Dáil Éireann Debate, Thursday - 7 October 2004
3 Mr. Eamon Ryan asked the Minister for Enterprise, Trade and Employment his plans to implement the recommendations of the enterprise strategy group which reported in July 2004; and if he will make a statement on the matter. [23788/04]
Amharc ar fhreagra4 Mr. Hogan asked the Minister for Enterprise, Trade and Employment the steps he will take to address concerns expressed by the enterprise strategy group and the national competitiveness council regarding the need to streamline the system of regulation affecting key sectors in the economy to ensure that competition is at the centre of the regulators’ focus; and if he will make a statement on the matter. [23793/04]
Amharc ar fhreagraI propose to take Questions Nos. 3 and 4 together.
Towards the end of 2003 my predecessor, the Tánaiste, Deputy Harney, established the enterprise strategy group, under the chairmanship of Mr. Eoin O'Driscoll, to undertake an examination of enterprise strategy. The group was tasked with identifying a comprehensive approach to sustain employment and maintain our economic growth while facilitating a transformation to a knowledge based and innovation driven economy.
The Government considered the report of the enterprise strategy group in advance of its publication on 7 July last. In view of the extensive recommendations and their impact on a range of Departments other than my own, the Government decided to set up a high level group to consider the implications of the report and the best manner to address its recommendations. The group is finalising its report and I expect to report to Government on its work shortly. It would not be appropriate for me to make further detailed comment before reporting to my Cabinet colleagues.
The enterprise strategy group's recommendations aim to provide the economy with the capacity to quickly act against emerging threats to business and to exploit the new opportunities being presented by technological developments and business internationalisation. Its recommendations come at a potential turning point in the trend of economic development. We are currently enjoying the benefits of sustained economic expansion but our past success, while providing a platform for future growth, does not guarantee that growth. Fundamental changes are taking place in the international business environment. These present exciting new opportunities and some formidable competitive challenges but never easy or simple choices, either for business or Government.
With regard to streamlining the system of regulation affecting key sectors in the economy, I am strongly supportive of encouraging competition in all sectors of the economy and I will give serious consideration to any proposed measures aimed at promoting this objective. Indeed, in this regard the Competition Authority has already concluded co-operation agreements with each of the sectoral regulators. The purpose of these co-operation agreements is to ensure a consistent approach, to avoid duplication between the actions of the authority and the bodies concerned and to keep competition at the centre of the regulators' focus.
I believe these agreements will have the desired effect and that the Competition Authority will keep matters under close scrutiny. I have met Eoin O'Driscoll and Forfás and have had preliminary discussions on the strategy and the road map forward.
I wish the Minister the best of luck with his new portfolio. His success with it will benefit the entire country. One of the main findings in the report, which shocked me, was in a table on page 6. It contained a graph showing the remarkable success of this country in exports from foreign investment industry. However, there has effectively been no growth in exports from indigenous industry over the past 14 or 15 years. Was the Minister shocked and concerned by that finding which I had not seen previously? I believe it was an unpublished figure.
The Minister seems to be saying we are going to have a report to analyse the report and that he cannot really discuss anything here until he has received that report. I have a slight fear that we are heading in the same direction which was, in a sense, a failure to take on board the lessons or the points made in the Culliton and Telesis reports which said that we needed to develop our enterprise sectors. The table to which I referred shows that we have completely failed to do that. I am slightly concerned that the Minister is now telling us that he is waiting for a further report.
I refer to an area which is covered by the Minister's Department, so he can, in a sense, have an opinion on it, and which does not affect his Cabinet colleagues. There is a number of recommendations in the report regarding internal structures within Enterprise Ireland, for example, that it would have a separate, new technology Ireland section and a special export Ireland section, that Shannon Development would have a remit within Enterprise Ireland and that the city and county development boards would also have a central function within Enterprise Ireland. The Minister may not be able to answer for his Cabinet colleagues but, in the area for which he has full responsibility, Enterprise Ireland and its structures, does he intend to implement those four basic recommendations of the report? Do we need another report to examine that report?
I strongly endorse the report, which is excellent. There is no point reinventing the wheel in terms of going around the analysis. The analysis is excellent and there is a series of recommendations but it makes absolute sense in that there is no point publishing a report with recommendations and leaving it there. One must engage all the players and that includes other Departments as it does Enterprise Ireland and those involved in the business. This is not a long piece of work but a relatively short one. However, this is a very substantive issue. The Deputy is correct in identifying the issue of indigenous industry and enterprise strategy for same as perhaps being the critical policy issue for which I will have responsibility. I believe it is one of the big ticket items going forward. Therefore, one does not just publish a report and leave it there.
The report analyses both the strengths and the weaknesses. It says very clearly that in terms of manufacturing and operations, we are nearly world class at this stage and that our basic general education system has served us very well. However, it identifies core weaknesses in terms of sales and marketing capability, particularly in regard to Irish owned firms competing abroad, and the lack of research and development as a core part of indigenous enterprise and so forth. It is basically saying that if we want to remain competitive into the future, we need to go after a range of issues, niches and sectors.
There is a need to look at the skills sets within Enterprise Ireland in terms of achieving those objectives and ensuring Enterprise Ireland has the necessary scope, capacity and skills sets to move up the league in regard to sales and marketing capability and in the other areas identified. I met the chief executive officer of Enterprise Ireland and it is already in the process of change. He was very clear in terms of the strategic direction of that organisation. Obviously, there is a certain dovetailing between that and what the enterprise strategy group has produced.
I refer to the question on regulators. Since many of the regulators have been appointed, it has seemed to mean higher prices for consumers, particularly in the energy sector. Today I see reports of another increase in energy prices by the energy regulator, Mr. Reeves. The enterprise strategy group recommended the bringing together of all the regulators rather than having empire building, which is going on at present, and no co-ordination on cross-cutting issues in regard to the various sectors. In the interest of the consumer and of costs and prices, which are out of control, there should be an amalgamation of the groups under some body, such as the Competition Authority, which would protect consumer and business interests and ensure the prices of goods and services are taken into account rather than what is happening at present. Rip-off Ireland is alive and well. We are living in the most expensive country in Europe. Will the Minister instigate a review of the regulators? When will he implement the recommendation of the enterprise strategy group on the amalgamation and co-ordination of the regulators?
Decisions of that kind will fall to Government. There are other Ministers involved in that particular sectoral regulators come under the aegis of their Departments. I would be broadly sympathetic to the recommendation in the report and to the Deputy's comments in terms of the desirability of having an overarching structure for regulation which would allow for a critical mass of skills, particularly where similar skills sets are required by the various sectoral regulators. That is a recommendation which must be pursued with my colleagues in Government and with those involved. I know the Competition Authority has already concluded agreements with the various sectoral regulators.
I have another concern in regard to the research and development we have done. Does the Minister share the concern that research spending at present tends to be in areas of use to the larger multinational, foreign owned companies, for example, in the area of bio-pharmacy, biopharmaceuticals and so on? The investment in that area is welcome but the research spending tends to favour those large multinational rather than indigenous companies. Will the Minister carry out a review of our research and development spending to try to steer it towards research spending which would have a real affect for small, indigenous Irish companies?
Returning to the Enterprise Ireland structures, the recommendations in the report are fairly clear, for example, whether Shannon Development has a link. To whom must the Minister go to make a decision on that, or can he do so?
Does the Minister have a view on the sectors of the economy that require to be opened to competition? Has he considered any action to open those areas to competition in light of the failure of the current regulatory system?
There are two parliamentary questions on Shannon Development, so perhaps we could deal with it later.
Deputy Eamon Ryan asked about research and its emphasis on the major players. We need to be careful that we do not divide in too simplistic a fashion the large multinational from the indigenous firm. There is a relationship between the two. The degree to which we have attracted foreign, direct investment has impacted on the growth of indigenous firms in terms of supply and skills derived from the multinational side. Clearly, some of the major projects which have emerged from Science Foundation Ireland, the centres for science, engineering and technology, will have a significant bearing on enabling us to attract some of the major bio-pharma entities and projects to this country, which is very desirable. What that type of research is doing for the universities is equally critical, that is, developing multi-faculty, multi-disciplinary research and changing the strategic direction of universities in terms of different faculties working together, concentrating on their strengths and governance systems etc. All that is for the good. The challenge for smaller and Irish owned industry is to develop the culture of a commitment to research and development within small industry and then, through Enterprise Ireland, the institutes of technology and the universities, to work more on the applied research to see if the research can be more directly applicable to the type of activities in which small industries are involved.
Ceist Uimh. 5.
On a point of order, I think there is a small amount of time left in this section.
There is not. We have only got through four priority questions in a half an hour. The Chair has been lenient and has been neglecting his duty today.
