally. It has produced a number of reports. It has worked on the export skills group examining future skills needs in this economy. It recently reported on Irish inflation and does much work with the National Competitiveness Council which reports to the Taoiseach on the factors that affect Irish competitiveness across a broad range of areas, including energy, transport, waste treatment and so on.
On the foreign direct investment side, we still perform extremely well. Clearly we are not getting the scale of projects that we got in recent years, but we are still doing remarkably well. Since the start of this year we have been announcing, on average, one project a week. Sean Dorgan of the IDA made the point last week, when the annual report of the IDA was published, that he is very optimistic about this year and the pipeline does look very good. Basically, we are extremely attractive for higher value-added activity. We compete aggressively against Singapore, Puerto Rica and so on. The biggest bio-pharmaceutical facility being built in the world today, a €2 billion investment, is being built by Wyatt in Ireland. These are among the areas where we are seeking to encourage further activity into the Irish economy because bio-technology and bio-pharmaceutical activity are essential for the future.
In the national development plan, the IDA was asked to ensure that half of all the new greenfield jobs would be in the Objective One region, that is the Border, the midlands and the west. Although we have been making great strides to achieve that objective, there are serious infrastructural issues that affect investment in the less developed regions of the country. They include transport, broadband and factors of that kind which make attracting investment far more difficult. Many of the projects that are interested in coming to Ireland still want to locate in either the greater Dublin area, Cork and, to a lesser extent, Waterford and Limerick. In so far as the BMW region is very attractive, Galway city and the surrounding area tend to be the most attractive. However, in recent times Longford, Sligo, Tullamore and a number of other centres in the BMW region have been attractive for investment.
I have dealt with Enterprise Ireland. By way of comment, our second largest export market after the UK is now the United States and that is a considerable change for us. The indigenous sector, particularly the technology sector, is very focused on the US market.
Irish unemployment is still very low at 4.6% and we had employment growth over the past 12 months of about 1.3%. However, we cannot become complacent. We have achieved full employment after enormous efforts by successive Governments regarding labour market strategies and lowering taxes. We have moved from a labour market shortage to a surplus and back again to a labour market shortage. Approximately 40,000 people work in the Irish economy on work permits and it is estimated that 40,000 to 50,000 people are here from other European countries who obviously do not require work permits.
In keeping with the fall in long-term unemployment, a budget of nearly €370 million was allocated to FÁS employment programmes and these included community employment, the jobs initiative and the social economy programmes. There was a time when we had one community employment place for every six long-term unemployed people. We have more people today on community employment than we have long-term unemployed people. However, a huge issue that arises regarding community employment, which is not quite a labour market issue, is that a whole host of services on the ground are now being exclusively provided by community employment. In the past many of those jobs were done by voluntary effort but changing lifestyles and work patterns make that more difficult. There are major issues we need to confront as a society in terms of how we provide services on the ground in many communities, both urban and rural.
My Department took over responsibility for training people with disabilities in 1998, and it is appropriate that the training of somebody with a disability should be mainstreamed and not seen as a health-related issue. Although disabled people have health difficulties from time to time, their track record in employment is fantastic. They have lower levels of absenteeism and greater commitment. When they succeed in getting jobs, employers find them very motivated, supportive employees. That is why we have to continue with their efforts. We are doing reasonably well in some respects in the training of people with disabilities for jobs in the labour market.
The national training fund was established a number of years ago to earmark a percentage of employers' PRSI for training initiatives, and it is working extremely well. Total expenditure from the fund in 2002 was €204.6 million and in 2003 it will be about €239.7 million. A total of 0.7% of reckonable earnings of employees in classes A and H fund that, and this represents approximately 75% of all insurable employees.
On the question of industrial relations, the other day I had the opportunity to publish the annual report of the Labour Relations Commission and I was pleased to see that although the volume of business is up 36% on the previous year, we have had the lowest level of days lost from industrial strikes since 1970. A total of 81% of the industrial disputes referred to the conciliation service are resolved positively, which is a very good record. I have to say, however, that there is a tendency for the labour relations machinery of the State to be often used as a place of first rather than last resort. Disputes should be resolved at local level and the State machinery, which has enormous expertise and a supportive role to play, should only be called in as a last resort.
I dealt earlier with the issue of work permits. On insurance and a number of issues not covered in the script, as I have said previously, insurance is my number one political priority. We have published the heads of the Bill for the PIAB, the Personal Injuries Assessment Board. If Deputies, particularly spokespersons, have views on that I would like to hear them before we finalise the Bill because it would help to get better legislation. We could then have a more effective debate in the Oireachtas when the full Bill is published in the autumn and hopefully taken through the Oireachtas by the end of this year.
In advance of the legislation, however, we have established the PIAB on an interim basis, chaired by Dorothea Dowling, which is doing an enormous amount of work. It is currently recruiting the independent medical expertise. It will also shortly be looking for a chief executive. It has had numerous discussions with various bodies, particularly the Data Protection Commissioner regarding the exchange of information because it is envisaged that it will be able to have access to the Revenue and social welfare details of individuals so that people will be compensated on the basis of actual earnings and not fictitious earnings, which is often the case in this situation. It is also involved with the Courts Service in drawing up a book of quantum, which will be the first time we will have a book of quantum in Ireland.
Essentially, the PIAB is a paper-based way of settling claims where liability is not an issue. It takes six times longer in Ireland for a genuine claimant to get what he or she is entitled to under our model than it does in the United Kingdom. That is very unfair on genuine claimants. In addition, 40% of the cost of delivering claims is accounted for by legal and other fees. The PIAB will be paper-based. People will not be given resources for lawyers. There will be no advocacy role, therefore, nobody will be presenting anywhere. It will operate from 8 a.m. to 8 p.m., and on Saturdays. It will have an extensive information service available to inform people and help them complete application forms. It will have its own actuarial staff so instead of the insurance company and the claimant each having to recruit a great deal of expertise, it will have all the expertise in-house. Essentially, it is about getting the money to the genuine claimant as quickly as possible. It will be mandatory for all cases which have not gone to trial to first go to the PIAB.
The PIAB is not a panacea for all ills. It will simply work as part of a solution with all the other pieces, in particular the measures being brought in by the Minister for Transport on road safety issues and those of the Minister for Justice, Equality and Law Reform on the swearing of affidavits. If any part of the affidavit is false or exaggerated, the whole claim falls. There are also the issues of the streamlining of court procedures, the introduction of a mediation service and so on. I am aware insurance is a major issue for Deputies and one which is also affecting the competitiveness of this economy.
As regards regulation, Irish inflation still runs at over twice the EU eurozone rate. That is leading to pressures on wages. It is making Ireland very expensive for our own citizens and for those who visit our country. It has huge effects on the overall performance of the Irish economy and that is why the Government, together with the social partners, has established a working group to examine all matters that affect Irish inflation.
Basically, everything is under review. If we can, by regulation, remove artificial barriers that can drive down the cost of products in Ireland, we have an obligation to do that in the interests of consumers. We cannot be constantly focused on producers. We have to be focused on the needs of consumers across a whole host of price headings. Food prices in Ireland, for example, have risen by twice the eurozone average over the past five years, yet farm gate prices are declining fairly rapidly. One has to ask why that is the case. If there are artificial barriers they should be examined with an open mind with a view to Government looking at some of those issues.
The challenge for us as we go forward is to upscale and retrain our workers, particularly those working in basic manufacturing, for the new jobs that are being created in this economy and to work with our companies to move up the value chain so they can compete successfully in the international marketplace. A.T. Kearney said recently of the Irish economy that we are the most globalised economy in the world and, therefore, we are more susceptible than any other economy to what happens in international markets. We are big importers and big exporters.
Last week, the rate of inflation reduced substantially to 3.7%. Much of that is as a result of what happened in exchange rate policy over the past few weeks. What happens in international marketplaces has a huge impact on this economy and there are some aspects over which we have no control. However, in so far as we can control our own destiny in training, education, innovation and in the issues that affect competitiveness like insurance, the challenge is to address many of the issues with the hope of maintaining the competitiveness of this economy and the full level of unemployment we have at 4.6%. The German rate is 11%. The eurozone rate is 9%. For us to have one of the lowest rates is extraordinary because for 21 of the 30 years between 1960 and 1990, we had the highest level of unemployment in the European Union. Today, we have one of the lowest levels of unemployment and we know how that came about. It was painful and we want to ensure that we do not return to the days when we are up at the higher end of the league rather than at the bottom of the league.