Dáil debates

Thursday, 10 October 2013

Ceisteanna - Questions - Priority Questions

IDA Site Visits

4:50 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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4. To ask the Minister for Jobs, Enterprise and Innovation the reason some counties have received only one Industrial Development Agency-sponsored visit by potential overseas investors to date in 2013; the way he plans to address same; and if he will make a statement on the matter. [42819/13]

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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The challenge facing IDA Ireland is to continue winning top quality investment for Ireland in a difficult and competitive global environment. It also seeks to secure a required spread of investment across the regions. Investors usually come with quite clearly specified requirements and the IDA offers regional locations that meet those requirements in the choices for scheduled visits. It vigorously markets the gateway locations within each region and highlights the opportunities provided by hub locations that are within commuting distances of those gateways. With continuing enhancement and improvements in physical and digital infrastructure, a foreign direct investment, FDI, project secured for one gateway can have a positive impact on hubs, other gateways and their surrounding areas. However, it must be acknowledged that the decision on where a client company will locate a new FDI investment is made by the senior managers of the companies involved.

From 2008 to 2010, more than 16,000 net jobs were lost in IDA companies. Since the Government entered office, more than 12,500 net new jobs have been created. There have also been notable regional successes, including 1,500 jobs in PayPal and eBay in Dundalk, 200 jobs in Allergan in Westport, 200 jobs in Nypro in Waterford and 400 jobs in Northern Trust in Limerick.

The existing base of multinational companies in a region represents a substantial opportunity. Approximately 70% of all FDI investments won by the IDA are from the existing client base. In addition, success in a sector gives confidence to other investors of the region's capacity to meet their needs. The IDA seeks to develop sectoral clusters within regions.

ConnectIreland is a new initiative for promoting FDI. It has been successful in accessing new streams of investment, many to regional locations. For example, Mafic announced 70 jobs in Kells, Magni announced 50 new manufacturing jobs in Portarlington, with other jobs announcements in Galway and Longford. A key to its success is the vigorous involvement of the individuals and communities in specific regions to promote this opportunity and I encourage local authorities to build such networks.

Additional information not given on the floor of the House

I am determined to ensure that Ireland can continue to compete globally for foreign direct investment. In winning such investments, however, I am mindful of the need to address the concerns that have been expressed to me by Deputies on all sides of the House about the relatively low level of site visits to certain regional locations. I have accordingly requested IDA Ireland and Enterprise Ireland to work with my Department so that we can explore what further initiatives we can take to ensure a better approach to enterprise development in regional locations. This exercise will complement the in-depth analysis of our FDI strategy that is being undertaken. This analysis will take account of factors such as key trends emerging in FDI best practice internationally, Ireland's strengths in attracting FDI and changes to the EU's state aid rules that will be introduced in 2014. These factors will inform the formulation of an appropriate FDI strategy for the period post 2014.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I thank the Minister. I will take him up on ConnectIreland, which is a fantastic project. Mr. Terry Clune and Mr. Tom Dowling have done good work in that regard. It has potential.

The difficulty lies in the fact that, given the visitation figures, there is a danger of a two-speed recovery. I accept that there is employment growth, but there is no sense in us concentrating that growth in specific parts of the country and not giving other parts that opportunity. Longford, which fits many of the criteria that the Minister mentioned, such as commuting areas, has received no visits since the beginning of 2012. The Minister referred to commuting distances, yet Carlow, Kildare, Meath, Wexford and Wicklow have received only one IDA site visit each this year. There are locations on the outskirts of Dublin that meet many of the criteria required by any international company. The figure of 275 visits so far this year is healthy. However, unless they are spread around areas outside of Dublin and other cities we will not achieve the full recovery that we need.

The most recent annual employment survey by Forfás shows that employment in agency-assisted companies in the north west decreased by more than 20% in the past nine years. There has been a further 1% reduction since the Government entered office. We need to start using regional centres. They tick all of the boxes that the Minister just outlined. The Department must push the IDA on what has been done in Longford. I cannot imagine that Deputy Bannon is keeping quiet on the matter. Just to save himself from that alone, the Minister should put a bit of pressure on the IDA to adopt a greater regional focus.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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The Deputy speaks for many other Deputies who want to see a broader spread of IDA projects. I am mindful of the need to try to address those as best we can. There is considerable pressure on the IDA to do so. An in-depth analysis of our FDI strategy is being undertaken. One of its dimensions will be a consideration of how to achieve a better regional spread.

Often, we compete for projects globally. It is not a question of Longford competing with Leitrim or Dublin. Rather, it is a question of whether Ireland can get a project instead of Singapore, the Netherlands, Luxembourg or wherever. That is the context.

This discussion of regional strategy needs to focus more on the competitive advantages of regions and not just in terms of FDI. In some regions, FDI only plays a small role. Many regional strengths are not in that sector. We need a regional strategy that accounts for entrepreneurship, the base of Enterprise Ireland companies and their capacity to become exporting companies. I am anxious to examine this type of broad-based, regional enterprise strategy. I am starting initiatives in this regard to determine whether we can frame such a strategy on a broader base. This is not to say that FDI is not important in all regions.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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In terms of a broader approach, Mayo County Council's economic investment unit is the way to go. If the Taoiseach allows the Minister and Minister of State in, they should visit to see that work. Alternatively, we could arrange for the unit to visit them. The Minister of State would be well aware of it.

The Minister mentioned Allergan. A few weeks ago, we had the opportunity to meet its international board, which visited Westport for its annual meeting and spoke about the Allergan product. Would the IDA locate Allergan in Westport today? Based on these figures, it would not, yet the Allergan experience of Westport has been amazing, as has its workforce. I want the workforces of Longford and elsewhere in my county to get the chance to recreate companies in the same way that the Allergan workforce has done in Westport since the mid-1970s. Based on this visit profile, that will not happen.

I accept that we are competing against large regions, but even Wicklow, Kildare and Meath in Dublin's commuter belt are not getting an appropriate number of visits. They can be sold as city regions with connectivity to colleges and industry and all of the criteria about which the Minister spoke, yet we seem determined to focus our efforts on this city. If we keep doing so, we will start walking down paths that we took in the 1990s and the early part of this century that we do not want to walk again.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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The truth is, we need to be able to build on regional strengths, whatever they may be. Some companies will come for deep labour market pools. They identify their needs early. Either Ireland delivers on those needs or we lose the projects. This can result in a narrow choice of regional locations. However, this is not the case with other projects. Clearly, we need to develop a better flow of projects that are more regionally mobile. ConnectIreland plays a part in that. We also need to strengthen regions. I am keen to see them building competitive strengths and to work with them in that regard.

It is not as simple as just telling the IDA to start shifting pawns around the board, but we can build stronger magnets of attraction within our regions and pursue companies that fit them. This forms part of the revision of strategy that we need to consider.