Bernard Durkan (Kildare North, Fine Gael)
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Question 9: To ask the Minister for Jobs; Enterprise and Innovation the extent, if any, to which he has examined possible reasons for job relocation from this jurisdiction to other areas in Europe and around the globe in respect of high, medium and low skilled employment over the past six years to date; if any evaluation has been done regarding the number of enterprises in each of the aforementioned categories in order to determine the main reason for such a move; his plans or proposals to address any issue arising in the future; and if he will make a statement on the matter. [28852/11]

Bernard Durkan (Kildare North, Fine Gael)
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Question 88: To ask the Minister for Jobs; Enterprise and Innovation the extent to which he has studied the reasons for relocation from this jurisdiction and for whatever reason over the past five years; the degree to which specific steps can be taken to address such issues with a view to minimising any such relocations in the future; and if he will make a statement on the matter. [29122/11]

Richard Bruton (Dublin North Central, Fine Gael)
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I propose to take Questions Nos. 9 and 88 together. There are many differing and complex factors that can influence a firm's decision to relocate in today's modern globalised economic environment. Companies adjust their plant and utilisation strategies to address matters such as accessing new markets, moving production nearer to customers, meeting firm or market specific customer relationship issues, in addition to business takeovers and consolidations.

Recent jobs losses that have occurred in the FDI sector in Ireland are largely the result of the continuing restructuring process that is ongoing in Ireland and other developed economies, driven by competitive pressures and technological change. This results in jobs at the lower end of the value added scale being either phased out completely or relocated to lower cost locations.

An analysis of closures in the IDA portfolio of companies over the period 2005-10 shows that the majority of the closures were in areas such as metals and engineering, print and packaging, textiles, and plastics and rubber. The remainder of closures were spread across more vulnerable parts of sub-sectors that are growing overall, such as ICT, international services and chemicals. In many instances, it is not possible to distinguish between jobs that are made redundant as a result of technological change and those that relocate to lower cost locations.

The IDA strategy, Horizon 2020, is focused on winning as many new jobs as possible each year and giving equal priority to maintaining existing jobs. On a daily basis, the IDA is working with its clients, making every effort to retain their operations in Ireland and minimising job losses. The IDA continues to play a key role in both encouraging and assisting its client companies to move up the value chain in terms of carrying out higher skilled operations and expanding their presence in Ireland. The IDA's aim is to retain existing clients, improve the quality of employment opportunities in Ireland and increase the positive economic impact.

The IDA actively encourages its clients to engage in transformation initiatives, and is assisting them in programmes to improve company-wide competitiveness, enhance the use of new technologies, grow the skills of the business, engage in research, development and innovation, develop new business processes and make company operations more energy efficient.

Additional information not given on the floor of the House

For much of the last decade, company relocation has been positive overall for Ireland. The IDA has continued to attract and retain high value investments from leading global corporations. The combined influence of Ireland's improving competitiveness, our commitment to maintaining our 12.5% corporate tax rate, the development of our national infrastructure, the Government's investment in science, technology and innovation, and our strong skills base has been instrumental in this regard, and will continue to attract and increase the level of inward investment in Ireland. To date in 2011, the IDA has announced investment decisions which will create over 4,500 jobs in the Irish economy as the investments come on stream.

IDA's focus will continue to be on high end manufacturing, global services and RD&I across a wide range of sectors. In particular ICT, digital media, international financial services, internationally traded services, life sciences and clean tech are poised for further growth.

Bernard Durkan (Kildare North, Fine Gael)
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Over the past five years or more, there has been a steady outflow of jobs to other jurisdictions for a variety of reasons. Some of these are jurisdictions within the EU, some are outside. Has a stringent and forensic evaluation of the causes given for the suppression or relocation of such jobs been carried out? Has the Department engaged with the firms concerned with a view to identification of those issues? To what extent has a plan been put in place to address the issues arising therefrom? For example, the case of Jacob's Biscuits comes to mind. The firm relocated from this jurisdiction to an adjoining jurisdiction, where the costs should not be all that much greater. Given the need to encompass within our economy all levels of skills and accommodate them within the labour force, can the Minister indicate whether his Department will lead the campaign to identify the issues with a view to addressing them in the short term?

Richard Bruton (Dublin North Central, Fine Gael)
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The Deputy is right, there is always a careful analysis of each closure, and the IDA seeks to work with companies to prevent that where possible. In many of these cases, however, the cost competitiveness comparisons are significant. This applies even to the UK. Over recent years there have been adverse cost comparisons between some Irish locations and some UK locations. Over the last two years there has been a significant improvement in unit wage costs in Ireland compared to other countries, and we are seeing developments and advantages due to this. Companies that were struggling are doing better as a result.

There is a range of issues here, as I said in my reply to the question. It is never one issue. Some companies have located service centres here, which will survive if they become more sophisticated over time, add value and become more integral to their companies. If they are allowed to become slightly marginalised from the central operations of the company they are vulnerable, and small cost differences can then undermine them. That is one analysis. However, the reason I pointed to the programmes run by the IDA is that they are built on that analysis. It is the application of new technologies, the introduction and upgrading of skills, investment in research and development, examination of the business process, and deeper involvement in the business - for example, if a centre is providing customer support, it could move to other areas of involvement with the business - that copperfasten the survival of businesses.

Mick Wallace (Wexford, Independent)
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Would the Minister agree that for a long time the Government has concentrated on foreign direct investment? It is great that we have foreign investment here; unfortunately, however, there is always a temptation for such companies to move to countries where their costs are lower. For too long, we have not concentrated enough on indigenous industry. This is a major problem for us. In Wexford, where 20,000 people are already unemployed, 80 jobs have been lost at Sola ADC Lenses. I have not seen much effort being put into the creation of indigenous industry in the Wexford area and in Ireland generally. This is a major problem. It would be a feather in the cap of this Government if it changed track and put far more resources and effort into the development of indigenous industry.

Bernard Durkan (Kildare North, Fine Gael)
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I still have a problem - as I am sure the Minister has - with some of the relocations. For whatever reason, companies have decided to move to other jurisdictions. How can we address those issues? For example, is it a question of costs, such as energy costs? If it is something else, such as access to markets, what can be done to address that in the short term? Now is when we need do this.

Richard Bruton (Dublin North Central, Fine Gael)
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I do not want to be smart, but each case is different. For example, the work being done by TalkTalk, which is very much in the news, had dropped by something like 40% within the group. As a result, that fairly narrow range of services was no longer required, and the centre moved to another location because business, generally, was down. In other cases, one can seek to broaden the base of the company to future-proof it against changes. There is no single explanation that can apply in all cases. The challenge for the IDA is to work with companies. It is no secret that the IDA was engaging with TalkTalk with the aim of implementing training programmes to strengthen its base. We need to examine these issues continually.

To comment on Deputy Wallace's point, it is not an either-or situation. However, I accept his point that we have failed to develop a strong indigenous engine of growth. This is something we need to consider seriously. It is true that Enterprise Ireland has been successful with high-potential start-up companies, of which there are 80 this year. These are very dynamic companies. However, we do not yet seem to be able to increase the size of them to the kind of scale to which other countries have built them. We need to consider the obstacles to that. Are they policy obstacles, or is there an issue with the way in which we fund companies? We need to think hard about that.

In addition, we have not penetrated sufficiently broad export markets with our indigenous companies, which have tended to stay within a narrow geographical area. What we are seeing in this recession is that they are doing exactly that. Much of our success in this recession is due to indigenous companies. As the Minister of State, Deputy Sherlock, just said, growth in indigenous exports this year will be 10%, and this will exceed growth in foreign-owned companies. They say necessity is the mother of invention, and we are seeing indigenous companies become much more inventive.