Vol. 553 No. 2
158 Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the increasing level of costs in the economy which is giving rise to a deterioration in business competitiveness; and if she will make a statement on the matter. [13878/02]
A wide range of factors impact upon our competitiveness. At international level, the European Union produces a series of competitiveness comparisons such as the European competitiveness report, the enterprise policy scoreboard and the innovation scoreboard in which Irish performance has been top-ranking in terms of GDP growth (first), labour productivity (first), total factor productivity growth (first), lowest administrative burdens for small business, net birth rates for small business (first) etc.
The World Competitiveness Yearbook 2002, which uses over 300 criteria to measure competitiveness, currently ranks Ireland in tenth place in the international competitiveness league. This is a drop of three places from last year's seventh placing.
Our own National Competitiveness Council, in its most recent Competitiveness Report (2001), ranked Ireland in first and second place respectively under the headings of economic performance and internationalisation. But the Council also identified areas of concern, which it further elaborated upon in its Competitiveness Challenge Report, such as the rapid acceleration in wages growth and unit labour costs. It also ranked Ireland in 11th place out of 16 in relation to non-labour enterprise costs.
The recently published data from the CSO, indicating a prevailing inflation level of some 4.7%, is also a shot across the bows which can impact upon our cost base. All of this means that the competitiveness agenda must again come centre stage. But the drivers of our competitiveness in the past, which derived from low wages and taxation as well as a plentiful supply of labour, will not be the same for the period ahead. We certainly have to moderate our costs, but this must be accompanied by a commitment to investment in those factors which enhance our productivity, including a shift to higher added-value knowledge-based activities, capitalising on the application of new technologies, investing in skills and research and development, promoting greater competition and addressing the infrastructural deficits. The measures the Government will be taking to meet these imperatives and secure the success we have attained in recent years are set out in the recently agreed Government programme, particularly under the heading of "Sustaining a Strong Economy".
