Dáil debates
Thursday, 28 February 2008
Other Questions
Job Creation.
4:00 pm
Enda Kenny (Mayo, Fine Gael)
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Question 8: To ask the Minister for Enterprise, Trade and Employment the percentage of Industrial Development Authority created jobs in the border midland western region in the past 12 months; and if he will make a statement on the matter. [8471/08]
Micheál Martin (Cork South Central, Fianna Fail)
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IDA Ireland is the agency with statutory responsibility for the attraction of foreign direct investment, FDI, to Ireland and its regions. The marketing of individual areas for new or expansion FDI investments and jobs is a day-to-day operational matter for the agency.
During 2007, the latest period for which data are available, 9,216 new jobs were created in IDA supported companies, of which 1,446 were created in the Border, midlands and western, BMW, region. This figure represents 16% of all new jobs created that year.
At present there are 184 IDA supported companies in the BMW region employing 26,430 people, which represents almost 20% of all IDA supported employment in the country. The impact of FDI in Ireland goes much deeper than job creation alone. The positive impact is visible in many key aspects of Irish life. Foreign-owned companies are at the cutting edge of demand for high skills, advanced management training and business processes, which permeates the wider business community. These companies have contributed to the broadening of the economic base in Ireland by fostering entrepreneurial activities and new start-up companies aimed at supporting and selling to foreign-owned companies.
In line with the national spatial strategy, IDA is focused on delivering investments to all of the gateway and hub locations. This strategy involves matching investor requirements with the competencies, infrastructure and critical mass of these locations to secure the maximum number of investments for Ireland. The key sectors of focus for IDA are life sciences, information and communications technologies and high-value international services activities. Of the five strategic sites currently being marketed by IDA Ireland, two are in the BMW region, one in Galway and one in Louth and another is on the way.
The nature of foreign direct investment has changed and Ireland is now competing for premium mobile investments against the most advanced countries in the world. As Ireland competes for investments at the highest end of the value chain the concept of scale is crucial to our economic destiny. Leading corporations require a significant population of highly qualified and talented individuals, effective physical and digital infrastructure and the availability of sophisticated professional support services. If we are to make progress in attracting FDI to the regions we need to continue our investments under the national development plan, NDP, and all economic and social stakeholders will need to commit to the goal of balanced regional development as envisaged in the national spatial strategy. Future thinking and action must have a regional rather than a local bias and this requires a significant change in mindset.
I am confident that the policies being pursued by the development agencies, together with the roll-out of the national development plan, will continue to bear fruit in terms of employment and investment in the region.
Damien English (Meath West, Fine Gael)
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The target of 50% has not been reached.
Micheál Martin (Cork South Central, Fianna Fail)
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What target is the Deputy referring to?
Damien English (Meath West, Fine Gael)
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IDA Ireland has a target to create 50% of all new jobs in the BMW region. This is stated as a policy in everything we read; the Minister answered a question in this regard in recent weeks and gave the percentages.
The fact that the Minister is unaware of this target probably answers my question. The target has not been reached in any year of the past seven years; levels of 36%, 41%, 44% and 45% were reached. That the target has not been reached may be explained by the fact that nobody knows it exists. Is the target to remain or will it be changed because it would be nice to reach it one year in seven?
The Minister mentioned the national spatial strategy but is there any intention to review its success? It has never been debated properly and it is felt that my county got a raw deal in the strategy. I understand that the strategy does not relate directly to the Minister's Department but this area is related to the original question.
Willie Penrose (Longford-Westmeath, Labour)
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As I said a few minutes ago, Westmeath's is one of the most progressive local authorities in attracting employment and generating opportunities. Mullingar is an excellent location; it is centrally located, has a good road network, the N4 and N52 lead into it, and excellent school, leisure and train facilities. Was Mullingar not nominated as a strategic site? It has 75 acres of developed land in the BMW region.
Micheál Martin (Cork South Central, Fianna Fail)
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Are we talking about strategic sites?
Willie Penrose (Longford-Westmeath, Labour)
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Why has the IDA not designated Mullingar as a strategic site? I wrote to the authority in this regard on 12 February as chairperson of the committee and am very disappointed that I have not yet received an answer. I am not a great believer in technology: I contacted the IDA in an e-mail for the attention of its chief executive on 12 February at 5.20 p.m.
Michael Ahern (Cork East, Fianna Fail)
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Did the Deputy press "send"?
Willie Penrose (Longford-Westmeath, Labour)
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I am sure I will get an answer in due course because he is a busy man.
What is the IDA doing to attract industry to Longford and Westmeath? I know there has been much good news in Athlone and that is important because there have been significant job losses there. What has the IDA done for Longford and what has it done for Mullingar? There is an excellent, 75 acre, well-serviced site there. What is being done to attract industries in the fields of technology, pharmaceuticals and services? Westmeath County Council did much to facilitate the availability of the aforementioned site. Am I wrong in saying the centre of the country, the heart of the BMW region, Mullingar, is not on the map?
Willie Penrose (Longford-Westmeath, Labour)
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Can the Minister correct it? Did I hear him correctly? Did I hear Louth and Galway being mentioned while Westmeath was not?
Micheál Martin (Cork South Central, Fianna Fail)
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That is strategic. I will explain.
Willie Penrose (Longford-Westmeath, Labour)
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If the IDA was working, surely the geographical centre of the country, the intersection of the N4, N6 and N52, would be included. It is no wonder we have got nothing for years in Mullingar if that is the position.
Charlie O'Connor (Dublin South West, Fianna Fail)
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As we are over time on this question I ask the Minister to be as brief as possible.
Micheál Martin (Cork South Central, Fianna Fail)
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I did not anticipate Deputy Penrose endeavouring to outdo Senator Cassidy on the virtues of Mullingar. Deputy Mary O'Rourke is keeping a watchful eye on both of you in terms of job creation in Westmeath.
Willie Penrose (Longford-Westmeath, Labour)
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She is also watching the Minister.
Micheál Martin (Cork South Central, Fianna Fail)
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The objective of 50% was for new greenfield projects. The general question the Deputy asked was about jobs created.
Damien English (Meath West, Fine Gael)
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That is only greenfield sites.
Micheál Martin (Cork South Central, Fianna Fail)
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That was always the objective. I will go through that in a moment.
Micheál Martin (Cork South Central, Fianna Fail)
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The 16% I mentioned is of all new jobs created, that is, 9,216 in 2007. How many existing companies create additional jobs by new project expansions and so on? Quite a number of the 9,000 jobs would be expansions to existing facilities and the operations of companies that already exist in Ireland. The greenfield ones are new projects. Substantial progress was achieved during the period 2000 to 2006. Some 36% of all new greenfield jobs were located in the area. I have a table here which I can send on to the Deputyââ
Micheál Martin (Cork South Central, Fianna Fail)
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It shows the following â 45% in 2000, 43% in 2001, 44% in 2002, 46% in 2003, 41% in 2004, 39% in 2005 and 36% in 2006. Very significant progress was made by the IDA in the BMW region and there were very significant projects across the region.
In reply to Deputy Penrose's question, the IDA has business parks across the country, including a substantial one for which I dug the sod in Mullingar to great aplomb.
Willie Penrose (Longford-Westmeath, Labour)
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At Marlinstown Park.
Micheál Martin (Cork South Central, Fianna Fail)
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I would refer the Deputy to Carlow. I spent a number of years going there and took many heated attacks and so on in regard to our inabilityââ
Micheál Martin (Cork South Central, Fianna Fail)
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In the space of four or five months we had the announcement of Merck Sharp & Dohme for Carlow and two weeks ago, an internationally traded service company, Unum. The idea of having property solutions is very important.
The strategic serviced sites to which I referred are a new development by the IDA in terms of major sites with all the utilities in place and the planning permission secured in advance. The one I referred to was in Oranmore, Galway, which is for a bio-pharmaceutical facility. A similar one is being provided in Louth. Ringaskiddy would have been an existing one that was conceived 20 or 30 years ago. The idea is to have significant land solutions in place in the various regions to attract the more significant bio-pharmaceutical or some of the FAB projects.
Charlie O'Connor (Dublin South West, Fianna Fail)
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Perhaps the Minister would conclude. We are way off time.
Micheál Martin (Cork South Central, Fianna Fail)
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I am mindful of the claims of Mullingar to inward investment, given its centrality to the nation. I will continue to work with the IDA to try to bring investment there.
Damien English (Meath West, Fine Gael)
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I thank the Minister for the correction in regard to the green field jobs and so on. If the Minister looks at the percentages he will see they are falling miserably from 50%.
Micheál Martin (Cork South Central, Fianna Fail)
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Not miserably.
Damien English (Meath West, Fine Gael)
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There is a big difference between 36% and 50%. The trend is in the wrong direction whether the Minister likes it or not. We will come back to it again.
Micheál Martin (Cork South Central, Fianna Fail)
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The Deputy is representing his leader very well. He is even prepared to go to Carlow and sacrifice his own constituency.
Damien English (Meath West, Fine Gael)
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I will come back to that later.
Dan Neville (Limerick West, Fine Gael)
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Question 9: To ask the Minister for Enterprise, Trade and Employment the net gain in Industrial Development Authority generated jobs over the past five years; if he is satisfied with the net return to the State; his forecasts for IDA job creation in the next five years; and if he will make a statement on the matter. [8487/08]
Micheál Martin (Cork South Central, Fianna Fail)
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The Forfás annual employment survey shows that in five-year period from 2003 to 2007 the net gain in the numbers of new jobs created in IDA supported companies amounted to 4,623. This relatively small net gain masks the fact that there has been a considerable churn in employment in client companies.
The significance of foreign direct investment to Ireland's current economic prosperity and future growth should not be underestimated. The level of FDI in Ireland, relative to the size of the economy, is one of the highest in the world. Today employment in IDA companies directly accounts for over 136,000 jobs or 42% of industrial and financial employment in the economy. The average salary in IDA supported companies in 2007 was almost â¬44,000, or 19% above the average industrial wage of â¬36,800. This reflects the higher skills of the new positions being created by these investments. IDA supported companies paid an estimated â¬3 billion in corporate tax in 2007. They also accounted for approximately 85% of manufacturing company's exports. They accounted for â¬15.87 billion in direct expenditure within the economy, comprised of â¬6.73 billion on payroll, â¬5.71 billion on services and â¬3.43 billion on Irish materials. These investments have also generated significant indirect employment in indigenous sub supply and service companies.
The impact of FDI in Ireland goes much deeper than job creation and financial contribution to the economy, the positive impact is visible in may key aspects of Irish life. Foreign-owned companies are at the cutting edge of demand for high skills, advanced management training and of business process, which permeates the wider business community. These companies are leading contributors to national research and innovation agenda through substantial capital and intellectual investment in company owned research facilities and in widespread collaboration with third level institutions and dedicated research institutions. Through their success they have contributed to the broadening of the economic base in Ireland by linking to and fostering entrepreneurial activities and indigenous start-ups aimed at supporting and selling to foreign owned companies.
I am satisfied that the expenditure incurred by IDA in attracting new inward investment represents significant value for money and an excellent return on investment for the State.
While neither IDA Ireland nor I make forecasts as to the number of jobs to be created in any one year I am satisfied that the agency has a healthy pipeline of prospective new projects in place and, given the successes of the agency in previous years, I share their confidence that Ireland is well placed to secure significant investment for 2008 and the years ahead.
Damien English (Meath West, Fine Gael)
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I agree that the IDA gets good value for money. It came before the joint committee recently and it is clear it is doing a very good job for the money its gets. There is no problem in that area. When one includes the other agencies, Enterprise Ireland and Shannon Development, it averages out at approximately 2,500 net jobs per year. We mentioned targets earlier. I appreciate the Minister cannot predict exact numbers, but going forward would the Minister be happy with a net return of 2,500 to 3,000 jobs per year? Should we aim higher or is there anything that can be done by the Department to improve that even further? Some counties, I can name them if the Minister wishes but there are seven or eight on my list, are down a good deal of jobs over the years; they have experienced a net loss rather than net gain. In general, are there any plans to increase the overall figure from 2,500 to 3,000 per year?
Micheál Martin (Cork South Central, Fianna Fail)
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The question asks about the net gain. That is a fair question because it amassed some of the bigger issues. A total of 53,976 jobs was created over that period.
Damien English (Meath West, Fine Gael)
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I am not disputing that. That is not the issue.
Micheál Martin (Cork South Central, Fianna Fail)
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That is a huge number. Unfortunately 49,300 odd jobs were lost. That reflects the churn in the economy. Fortunately, over the past decade we have been in the strong position where we created many jobs in services and the indigenous sector improved. We have had record job creation figures of 80,000 last year and 90,000 the previous year. We have created more jobs than we have lost.
In terms of the future, the 2007 business environment ranking of the economist intelligence unit ranked Ireland in tenth place globally out of 82 countries, naming it as one of the most attractive business locations in the world. Once we continue to get that type of international recognition, in terms of the attractiveness of Ireland as a location, notwithstanding the significant global competition in terms of wage costs, emerging markets and emerging economies, we are confident we can continue to secure significant investments. If one looks at the last month alone, we have had good quality investments from Zimmer in Shannon to Citco in Cork and Vistakon in Limerick, all high value.
Jimmy DeenihanMicheál Martin (Cork South Central, Fianna Fail)
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Watch this space in regard to Kerry. We do not like putting targets on it because although I understand fully the Deputy's sincerity, I know what he would do with them if we did not reach them. The IDA, of course, has benchmarks and targets for the different sectors.
Damien English (Meath West, Fine Gael)
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My main concern is that even in the past ten good years, the gain was not very good. I am concerned that in tougher times the net gain might drop slightly.
Micheál Martin (Cork South Central, Fianna Fail)
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To qualify that, the period 2001 to 2004 was not a great period given the post dotcom experience. The FDI situationââ
Damien English (Meath West, Fine Gael)
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That was not what was said in the 2002 election campaign.
Micheál Martin (Cork South Central, Fianna Fail)
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The people were worried in 2002, which is why they voted us back in. They felt we were a safer hand at the tiller.
Damien English (Meath West, Fine Gael)
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We will not talk about last year.
Micheál Martin (Cork South Central, Fianna Fail)
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There was a reduction in activity in the years after the international problems in the post 2001 scenario.
Jack Wall (Kildare South, Labour)
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I will be parochial on this issue. I am delighted to see the Minister has satisfied my colleague, the Minister of State, Deputy McGuinness, with regard to Carlow-Kilkenny. The same cannot be said for south Kildare area, where there are five IDA sites. When I wrote to the Minister about this, he accepted he would meet me but that meeting never took place, unfortunately. In the past five years, only three visits to south Kildare have been organised by the IDA and, of those, only one resulted in a second visit.
The Minister of State, Deputy McGuinness, can explain to the Minister that if one is travelling through Kildare in the morning, all one will see is a red necklace of cars ahead. Everyone is travelling out of Castledermot, Athy, Monasterevin, Kildare and Kilcullen, where there has been no development for many years. There has been a haemorrhage of jobs and a list as long as my arm of closures over the years.
I hope the Minister will reconsider this issue. I have continually put down questions on what the IDA intends to do with the lands. All it has done is to put the Monasterevin GAA club off land it has not been able to sell for five years. It is a joke. I want the Minister to honour his commitment to meet the three Oireachtas Members from Kildare South, if that is the road he wants to take. In the initial stages, he promised me he would meet me but it never happened. If he wants to honour his commitment to meet, I have no problem who he meets. However, there is a need to meet someone with regard to that area. We have seen development in Carlow and other areas but, while there is an unemployment blackspot in south Kildare, there have been only three IDA visits in five years.
Willie Penrose (Longford-Westmeath, Labour)
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To follow up on that point, the IDA sometimes holds blocks of land where projects did not work out for it. We all accept that this land was bought in good faith. Is it the Minister's intention to discuss with the IDA the possibility of it giving that land to local authorities? While the IDA wants major industry in sectors such as the pharmaceutical and biotechnology sectors, it could give these lands to local authorities or county enterprise boards at the market value at which it bought them, not at today's market value, which would ruin the local authorities and boards. I do not suggest this would solve the problem raised by Deputy Wall.
A number of people made submissions to the joint committee that an ideal way to give small start-up units an opportunity would be for the IDA to trade land with the local authorities or the county enterprise boards from the landbank it was not successful in marketing. In this way, small indigenous industries would be given an opportunity to take off. Perhaps this is the way forward.
Micheál Martin (Cork South Central, Fianna Fail)
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I have visited Athyââ
Jack Wall (Kildare South, Labour)
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The Minister did not honour the commitment.
Willie Penrose (Longford-Westmeath, Labour)
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I am surprised at that.
Micheál Martin (Cork South Central, Fianna Fail)
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I will have to check that.
Jack Wall (Kildare South, Labour)
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The Minister suggested it, not me.
Charlie O'Connor (Dublin South West, Fianna Fail)
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We are out of time. I am anxious that the Minister would conclude.
Willie Penrose (Longford-Westmeath, Labour)
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He will remedy the problem.
Micheál Martin (Cork South Central, Fianna Fail)
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We certainly will. In my opening reply, I stated that we will have to try to think regionally as opposed to locally. Kildare overall has done extremely well in terms of employment creation.
Micheál Martin (Cork South Central, Fianna Fail)
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That said, we will work on certain areas. Some counties which have done very well in terms of their commuter traffic, such as County Meath, did not complain. They analysed the situation and produced information that is now of value to would-be investors. They made the point that as there is significant commuter traffic into Dublin in IT and life sciences, the people are all prepared to work in the county if the investors located there. We have had good announcements from towns in Meath such as Navan and others.
Damien English (Meath West, Fine Gael)
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We look forward to more.
Micheál Martin (Cork South Central, Fianna Fail)
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That kind of can-do attitude is important at local level, with county enterprise boards working with the local authorities.
With regard to Deputy Penrose's point, the IDA has sold much land to county councils in recent times. I am anxious that the land would continue to be used for employment purposes and indigenous purposes. However, in order to build the sites at Oranmore and so on, it must charge the current market value. It then uses that resource to provide better and more modern facilities to help attract quality investments, which has been the strategy for a number of years and enables us to undertake the projects in Oranmore, in County Louth and elsewhere. In addition, the number of sites has reduced considerably.
On a personal level, I was never a great supporter of the State selling land or having a sale here and there just for the sake of it. I like the idea of selling to the county councils where there is no prospect of multinationals coming in but where we could get significant indigenous projects off the ground. The indigenous story is important and growing. That sector also needs property solutions, which is where we must focus.