Richard Bruton (Dublin North Central, Fine Gael)

I thank the House for making time available to debate this matter. No case is more compelling in Ireland at the moment than that of addressing the jobs crisis. Everyone elected to the Chamber is aware that in the past three years almost 350,000 jobs have been lost. Sadly, most of these have been lost by people under the age of 30 years. These are the people who will drive the economic future of the country. There is an absolute obligation on everyone in society to get in behind action to tackle the jobs crisis. I approach this debate in an open manner. We are keen to hear and develop ideas.

The purpose of the Action Plan for Jobs 2012 is to harvest what can be done across Government within the next 12 months and to set it out in a coherent way and set about implementing it. When we reflect on previous major strategies, whether to address climate change or health, we find that what went wrong was a failure to implement change or to hold people to account in the move from the good idea to delivering it in a coherent way. This is despite that these were well-placed ambitions

We believe this plan is different in an important way. Each measure has a responsibility assigned to it. The Taoiseach will play a central role in monitoring the delivery of each responsibility. As every one in the House is aware we come to this crisis recognising that a fundamental shift has occurred in the economy. Fundamental damage has been done to the economy. It is not a question of trying to get back to where we were with some stimulus package, even if we could afford it. This is about major change across many sectors. This has inspired the programme of actions and reform that the Government has undertaken on many fronts.

The Minister, Deputy Michael Noonan, has undertaken a major restructuring of the banking system. Without this restructuring and the creation of pillar banks that have the ability to lend we could not get the economy going. The Minister, Deputy Joan Burton, is undertaking a major transformation of employment services. Over the years, people have rightly been critical of the system in Ireland whereby often welfare was conditional on being idle and one was paid only if one was idle. The concept the Minister is developing is that people should be supported to be active, to develop their potential, to get opportunities and to move on with their lives. This is a fundamental shift in the way we think about the challenge.

The Minister for Education and Skills, Deputy Ruairí Quinn, is undertaking a major change of the training network. We all understand that the FÁS system probably got caught in a certain view of the world associated with the construction boom and, as a result, it lost ground. We need a more modern system of training focused on where the opportunities in our economy will come from. This is part of the major reform agenda. We must reorient our tax system to emphasise the importance of enterprise as opposed to property. The Minister for Finance, Deputy Michael Noonan, has undertaken this work. This is another considerable shift.

The work undertaken by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin recognises that we own assets such as the National Pensions Reserve Fund. There are State assets available and we must think of innovative ways to use these resources to drive the necessary infrastructure of the future. The creation of a €1 billion infrastructure fund is central to this.

The new approach this document encapsulates holds that creating, promoting and supporting employment is not the concern of one or two Departments, it is the concern of every one and every Department can contribute. Each of the 15 Departments has put forward actions as part of this programme and 36 agencies have put forward actions as well. The idea is to put jobs first and foremost and this is what the Government has set about. At the same time we must do a good deal of work to correct the public finances.

Much restructuring remains to be done but there is a central goal which people have bought into. We have every right to be optimistic about our capacity to rebuild the economy and its employment base. Some of the most ambitious and creative companies in the world pick Ireland as the location of choice in which to set up companies. Despite the difficulties in the economy we continue to have one of the highest rates of business start-up in Europe. More and more people have the courage to take on the difficult task of setting up their own business and ensuring they generate customers and make the business succeed. These are fundamentals on which we can build.

We have set out what I believe to be ambitious but realistic targets in respect of the net employment increase and other targets. This ambition has been clearly articulated by the Taoiseach time and again in his declarations that he wants to make Ireland the best small country in the world in which to do business by 2016. This will involve a good deal of re-working of the system.

We are a team. The Minister of State, Deputy John Perry, is working on the small business dimension and examining how to audit the licences and the obligations that companies are subject to. The Minister of State, Deputy Sean Sherlock, is examining how we use the vast investment we have made over many years. Credit is due to previous Governments for creating this investment. We have invested in research and development capability in our higher education institutions. The challenge is to move from being a ship builder and of creating these individual areas of excellence to being an Admiralty where one organises and directs the resources to create commercial opportunities and to create companies and enterprises that can succeed. This is the task of reorientation we must carry out in this Department.

The sad truth is that Ireland forgot what it was to succeed in a small open economy. We got carried away believing that property could do it for us and, sadly, through the noughties we lost export market share. Each year, six years in a row, we lost export market share which was the lifeblood of our small open trading economy. Now that the crash has come, significantly more damage has been done than that property simply led us astray. Take for example the skill choices that young people made when choosing what to do in college. Approximately 10% of those who started in the year 2000 chose technology, an important sector where there are now huge skill shortages. In the boom years, those selecting this option fell from 10% fell to 3.5%. Therefore, it was not just that we got too expensive, but that other parts of our system became distorted through the choices people were making as to what they felt would build a strong future for us. The task of reorienting our system will need a major transformation that will involve many other Departments along with our own.

This is about going back to basics. The role of individuals willing to start a business is crucial and we must ensure that we provide the best opportunities we can to ensure those willing to take that risk have the best chance of success. It is for this reason that we are reorganising the local enterprise support service. The county enterprise boards have done great work, but we recognise now that there are gaps in that system and that small companies hit a ceiling in that system and do not have the chance to progress seamlessly to programmes that could help them develop and become major exporters and companies. We believe it is important to have a seamless ladder between Enterprise Ireland and the local enterprise office, setting standards for those local offices and for the local authorities. The local authorities have huge potential to shape economic development. They can make the licensing and planning procedures easier to undertake and make it easy to comply with requirements. They can create opportunities for procurement and thereby create an environment in which businesses can succeed.

It is important to see the reform we will undertake, in which the Minister of State, Deputy Perry, will play a central role, as not just about creating a one-stop shop, but about creating a location where the excellent new ideas on enterprise formation will be fed through Enterprise Ireland and where there will also be a new attitude to enterprise within the local authority system. This is ambitious, but it is right to be ambitious in this area. This first experience for small businesses starting up is crucial and we want to make it easier for them to succeed. We are also developing a micro-finance project. We recognise that banks, particularly at the current time, do not want to touch the very small start-up company, such as the one that needs approximately €20,000 to get started. Banks will not be interested in the administration and risk involved with that. Therefore, we must intervene in that area and are doing so.

We also need to see established companies expand and grow without being taken over by a foreign company because they have grown to a certain stage and capability. Therefore, we are putting in place a development capital fund of €150 million which is aimed at companies that are growing fast or at well established companies in traditional sectors that are not clients for venture capital but which need equity to go to the next level without being taken over by foreign interests. This fund is an important initiative.

We also want to see more companies break into new export markets. In that regard, I welcome the initiative proposed by the Minister for Finance, Deputy Noonan, which will be implemented this year and which will allow tax relief for placing people in the BRICS countries. These are emerging markets and while we are doing well in those markets, we are doing so from an extremely low base. The total percentage of trade from all the BRICS countries is less than 5%. These are rapidly growing markets and we need to recognise that and build our part of that market. We are also stretching further by setting up a first-time exporter division within Enterprise Ireland for the many companies that have never exported. We are targeting approximately 1,800 companies that do not export but which have the capacity to get a foot on the export ladder. This initiative is an important statement on how Ireland needs to transform for these markets.

There are practical ways in which we can help businesses win new contracts. We have looked specifically at how we can get public procurement more oriented towards innovative small companies so as to help them break into this area. As other Members are aware, it is always disconcerting to travel abroad and find some wonderful Irish companies doing business in places like India, China or America but to realise that they have not been able to get even one customer in Ireland for their innovative product. If we want to see small companies succeed, we must give them this first break.

The action plan also hopes to focus on developing sectors where we can stake out a lead. We have mentioned many of these areas, but ours is not an exhaustive list. We recognise that action can be taken in key sectors, some of which are traditional sectors like the agrifood business. Horizon 2020, which was developed by the last Government has put ambition on the map for agriculture and the food sector. It is important we deepen and strengthen this. However, there are new sectors, such as digital gaming and cloud computing. These offer opportunities in areas where Ireland has critical mass and can build success. We need to ensure the State nurtures these opportunities and that no obstacles stand in the way. When looking at sectors in which we can stake out a future, we must also look to see we have the skills base right, the access to investment capital and that we exploit the cluster we have and get people together to collaborate. We must ensure we have the research facilities to support those new sectors and that these are properly oriented towards the needs of the companies. This is an important theme of the action plan.

We must also recognise that foreign investment is vital. A high proportion of our exports - too high to be honest - comes from foreign owned companies. While it is great to see a major name, like Hewlett Packard last week, deciding to expand in Ireland, it would be even better if we could see some of the new dynamic companies establishing and starting their business in Ireland. This is an opportunity we intend to target. If one visits places like Silicon Valley, one will see that more than half of the companies that have started up there are not owned by US citizens, but by people who have chosen Silicon Valley as a location which has the dynamism to help them thrive. I believe we have that similar environment. We have many of the best companies in the world and we have many of the best skills in the world, particularly in the IT and medical device sectors. We also have a good research base, a good corporate tax regime, a good business environment and now have venture capital funds in place with the capacity to fund companies.

Therefore, Ireland can now say it is the go-to place for start-ups, particularly in certain sectors. We need to sell this vision. Just as the IDA actively pursues well established companies and seeks to get them to establish here, we need to supplement the work Enterprise Ireland does in identifying international players who could start first time businesses. We are very fortunate to have Dylan Collins as one of the ambassadors for this initiative. He is a serial entrepreneur in the digital gaming sector and has set up many successful companies, such as Havok. Someone like him can tell his peers what it is like to do business in Ireland and we need to exploit such opportunities.

I am pleased that an idea that came from the consultative process is being realised through the Succeed in Ireland idea. This is the idea to give a finder's fee to Irish people, or non-Irish people, who introduce a new company - typically a small company - which decides to use Ireland as a gateway to develop its European business. The IDA is an exemplary authority, but it cannot be in every location. All resources are strained and this idea is a worthwhile project to access the diaspora to look and work on Ireland's behalf to identify companies that could successfully locate and develop from an Irish base. We are looking forward to launching the details of this project next month.

We should also recognise that some of the basics must be got right, including the competitiveness of our economy. Difficult changes have had to be undertaken; we know all about this in the public service and in many private companies which have been restructured. Work practices have changed and wages have come down. We must ensure that right across the board we get a more competitive economic structure. This will include reform of legal services and cost of access, which is important, and consideration of our skills base to ensure the sort of choices and facilities we offer are cost-effective and recognise the needs of enterprise. That is really important to our long-term competitiveness. We must examine our research investment and get the best out of it.

There is an agenda across the costs and infrastructure that is crucial to create the environment where businesses can succeed. We are fortunate that over the past two years there has been a very significant improvement of almost 20% in our unit wage costs relative to the rest of Europe . That has given us a significant edge and is the reason we are now doing well in export markets. We must copperfasten this success and it should not be eroded at the first sign of recovery. We should examine what structural changes we can make in our economy to get all the different sectors, including energy, public service costs and red tape, addressed appropriately.

I have introduced this plan to the House and it is a really important first step. Action Plan for Jobs 2012 will be followed by another plan in 2013 and subsequent years because we recognise the need for relentless attention to this challenge. It is not a question of doing this and thinking we can rest on our oars. This debate is about hearing the best ideas from people, although this must happen with the knowledge that we are living in constrained times. People must recognise that we have limited resources. Much of this is about using our money in a smarter way to leverage activities by others who can support the challenge we face.

See this speech in context