Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context

Question 12: To ask the Minister for Enterprise, Trade and Employment his views on the recent spate of job losses and evidence of reduced investment here; and the measures he will take to reverse these trends. [18795/07]

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

While all company closures and their associated job losses are to be regretted and their impact on a personal, community and national level should never be underestimated, these losses have occurred during a period of unprecedented job creation. Well over half a million jobs have been created in the past six years. In the 12 months to February 2007 the number of people in employment increased by 16,000.

Overall, Ireland has performed very strongly over the last few years. However, as the country's economy moves to higher value added activities and providing quality sustainable jobs, some traditional lower cost industries throughout the country are under pressure and other lower value activities are transferring out of Ireland. This shift in the structure of international trade poses challenges to economic policy makers in all developed countries. The Government will continue to pursue policies to promote lifelong learning and upskilling to improve labour market flexibility and will ensure where necessary that appropriate training supports are provided for workers in sectors that are no longer competitive and assist workers who lose their jobs in finding alternative employment.

It must be remembered that Ireland also experiences the benefits resulting from globalisation as new markets and business opportunities open up for Irish companies. The level of foreign direct investment in Ireland relative to the size of the economy also remains one of the highest in the world. While competition from emerging markets for FDI has intensified, Ireland continues to punch above its weight when it comes to attracting overseas investment. Although our relative costs are now higher, we have responded nationally to a changing environment by positioning ourselves as the location for more advanced activities with more qualified and better paying jobs.

During 2006 IDA Ireland successfully marketed the country as a location for 71 new investments valued at more than €2.6 billion over the next few years. The agency also successfully negotiated 54 research and development projects representing an investment of almost €470 million. Ireland is now a global competitor for research and innovation investment from multinational companies and leading research institutions.

Notwithstanding these positive developments, the Government, my Department and the enterprise development agencies are not complacent about the future challenges facing the country's economy. One of our main tasks is to ensure Ireland remains an attractive place to do business and to support the development of economic competencies higher up the value chain. In that regard, we continue to work to maintain and enhance our framework competitive conditions, and promote new areas of competitive advantage by developing our research and development base, investing in critical physical and communications infrastructures and promoting tertiary education and lifelong learning.

Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context

I ask the Minister to provide a realistic assessment of the present situation. The election is over and I am merely asking for an assessment of where we stand. How serious is the problem? We have had evidence in recent times of quite a number of job losses and, more worrying, losses in high value sectors in which we prided ourselves on our competitiveness. How does the Minister view the present situation, taking into account those factors?

What is the current position with regard to foreign direct investment? In the past we received a high proportion of the FDI going to Europe but the percentage seems to have decreased greatly in recent times. Does the Minister accept that is a worrying trend?

Is it clear that our competitiveness is being called into question compared to others who are competing for the same jobs? A recent IBEC magazine report referred to Ireland as one of the most expensive countries in Europe for energy. Clearly, energy is a major factor in many industries. There is a problem but how serious is it and is the Government facing up to it? What measures are being taken to address the problem?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

We are in a globalised world, which means we can never stand still but must consistently look ahead and ask where we should be in five or ten years time. That is the approach I take as Minister for Enterprise, Trade and Employment and the reason for my concentration on the science and technology innovation strategy published last year. I worked with eight other Departments under the aegis of the strategy for science, technology and innovation Cabinet sub-committee to say to the world that Ireland is moving up the value chain, particularly in the area of fourth level research, and that we want to become a world-class centre for innovation and the development of new products, services and ways of doing things. We have also put in place the national upskilling strategy, which is intended to make sure that all the people working in the economy at present can explore ways of increasing their qualifications and certifications, be more flexible and adaptable and rise up the value chain.

In terms of our current position, I refer Deputy Jim O'Keeffe to the 2006 annual report from IDA Ireland. Last year was probably one of the best in the past five to six years for FDI. The quality of FDI, which is the key issue, is of the highest standard. Companies such as Amgen, notwithstanding its decision to delay, chose to come to Ireland as opposed to anywhere else. Glaxo Smithkline and Beecham have made significant investments in the pharmaceutical sector. The first ever drug discovery centre has been established in tandem with the alimentary pharmabiotics centre in UCC. PepsiCo, eBay, Amazon, Georgia Tech in Athlone and Google, with up to 96 language competencies in Dublin, are further examples of companies locating in Ireland. In the higher end sectors of digital media, financial services such as Northern Trust in Limerick, medical devices and pharmaceutical and biopharma, Ireland is punching above its weight and doing very well.

Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context

I take it the Minister has an early warning system in place in his Department.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Yes.

Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context

Is that system giving signs of trouble in the short term and can we anticipate difficulties in the near future in terms of employment?

James Reilly (Dublin North, Fine Gael)
Link to this: Individually | In context

I congratulate the Minister and the Ministers of State on their appointment.

Given the increasing competitiveness faced by Irish industry and the critical importance of research and development to our future growth and competitiveness, what plans, if any, has the Minister to increase funding for research and development? More specifically, will the Minister tell us what the spending was in 2005 and 2006 and what he plans to spend in 2007? I am not seeking definite figures but rough estimates.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

I congratulate Deputy Reilly on his election. He asked questions of me in a different context previously, when I held a different portfolio. Deputy O'Keeffe asked about competitiveness and the early warning system. We get early warnings related to specific companies.

The current commentary on manufacturing is quite positive. Following the prolonged period of slow growth in continental Europe, we have seen a growth in Irish manufacturing. It reached a low ebb in 2004 and 2005 but last year, with the emergence of more robust activity and growth elsewhere in Europe, manufacturing in this country began to recover and output grew by 5.2%. In the first quarter of this year, the recovery accelerated sharply and output was over 14% higher than a year earlier. The strengthening growth in employment in the first quarter is a further indication that the recovery is solidly based. Some economists are expressing the view that manufacturing is recovering very well and is in a very solid position overall because of a more robust European market position, which has led to increases in exports.

We get early warnings related to specific companies. If a particular company is in difficulty, agencies such as Enterprise Ireland will notify the Department. We try to work with those companies to determine whether we can salvage anything. Obviously, the communication would be confidential because the companies ——

Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context

Would that be initiated by the companies?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

It would be initiated by the company or the agency. On an ongoing basis, companies would contact the agency and——

Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context

Do we not have an overall monitoring of the situation?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

We have an overall monitoring of the economy and of broad sectors. I prefer to look at these situations as challenges.

To deal with Deputy Reilly's point, the Forfás annual report contains very good data on the dramatic increases in research and development expenditure over the past few years, particularly in 2006 and 2007. I do not have the specific figures here but sufficit to say our plans are very clearly articulated in the science and technology innovation strategy which aims to do the following: double PhD numbers by 2013; double the business spend on research and development between now and 2013; strengthen the partnerships between industry, universities and institutes of technology, in which the Minister of State, Deputy Michael Ahern will have a key role; increase the technology transfer from third level campuses to businesses; and increase participation rates in science and information technology courses.