Micheál Martin (Cork South Central, Fianna Fail)

World trade, global investment flows and consumer decisions influence the pattern of economic growth, company development and job prospects here. In recent years I recognise that Irish manufacturing firms, particularly in the more traditional sectors, have operated against a backdrop of significant downward price pressure and an increasingly competitive international environment. I have to recognise that some firms, which are unable to generate sustainable returns from the modern Irish economy, will inevitably be attracted by lower cost environments abroad.

In the same period we have become a more sophisticated and developed economy, where technology and intellectual endeavour are becoming more important than simple cost competitiveness as the foundation for future enterprise and growth. A process of structural evolution is inevitable as our economy maintains a dynamism to grow and expand employment across different sectors. This inevitably brings some plant transfers and other adjustments. Because of the importance of manufacturing, we cannot afford to be complacent about any consistent erosion in employment in such an important economic sector, nor about the impact on employees affected. Manufacturing remains at the heart of overseas investment and is likely to do so for a considerable time.

While there is no denying that manufacturing employment has declined we must view these losses against employment expansion in the broader economy. The latest quarterly national household survey, quarter 3, 2004, shows that the total at work rose by 57,400 to more than 1.893 million in the year. Total employment has increased in each of the past five years. Some 227,800 more people or an extra 13.7% were at work in the June to August quarter last year, than in the corresponding period in 1999. This is a remarkable achievement at a time when there is considerable debate and comment about the impact of competition from lower wage economies on employment levels in developed economies.

The focus of enterprise policy must concentrate on developing sophisticated activities that will justify continued levels of high income and productivity. These will allow us to maintain current levels of economic growth and living standards. Key to this is greater and more intensive investment in skill levels and a concentration on activities that are innovation based rather than production led. It is up to entrepreneurs to make these decisions, but it is the role of Government to design the framework conditions that will help them succeed and maintain an economy in which it is attractive to do profitable business in and from Ireland.

Additional information not given on the floor of the House.

For manufacturing and the services sector, sustainable employment will be based on competitiveness, higher productivity and the application of technology and skill in both existing and new enterprises. The challenge for my Department's agencies is to assist companies move into higher value added activities and help up-skill employees that will provide more sustainable employment. The enterprise development agencies have been clearly mandated to align their operations around this policy objective.

The enterprise strategy group recognised the potential for high value added manufacturing to be a key driver of employment and growth in the future as part of a new strategic direction for the economy. Earlier today, I announced the main findings of the Government concerning implementation of the ESG recommendations in which advanced manufacturing will play an important part. As part of this process I will make regular reports to Government on progress in implementing the ESG's prescriptions, which are imperative to providing the enterprise economy with the momentum for continued prosperity and profitability.

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