Dáil Éireann díospóireacht -
Tuesday, 5 Nov 2002

Vol. 556 No. 3

Written Answers. - Job Creation.

John Perry

Ceist:

119 Mr. Perry asked the Tánaiste and Minister for Enterprise, Trade and Employment the position regarding foreign direct investment; the sup port on offer to mobile investors; if the different use in favour of Objective One funding increased investment in the area; her views on the effectiveness of the e-business legislation; if her attention has been drawn to the lack of broadband infrastructure which is presently effecting the growth of the region; and her plans in this regard. [20088/02]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. M. Ahern)

The level of foreign direct investment in Ireland, relative to the size of our economy, is one of the highest in the world and certainly one of the highest in Europe. Ireland has for a long time received a far higher proportion of foreign direct investment inflows into the EU than our population, which is 1% of the EU's total, would suggest. In 2000, for example, Ireland received 10% of the EU's foreign direct investment, a large proportion of it from the United States. While 2001 ended with a small net loss in IDA backed jobs, the period between 1992 and 2002, taken as a whole, showed a rise of almost 44% in the number of foreign direct investment companies operating in Ireland and an increase of over 75% in permanent employment. Just over 50% of job approvals between 1992 and 2001 came from clients already located in Ireland, with the rest coming from greenfield projects.

The focus on developing the IDA's existing clients is therefore critical. The IDA is actively seeking to facilitate a progression in the sophistication and breadth of its clients' Irish operations. This means not only increasing value in their manufacturing operations, but also adding corporate level innovation, such as research and development, and service, logistics and supply chain management functions alongside manufacturing. The objective is to create more rounded and strategically important operations within the overall corporation. Such operations are better embedded and more suited to the competitive characteristics of the Irish economy in the medium to long term.

The support on offer to mobile investors includes a comprehensive service to client companies, by co-ordinating services and supports to ensure efficient and trouble free start-ups. To increase embeddedness in the economy, the IDA has adopted a strategic model of the path multinationals might typically follow as they move into higher value functions. The IDA has targeted moves on this model by client companies and has a set of instruments to support this. It is also backed up by a number of incentive schemes focused, for example, on encouraging clients to undertake the establishment of a dedicated research and development centre in Ireland.

The IDA is fully committed to achieving a target of locating 50% of new greenfield jobs in the 2000-06 period in the Objective One region. This is consistent with the regional policy objectives set out in the national development plan. The process of creating new greenfield jobs in the Objective One region is initiated with first time site visits by overseas investors to the region. Following on from this, the expectation is for IDA Ireland to secure at least 50% of all greenfield job approvals for the Objective One region. Typically, new jobs on the ground come on stream within three to five years of approval. In 1999, prior to the start of the current national development plan, about 25% of all new greenfield jobs were locating in the Objective One region. This figure rose to 45% and 42%, respectively, in 2000 and 2001.

A secure legal environment for e-business is essential to promote Ireland as an e-business hub. Significant progress has been made in that regard through the enactment of the Electronic Commerce Act, 2000, which established legal recognition of e-business transactions in most areas of business, private law and public administration. The Act was one of the first such pieces of legislation in the world. The Copyright and Related Rights Act, 2000 modernised Irish copyright law with the information society in mind. The Data Protection (Amendment) Bill, 2002, which was brought forward by the Minister for Justice, Equality and Law Reform and which gives effect to the EU data protection directive, is currently before the Dáil.

Other measures to give effect to EU legislation are imminent or will follow in the near future under the aegis of various Ministers. Further measures needed to underpin our e-business strategy and to maintain the competitive advantage we have built up in this area will be considered as required. Two recent Forfás reports, eBusiness, Where Are We and Where Do We Go From Here? and Legislating for Competitive Advantage in eBusiness and Information and Communications Technologies, contain proposals that are addressed to a number of Ministers and will require detailed examination in this context. The provision of telecommunication services including broadband is a matter in the first instance for companies that operate in a fully liberalised market, regulated by the independent Director of Telecommunications Regulation. My colleague, the Minister for Communications, Marine and Natural Resources has undertaken a number of initiatives to facilitate the roll-out of advanced communications infrastructure which seeks to address gaps in communications infrastructure in the regions.