Dáil Éireann Debate, Thursday - 7 October 2004
60 Mr. Eamon Ryan asked the Minister for Enterprise, Trade and Employment the initiatives he views should be developed to encourage the retention of jobs within the country in view of the recent announcement of an expected 180 redundancies in one of Ireland’s largest general insurance companies and the concerns that such reductions may in part be caused by the outsourcing of some of the companies’ services to lower cost countries. [23592/04]
View answer77 Mr. Durkan asked the Minister for Enterprise, Trade and Employment the extent to which he intends to address the issue of job relocation to lower wage economies with particular reference to areas throughout this country that have been particularly affected in this regard; and if he will make a statement on the matter. [23614/04]
View answer83 Mr. Rabbitte asked the Minister for Enterprise, Trade and Employment the steps he intends to take arising from the spate of job losses announced over recent months in firms (details supplied); his views on the high level of job losses in the traditional manufacturing sector; the steps being taken to address the job losses in this sector; and if he will make a statement on the matter. [23674/04]
View answerI propose to take Questions Nos. 60, 77 and 83 together.
It is clear that the Irish economy has been undergoing substantial change for some time now, a change that has impacted on both the manufacturing and service sectors. A fundamental shift in our strengths and competitive advantages has taken place and our economy is now one typified by higher 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 if anyone would have it any other way.
The change that is 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. This is not to minimise in any way the problems caused for those made redundant. In today's globalised economy, however, it would be foolish to expect that employment losses can be avoided. To counterbalance the competitive threat from lower cost competitor economies, both the country and firms operating here must move to higher levels of competitiveness and value added products and services.
Sustainable employment will be driven by companies with higher profitability, that are more technologically advanced, that prove a better fit with the competitive characteristics of our economy and are less likely to move on the basis of simple cost influences. This new investment will be sourced by a combination of developing existing clients and new investors in existing or new activities or sectors. Given the critical mass of FDI in Ireland and its linkages with indigenous companies, one of the greatest potential contributions will come from developing companies already operating here.
The enterprise development agencies have a determination to encourage companies into more sophisticated activities where competitive advantage in niche areas is less likely to be whittled away by simple cost based competition. The agencies provide a range of integrated programmes to support companies that want to make the strategic and sometimes difficult transition to extending both the sophistication and breadth of their operations. These supports are carefully tailored to the different needs of both the foreign and indigenous sectors.
From a regional perspective, differential financial supports are available to encourage more investment in regional centres. Efforts to attract new investment and to assist with issues such as re-training are reinforced by the development agencies in areas that have suffered job losses. The adoption of a national spatial strategy that recognises the need for regional growth centres is linked with IDA's strategy of setting up magnets of attraction in regional locations that sell a compelling reason to potential investors. Substantial software development activities have been attracted to Letterkenny and Mullingar, while financial services have been drawn to Wexford, Kilkenny and Galway.
The recent report of the enterprise strategy group recognises that we are at a turning point in terms of the competitive impact of global competition for markets and investments. That group made a number of key recommendations that are being considered by a high level group set up by my predecessor to look at the most appropriate route to implementing the recommendations. I will shortly be making a report to Government on their work and recommendations.
