Dáil Éireann Debate, Thursday - 20 November 2008
67 Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps she has taken or will take to reduce manufacturing costs here with particular reference to ensuring the competitiveness of Irish goods on world markets; and if she will make a statement on the matter. [42058/08]
Amharc ar fhreagra68 Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she or her Department have carried out an assessment of the number of manufacturing jobs which have in the past five years relocated to other more cost competitive jurisdictions; her plans to avert this trend in the future; and if she will make a statement on the matter. [42059/08]
Amharc ar fhreagra69 Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which jobs in the services sector have relocated to other jurisdictions in each of the past five years; her plans to address these issues in the future; and if she will make a statement on the matter. [42060/08]
Amharc ar fhreagra71 Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans she has to address the issue of job relocation to lower cost economies; and if she will make a statement on the matter. [42062/08]
Amharc ar fhreagraI propose to take Questions Nos. 67 to 69, inclusive, and 71 together.
There are many factors apart from costs that influence a firm's decision to relocate, therefore, it is not possible to determine the number of jobs which may have been lost to lower cost economies. Decisions to relocate companies or elements of their supply chain are a reality of the modern globalised economic environment. Companies adjust their plant location and utilisation strategies to address matters such as accessing new markets, moving production nearer to customers, meeting firm or market specific customer relationship issues, accessing technology, in addition to business takeovers and consolidations. Such decisions inevitably result in flows of investment and employment across borders. In the main, Ireland successfully manages this process, through our policies on enterprise and foreign direct investment. These policies, such as competitive tax rates, investment in skills, education and R&D and investing in critical physical and communications infrastructure, have positioned us to win many prestigious and high value added investments.
Ireland has not been a low cost economy for some time now, and manufacturers in particular have been facing increased competition from producers in lower cost economies. The manufacturing sector in Ireland has evolved noticeably since 2000, in terms of the composition of industry and the nature of activities, and is likely to continue to do so. The model of manufacturing in developed economies has changed and Irish enterprises are adapting to those changes and engaging in higher value added activities in order to compete in the global marketplace. Irish based manufacturing enterprises will have to continue the progression to high value added sectors and activities, and to increase productivity through investments in human capital, technology and innovation. Innovation, and the productivity gains that flow from it are the new foundations for competitiveness.
Earlier this year my predecessor in this Department launched the Report of the High-Level Manufacturing Group which contains some 26 recommendations directed at key areas of innovation and productivity leading to transformational change, reskilling and management development for the innovative firm, increasing awareness and take up of existing supports. In addition the group recommended the establishment of a Manufacturing Forum to take responsibility for progressing the implementation of the recommendations outlined in the report and to act as a strong advocate and champion for the manufacturing sector thereby ensuring that manufacturing remains central to current and future industrial policy. This matter is currently being progressed by my Department in consultation with the Department of An Taoiseach and the Social Partners.
We continue to be one of the world's leading service exporting countries and are currently ranked the 10th highest exporter of services in the world. In September, I launched the report of the Services Strategy Group, "Catching the Wave: A Services Strategy for Ireland". This report sets out new policy proposals on how we can ensure the continued development and growth of Ireland's services sector and in its recommendations outlines suggested strategies to maximise the future returns to the country from services activities in all enterprises, both current and potential. I believe that the implementation of these recommendations will enable Irish service companies to exploit new and exciting opportunities, such as eLearning, business and financial services, professional and consultancy services and others.
The level of foreign direct investment in Ireland, relative to the size of the economy, remains one of the highest in the world. While competition from emerging markets for FDI has intensified, Ireland continues to punch above its weight when it comes to attracting overseas investment. The pipeline of new business for which IDA Ireland is competing is strong. Already this year over 43 new IDA investments have been announced with the potential to create close to 4,000 jobs over the coming years, demonstrating that we remain a location of choice for mobile investment.
One of the Government's main tasks is to ensure that Ireland remains an attractive place to do business, and to support the development of economic competencies higher up the value chain. In that regard, we continue to work to maintain and enhance our framework competitive conditions, and promote new areas of competitive advantage by developing our R&D base, investing in critical physical and communications infrastructures, and promoting tertiary education, lifelong learning and upskilling to improve labour market flexibility, in line with the NDP and the Programme for Government.
Our priority remains the creation of high quality, sustainable employment, driven by companies with higher profitability, that are more technologically advanced, prove a better fit with the competitive characteristics of our economy, and consequently less likely to move on the basis of simple cost influences.
70 Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she or her Department have sought or received reasons for the relocation of a major component of the Irish insurance industry to India; and if she will make a statement on the matter. [42061/08]
Amharc ar fhreagraIn June 2008, Hibernian Insurance announced a restructuring plan that involves moving 580 jobs out of Ireland over the coming three years. These job losses will come about as a result of outsourcing of work to Bangalore, India. I understand that this is part of a greater outsourcing exercise on the part of Aviva, Hibernian's parent company. While I very much regret the decision of Hibernian Insurance to move jobs from Ireland, the relocation or off-shoring of lower value-added functions, and with them a certain number of jobs, is a reality of the modern global economic environment for a highly developed economy such as Ireland. This shift in the structure of international trade poses challenges to economic policy makers in all developed countries, not just Ireland.
It must be remembered that Ireland also experiences the benefits resulting from globalisation as new markets and business opportunities open up for Irish companies. The level of foreign direct investment in Ireland, relative to the size of the economy, remains one of the highest in the world. While competition from emerging markets for FDI has intensified, Ireland continues to punch above its weight when it comes to attracting overseas investment. While our relative costs are now higher, we have responded nationally to a changing environment by positioning ourselves as the location for more advanced activities, with more qualified and better paying jobs.
The country's international financial services sector has witnessed dramatic growth and phenomenal success in recent times. The financial services sector contributes over 10% of Ireland's GDP, and employs and estimated 90,000 people. Ireland's success in developing a thriving financial services environment has been due to many factors including competitive tax rates, an efficient and responsive regulatory regime, a highly educated and English speaking workforce, and strong political support.
We will continue to pursue policies to promote lifelong learning and upskilling to improve labour market flexibility and ensure that appropriate training supports are provided for workers in sectors that are no longer competitive, should they need to find alternative employment. Investment in our people and ensuring that they have the skills required to live and work in the global knowledge economy is at the heart of the Government's strategy to continue our progress towards a knowledge economy and society.
The Government's priority remains the creation of high quality sustainable employment driven by companies with higher profitability that are more technologically advanced, and prove a better fit with the competitive characteristics of our economy.
