Ireland is a competitive economy, as reflected in a range of economic metrics, such as: high economic growth; the strong performance of the labour market across sectors and regions; strong trade figures; and, our productivity levels. For example, CSO’s Labour Force Survey data show that there was a 2.4% increase in employment in the year to Q3 2019, bringing total employment to 2,326,900, the highest number on record. In addition, unemployment rate fell by 11% in the same period bringing the number of unemployed people to 128,000.
At the heart of national competitiveness is the ability of Irish businesses to compete successfully in international markets. Two of the most important determinants of competitiveness are productivity and costs. A competitive economy is one where productivity is not out of line with the cost base.
As a small, highly open and concentrated economy, we are particularly vulnerable to external shocks and cannot afford to be complacent and must continuously strive for improvements in order to remain competitive . The increasingly challenging international environment raises the stakes even further.
Over the medium to long term, productivity growth is the main mechanism to improve competitiveness as it can support cost competitiveness in tandem with high and increasing wage levels and improving living standards for all.
However, our strong competitiveness position cannot be taken for granted – especially because Ireland is a high cost economy (the 5th most expensive in the EU). Improving Ireland’s competitiveness position is a key priority for this Government, and my Department.
Future Jobs Ireland is a whole of Government framework designed to improve our economy’s resilience in the face of emerging and future challenges. Future Jobs 2019 set out 26 ‘ambitions’ to 2025 across five pillars in the areas of innovation; productivity; skills and talent; participation; and transitioning to a low carbon economy. Taken together, Climate Plan 2019, Project Ireland 2040, Global Ireland 2025 and the Future Jobs represent an integrated approach to prepare for the opportunities and challenge of the future economy.
A range of specific deliverables in Future Jobs Ireland 2019 aim to enhance the business environment and improve competitiveness, as well as other factors, that contribute to specific sectorial cost challenges. Some examples include:
- On credit and financial costs , the Future Growth Loan Scheme will provide long term debt financing for strategic investments at competitive rates in a post-Brexit environment;
- On legal services , new business models for legal services will be introduced, including new legal partnerships and limited liability partnerships;
- On construction , an implementation plan for actions to stimulate construction sector productivity will be delivered, including greater deployment of Building Information Modelling.
As a small open economy, we must never underestimate the importance of maintaining competitiveness, and ensuring that the cost of doing business does not impede this. In this regard, Future Jobs Ireland is an integral component of the Government’s over-arching plan for the future of the Irish economy.