Thursday, 11 March 2004

Questions (41, 42)

Arthur Morgan

Question:

39 Mr. Morgan asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on whether there will be a flow of jobs out of this State as multinationals relocate to the EU accession states following enlargement; if the Government has a strategy to deal with this eventuality; and if she will make a statement on the matter. [8024/04]

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Pat Rabbitte

Question:

74 Mr. Rabbitte 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; and if she will make a statement on the matter. [8094/04]

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Written answers (Question to Minister for Enterprise)

I propose to take Questions Nos. 39 and 74 together.

It has been obvious for some time that our economy is undergoing fundamental change, which has affected both the manufacturing and service sectors. It is fair to say that our strengths and competitive advantages, especially compared with low wage economies, have changed fundamentally. Ireland's economy is now one typified by high output and productivity together with high returns to labour in the form of wages, salaries and better living standards. Ireland has become a more prosperous and wealthy economy, converging with the broad income and prosperity levels of other member states of the EU. I doubt anybody would have it any other way.

Naturally a more attractive cost environment abroad will inevitably attract some firms that are unable to generate the return from the modern enterprise economy into which we have transformed ourselves. The change taking place across our enterprise base will continue and is 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 relatively low technology, labour intensive activities. In a borderless Europe that places no restrictions on where people can work or where investors can do business there will always be competition for investment.

One of my key objectives is to develop a competitive economy that will be resilient to the toughest competitive pressures, either from within the EU or elsewhere. At the end of the day, however, it is entrepreneurs that decide where to invest. Consequently, I am committed to making sure that when companies decide to invest, Ireland has the reputation as a secure world class investment location to meet the most demanding business requirements and our citizens have the skills to blend creativity and adaptability with the resourcefulness that knowledge businesses need. To a large extent, our destiny is in our own hands.

Government policy is focused on ensuring this happens. Arising from the most recent work of the National Competitiveness Council, the Government has decided that it will assess our competitive status every six months. My Department's focus on helping generate sustainable employment growth complements work that I am pursuing at a European level. As President of the competitiveness council I am acutely aware that we have to work together with other member states to reinforce our national objectives.

We are working to accelerate the Lisbon agenda in the many areas that are essential to making Europe the enterprise region of the world. Items on our agenda that we must progress include entrepreneurship, strengthening the internal market and putting in place EU framework conditions to deliver greater and more effective research, development and innovation.

Last July, I set up the enterprise strategy group to be the architect of new enterprise policies for the coming decade. I asked its chairman, Eoin O'Driscoll, to specifically look at what we need to do to be a competitive, knowledge based enterprise economy and asked that the group specifically take account of international trends in globalisation and EU enlargement. I expect to receive this report around the middle of the year.