The function of the development agencies is to assist industry to become more competitive and thus generate increased economic growth and employment. It is not practical to calculate the cost per job created in firms assisted by the agencies on a year to year basis. The reason for this is that the grants paid out in a particular year do not necessarily impact on employment levels in the same year. Equity funding and capital grant payments, for example, are often made prior to the creation of new employment, while employment grants are paid retrospectively. Research and development and technology acquisition grants are not directly linked to employment, but as they have a significant impact on competitiveness, it is also necessary to take them into account.
Because the provision of financial support by the State agencies and the creation of jobs in the firms assisted both take place over an extended period, it is necessary to reflect this in the methodology for assessing the grant cost per job. The indicator employed, grant cost per job sustained, is defined as the sum of all Forbairt and IDA grant payments over a seven year period, divided by the number of first time jobs created and still in existence at the end of that period. For the purposes of this calculation, a first time job is defined as the increase in employment in a company over and above the peak employment level in the previous five years and related to a specific investment programme agreed with IDA Ireland or Forbairt. The grant cost per job sustained for the seven year period 1988 to 1994 was £9,930 for Forbairt companies and £12,786 for IDA Ireland companies, giving an overll average of £11,409. The corresponding cost for Shannon Development was £12,476.