Eamon Ryan (Dublin South, Green Party)
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Question 10: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the criteria which apply to the IDA and Enterprise Ireland on the nature of companies they can support; if restrictions exist for either agency on the basis that their client companies have to be engaged in a certain percentage of exporting activity; if it is possible for companies involved in import substitution to meet such criteria; and if not, if she will consider a review of such arrangements. [13895/04]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The decision whether to provide funding to a company is a day-to-day matter for the State agencies. Enterprise Ireland and IDA Ireland operate in accordance with the provisions of the Industrial Development Acts and within the policy framework established by my Department.

Enterprise Ireland is the agency that has primary responsibility for the development of indigenous sector. A small or medium enterprise is considered to be a company employing between ten and 250 staff. The types of service that may be eligible for Enterprise Ireland support are scheduled in the Industrial Development (Service Industries) Order 2003. Enterprise Ireland also has responsibility for Irish-based food and natural resource companies that are overseas-owned or controlled. IDA Ireland is the agency with statutory responsibility for the attraction of foreign direct investment to Ireland.

Enterprise Ireland works with companies in its portfolio to assist them in growing their sales and exports, and to improve innovation in order that they can compete on world markets. It also supports entrepreneurs with the ability to initiate projects that can compete in international markets. It is not true that potential clients must be engaged in export activity. However they must be able to demonstrate that export activity is a real possibility for the company and that the company has an ambition in this regard. The key focus of Enterprise Ireland's policy is to work with companies which have the potential to develop sustainable export sales, and to qualify for support, a company should demonstrate clear potential to do this.

It may be possible for Enterprise Ireland and IDA clients involved in import substitution to meet support criteria as the business development plans of such clients are considered on their merits. Import substitution can contribute to the viability of a new or growing enterprise and, to that extent, it is a valuable and welcome constituent part of the client's target market and can be a component of a client's business plan. However, import substitution by itself is typically considered insufficient to justify significant resources. It is important for companies to recognise that Ireland operates within the single European market and that supplying the domestic market will be carried out in competition from suppliers in other European countries.

Arthur Morgan (Louth, Sinn Fein)
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Import substitution could be effective in helping Irish industry to improve performance in many areas. I am thinking of the fish sector, for example, which is seasonal. As some fish products are plentiful at certain periods, their price could be maintained at reasonable levels if blast freezers were made available in ports. It would also create additional employment, albeit for a short period initially. The increase in turnover would help the companies concerned to expand into other areas beyond the realm of import substitution. Research and development also applies in this regard. Does the Tánaiste consider this area to be worth examining?

Mary Harney (Dublin Mid West, Progressive Democrats)
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Import substitution clearly has a role to play, but it depends from where the imports come. We cannot support import substitution from taxpayers' money if the competitor is another European company from within the enlarged EU. If the company was Chinese or American, import substitution might have a role to play. This market is very small with a population of less than four million. Companies must focus on wider markets and must look at export potential, rather than substituting imports. We are trying to grow companies to succeed in selling products, not just in nearby markets but in far away ones also. The second largest market for Irish companies, after the United Kingdom, is the United States. The EU is now bigger than the US, but the US has emerged as a successful market for our new technology companies.

As the Deputy knows, I do not have responsibility for the food and fisheries sector. The food sector falls within the remit of the Minister for Agriculture and Food while the fisheries sector is the responsibility of the Minister for Communications, Marine and Natural Resources. I would like to see greater value being added in both those sectors through more processing rather than some of the activities being engaged in whereby fish from Ireland is sold in Spain. We could get much greater value from our fishing industry than we may have realised to date.