Richard Bruton (Dublin North Central, Fine Gael)

We all need to think of what we, as a community, can do to promote employment. The local heroes initiative was very interesting because it involved fairly simple things, such as using technology to advertise local services more effectively. It brought more people into the town who picked local things to do and generated activity. A lot of our current challenge also involves giving people the confidence to invest.

People have said it is all very well for foreign companies to invest in Ireland but we need demand locally. That is true, but it is equally true that for every job created by foreign companies at least one other is created by the demand that generates, such as in restaurants, bars, shops, hotels and so on. Demand flows from international investment. The sense of international confidence that is returning, as seen from the IDA results, is having a local fillip. Investment in a town like Dundalk has a major impact on the area.

The core of this strategy is built around enterprise. When the economy was going well we were good at seeing a balanced expansion of enterprise and public service growth because we had strong enterprises which exported. We were nimble and quick to adapt to changing trends. One of the disasters that befell this country was not just the impact of the housing crisis on banks, but also the six years of declining market share in our export markets. We saw the core of a small open economy being eroded by excessive growth in the building and banking sectors.

We have to create a strong indigenous engine of growth based on the capacity to export. A lot of what we seek to do for indigenous business is to make it easier to start up enterprises, which is vital, and for companies to grow to scale. There are numerous initiatives to make it easier to start up companies. From visiting different places around the country, I found it surprising that a lot of people do not know about established concessions.

For example, they do not know that if one sets up a business for the first time one can claim back the last six years of one's income tax to create a shareholding in a new company, which is a very valuable concession. Some 12,000 new businesses were set up in Ireland last year but only 63 chose a concession that is generally available. A few sectors are excluded, such as hotels, catering, horticulture and some agricultural areas, but by and large it is broad-based. However, there has not been a large take-up of the scheme.

Some 1,000 people a month set up businesses and we have to make sure they succeed and do not stumble on the valley of death during the initial difficult years. We need to build a better support network at local level, have a stronger mentoring service and better microfinance, which we are developing. We need to ensure those with high potential can migrate into the Enterprise Ireland programmes which offer opportunities to develop.

We are also seeking to raise the ambition of a lot of local companies. One of the important initiatives in that regard concerns exporting. We are setting up a first-time exporter division within Enterprise Ireland to target approximately 1,800 companies that we believe have the potential to export but which have not put their toes in the water. It is important that, with demand constrained domestically, we chase the opportunities for new demand elsewhere. This is a very practical way of supporting companies that have the capacity to enter export markets. It is supplemented by the Minister for Finance's concession in the Finance Bill to allow people obtain tax relief if they put people in the BRIC countries, in addition to South Africa. If one is willing to put feet on the ground in those countries, which one must do to be successful, there is now a tax concession.

We are expanding management training and introducing new forms of management training to seek to lift the horizons of companies. A development capital fund is another innovation in the programme. It is targeted specifically at growth companies, not at the very vigorous ones that avail of venture capital, which we are also funding, but at companies that are more established and which are often forced to sell out in order to reach the next level of growth. To lose control within Ireland represents an awful loss. We are, therefore, establishing a development capital fund, again under Enterprise Ireland, to target those companies which, with access to the equity, can continue to drive their growth from within Ireland.

We need to recognise that the presence of multinationals presents an enormous opportunity. In many ways, what sets Ireland apart is the presence of really strong multinationals. We need to think more strategically about how we use that strength. We need to see multinationals clustered more strongly not only with their existing supply chains, but with indigenous businesses which are coming through with new ideas. The medical devices sector comprises a wonderful example in this regard. It is predominantly based in the west, where strong multinationals have bred equally vibrant indigenous companies that are developing new ideas that can be applied and developed within the cluster. It is a really great example and we need to build more such clusters. The action plan seeks to identify the sectors where Ireland can stake out a future and build successful clusters. Some sectors are well known, such as financial services, tourism, ICT, medical devices and life sciences. Other sectors, such as clean technology and digital gaming, present new opportunities in respect of which we believe we have the basic ingredients to succeed.

Another exciting initiative involves making Ireland a destination in which companies can establish. One striking point about places such as Silicon Valley is that many of the companies that establish there are not US companies. People go to Silicon Valley because of the environment it offers, including access to venture capital and the buzz associated with the setting up of new businesses. We have that sort of buzz in many sectors. We have the venture capital and the good taxation environment, and we also have the flexibility and a quality workforce. Increasingly, we have start-up companies.

Mr. Dylan Collins, who set up the digital gaming company Havok and other companies, is a business ambassador and serial entrepreneur. We need to see people like him piloting projects and promoting Ireland as a place in which to set up a business. We are seeking to box a little more smartly. Instead of relying on Enterprise Ireland, the body that now promotes Ireland as a start-up location, we are bringing the IDA in on the scheme. We are using the much broader international office presence of the IDA to promote Ireland as a start-up location.

I do not want to spend too much time talking about this as this opportunity is more about hearing the views of the Senators. The last area worth mentioning, however, is the one that people think of most of all. We need to rebuild our competitiveness. To be fair, it has improved in the past few years. Some would say this is attributable to the recession itself but unit costs in Ireland have improved by approximately 20% relative to those of our competitors in the eurozone. This is a very significant change. Unit costs in Ireland have improved by about 20% relative to our competitors within the eurozone. That is a very significant change and it is the reason one sees Ireland back on the radar for many investors. Not only do we have a good environment, but we have also become more competitive.

However, we cannot afford to rest on our laurels in that area. We must look at how we can become more effective in many different ways. The skills area is important. One of the casualties of the boom, aside from banking, the mortgages legacy and so forth, was the choices young people made about their careers. At the beginning of the last decade, almost 10% of people were picking technology as their career, but by 2008 that had dropped to 3.5%. That is a huge handicap as we now seek to rebuild an enterprise driven economy focused on exports. That is the reason there are scarcities in certain skills, and we must address that both in the short and long term. Recently, the Minister for Education and Skills, Deputy Ruairí Quinn, has created opportunities for people who have completed other courses to switch into technology through the springboard courses. We need to do a great deal more of that.

We must also look at the critical mass we have built in science and research capability, which is now very strong. For the amount of money we are spending relative to other countries, we have done much better in terms of patents, citations and whatever else academics use to determine the measure of success. The challenge now is to go from being successful academically and to sweat that resource for economic outcomes. The research prioritisation exercise undertaken by the group chaired by Jim O'Hara, formerly of Intel, has sought to stake out the areas and sectors where Ireland has an opportunity to be a leader and to have the critical mass whereby we can create ideas that can be made commercial. People talk about the importance of research. When I was in the United States recently, a man said something very original, although it might not be to the Members. He said research is about the process of transforming money into ideas, but innovation is the taking of ideas and turning them into money and jobs. We need the innovation part. We have the research part and the challenge is to convert that into a higher flow of innovation. That is a huge element of competitiveness which we can build.

Competitiveness stretches to many areas, which is why we have enlisted 15 Departments. It stretches to regulatory burdens that are often inadvertently created by processes that grew like Topsy. We must focus on whether these regulatory burdens are necessary and whether they can be done more smartly and better. My Department is examining the employment rights and industrial relations system. It grew like Topsy. There were 30 different forms on which people could make complaints until we started to address the matter. There are five different bodies involved in this area. We believe we can craft a much simpler process that is better for workers seeking their rights, better for employers in terms of certainty, better for compliance and more effective all round. There are opportunities to do this in the public service and help businesses in critical areas. This process is about identifying and seeking to seize those opportunities.

Again, I thank the Senators. This is an opportunity to hear Members' reaction and, from my point of view, to learn for next year. It took a great deal of effort to produce this plan. I am not accompanied by any civil servants but I thank them, in their absence, and many other people for the long hours that were put into the plan, even over the Christmas period. However, we need to build something better. This is an important piece of work but it is not the end. It is only the start. We need to build on it and to draw on the experience in this Chamber and in the many chambers outside the Oireachtas to help us in what can only be seen as the most compelling challenge our society faces for the foreseeable future.