Bernard J. Durkan
Question:218 Mr. Durkan asked the Minister for Enterprise, Trade and Employment his plans to address the issue of competitiveness; and if he will make a statement on the matter. [38217/06]
View answerWednesday, 15 November 2006
Questions (155, 156, 157)
Written answers
Competitiveness is a remarkably broad policy area constantly under review and consideration both in my Department and across the Departments of my Government colleagues. Several activities are directed at identifying and improving our competitiveness.
Recently the National Competitiveness Council (NCC) published its Annual Competitiveness Report (ACR) with its presentation of international benchmarks of competitiveness. I look forward to the next publication from the NCC, its annual Competitiveness Challenge that will use the results of the ACR to suggest policy options to strengthen competitiveness. This presents on an annual basis reminders of where we need to focus attention to maintain and improve upon current levels of competitiveness. I will bring this report to Government so that its policy suggestions are given the widest circulation to Ministers and their policy advisers.
My Department is currently working with Groups associated with implementation of important enterprise reports such as that from the Small Business Forum and the Enterprise Strategy Group.
In addition to this, the Business Regulation Forum is working to identify disproportionate administrative burdens that may impede competitiveness. In addition Forfás produces a range of research on issues affecting competitiveness that helps inform and guide policy innovation and thinking across my Department.
Numerous other activities by the various enterprise development agencies under my Department are underway. These operational programmes are helping individual enterprises in Ireland maintain competitiveness in a fiercely demanding market, develop their capacity to build their businesses and extend their ability to profitably export to a growing number of international markets.
Bernard J. Durkan
Question:219 Mr. Durkan asked the Minister for Enterprise, Trade and Employment the three most obvious costs affecting industry and competitiveness; his plans to address the issue; and if he will make a statement on the matter. [38218/06]
View answerBernard J. Durkan
Question:220 Mr. Durkan asked the Minister for Enterprise, Trade and Employment the extent to which he has identified cost issues which might inhibit investment and thereby employment here; the remedial action proposed; and if he will make a statement on the matter. [38219/06]
View answerI propose to take Questions Nos. 219 and 220 together.
The National Competitiveness Council recently published a Statement on the Costs of Doing Business in Ireland. The Statement outlines the key findings of research assessing the cost of doing business at four locations in Ireland — Dublin, Cork, Galway and Limerick. These locations are compared with international centres in both developed and developing economies, including Bangalore, Boston, Budapest and Copenhagen across a range of 8 sectors such as biopharmaceutical manufacturing, engineering and funds administration. The data are for one period only — January 2006 — but will be updated in two subsequent reports in 2007 and 2008, which will allow for comparisons over time.
As many observers would expect, labour costs (59%) dominated firms' business costs. These were followed by property costs (11%), utility costs (9%) and transport costs (4%). However as the analysis mentions, the research excludes other business input costs such as equipment or raw materials. These can be significant in some sectors, such as biopharmaceutical manufacturing and food processing.
It should be noted that, while the cost profiles of selected firms in the study will not necessarily be representative of all firms in the sector, the analysis by the NCC shows that labour costs, taxes and transport costs are competitive when compared with benchmarked locations in the EU-15 economies or in the Unites States. Furthermore labour costs in manufacturing are marginally more competitive than in the services sectors, compared with other EU-15/US cities. This underlines the competitive position of a large part of our economy.
The NCC Statement identifies utility costs, particularly electricity and property costs as having the potential to weaken competitiveness, but the analysis points out productivity is the key determinant of competitiveness. In relation to energy utility charges, these are for the most part driven by international cost pressures on fossil fuels and the need to modernise and strengthen our energy infrastructure.
The Government's Green Paper on Energy Policy sets out a vision, with clear targets and timelines, for making the economy less reliant on imported fossil fuels by building our capacity in indigenous renewables. In relation to other costs such as telecommunications and waste, the forthcoming National Development Plan will play a significant role in investment in these sectors to address their competitive impact on enterprise.
Regarding productivity, my Department's enterprise support agencies provide an extensive range of programmes to help companies address either specific competitiveness challenges or the productivity and efficiency of their entire business functions. These include initiatives in technology acquisition, innovation, research and development, management capability and strengthening export capabilities. The joined up strategic links between our education and business sectors as set out in my recent Strategy for Science, Technology and Innovation exemplifies a new approach to building both national and enterprise competitiveness in a globalised world.