I propose to take Questions Nos. 100, 102, 105 and 108 together.
Since the 1960s manufacturing has played a strong role in Ireland's economic development and growth. It is a key driver of innovation and technological advance, is an important source of jobs for people at all skills levels and generates many additional secondary jobs. However, there has been a noticeable decline in numbers employed in manufacturing and in the contribution from manufacturing activities to Ireland's employment and exports vis-a-vis services activities over the past decade. This is not necessarily surprising, and it echoes what has been happening in most developed economies.
While there has been a net reduction in overall employment in the past five years, jobs have been created in agency-assisted companies. The number of net new jobs created in manufacturing has declined since 2006 when 19,497 new jobs were created. The number of new jobs created in manufacturing since then is as follows: 11,553 in 2008, 7,500 in 2009, 9,308 in 2010 and 10,010 in 2011 (Source: Forfás Annual Employment Survey). A similar decline has taken place in the sector in most developed economies. For example, a reduction in the manufacturing sectors employment and its contribution to total employment since 2000 has also been experienced in Germany, UK, USA, Netherlands and Korea (Source: OECD).
The manufacturing sector in Ireland has experienced considerable structural change over the last decade. Although it is a very challenging and internationally competitive environment, there is considerable potential for the manufacturing sector in Ireland.
The Action Plan for Jobs 2012 set out a number of actions to address particular issues facing the manufacturing sector in Ireland, which include the need to address the costs of production, the issue of scale and absorptive capacity, management development and upskilling, among a number of other issues.
Key initiatives relating to the Manufacturing Sector in Ireland have recently commenced:
1) The Manufacturing Development Forum: Chaired by Patrick Miskelly of Cadbury, the Forum comprises senior corporate representatives in manufacturing in Ireland together with enterprise development agency officials. It includes both strong indigenous participation and representatives of the foreign sector. The Forum will, in the immediate term, ensure that manufacturing remains central to current and future industrial policy. The first meeting of the Forum took place on 29 June. The Forum will examine the full range of factors influencing employment levels and growth opportunities in the sector, including technology and innovation capacity.
2) Forfás Long-term Vision and Strategic Plan: Forfás has commenced a study to revisit the role of manufacturing in Ireland’s economy to assess where it stands today and to set out a strategic vision for 2020 aimed at reversing the current employment trend and enabling a return to growth. This research will set out the policy actionsneeded to support a sustainable and competitive manufacturing sector to 2020 in the context of global trends, the on-going transformation of the sector and the existing issues facing the sector in Ireland.
3) Assessment of Manufacturing Skills Needs: The Expert Group on Future Skills Needs, working alongside Forfás in the development of the Long-term Vision and Strategic Plan, is currently undertaking an in-depth study on the future skills needs of the manufacturing sector in Ireland, building on previous sub-sectoral work and undertaking new firm-level inquiry.
Both the Long-term Vision and Strategic Plan and the Assessment of Manufacturing Skills Needs will be completed by the end of 2012.
Manufacturing has contributed significantly to Ireland's economic development in the past and is a crucial element of Ireland's future economic structure. The combined work of the Manufacturing Development Forum, Forfás and the EGFSN will provide a solid grounding for the achievement of sustainable growth in employment in manufacturing companies in the short term.