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Dáil Éireann díospóireacht -
Tuesday, 5 Nov 2002

Vol. 556 No. 3

Written Answers. - Job Creation.

Eamon Gilmore

Ceist:

72 Mr. Gilmore asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to recent reports suggesting that multinational investment here declined by 40% in 2001; the consequence of this decrease for employment levels here; and if she will make a statement on the matter. [20351/02]

Michael D. Higgins

Ceist:

121 Mr. M. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will confirm figures quoted recently by the chief executive of the IDA showing that 2001 was the worst year for job creation here for 15 years; and if she will make a statement on the matter. [20352/02]

I propose to take Questions Nos. 72 and 121 together.

The issue of job creation through the attraction of foreign direct investment is statutorily charged to IDA Ireland, for which it is a day to day operational issue. At the beginning of 2001, it was clear that the year was going to be very different to the previous ones, in terms of IDA Ireland's work in foreign direct investment markets. Global circumstances, particularly in the dotcom and information technology sectors, had changed investor mood considerably. International business confidence ebbed as 2001 progressed and the awful events of 11 September in the United States added to concerns. This exceptional set of circumstances resulted in one of IDA Ireland's toughest years. Overall, the value of non-IFSC foreign direct investment inflows into Ireland in 2001 measured €8.2 billion, down from €11.4 billion in 2000, as quoted in the 2002 world investment report 2002, Transnational Corporations and Export Competitiveness, published by the United Nations Conference on Trade and Development.

The global economic slowdown, especially in information technology, impacted on the agency's 2001 results and it ended the year with a small net loss of 2.8% in IDA Ireland assisted jobs in overseas companies, the first such loss in 15 years, despite a positive performance in other sectors. This was acknowledged in the agency's annual report and accounts for 2001. In absolute terms, however, the number of jobs created in 2001 was still very high at 13,514, higher than every year prior to 1997. The period from 1992 to 2001, inclusive, saw increases of almost 44% in the number of foreign direct investment companies operating in Ireland, and over 75% in permanent employment in these companies.
Ireland's recent economic success has changed its profile as a location for investment. IDA Ireland is now competing for a different type of business to the labour intensive manufacturing which it won over the past four decades when Ireland was largely a low cost location. Basic operative skills are now available at lower costs throughout the developing world. Improving communications facilitate businesses to locate parts of their value chains in distant locations. Ireland's future success will be dependent on our ability to achieve an environment where research and knowledge, high level skills and expertise, high quality infrastructure and business services, are combined in that flexible and creative way which is almost uniquely Irish. Foreign direct investment will feed into the future operating model and will be essential to our success, but it will be increasingly integrated and interwoven with Irish business which is itself ever more international.
The transformation to being driven by innovation will not be instant, but it will need to progress quickly so we are recognisably different by 2010. In the meantime, we need to continue winning foreign direct investment at higher value levels using some of the advantages and tools that have been so successful for us to date. IDA Ireland needs to continue its existing priority work first, with current clients to move them up the value chain; second, to achieve better regional balance in new investments; and, third, to influence improvements in infrastructure and skills. The objective must be to place Ireland at the leading edge of the global economy in some specific competencies or industry niches. It will mean not relying solely on an individual project focus, but adding the development of clusters of excellence in which technology companies, education and research activities, venture capital providers, business service providers, etc. network to create a climate of innovation and entrepreneurship.
I am confident that the measures outlined above which are currently being adopted by IDA Ireland, as well as the continuing commitment of the Government to regional development, will bring positive results to the country. I will continue, along with the industrial development agencies, to promote Ireland with international firms for suitable industrial development projects.
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