Mary Coughlan (Donegal South West, Fianna Fail)

Ireland's overall innovation performance remains strong according to the latest evidence released jointly by Forfás and the Central Statistics Office. The level of product and process innovation activity is above the EU average for manufacturing and service sector firms.

A strong research and development and innovation performance is one of the many elements in ensuring that Ireland remains a competitive location for attracting foreign direct investment. Such investment has played and will continue to play an important role in the development of our economy. In recognition of this, the foreign direct investment subgroup of the national development plan, involving IDA Ireland and Shannon Development in the Shannon Free Zone, will invest €1.6 billion over the lifetime of the plan to promote new foreign direct investment and the expansion of existing foreign direct investment in Ireland. While international competition for foreign direct investment is relentless, Ireland continues to punch above its weight when it comes to attracting overseas investment.

The level of foreign direct investment in Ireland, relative to the size of the economy, is one of the highest in the world. Today, there are in the region of 1,000 overseas companies employing more than 136,000 people in this country. These include many of the leading companies in pharmaceuticals and biotechnology, medical technology, financial services, international services, digital media and information and communications technology.

The economic impact of foreign direct investment in Ireland is pervasive and goes much deeper than just job creation. Foreign owned companies are at the cutting edge of demand for high skills, of advanced management training and business processes, which permeate the wider business community. These companies are leading contributors to the national research and innovation agenda. They have contributed greatly to the broadening of the economic base in Ireland by fostering entrepreneurship and promoting the start-up of indigenous enterprises.

In addition, during 2007 these companies have put €15.87 billion in direct expenditure back into the economy. Of this €5.7 billion was spent on services and €3.43 billion on material and components from Irish sources. In addition, the corporation tax generated by these companies was €3 billion or almost 50% of the total corporate tax take in the same year.

In line with the national spatial strategy and the national development plan, IDA Ireland is actively enhancing the potential for regions to prosper. It has been instrumental in the development of high quality flagship technology parks in the gateway and hub locations, ensuring full integration into the surrounding business and economic environment. Over the lifetime of the NDP, IDA Ireland will maintain a strong focus on maximising the capability of regional locations to absorb a greater proportion of high-quality FDI. Last year alone, IDA Ireland secured 114 new investments, amounting to more than €2.3 billion in capital investment. A total of 64% of the investments secured by IDA in 2007 were located outside of Dublin.

Ireland's competitiveness is based not on Irish tax benefits and costs alone but on knowledge, innovation, flexibility, and connectedness — how everything works together. Ireland continues to be one of the most attractive places in the world as a location for global business. With our highly educated, skilled and adaptable workforce; our strong focus on research and development and knowledge; and our "can-do" responsive and open attitude, we remain a location of choice. As a small open economy, Ireland welcomes the continued strong interest demonstrated by many of the world's leading companies in investing and expanding here. Ireland has transformed as an economy over recent years and we are well positioned to continue this transformation over coming years. We are pro-business, pro-European and proud to be always at the forefront of the minds of global business leaders as they make critical investment decisions.

Of course, FDI is only one side of the enterprise equation. A strong and vibrant indigenous enterprise sector is also important to ensure that our economy grows and develops. An investment of €1.7 billion has been allocated under the NDP for enterprise development in the indigenous sector.

Enterprise Ireland has delivered handsomely on its 2005-2007 strategy by meeting or exceeding the publicly stated targets through assisting 221 new high potential start-up companies against a target of 210, 70 of which came into being in 2007.

In summary, while the issues facing the economy are challenging, we are starting from a strong position. Ireland has a good economy, the fundamentals of which are right. The Government is committed to building on this and ensuring that we remain competitive and in a position to take full advantage of any upturn in the global marketplace. We do this through our plans and programmes under the NDP and will create the environment whereby we will continue on a path of sustainable export growth, enhancing our attractiveness as a location for FDI and continuing our development as a knowledge-based and innovative economy.

See this speech in context