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Job Creation

Dáil Éireann Debate, Thursday - 23 January 2014

Thursday, 23 January 2014

Questions (5)

John Halligan

Question:

5. Deputy John Halligan asked the Minister for Jobs, Enterprise and Innovation to outline the number of jobs created by IDA Ireland in County Waterford in 2013; the net increase or decrease in the number of jobs created in 2012; if he considers this figure to reflect a success under the target set out in the Horizon 2020 document for regional development, which aims for 50% of all jobs created through the IDA's dealings in 2013 to be located outside of Dublin and Cork; his plans to review the targets originally set out in the Horizon 2020 document; and if he will make a statement on the matter. [3181/14]

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Oral answers (6 contributions)

Waterford is one of the worst affected areas in the country for unemployment, a fact that has been acknowledged by the Government on several occasions. The latest live figures show that there are now almost 24,000 people unemployed in the city and county out of 52,000 unemployed in the entire south-east region. Since 2008 some 2,441 IDA Ireland jobs have been lost in Waterford and only 581 jobs have been created. Last year more than 1,100 IDA jobs were created in Cork, 700 were created in Galway, almost 300 were created in Limerick and more than 500 jobs were created in Dundalk. Will the Minister explain why Waterford is always lagging behind the other major urban centres when it comes to foreign direct investment?

The Forfás annual employment survey, which reports on job gains and losses in companies supported by the enterprise development agencies, shows that 172 new jobs were created in IDA companies in Waterford in 2013, an increase of 55 on the number created in 2012. There are currently 28 IDA client companies employing more than 5,000 people in Waterford city and county. The number of net IDA jobs in Waterford increased in 2013, the first increase in six years.

During 2013 there were two significant IDA investment announcements for Waterford. In February, Sanofi announced plans to invest €44 million in Genzyme's biotechnology campus in Waterford. As the Deputy is aware, that will gear the company up for a new and diverse range of products. In March, Nypro Healthcare announced plans to establish an additional state-of-the-art medical devices facility in Waterford. This will result in the creation of over 200 high-quality jobs in the coming years.

As the Deputy knows, following the closure of TalkTalk in Waterford, I have put a particular focus on the south east. I published a south east employment action plan and established a forum of all state agencies and local players to set out actions to increase employment in the area. I have met regularly with IDA, Enterprise Ireland and the forum to review progress.

IDA has announced plans to build new advanced manufacturing facilities in Waterford to enhance the offering in the area and win new business. To support its marketing efforts for the region, IDA Ireland has rolled out a dedicated digital marketing initiative for inward investment focusing on the south east region and Waterford. The number of site visits by prospective IDA clients to the south east and Waterford has increased substantially.

The employment strategy for Waterford and the south east has not only focused on foreign investors. Companies such as Eishtec, Dawn Meats, FeedHenry and Danone have been supported by my Department in creating almost 900 jobs.

IDA has ambitious targets of 50% of investments in regions outside Dublin and Cork, but this has proven to be a difficult target to meet. There are complex factors influencing investor location decision-making, such as the increasing preference for big cities with large-scale populations and significant challenges from lower cost locations.

Additional information not given on the floor of the House

I have called on IDA and Enterprise Ireland to work with my Department in order that we can explore what further initiatives to take to ensure a better approach to enterprise development in regional locations. This exercise will complement the in-depth analysis of our foreign direct investment strategy, which is currently being undertaken by Forfás and which will take account of factors such as key trends emerging in FDI best practice internationally, Ireland's strengths in attracting FDI and any changes to the EU state aid rules, which will come into effect on 1 July 2014. The results of these two exercises will form the basis of IDA's strategy from 2015 onwards.

The IDA Horizon 2020 project was published in March 2010. It aims to have 50% of new jobs based in locations outside Dublin and Cork. Will the Minister admit that this plan has since been quietly shelved? Research at NUI Maynooth has found that many of the 82% of jobs created here by overseas firms in recent years have been centred around Dublin, Cork and Galway. Surely the obvious way to achieve the targets of Horizon 2020 would be to improve the regional aid for foreign companies investing in areas of high unemployment.

We invest vast sums of money in IDA Ireland, whose job description is to attract and create companies in the south east and to direct them there. I am referring specifically to the IDA in the south east. Many people in Waterford consider that the agency is not doing its job and I agree on the basis of the statistics I have given to the Minister, which are reasoned statistics that have come to light from Government sources in recent weeks. They indicate that jobs are not being created in Waterford and that the IDA Horizon 2020 project is a failure when it comes to the south east.

The strategy that the IDA published set a target of 50% job creation outside Dublin and Cork. It has not been possible to achieve that. That is not because the company has not been seeking to deliver it. The agency reports and makes efforts to promote the other regions. Unfortunately, the nature of mobile foreign investment has changed. We can see this in the type of wins the agency is getting. The sector has shifted and unfortunately that shift has favoured large cities in particular, such as Dublin and Cork.

The reason I put the spotlight on Waterford and the south east was in recognition of the difficulty. The site visits of prospective IDA clients have almost trebled since I put that spotlight on. Undoubtedly, there is a new emphasis by IDA on the south east and Waterford in particular.

We do not have it open to us to set different regional aid packages for Waterford as against other areas. Regional aid packages are set by EU strategy and we must comply with the rules. I am reviewing the foreign direct investment strategy and I will be looking at how we seek to achieve it. One of the things we have done which, I believe, is innovative, is the development of ConnectIreland, which uses the resources of regions and their international contacts to help lever new investment into those regions.

I do not direct my criticism directly at the Minister. The Minister has a difficult situation and I recognise that it is remarkably difficult for him. My criticism is directed primarily at IDA. We are told by IDA that it cannot direct companies to locate in any particular region. Surely the logical thing to do would be to examine why companies are not locating in places such as Waterford and then address that. For example, it has been acknowledged repeatedly that university status for Waterford Institute of Technology, WIT, is a key marker for the development of the city and region. Yet we have still to see the Government keep its promise to fast-track this development.

We pay the IDA substantial amounts of money and the staff get high salaries in particular regions for a job description that amounts to directing jobs into those regions. If the Minister speaks to any Member, councillor or person from Waterford he will ascertain that we believe we are not getting our fair share and that the IDA is not doing its job.

I reject Deputy Halligan's allegation that the IDA is not putting the effort in. This is borne out by the increase in site visits and additional activity. The IDA is correct: the agency does not direct companies on where to invest. The companies come with a well-known list of what they need. Typically, they use advisers to identify where they can get the right fit. The IDA does not move the pawns around the board, so to speak. That is not the way international investment works.

Through the forum, we enhance the promotion of Waterford's assets more effectively. The WIT is a major asset, which has spawned FeedHenry, for example, and has very good technology. We need to leverage that sort of asset to attract additional investment, which is what we are seeking to do here. It is not fair to criticise individuals or organisations. This is a team effort and we have created a sense of teamwork within the south east. That is the route to resolving these problems and not an alternative.

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