Micheál Martin (Cork South Central, Fianna Fail)

The level of foreign direct investment in Ireland, relative to the size of the economy, is one of the highest in the world. Many of the world's leading overseas companies have substantial international operations in Ireland. These include companies in ICT, life sciences and international services, including financial services. Employment in IDA-assisted companies increased by 3,795 in 2006, bringing total employment to 135,487.

However, I accept that IDA Ireland faces a significant challenge in seeking to sustain, embed and increase this investment. A growing number of locations are competing for mobile investment, notably in eastern Europe and the Far East, not only on the basis of low costs but also on the basis of future market potential. In recent times, cost-sensitive projects have begun to bypass Europe for lower-cost countries such as China and India and it has to be accepted that Ireland is no longer a prime location for what might be called low-cost, low-skilled, basic manufacturing and service activities.

In responding to this challenge, IDA Ireland is focusing on the development of its client employment base into high technology, high value-added and high-skill functions in areas such as high-end manufacturing, high-end services and research and development. For some years it has focused on facilitating and encouraging existing and new FDI clients to move up the value chain into higher value-added products, functions and activities, more in tune with the competitive strengths of Ireland today.

A key factor that will impact on our ability to sustain rapid growth and high employment levels is cost competitiveness, particularly related to property and construction demand, energy costs, local authority charges and services where competition may be limited. Continued flexibility in responding to changes in both local and international economic conditions is also essential.

The new national development plan will play a crucial role in maintaining Ireland's attractiveness as an investment location. The pace of economic growth makes further investment in education critical. We need to build on our strong relative position in producing science, engineering and business graduates and reverse some of the movement away from the sciences by students in recent years. Rapid improvement in physical infrastructure is also an ongoing need, especially to support regional development. Further investment in research and development as provided for in the NDP will be a key factor in improving our competitiveness into the future.

I am confident all of these issues will be fully addressed by the national development plan and, in tandem with the policies being pursued by the Government and IDA Ireland, we will maintain the attractiveness of Ireland as a location for high-quality inward investment by the world's leading companies.

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