Tuesday, 10 February 2004

Questions (91)

Eamon Gilmore

Question:

161 Mr. Gilmore asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps she intends to take to counter the growing trend of jobs being transferred to lower cost countries in view of the recent announcement by a company (details supplied) that it was to transfer 150 jobs from its office at Leopardstown to Poland. [3787/04]

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Written answers (Question to Minister for Enterprise)

While I regret the decision of the company in question to relocate some of their activities from Ireland, I also appreciate that it retains its commitment to the country, as evidenced by a large material investment at one of its Irish facilities recently. The company plans to maintain its other existing operations here and the 320 staff employed in those operations. The company has indicated that up to 50 of the 150 staff whose jobs are to be relocated may obtain jobs in other company facilities, and that a number of these jobs may be retained in Ireland. Efforts are already being made to locate alternative employment for those affected by the relocation. Officials from my Department will meet with the company to discuss the background to the company's decision. I cannot be complacent about these or other job losses from a national viewpoint and from a personal perspective I very much understand the serious blow to the individuals concerned as well as to their families.

Despite this setback, however, IDA Ireland continues to discuss opportunities with a number of companies considering Ireland as a location for similar activities.

Clearly, a more attractive cost environment abroad will inevitably attract some firms that are unable to produce in the high-wage environment of modern industrial economies. The continuing structural transformation of our economy is economically inevitable. With this, some plant transfers and other adjustments are bound to come, but where relocation has occurred to date, it has largely been limited to low technology, labour-intensive activities. Over the past few years I have mandated the enterprise support agencies under my Department to adjust their support strategies to meet both the needs of society in terms of high quality employment opportunities and the needs of businesses that generate and sustain those jobs. We all have a tough competitive battle ahead because our ability to win investment for Ireland will depend on convincing investors that profitable business can be done from here.

The enterprise development agencies have had a good deal of success in attracting higher-value replacement enterprises, in line with our policy of moving enterprise in Ireland to the higher value output of products and services. Such changing specialisation is a reflection of a changing comparative advantage, where we will retain those jobs that are human capital and technology intensive and characterised by high productivity and correspondingly high real wages.

We are implementing a careful progression in the sophistication and breadth of higher value activities that foreign owned companies carry out here. IDA Ireland has responded to the new value-added imperative by attracting firms working with new technologies or involved in higher value activities. We have secured superior new strategic projects and good success has been achieved by IDA Ireland in encouraging their clients to undertake more important strategic research and development and investments in their Irish operations. For example in 2003 Google, Overture and eBay announced the establishment of key European centres in Ireland while Diageo has made Waterford the location for a global supply production facility. This year the Canadian Covers Media Group decided to locate its European headquarters to Galway.

I am committed to creating and sustaining framework conditions that will encourage science and other knowledge-based activities, important to future standards of living, to take place here. We know from experience that creating the best conditions for enterprise and stimulating a climate for investment are the best ways to take industrial policy forward.

The changes taking place in our economy do not have to be consistently negative. We have proved that we can be the authors of our own successful destiny. I am committed to replacing relocated industry with other, higher-value enterprises. Investments in research, innovation, training and ICT as well as re-organisation of work and the ways we do business are constitute key ingredients of the transition process. Effective policy responses include the re-evaluation of the enterprise environment, and gaining a better understanding of the new dynamics facing industry. To this end, in July last year I set up the enterprise strategy group to recommend new strategies to ensure that the enterprise prosperity we have enjoyed will continue into the future. I expect the group to report to me around the middle of this year.