Billy Kelleher (Cork North Central, Fianna Fail)

I thank the Senator for raising this issue.

I wish to outline in broad terms that there are great challenges globally on the international scene in efforts to encourage inward investment, especially because there is a consolidation of many multinational companies throughout the world. This, of itself, creates uncertainly and can slow the pipeline. In general, IDA Ireland is actively promoting Ireland as a location and we are now targeting areas outside the traditional zones as part of the new strategy. It is important to acknowledge that there are significant international pressures. This transcends into job losses or a lack of creativity at home with regard to job creation. I emphasise to the Senator that Donegal is a priority area and that we are trying to insist on companies considering Donegal as a location for inward investment.

IDA Ireland is actively encouraging new investment in Donegal in knowledge-based industries. This is part of a focused strategy to replace the traditional clothing and textile industries which have been declining in the north-west region in recent years. During the past five years IDA Ireland supported companies in Donegal have created more than 663 new jobs. There are 12 IDA Ireland supported companies in Donegal, trading internationally and employing 1,684 full-time staff in the software development, systems development and medical technology industries. New companies such as Pramerica and United Health which have located in Donegal are continuously growing and recruiting, as is Abbott, to which the Senator referred.

IDA Ireland's main emphasis is on building an international and financial services cluster and it is making strides in delivering on this, evidenced by the quality of the existing companies and the announcement of an expansion of 123 jobs by Sita Inc. In addition, IDA Ireland is actively promoting Donegal as a successful location for high-end manufacturing, especially to companies in the medical technologies sector. This is proving successful with projects from Medisize and Zeus Industrial Products Limited which has opened a European operations centre for the production and distribution of precision medical tubing products.

Another primary focus for IDA Ireland in Donegal is the designated linked gateway of Letterkenny-Derry. Significant investment has also been undertaken in developing property solutions through the provision of a business and technology park, with three advance buildings in Letterkenny. This focus involves developing stronger economic links with Invest Northern Ireland which includes initiatives such as the north-west business and technology zone which is aimed at promoting the linked gateway of Letterkenny-Derry in line with the objectives of the national spatial strategy and the Northern Ireland regional development strategy.

The delivery of physical, social and economic infrastructure is key to securing inward investment and IDA Ireland continues to be engaged in identifying and prioritising investment in these areas in association with local partners. Positive developments include the delivery of the metropolitan area networks to towns in Donegal, with the direct international telecoms connectivity project funded under the INTERREG programme. Project Kelvin, as it is known, will provide a direct international telecoms link from Northern Ireland to north America by building an onshore link to the coast of Northern Ireland from an existing transatlantic submarine telecoms cable.

IDA Ireland recognises the need to work with its partners in Donegal to continue to address some key constraints, including strategic developments for foreign direct investment within the third level sector, local skills supply with an emphasis on medical technologies in Donegal and Derry and a requirement for improved access to international airports for its clients.

While IDA Ireland has made a significant contribution to regional development during the years, its capability to deliver is increasingly under pressure from enhanced global competition, EU regional aid limits and the changing needs of clients, as well as a lack of critical mass in some regions of the country. This issue must be overcome. The rise globally of metropolitan city regions as magnets of attraction is an added challenge. Ireland has only one such region, the greater Dublin area, which presents challenges for balanced regional development.

We are promoting Ireland as a location for key strategic inward investment and gaining competitiveness internationally. The downturn has forced a realignment of salaries and wages. It is recognised internationally that we are now becoming more competitive than in recent years vis-À-vis some of our major international competitors for the industries we seek to attract to Ireland, especially to areas such as Donegal and in such clusters as financial services and medical devices.

IDA Ireland's contribution to regional development is primarily as a stimulator of economic activity through key investment which brings high value employment, expertise and promotes confidence and overall economic dynamics within a region. Successful enterprise development and the creation of attractive locations are interdependent. Regions and gateways which support strong dynamic enterprise are crucial to Ireland's return to balanced economic growth. IDA Ireland will continue to focus on balanced development in these regional gateways.

Under its new strategy, IDA Ireland will continue to focus on delivering 50% of investment in the priority regional locations outside of Dublin and the south west. Some 50% of investment is dedicated to these key areas. The renewed emphasis of the proposed strategy features such regions as the west, the mid-west, the north west, including Sligo and Donegal, the north east, the midlands and the south east.

We will continue to understand the difficulties faced in Donegal because of the loss of traditional industries there in recent years. We are committed to ensuring this it will be seen as a strategic location for clustering developments. This is critically important. Companies will decide where they wish to locate. We must offer specific supports and infrastructure, third level facilities and a critical mass that is seen to be attractive to companies in the context of foreign direct investment. It is very difficult in the current international climate to attract inward investment to Ireland because of the consolidation of multinationals and the repatriation of some companies to their home countries is something we fight on a continual basis. Many other countries are competitive and offer very attractive packages such that we must be on top of our game in promoting Ireland, first and foremost, as a location for inward investment. Thereafter we must try to find companies which could benefit from locating in the regions. We are especially committed to trying to encourage IDA Ireland to promote Donegal in the attraction of financial services and medical technologies.