John Perry (Sligo-Leitrim, Fine Gael)
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Question 117: To ask the Minister for Enterprise, Trade and Employment the reason the number of people working for companies backed by Enterprise Ireland fell by 218 in 2005; and if he will make a statement on the matter. [4066/06]

Micheál Martin (Cork South Central, Fianna Fail)
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Job creation and retention in Enterprise Ireland-supported companies are day-to-day matters for the agency itself, and not ones in which I am directly involved.

Provisional figures indicate that in 2005 the number of jobs gained in Enterprise Ireland companies amounted to 12,212. That was offset by job losses of 12,430, giving a net decline of 218. I emphasise that those 2005 figures are provisional and will be finalised only when the 2006 Forfás employment survey is undertaken later this year. This time last year, the provisional figures for 2004 indicated a net job loss of 1,317 in Enterprise Ireland companies. However, outturn figures for 2004 now show that Enterprise Ireland companies created 15,933 jobs and lost 13,956 jobs, resulting in a net gain for 2004 of 1,977 jobs.

Brendan Howlin (Wexford, Labour)
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Where did they find the figures?

Micheál Martin (Cork South Central, Fianna Fail)
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They come with a warning.

Brendan Howlin (Wexford, Labour)
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Where did they find those 2,000 jobs?

Micheál Martin (Cork South Central, Fianna Fail)
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They were created towards the end of the year.

Despite the pressures experienced in some sectors, total unemployment in Ireland remains relatively low, at 4.3%, and economic growth is estimated at 4.8% for 2005. With more than 2 million people in work, Ireland enjoys one of the lowest unemployment-to-employment ratios in the EU 15.

In recent years, Irish manufacturing firms, particularly in more traditional sectors, have operated against a backdrop of significantly declining external demand, downward price pressure, and an increasingly competitive international environment, together with upward pressure on costs and the strengthening of the euro against our key trading partners' currencies. In contrast, the 12,212 new jobs created in Enterprise Ireland client companies during 2005 are heavily concentrated in high value-added, knowledge-based companies that offer greater security in the face of intense international competition. The headline figures do not reflect the considerable churn taking place in the Irish economy or the quality of jobs being achieved.

Irish manufacturing companies must increasingly compete though innovation, adopting best practice, maintaining a relentless focus on driving productivity gains and increased automation to maintain competitiveness. In addition, companies need to be outward-looking in their development strategies.

Enterprise Ireland's strategy for 2005 to 2007, which I launched last year, sets out the role the agency will play in transforming Irish companies into market-focused and innovation-driven companies with the ability to complete successfully in world markets. A significant initiative under the strategy is the productivity improvement fund, which supports manufacturing companies to adopt advanced technologies and focus on skill developments to improve productivity, thus laying the foundation for export readiness. Research and innovation are also critical to success in the increasingly global marketplace for all companies, regardless of sector.

Additional information not given on the floor of the House.

Enterprise Ireland encourages sustained levels of research and development activity through its RTI scheme and research and development initiatives. In addition, support for entrepreneurs to establish high-potential start-up companies, HPSUs, is vital to ensure a constant stream of companies providing valuable employment opportunities as such companies grow in scale. In 2005 alone, 75 HPSUs were established with Enterprise Ireland support in sectors as diverse as biotechnology, photonics, medical devices, functional foods, ICT and entertainment.

I am confident these measures will ensure a fully integrated approach to developing Ireland's indigenous enterprises.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I am not much the wiser from that reply regarding why employment fell in Enterprise Ireland-supported businesses in 2005. The Minister said a great deal, but I was not sure exactly what.

Brendan Howlin (Wexford, Labour)
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They may have to have a recount.

Micheál Martin (Cork South Central, Fianna Fail)
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I am an expert on recounts.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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It is a worrying development that Irish-owned indigenous businesses are coming under pressure. We saw the decline in manufacturing in 2005. The enterprise strategy report, Ahead of the Curve, was excellent, and the Minister has said that some aspects are being implemented. What action does he intend to take — I see none in the Finance Bill — to improve the take-up of research and development? The Government seems to be making no effort to promote research and development through greater incentives. The 20% incentive that the former Minister for Finance, Mr. McCreevy, introduced some time ago apparently is not being taken up. Perhaps it is not attractive enough or offset against payroll costs. Does the Minister have any initiative to ensure greater involvement by Enterprise Ireland in assisting companies in research and development to create added value and additional employment in 2006?

Micheál Martin (Cork South Central, Fianna Fail)
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Enterprise Ireland and I have the substantive commitment to research and development. I am working with it to enhance and grow the number of companies engaged in meaningful research and development. Part of Enterprise Ireland's new strategic vision involves a defined objective in terms of the number of companies. In essence, it wants to double to more than 1,000 the number involved in significant research and development, which means spending more than €100,000. I am also working with Government colleagues to develop a medium-term strategic position on further ramping up research and development and investment in the country.

This Government, more than any in the history of the State, has created a new platform of research and development expenditure through the programme for research in third level institutions, PRTLI, and the SFI. We now wish to move beyond that to prepare ourselves and ensure that we are competitive enough to withstand the pressures of globalisation and so on. There is a great deal of action on the Enterprise Ireland front on research and development, and the kinds of technology-based companies now emerging as having high potential growth are quite significant and cutting it with the rest globally.

Brendan Howlin (Wexford, Labour)
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Perhaps I might say something.

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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That concludes Question Time.

Brendan Howlin (Wexford, Labour)
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I welcome the Ceann Comhairle back. We missed him.