Dáil Éireann Debate, Wednesday - 12 October 2016
95. Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation further to Parliamentary Question No. 1905 of 16 September 2016, if she will provide details of the data used in the employment multipliers derived from the supply and use and input-output tables by her Department in making forecasts in Enterprise 2025; and if she will make a statement on the matter. [29999/16]
Amharc ar fhreagraIreland’s enterprise strategy, Enterprise 2025 is premised on delivering employment that is sustainable over the longer term. Enterprise 2025 is premised on export-led growth, underpinned by innovation and productivity. An export-led strategy creates a ripple effect in terms of job creation throughout the entire economy as well as an increase in skills and management development, technology adoption, innovation, standards and best practice overall.
The ambition set out in Enterprise 2025 includes the potential for job creation supported by the work of the enterprise development agencies. The enterprise development agencies are responsible for the attraction of foreign direct investment and for the support of start-ups and scaling enterprises that export, or have the potential to do so. The exporting sector impacts on the wider economy through re-invested profits and expenditure of wages, materials and services. It also generates significant downstream effects in areas such as sub-supply and secondary employment. This impact can be calculated in terms of a multiplier. The value of the multiplier depends upon the percentage of extra money that is spent within the domestic economy.
Analysis undertaken to inform the future potential set out in Enterprise 2025 included a review of the multiplier effect of export-led growth. The multipliers are derived from the Supply and Use in the CSO Input Output Tables. The employment multipliers used include direct, indirect and induced impacts of agency client firm activity (known as Type II Multipliers). These take account of demand on the suppliers and so on down the supply chain as well as induced impacts arising through the additional consumption that takes place as a result of the additional employment incomes created through the indirect impacts.
Based on a robust methodology, sectoral employment multipliers were calculated and applied to the sectoral employment data of agency client firms. The derived sectoral multipliers for employment were then applied to agency client firm employment data. Type II Indicators should be interpreted with caution, as they assume that all additional income generated through indirect employment is spent. It is important to note that employment multipliers are best estimates and may be subject to small changes over time based on structural adjustments in the economy and the composition of the agency client firm base.
The enterprise development agencies place a strong emphasis on promoting linkages with the domestic economy when they are negotiating with investors and in their assessments of proposals seeking state support. The agencies have well developed methodologies for assessing the direct and indirect impacts of investments made.
Analysis of Employment Multiplier Impacts of enterprise agency-assisted firms’ export sales-employment
|
Food, drink and tobacco |
2.55 |
|
Chemicals & Pharmaceuticals |
1.65 |
|
Medical device Mfg |
1.88 |
|
Computer, Electronic… |
1.40 |
|
Other Mfg |
1.54 |
|
Computer Programming |
1.99 |
|
Computer Consultancy |
1.99 |
|
Business Services |
1.64 |
|
Financial Services |
2.42 |
|
Other Svcs |
1.95 |
|
Total |
1.88 |
Based on Forfás ABSEI and AES data (2013) [export sales employment] and CSO Input-Output and Supply and Use Tables (2011) (Indecon analysis)
The employment multipliers are Type II and include both indirect and induced impacts.
The overall multiplier is derived through the ratio of the addition of the individual sectoral economy-wide impacts to the total enterprise agency direct export sales-employment.
