Micheál Martin (Cork South Central, Fianna Fail)

With respect, those are the facts. The number of jobs created in the last three years is very significant. We have moved from a workforce of one million, 12 years ago, to more than two million now. Yet all the debate and the rhetoric would suggest none of that happened and that it was all a mirage. We need some reality and perspective. I certainly accept reasoned debate as regards the challenges that we face globally and domestically, because Ireland is now a different economy from what it was ten years ago — or when Fine Gael was last in office. I accept that when Fine Gael was last in office, during difficult times, there were very few jobs to compensate for those that were lost. However, in recent times we have been able to create jobs and through our policies to create the environment to facilitate job creation, both indigenously and through foreign direct investment. Neither can any responsible Government pretend that no company will every close, that there will not be economic churn, or that jobs will never be lost. Jobs will continue to be lost in certain sectors and we have to win them in others. That is the challenge Ireland faces as a country. We cannot stand apart, either, from global shifts and movements. Globally, the past ten to 15 years has been a dramatic time. I noted that a majority in the long list of countries cited by Deputy Varadkar were what we would term emerging economies — in terms of China, India, the eastern European economies and many more. The Government will continue to work to replace jobs and, above all, to equip people with the necessary skills to deliver employment opportunities.

There is no basis for complacency about the economy and we shall remain vigilant. We shall continue to invest in the critical areas in the context of the national development plan. I would caution the Opposition, however, against dismissing the underlying strength of the economy and ignoring the major new job creation that has occurred over the decade which means the economy is a on a different plateau relative to where it was ten years ago. To refuse to acknowledge the positive structural changes in the economy in the last decade is to completely opt out of constructive debate. That is Fine Gael's choice, but it is not ours on this side of the House.

I do not wish to get into a negative type of debate this evening. That appears to have marked quite a number of the opening speeches we have heard in this debate. We want to work on policies that will position the country to take advantage of global upturns in the months and years to come. The reality is that the strength and resilience of the economy has enabled us to dramatically raise living standards and improve life chances for our citizens. In these two areas our record of achievement is beyond question. The United Nations ranked Ireland as No. 4 on the OECD's quality of life index in 2007 and we now have one of the highest per capita income levels in the European Union. We have a well educated workforce, and an environment which encourages work and entrepreneurship. We have already embarked on the next phase of economic development with unprecedented levels of investment in science, infrastructure and skills.

Let no one talk to me about paying lip service to science and technology. I recall when I was Minister for Education in 1997 that the Department's budget for research was nil. It has restarted the PRTLI programme and it was this Government that started the Science Foundation Ireland programme, which in an unprecedented way catapulted research to a primary position within the political agenda. It has invested hugely in the physical capacity of fourth level and in programming funding for science, particularly in terms of biotechnology and ICTs, the two fundamental pillars of Science Foundation Ireland. We continue to do that and last year we published an all-embracing comprehensive science technology innovation strategy, which will have an €8.2 billion budget under the national development plan. That is, again, to effect a quantum leap forward in terms of our performance in research and development, and ultimately is a key pillar underpinning competitiveness into the future, in terms we can maintain as regards jobs in high-end manufacturing, services and across a whole range of other areas.

The profile of employment has changed. We now have more and better paying jobs. We have a growing services sector, with a very strong exports performance. That is an aspect of the economy which has not been profiled, perhaps, to the extent it should have been. It has been getting some attention, however, in terms of the dramatic growth in services in recent times. Clearly, there are external challenges to be faced, not least as regards the whole financial situation internationally, liquidity issues and the difficulties in both the US and UK economies, which are two significant markets for Ireland. Ireland's growth rate will clearly moderate this year, but let us not forget that GDP expanded at an annual average rate of about 6.5% over the period 1997-2007, and this has facilitated a substantial improvement in living standards. Only last month the Lisbon Council in Brussels and the Centre for European Reform ranked Ireland highly in their annual reports, reporting a strengthened performance on the previous year. They noted that Ireland's growth potential was far from exhausted. The 2007 business environment ranking of The Economist intelligence unit placed Ireland in tenth place globally, out of 82 countries, naming it as one of the most attractive business locations in the world.

In the World Economic Forum, WEF, ranking Ireland has dropped in position from the stellar heights of 2000 when we had super national growth rates. The growth rates of over 6.5% could not be sustained on an ongoing basis, yet we are still ranked among the top ten smaller economies in the world. I also want to mention the capital access index, CAI, drawn up by the Milken Institute, based in Santa Monica. This is a publicly supported independent US economic think tank, whose capital access index scores the ability of entrepreneurs to gain access to financial capital in countries across the globe. The CAI measures the breadth, depth and vitality of capital markets and also openness in providing access without discrimination — a measure of global progress in the democratisation of capital. The 2007 index ranks 122 countries based on macro-economic and institutional environment, financial and banking institutions, international funding, bond and equity market development and alternative capital sources. Again, the key point is that Ireland has performed well, securing sixth place overall in 2007 — an improvement on the 2005 and 2006 rankings of tenth and ninth place, respectively. Ireland also tops the ranking for financial and banking institutions — based on the level of involvement of deposit-taking institutions in financing businesses. Our achievement in this domain is reflected not only in the effectiveness of our banking institutions but also in the Government initiative through Enterprise Ireland, namely, the access to venture capital scheme. That is a practical measure we decided on more than two years ago, which seeded the 2007-12 venture capital programme. The Government, through Enterprise Ireland, injected a new round of €175 million in venture capital funding and to date this has leveraged about €560 million of the funding being raised against a target of €860 million over that period to 2012 — and many of the funds have been established. When this is combined with some of the budget initiatives we introduced in terms of small business, we are making a difference to the capacity of indigenous enterprise to access venture capital.

I am not saying we are finished yet. We are looking at new opportunities for enhancing that access to venture capital in this country into the future. In terms of Ireland's trade performance, the value of our merchandise exports in 2007 reached €88.6 billion, up €1.8 billion on 2006, equivalent to a 2.1% rise. I noted earlier that services is a key sector. It has risen dramatically between 2003-07, from about €37.1 billion to €64.7 billion, an increase of nearly 75%. It has been an extraordinary story and the value of services exports represents about 42% of our total export trade now, and is growing. Some economists estimate that it will reach 50% by 2010-11. Again, in terms of the future, we have put together a working group to look at the services sector in this country and how it may more effectively be internationalised, and enhance its contribution to Ireland's economic growth.

We have made provision in the budget to account for the economic growth rate but global uncertainty will affect the projections of economic growth. We are not immune from global developments. It is important that we focus on the fundamentals of the Irish economy, which remain sound and which will shore up our capacity to respond to the challenges that exist.

The slowdown in the domestic housing and construction sector has been a significant factor in the moderation of growth this year. We are moving towards a more sustainable level of house building. We could not have continued to build over 90,000 houses every year. Approximately 48,000 houses are expected to be built in 2008. This does not represent a collapse but indicates a significant move back from 90,000. It presents an opportunity to refocus capital and funding on enterprise, new technology companies and value-added food companies, as has been stated. We will work on this through Enterprise Ireland with a view to convincing people to invest in new enterprises. We must be honest about the fact that the property sector in recent years was drawing an increasing amount of capital away from other productive sectors of the economy.

The good news that arises from the considerable activity in the construction sector is that we have witnessed the growth of a significant number of high-quality construction companies. The challenge for us now is to internationalise some of these companies, export construction products and services and avail of the various opportunities that present themselves, such as the Olympic Games in London in 2012. The international business community will be looking for professional services that our construction sector should be well placed to provide.

We believe our medium-term growth prospects remain favourable. The Minister for Finance has made it clear we will keep an eye on the public finances, which process we have already begun in the context of the most recent budget by way of ensuring that fiscal measures will remain a core part of our overall strategy. Current spending will rise moderately this year.

Deputy Varadkar indicated he wants further curbing of public expenditure. He clearly wants to slash it but we believe that rather than adopting a slash-and-burn approach, we need to moderate current expenditure and not decrease capital expenditure. Capital expenditure will increase by approximately 12% this year and it will be used to deliver on the national development plan across all the areas of infrastructure.

This year will be different to last year in terms of employment. We will not enjoy the same level of employment growth as last year. We have forecast this and said so at the beginning of the year in light of the budget forecasts. Over recent years, there has been a significant churn in employment. The Opposition has mentioned various companies in this regard. We could also mention companies that have been established in the past two to three years. Only yesterday I was in Dungarvan, where an American multinational, Lancaster Laboratories, has decided to locate so as to have a footprint in Europe. It took over an indigenous company that has been in the region since 1986. There are currently 100 jobs and 100 more are to be created.

Genzyme, a major biotechnology company in Waterford, is to spend a further €113 million and increase its employment level in Waterford to above 600. Earlier this week I visited Thermo King in Galway, where a research and development centre has been established, again with a view to underpinning manufacturing jobs. The technology available in Thermo King to produce next-generation green refrigeration products for trucks is probably the best around. It is extraordinary. The company is a subsidiary of one of the most successful companies in Europe, Ingersoll Rand.

We need to celebrate and talk up our technology a little more. We can overdo the gloom and negativity in respect of the Irish economy and its performance. Zimmer Holdings, one of the most renowned manufacturers of medical devices for joints, including knee joints, which we will all need at some stage, is to locate in Shannon in County Clare, thus creating 250 high-quality jobs.

Investments have been made by Vistakon in Limerick, a great company that manufactures contact lenses. ChannelAdvisor Corporation has also announced jobs in Limerick. Jobs have also been created by Citco Fund Services in Cork and Service Source Europe in Dublin. Teva Pharmaceutical Industries has created jobs recently, again in Waterford. IBM has decided to establish Europe's first cloud computing centre with the support of IDA Ireland in Mulhuddart. We are therefore going up the value chain and targeting companies, mandates and functions that will make a difference.

I set up the small business forum to create a new focus on small business. There are 800,000 people working in small businesses in our economy, which represents almost 50% of private sector employment. We received a significant number of recommendations on this and we are clearly focusing on indigenous and small countries to develop and internationalise them.

I mentioned our commitment to science and technology, research and development and the €8.2 billion to be allocated in the coming years. The good news on this is that we are making very rapid progress. On human resources, the number of employed researchers has risen dramatically since 2000 in parallel with the strong increases in investment in research and development. The proportion of full-time adjusted equivalent researchers per 1,000 in employment has risen significantly and is now in line with the EU average and only slightly below the OECD average. The increase in the number of researchers, including principal researchers and their teams, to realise the goals of our investment will continue.

Reference was made to the brain gain. We are in the business of procuring skills and we have a migration policy that facilitates high skilled labourers, particularly world-class researchers to attract them into Ireland with good, interesting and well-funded projects. At the close of 2007, there were over 400 different companies collaborating with scientists supported by Science Foundation Ireland, SFI. Some 42% of SFI-backed scientists were collaborating with industry.

Enterprise Ireland, IDA Ireland and SFI all meet under a group called Technology Ireland and work in a cohesive way to develop research investments in collaboration with industry. We probably have a more flexible suite of offerings in terms of the synergies between industry and academia than many other countries. This is generating a lot of interest in the global research community. There is a lot on offer in Ireland through the funding of Science Foundation Ireland, the IDA and Enterprise Ireland. The challenge is to maintain this in terms of both indigenous industry and foreign direct investors. It is not a question of "either or" and we should not engage in the game of playing one off the other. There is a lot of foreign direct investment to be won. The task has become more challenging but we can still win a significant amount.

There is a link between foreign direct investment and indigenous enterprise in that many in the latter sector are supplying the former. Many of them are adding solutions to the multinational offering in terms of the quality of our technology.

I mentioned small business. The small business report listed many recommendations, which we have implemented. The Minister for Finance, in his budgets of 2006 and 2007 in particular, gave effect, in a very solid and effective way, to almost all the taxation recommendations contained in the report. We introduced the innovation voucher, for example, which represents a novel approach to enable micro-companies of four and five people to obtain grant aid from Enterprise Ireland to buy knowledge and expertise from colleges. To date, approximately 428 companies have received innovation vouchers. The interest of the companies in this initiative has been satisfactory. The business forum picked up the idea in Holland. It is a very useful way to encourage innovation and entrepreneurship across the economy. We also introduced a Tech-Check system, whereby we enable small companies to check that their technology is being used to the greatest effect. We are supporting companies in this regard.

Reference was made to regulation and the external audit. We did significant work to remove the audit burden from many small companies.

We are agreed on the issue of skills and we have devised and developed a national skills strategy. It sets out the most challenging upskilling target the country has ever set and will result in the upskilling of 500,000 workers between now and 2020. We have, through Skillnets and the FÁS one-step-up initiative, allocated significant resources over the past two to three years to dramatically change the level of engagement with existing workers and to enable existing workers to upskill.

Some 80% of all existing workers will be working in 20 years' time and our challenge is to enable them to gain an extra qualification while at work. That is a big challenge for education and training providers, but it is one that we are keen to deliver. The function of the Minister of State, Deputy Haughey, who is straddling both the Department of Education and Science and my Department, is to implement that skills strategy and to facilitate synergies between the two Departments in the future.

As the House will be aware, the Minister of State with responsibility for trade, Deputy McGuinness, has been active on the trade front and is particularly active on the WTO side. Mention was made of agriculture earlier. We are focused on the connection between agriculture, as a key sector in the economy in terms of job creation, and the value-added nature of the food industry, on which Enterprise Ireland is working flat out. Enterprise Ireland has a strong, proactive approach with food companies. I have been at many functions with the Minister for Agriculture, Fisheries and Food, Deputy Coughlan, and the Minister of State, Deputy McGuinness, related to the research and development activities of many of our food companies such as Glanbia and Dairygold in terms of the nutritional health-enhancing foods, which are dear to my heart as many of the Deputies will be aware. It is all about gaining increased market share.

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