Dáil Éireann Debate, Wednesday - 5 October 2005
251 Ms O. Mitchell asked the Minister for Enterprise, Trade and Employment if he has made representations to the Minister for Transport or the Dublin Airport Authority outlining the cargo needs of a competitive economy as outlined in the Asia strategy report to ensure that facilities are safeguarded and expanded in any airport redevelopment. [26873/05]
View answerThe Asia strategy report, published by my Department earlier this year, did not identify any specific issues regarding cargo transport as impediments to the growth in trade with Asia. The high level group, which will oversee the implementation of the strategy, will hold its first meeting later this month. If any new relevant issues arise, these can be looked at by this group as part of its ongoing work.
252 Mr. O’Connor asked the Minister for Enterprise, Trade and Employment the policies he is pursuing for keeping unemployment low; his views on the main challenges in keeping unemployment low; and if he will make a statement on the matter. [26954/05]
View answerSince 1997, the numbers in employment have grown by 31%, from 1.5 million to a current level of over 1.9 million. Correspondingly, during this period, unemployment levels have dropped by 50%, from 171,200 to 85,600. A number of factors contributed to the dramatic economic growth which has resulted in continuing increases in employment, these include the expansion of the labour force, highly educated workforce, attraction of foreign direct investment and social partnership. All of these elements will continue to make an important contribution to future growth of the economy and employment.
Competitiveness is a key issue for our continued economic growth. Our economy is no longer a low cost one but typified by high output, high value added, high returns to labour and improving living standards. In pursuit of a knowledge-based economy, the continuing structural adjustment of our economy is necessary and will continue as high value added services increasingly become the wealth and employment drivers of the future. To offset any competitive threat from lower wage economies, a number of policies are being implemented to encourage a move to higher productivity and the use of technology to invigorate enterprise.
Future economic success lies in our ability to create sustainable employment by both attracting and growing companies with higher profitability and operating at the more sophisticated end of the value chain. The enterprise development agencies are working to source new investment by a combination of developing existing clients and new investors in existing or new activities or sectors and have been mandated to adjust their support strategies to help businesses to generate high quality employment opportunities. An example of this is a €20 million productivity improvement fund, launched by Enterprise Ireland, to help indigenous firms invest in the very technology, equipment and employee training that will give them the opportunities to win more business and survive against international competition. In addition, many IDA Ireland client companies who operate in less technologically advanced sectors are making significant new investments in high technology projects, including some notable research and development investments, which require high skill levels and, therefore, are a better fit with our competitive attributes. The agency is also continuing its investment promotion activities to generate new flows of foreign direct investment into Ireland and is working to identify and support new investment opportunities out of the existing client base.
There is also the need to encourage greater participation in further education and training in order to equip all individuals with the skills needed in an economy which is increasingly becoming knowledge based and innovation driven. The focus now is to upgrade the competencies and qualifications of the workforce, particularly those with low skill levels and in low level occupations, through providing targeted training programmes by way of in-company training and training for the unemployed. The current policies to encourage enterprise and investment will lead to continued economic and employment growth, thereby keeping unemployment low.
253 Mr. O’Connor asked the Minister for Enterprise, Trade and Employment his views on the current position of our competitiveness; the areas of competitive advantage which Ireland currently has; the areas where there is scope for improvement; the actions he will undertake to ensure such improvements; and if he will make a statement on the matter. [26955/05]
View answerAccording to the World Economic Forum's recently published global competitiveness report for 2005-06 Ireland has moved up four places from 30th to 26th out of 117 countries. This higher ranking is testament to the Government's committed efforts to strengthen our competitiveness. The improvement in Ireland's national competitiveness is further supported by the findings of the National Competitiveness Council's annual competitiveness report for 2005. This report highlights several encouraging statistics, which show that we are broadly implementing the right mix of policies. In 2004, the number of people in employment in Ireland grew strongly with almost 1.9 million in employment by the end of the year. Consumer inflation stabilised and in fact by mid 2005 Ireland's rate of inflation was below the euro-zone average. Government finances remained healthy and our investment in infrastructure as a percentage of GDP is approximately twice the EU average at 5%. Ireland has a very strong competitive advantage based on low direct personal and corporation taxes. In fact, the ACR 2005 finds that Ireland continues to rank 1st out of 16 for both these taxes. In the area of business regulation, Ireland also has a significant competitive advantage. Our social partnership process has and continues to create a benign business environment with both a stable fiscal and wage setting regime. Our demographic profile with our young and well-educated workforce also remains a key competitive advantage.
However, the ACR 2005 also highlights two principal areas where Ireland's performance could be improved. The first is our price and cost competitiveness, which has been eroded in recent years. Combined with a weak dollar exchange rate, this means that Ireland is now an expensive production location relative to several of our trading partners. A key factor in improving cost competitiveness is robust consumer and competition policies. The Government had already put in place the necessary measures to establish a national consumer agency to advocate the consumer's case. The Government has also implemented a successful reform process of the insurance sector and increased the powers and the resources of the Competition Authority, to aid it in tackling any anti-competitive practices in the Irish economy.
The second area of concern arising from the ACR 2005 is the significant discrepancies in the productivity performance of the Irish economy. Ireland's productivity growth has been concentrated in a small number of sectors, such as the chemicals and pharmaceuticals, which are dominated by foreign companies. However, there is evidence of much weaker productivity growth in sectors of the Irish economy less exposed to international competition such as retail, construction, general services and in some sectors of indigenous manufacturing. To address this issue the enterprise agencies of my Department have been mandated to adjust their support strategies to the needs of their clients in the modern global economy. For example, Enterprise Ireland has launched a €20 million productivity improvement fund, which will assist Irish firms in their drive for higher efficiency and international competitiveness.
The Government is determined to ensure that Ireland's competitiveness and the conditions for businesses operating here are as favourable as possible. In this context, the Government looks forward to receiving the NCC's competitiveness challenge report 2005, which is due to be published later this year.
254 Mr. O’Connor asked the Minister for Enterprise, Trade and Employment if he has satisfied himself with Ireland’s current exports performance; his plans to improve Ireland’s export performance; and if he will make a statement on the matter. [26956/05]
View answerAccording to figures published by the Central Statistics Office for 2004, which is the latest year for which full year figures are available, total exports from Ireland amounted to €84.2 billion while total imports amounted to €51 billion. This resulted in an overall trade surplus of €32.8 billion. Ireland has had a significant trade surplus as between exports over imports for a number of years. Figures available for the first half of this year show that overall, exports increased by 1% in the six month period to June 2005 when compared with the same period in 2004. This represents a very creditable performance on the part of Irish exporters in a difficult trading environment against the background of the current global economic slowdown, in particular the slow growth in the major European economies of France, Germany and Italy and the continuing high level of the euro against the dollar and the pound. I am confident that as the worst of the economic slowdown eases, Irish exporters are well placed to take advantage of a European recovery in the second half of the year.
Irish Government policy has been, for a number of years, to exploit fully our membership of the European Union by diversifying into EU export markets, and also to focus on new opportunities in the US and further afield. From a position of 75% of Irish exports going to the UK in 1960, we have now reached a point where the EU now accounts for 62% of our exports with only 18% of exports going to the UK. Since last year, the US has replaced the UK as our leading export market and now accounts for 20% of Irish exports. Of equal importance is the continuous transformation of both indigenous and foreign direct investment enterprises from low end manufacturing to the production of high value added goods and services such as software, telecommunications and pharmaceuticals resulting in new export opportunities to highly developed economies in the EU, the US and Japan. Other export destinations, which offer new opportunities in the future, are the ten newly accessed members of the EU and Asia. Both the Minister for Enterprise, Trade and Employment and I have been active in leading trade missions, in conjunction with Enterprise Ireland, to the new member states with a view to increasing our share of exports by Irish companies to these regions.
Earlier this year, the Taoiseach launched the second phase of the Asia strategy which is designed to increase Irish exports to the main economies of Asia, such as China, Japan and India, over the next five years. Within the context of the Asia strategy, it is envisaged that enterprise development agencies, such as Enterprise Ireland, An Bord Bia, Tourism Ireland and organisations engaged in the education sector, will be combining closely to exploit and increase Irish exporting opportunities in this area over the lifetime of the Asia strategy, which is scheduled to run until 2009.
