Michael Ahern (Cork East, Fianna Fail)
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I am pleased to address the House on the most recent in a series of periodic reviews of future skills requirements of key sectors of the Irish economy which was produced by the expert group on future skills needs. The expert group on future skills needs, EGFSN, was set up by Government in 1997 to develop national strategies to tackle the issue of skills needs, manpower estimating and training for business and education in Ireland. The EGFSN has published many reports that have identified in a systematic way the skills needs of different sectors and advised on the actions needed to address them.

The group is composed of representatives from Government, industry, IBEC, ICTU and the enterprise development agencies. The work of the expert group has focused on bringing together the different elements of the demand side and supply side of key sectors within the labour market, particularly those sectors of major importance to the economy. Using knowledge and experience drawn from industry, State agencies, Departments, educational providers and so forth of skill shortages, the EGFSN, in its recommendations to the Ministers for Enterprise, Trade and Employment and Education and Science, has been instrumental in pointing to the need for long-term planning in education and training systems.

The fourth report of the expert group on future skills needs brings together the individual items of research undertaken by the expert group over the period 2002-03. It contains ten chapters which highlight the future skills needs of key sectors in the Irish economy, including ICT, biotechnology, construction, logistics, food processing and occupations such as engineering and financial services. The report also explores the importance of generic skills for organisational success and includes a review of the overall labour market. The sectors chosen for analysis reflect the view of the group that it is important its work continues to concentrate on areas of high value if Ireland is to pursue its strategic goal of a knowledge based economy.

The central message that can be drawn from this work is that skills are pivotal to Ireland's future economic prosperity. As other sources of competitive advantage are being eroded, skills are assuming an ever greater importance for our future economic development. Having the necessary skills in place is vital if we are to meet the challenge of ensuring our future economic prosperity against a backdrop of rising costs at home and increasing competition from abroad. Arising from the significant body of work that the EGFSN has undertaken in the area of skills and which in summary format is reflected in this fourth report, we have a better idea of where opportunities for growth are likely to arise in the future and the skill sets which will be required. The report highlights that while the workforce continued to expand during 2002, albeit at a reduced rate of 1%, problems of recruitment and retention have greatly diminished.

As well as identifying sectors which are primed for growth, such as biotechnology and engineering, the report also draws our attention to the inescapable fact that low value added manufacturing will continue to migrate from Ireland. From a policy perspective, the important message is that significant skills gaps are anticipated in the medium term. The recommendations to Government contained in the report aim to increase the proportion of highly skilled workers in the labour force by improving the quality of the vocational system to facilitate upskilling and reskilling; arresting and reversing the decline in the take up of science subjects at second level; increasing the participation rate in higher education; addressing the variation in participation and levels of attainment in education based on socio-economic background, gender and so forth; and establishing a more targeted immigration policy. A second category of recommendations addresses the need to track the evolving skills needs of the enterprise sector. Emerging skills requirements include management expertise, marketing and sales skills and generic skills, for example, communications, team working and personal effectiveness.

I intend to highlight the key findings and recommendations of the fourth skills report. With regard to the general labour market review and outlook for 2003-04, the report notes that significant changes have taken place in the economy since the publication of the third report of the expert group in 2001. In particular, the tightness in the labour market observed in previous reports has eased considerably, with rising unemployment and a slow down in employment growth. However, a limited recovery in the international environment is anticipated which should have more positive implications for Ireland thereafter. The group is of the view that policy should continue to focus on increasing participation, increasing the proportion of those attending third level and on upskilling and lifelong learning.

The analysis of the ICT sector reviews and updates the forecasts in the third report in light of the global downturn. The report suggests that the recovery in the sector is likely to be gradual and growth rates are likely to be significantly less than was experienced in the late 1990s. The main areas where skills gaps are projected are in computing and electronic engineering for degree level graduates from approximately 2006 onwards. Up to 2006, demand and supply are reasonably well balanced.

The recommendations for the ICT sector focus on continuing the ICT investment fund established following recommendations in the third report; reinstating places on ICT courses; establishing a sales training initiative, separate from third level and requiring the appointment of academic staff to specialise in teaching and research in the area; establishing critical mass of capability in the higher education sector in the management of technology enterprises; promoting interest in the study of ICT courses; addressing under performance at second level in the areas of mathematics; and increasing transfer and progression from PLC programmes to third level computing programmes.

With regard to the biotechnology sector, the conclusion is that Ireland is well positioned to benefit from the anticipated rapid growth in the biotechnology sector worldwide over the next seven years. However, if the sector and Ireland are to reap the maximum economic benefits from the dynamic field of biotechnology over the period 2004-10, the potential skills deficiency, particularly in the areas of science and engineering, must be addressed. The recommendations to achieve this reflect three broad themes: initiatives to increase interest in the study of science and in careers in science; measures to improve the capacity of the education system to supply suitably skilled personnel; and supporting interventions, particularly in the development of Ireland's research competency.

In engineering skills the main areas where gaps are projected are in electronic engineering and degree level telecommunications engineering, from about 2006 onwards. The main constraint identified relates to the number and quality of college applicants wishing to apply for courses and the conclusion is that the take up of engineering as a career must be promoted by all those involved, from Government to educational institutions, employers and the engineering profession. The recommendations for engineering skills focus on boosting the numbers graduating in engineering from Irish institutions through promoting the study of engineering; broader science, engineering and technology promotional initiatives; actions at third level in research space and postgraduate funding; review of mathematics and teaching methods; upskilling and lifelong learning; and immigration and overseas students.

The report signals that in the construction sector a decline in employment of approximately 11% over the period 2003-10 is forecast. Even if these forecasts were to materialise, construction employment in 2010 would still be considerably higher than it was in 1999 and almost as high as the average employment in 2000.

The main area where a gap arises is with architects and a key recommendation of the study is that the education system should provide approximately 45 additional places annually for students who wish to study architecture. No significant gaps are forecast to arise for other occupations. The recommendations focus on monitoring the situation with visa authorisation and visa schemes for certain crafts and monitoring sponsorship levels in the construction trades of plasterer, painter and decorator and bricklayer.

The report makes it clear that the food processing industry faces many challenges over the coming years and although the sector is expected to experience a decline in employment over the period to 2007, it will continue to represent a significant sector in Ireland, both as an employment provider and as a major exporter. While the EGFSN study did not find evidence to suggest that the number of places on food related third level courses needs to be increased or decreased, the focus was instead on the industry's ability to attract such graduates. This mismatch between the educational institutions' output and the food industry's take up needs to be addressed. The focus of the recommendations is on five strategically important areas: employer focused demand initiatives, such as senior management training and a graduate fast track programme; employee focused initiatives, such as a promotional campaign on the benefits of training; third level education measures, including new modules at undergraduate level, and formally defined work placements; supply side training initiatives, such as immigrant induction programmes, and the expansion of "train the trainer" model and State support or training infrastructure, including a national centralised database of accredited trainers and training programmes and the expansion of skill nets.

The group's analysis of the financial services sector suggested that major skills shortages are not projected over the medium term as the industry responds well to any changes in the labour market. However, the need for monitoring is identified as the sector is predicted to undergo change. The recommendations for this sector include the need for the group to monitor changes in the financial regulatory environment which impact on skills needs; extending the FÁS traineeship for junior financial advisers in the insurance industry to other regions in Ireland; monitoring the actuary occupation closely; and suggestions for combined skills courses at the new financial services institute at the National College of Ireland.

The inclusion of the logistics industry in the report reflects the need for improvement in the logistics and supply chain management capability of companies in Ireland. Shortages of logistics and supply chain professionals are clearly identified in the report and specific skills gaps are identified in the areas of transport, warehousing and distribution, purchasing and e-procurement. There are important barriers to successful supply chain management in Ireland which the report details. The majority of the recommendations for the logistics sector are designed specifically to increase the number of young people obtaining qualifications in logistics. Significant increases in current education and training provision in all occupations from transport and warehouse operatives to documentation specialists, involving a range of different delivery systems including full-time and part-time education and training, traineeships and in-company training, are recommended.

Soft or generic skills have until recently not been given due prominence in our education and training system. These skills are becoming increasingly important in the workplace globally and although some improvements have been made in the delivery of such skills in the education and training system in Ireland, the group is strongly of the view that more needs to be done to prevent a gap arising in the future. Among the recommendations made in the area of soft skills are the need for soft skills development to be explicitly taken into account in a national policy agenda; initiatives in transition year; the need for soft skills to be incorporated into vocational programmes; and the development of soft skills at third level.

The range of issues and recommendations contained in the fourth skills report will help us to ensure we have the necessary skills in place to secure the sustainable development of our economy. It is also appropriate that I express my appreciation to the members of the EGFSN, particularly to the outgoing chairman, Dr. Daniel O'Hare, for the work and commitment which underlies the preparation and publication of this fourth report. Dr. Daniel O'Hare, who took up his appointment as chairman of this group in 1999 and relinquished it late last year, has, through his personal commitment and enthusiasm, delivered a considerable body of analysis, projections and recommendations for Government across a wide range of skills and sectors in the economy.

In addition to the fourth report which we are discussing today, the EGFSN has also published a dozen other major reports with the result that we have a key insight into the supply and demand situation for skills in the key sectors of the economy. This body of work is of considerable assistance to Government and policy makers in general as we try to match the skills of our labour force to the challenges and opportunities that lie ahead.

Looking towards the future, I am pleased to be able to tell the House that today the Tánaiste announced the appointment of Ms Anne Heraty as the new chairperson of the EGFSN in replacement of Dr. Daniel O'Hare. Changes at the helm of the EGFSN also prompted a look at the role of the group and the future focus of its activities. We need to continually keep in mind the impact of the changing business environment. In Ireland there are currently less pressures on labour supply than was experienced in recent years when the economy was operating at fuller capacity. However, intensifying global competition is leading to changes in the sectors where Ireland can complete effectively, necessitating a continued focus on changing skill needs, particularly with the diminishing availability of Irish students to participate in third level education over the coming years due to demographic changes.

Given the large number of reports produced by the EGFSN over the past two years, a key role for the incoming chairperson and the EGFSN will be to take stock of the recommendations in these reports with a view to securing ongoing commitments from responsible agencies and Departments to their implementation. There is little point in continuing to generate new reports and recommendations if insufficient attention is paid to implementation of existing recommendations. At least partly because the EGFSN has to date reported on most of the key sectors of the economy, there is now an opportunity to devote greater emphasis to implementation issues.

There are other areas where the work of the EGFSN will benefit from a new focus. In the past much of the EGFSN work has revolved around increasing the numbers participating in relevant courses. It is equally important to focus on the skills and competencies being acquired by graduates of these courses and their relationship and appropriateness to the skills required in the market place. There is an increasing need for graduates to have skills beyond their core disciplines, for example, software engineers must have business skills in addition to technology skills. Ideally the links between the enterprise sector and the educational sector should be close and mutually supportive. It may be possible in the context of some of the group's sectoral analysis that the EGFSN comment, where necessary, on the appropriateness of individual courses of study to the skills required in the market place.

Much has been said and written about the need to encourage students to take up the study of the physical sciences. The EGFSN can contribute to a greater public awareness of the importance of meeting the emerging skill gaps, such as in the area of the physical sciences, and promoting greater interest at both second and third level in careers in these sectors.

Skilled migrants in recent years have significantly enhanced Ireland's human capital base and its productive capacity. Our economic migration policy should continue to be directed at meeting the needs of our labour market. The trend towards an ageing population will have implications for the future Irish labour force if the number of new entrants every year continues to fall, while greater numbers retire from the workforce. While the accession of ten new EU member states from May 2004 will expand the pool of labour from which Irish based enterprise can freely recruit, there will be a continuing need for some level of inward migration from outside the EU to meet the need for targeted high level skills unavailable within the EU. Certain skills remain in short supply in Ireland, despite increased investment in education and that shortage, if not addressed, could hinder foreign direct investment, company expansion and market development. My Department's role is to promote the development of the economy and, more particularly, to mobilise the necessary labour supply in the quantity and quality needed to secure sustainable economic growth of the economy.

The mandate of the expert group on future skill needs makes it clear that it will provide an input to skills based immigration policy by advising on those skills requirements which cannot be met from indigenous supply and, therefore, may fall to be addressed via a skills based immigration policy. In current circumstances and with the imminent expansion of the EU the EGFSN is well placed to formulate recommendations based on identified and quantified specific skills shortages which are critical to assist the economy in moving up the value chain and which might have to be addressed as part of a more targeted economic migration policy. I expect therefore that the EGFSN's role in contributing to the development of our economic migration policy will be given greater emphasis in the future. The need to appoint a new chairperson for the EGFSN prompted a more general assessment of the work and future focus for the group as a whole. A key outcome of that process was the decision to effectively merge the role of the National Training Advisory Committee with that of the EGFSN. The Tánaiste established the National Training Advisory Committee in 2001 to provide independent, strategic advice to ensure national policies for training people in employment and for employment are forward looking and relevant to the needs of the economy.

The establishment of the committee complied with a statutory requirement under section 7 of the National Training Act 2000 which requires the Tánaiste from time to time to consult with employee and employer representatives with respect to her functions under this section of the Act. As well as carrying out an advisory role on issues of national training strategy generally, the National Training Advisory Committee provided the forum for the fulfilment of this provision. The terms of reference given to the committee were to advise the Minister for Enterprise, Trade and Employment on the overall strategy for enterprise training in Ireland; to identify best practice on enterprise training and its application to public policy; to advise the Minister for Enterprise, Trade and Employment on the priority training needs of the enterprise sector with a view to raising the skills of people in employment; and to advise the Minister for Enterprise, Trade and Employment on relevant aspects of the National Training Fund, as set out in section 7 of the National Training Fund Act 2000.

The potential synergies between the work of the EGFSN and the National Training Advisory Council prompted the decision that the National Training Advisory Committee be subsumed into the EGFSN and that the mandate of the EGFSN be broadened to incorporate the existing terms of reference of the committee. With the agreement of the Minister for Education and Science, the mandate of the EGFSN has now been expanded to incorporate fully the role discharged heretofore by the National Training Advisory Committee. The consultative role required under the National Training Fund Act is capable of being fully discharged by the new EGFSN including as it does representatives from employers and trade unions on the group.

We stand at a crossroads in our economic development. We have had very rapid economic growth and this has resulted in the numbers at work increasing by 500,000 in less than ten years. Despite the slowdown in the world economy our labour market has been very resilient with unemployment remaining stable. While some sectors have experienced job losses, these are being offset by employment opportunities in other sectors and it is predicted that this will continue to be the pattern into the foreseeable future. Over a quarter of employees in manufacturing work in high-tech industries, and this puts us in a stronger position than most other EU countries. However, about 40% of manufacturing employees work in low-tech areas and they are very vulnerable to lower-cost competition. When EU enlargement takes place in May, lower-end Irish manufacturing companies will face increasing competition from the accession states. We can also expect increased competition from these countries for foreign direct investment. It will be more difficult for us to compete successfully in certain sectors. We are entering a new stage of development where competitiveness must be addressed through the efficiency of the economy based on high quality, value-added products and services. Education and training are central to achieving this vision.

Labour market policy for most of the recent decades was dominated by issues of unemployment and long-term unemployment, and at the height of the boom by labour shortages. For the future, the main emphasis needs to be on the quality of the workforce as growth will rely on our ability to attract and retain higher value activities and higher skills with an emphasis on design and innovation. This involves moving from technology importing based development to innovation based development which leaves the country less vulnerable to competition from lower cost economies. Successful transition to this knowledge economy requires an increasing focus on the development of our human capital, through increasing the numbers of skilled school leavers, graduates and researchers.

Investing in education at first, second, and third levels, together with investing in our research capacity at fourth level, is crucial to achieving this transition. A key strength of Irish education in the past has been its relevance to wider social and economic needs. In a changing society and a rapidly evolving economy, education is continually challenged to remain relevant and responsive. This demands a deeper connection between education policy and national development needs. The EGFSN provides a key forum for employers, educationalists, trade union representatives, civil and public servants and members of the industrial promotion agencies to achieve a common understanding of these challenges and to agree on integrated strategies to meet them. Education-enterprise collaboration is founded on strong two-way communication. The EGFSN provides an important means for this and has resulted in several skills initiatives based on expert group reports to date.

There has been a dramatic change and acceleration in the growth in educational achievement in the past 20 years with the proportion of the youth cohort reaching leaving certificate level increasing and those proceeding to third level also increasing significantly. These are very important factors as there is a strong correlation between educational level and employability. In the future people will have more need to up-skill and re-skill throughout their working life than they did in the past and will therefore need basic abilities, self-confidence and learning skills. The fourth report of the EGFSN points the way to delivery on the education and training of our workforce through the formal educational establishment as well as through organisations such as FÁS, Fáilte Ireland, Teagasc and the VEC system working with employer and employee representatives.

Paul Coghlan (Fine Gael)
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I welcome the Minister of State and thank him for his overview of the fourth report of the Expert Group on Future Skills Needs. I am delighted to have the opportunity to comment on this report which comes at a significant time in Ireland's economic development. At a period when the recent economic boom and stability seems to have all but disappeared, it is important we look forward and prepare for the future needs of our economy. The third report on future skills needs was issued in July 1997, before the attack on the World Trade Centre on 11 September 2001 and the resulting downturn in the global economy. We were not prepared for the general economic decline experienced over recent years. Since the last report, there have been ever-increasing concerns about stagnating GNP growth and the competitiveness of the economy. In order to achieve further economic prosperity over the next decade, it is imperative that we closely examine this report and put into place the many recommendations outlined in this publication.

The report deals with nine main areas of interest: a review of the labour market, the ICT sector, biotechnology, engineering, construction, food processing, logistics, finance and soft skills. The labour market began to slow down in 2001 and continued to do so throughout 2002. The rate of employment growth fell from 2.5% to 1% and unemployment continued to rise. The report estimates that the rate of unemployment would have risen by more had it not been for a fall-off in participation levels during that time. Employment fell by 4,600 in agriculture and 9,700 in industry but increased by 32,000 in the services industry in 2002. This growth in the services industry is explained by the increase in the number of jobs in sub-sectors dominated by the public service, such as health, education, public administration and defence.

Labour supply growth also slowed during 2002 and this was due to a reduction in the labour force participation rate among the 20-34 year age group during that period. Earnings growth levelled off in the second half of 2002, from a high of 10.9% in September 2001, to 6.2% in December 2002. The group predicts the outlook for the labour market in 2004 is mixed. It says the slow recovery expected in the EU will have a negative impact on Ireland, but on a more positive note, labour shortages will not be as large a problem.

The group believes that the main challenge in the coming year will be to maintain competitiveness internationally, while minimising unemployment. It recommends increasing the number of highly skilled workers in the labour force by upskilling, re-skilling, improving the quality of vocational systems, increasing the amount of third level science and engineering graduates, creating more educational opportunities for disadvantaged groups and implementing a more targeted immigration policy.

As for the ICT sector, the report details the findings of an investigation into the potential for the development of ICT clusters in Ireland to 2010. This sector suffered a severe knock in late 2000 and the report says there are no immediate recovery signs, but that a comeback is expected to begin gradually in 2004.

The group predicts that one of two scenarios may take place in relation to the supply of graduates for ICT. In one scenario, students will not opt for those careers because of a lack of confidence in the profession. This is what happened in 2003. In the other scenario, the share of students entering computing and electronic engineering professions will rise to 80% of its previous peak by 2007. In general terms, the demand for computing degree graduates is likely to overtake supply after 2006. The group predicts a reasonable balance between supply and demand for engineering graduates but with a slight shortage of electronic engineers and a surplus of civil engineers. The report maintains that the ICT sector will continue to be a driver of economic growth in Ireland over the next decade. It recommends continuing the ICT investment fund, reinstating places on ICT courses, promoting further interest in ICT courses at second level, hiring specialised staff to carry out research and teaching in the area and addressing under-performance in mathematics at second level.

After the ICT sector, biotechnology is considered the next wave of the knowledge-based economy. IDA Ireland envisages 1,500 further employees in the biotech sector over the next five years and Enterprise Ireland plans to expand the sector to employ 1,800 by 2006. However, because of the downturn in the global economy, it is more realistic now to expect this to happen by 2010. Some 30 doctorate and 20 masters graduates will also be needed during this period. Although the numbers participating in postgraduate study are on the increase, the report indicates that the number of undergraduates and those receiving diplomas and certificates is decreasing. The report suggests that the biotechnology sector in Ireland has the potential to grow substantially over the next seven years. However, in order to maximise the potential of the industry, it is important to promote interest in the study of science and careers in science.

The engineering sector shows an overall increase in demand for graduates in the period 2004-06. The report suggests that civil and electronic engineers are in most demand and the potential need for engineers in the pharmaceutical industry is huge. However, the results of the report show the likelihood of a shortage of electronic engineers in the coming years and a surplus of civil engineers. This may hinder the growth of the ICT sector once markets recover. The report advises focusing on boosting the numbers of those graduating from Irish institutions, reviewing mathematics and teaching methods, upskilling, immigration and overseas students.

The construction industry has expanded enormously in the last number of years. The report estimates that output increased by over 75% between 1995 and 2002 and is now equivalent to €20 billion. It is predicted that employment in the sector will decline by 11% from an estimated 185,00 in 2002 to 165,000 by 2010.

There was an increase in the supply of professional and craft skills to the construction industry over the period 1998-2002. This is primarily due to a rise in the number attending postgraduate courses in town planning, surveying and so on. A large number of people have also taken up apprenticeships during the past few years in response to the boom in the industry. The report estimates that the increase in the number skilled in construction will not lead to an increase in unemployment as their skills can be used in other countries such as the UK. The report highlights the lack of architects available to meet the industry needs and suggests providing 45 additional places per year for students who wish to study architecture.

The Irish food processing industry is one of the most important sectors of the economy in terms of output, employment and exports. The sector faces challenges in today's market such as market liberalisation, changing consumer patterns and rapid developments in food processing technology. The report indicates that there is no shortage of graduates entering the food sector and that this will continue for the next five years. However, the skills of those involved in the industry will need to evolve to adapt to market changes. The report does not recommend changing the number of places available on food courses in third level but suggests changing the content of the courses. For example, it found an over-emphasis on science and technology subjects, and it suggests introducing more broadbased courses with an emphasis on marketing.

The research carried out on the logistics sector was based on 250 companies employing 15,600 individuals around the country. The study showed that 4,000 recruits will be needed annually within the logistics sector during the coming years. The report also mentioned that the main requirements in the area are opportunities for further training in computer appreciation, health and safety, customer relations, transport management and so on.

Employment in the financial sector increased by 30% between 1998 and 2002. The report suggests that the financial industry is one of the key components of a healthy economy, as a high level of financial services attracts foreign investment to the country. In the short term, the forecast for the financial sector is a slower growth rate in the next two years with recovery estimated at beyond 2004. However, no major shortages are expected. The market appears to be responding to current demand, and the opening of the National College of Ireland is further testament to a relatively healthy industry.

The final sector investigated by the report is soft skills. The report says that intra-personal and interpersonal skills are becoming more important for organisational success. Ireland currently has no formal policy relating to soft skills and the report recommends that soft skills be taken into account in a national policy agenda. It also suggests that transition year and third level programmes should be put into effect, teaching soft skills to a greater extent.

Although the forecast for our economy is far from dismal for the next number of years, it is important to consider the findings of the report and to acknowledge the forthcoming challenges. Ireland is in a special position as it embarks on its six-month presidency of the EU. It is imperative that the Government uses this opportunity to further the Irish economy by improving our reputation within the EU and worldwide as a thriving country with a highly skilled labour force. Throughout the Celtic tiger period, foreign multinationals were more than satisfied to locate businesses in Ireland. However, as we have seen in recent times with the closure of many businesses nationwide, it appears Ireland is no longer an attractive location to some.

Although unemployment levels remain relatively low, there is a concern that Ireland appears to be losing its ability to create employment. In 2003 we slipped from fifth to 30th in the world competitiveness table. The increasingly high cost of doing business in Ireland undermines our ability to compete worldwide, and this will undoubtedly be reflected in our economic situation in the future. Other countries with lower wages and insurance costs are taking business away from Ireland and damaging our economy in the process. It is important that the Government acknowledges this and acts accordingly.

One of the many recommendations in the report is that Ireland needs a targeted immigration policy. Ireland is now a multi-cultural society with a multi-cultural workforce. It is clear that immigration is healthy for the economy, with immigrant workers often occupying the lower-paid jobs which Irish people are no longer willing to accept. The Government must tackle immigration issues head-on and resolve any outstanding problems so that immigration becomes an acceptable and beneficial part of society, helping to develop a more prosperous Ireland.

It is also clear from the report that in order to enhance the profitability of some sectors of our economy, it is important to emphasise the re-skilling, retraining and upskilling of the labour force in sectors such as logistics and soft skills. The report also stresses the need for improved vocational programmes and education for the disadvantaged. Unfortunately, the Government decided to do away with many CE schemes and education grants for the disadvantaged in the last budget, despite all our protests. No doubt this will hinder the progress and growth of the economy in future years.

Unless the Government actively attempts to resolve the outstanding issues outlined in the report, the economy will have a poor base to build on during the next number of years, and no number of reports will alleviate our problems.

Mary White (Fianna Fail)
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I welcome the Minister of State and his official and take this opportunity to formally thank him for the help he provided in having stamp duty on intellectual property, which was an issue of interest to me, removed in the budget. I am delighted by the measure as are all those involved in the research and development sector.

The skill and expertise of the expert group on future skills needs in assessing the demand and supply of specific skills should be applauded. The results produced in its fourth report provide a solid basis for investing in greater output of certain skills and give positive indications to students, parents and teachers of specific areas of growing demand and job opportunity. Very few, if any, countries have the capability to carry out such analysis.

As the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, states in the foreword to the report: "Skills are now an instrument for industrial development; the a priori provision of an appropriate skill set is a key mechanism for stimulating a particular economic sector and attracting Foreign Direct Investment." The Government allocated funds in the past to respond to the shortages pinpointed by the expert group and it is critical that this type of investment should continue. Few countries invest in education to support industrial development as systematically as we do and this is an important national advantage.

I will address two areas, namely, the biotechnology and ICT sectors. The former is currently experiencing a shortage of recruits with more jobs available than young people to fill them. Having studied this issue in recent days, I decided to address the young people from a school in Drogheda who were in the Chamber earlier. I spoke to them on the stairs outside and asked them to study science and mathematics because these are the areas in which the jobs of the future will be found.

Ireland is the largest centre in Europe for pharmaceutical companies. The Wyeth company in Clondalkin, for example, is investing €1.5 billion in a new facility and has recruited 1,000 graduates from third level colleges and universities and fourth level graduates. In 2005, the company will produce a drug to cure arthritis for which hundreds of thousands of people around the world are waiting. It will also manufacture a vaccine for meningitis which will future proof our young children by vaccinating them at birth to help prevent them from contracting the disease.

Given that we have a shortage of graduates for the pharmaceutical industry, we need to encourage our young people to study science and mathematics. This is the reason I was inspired to go outside to talk to the young people visiting the Houses today. I had hoped to speak to them directly in the Chamber but they had to leave.

In 2006, we will also experience a shortage of graduates for the ICT sector — the information and communications technology industry. Intel in Lucan is investing €1.3 billion in the sector and recruiting a further 1,000 employees, which will increase its workforce to 4,500. The Government believes that ICT will be a major sector driving the economy in the future, but that by 2006 there will be a shortage of engineers for this type of company. It is for this reason that I encourage young people to study mathematics.

A recent OECD report showed that we have a poor record in mathematics and are placed well down the OECD table on standards in mathematics in Europe. Jobs will be available in the ICT sector in the future. If we are to succeed internationally and against the new entrants to the European Union, we will need to get on our bikes and compete. We cannot afford complacency, which appears to be creeping in a little.

Before Christmas, I attended Dublin Castle to listen to the Taoiseach's speech on priorities for the EU Presidency. I will never forget an off the cuff comment he made when referring to research and development as one of our priorities. Departing from the script, he said we in Europe are only in the ha'penny place in comparison with the United States in this area. One of the main reasons the American economy is so dynamic and vibrant is that the country undertakes so much research and development.

I welcome the inclusion for the first time in the report of an issue of great interest to me, namely, soft skills. In the past, soft skills and emotional intelligence were never regarded as academic. While we encouraged students to be good at maths or science, we forgot about interpersonal skills. From my experience in business, I know that 95% of it relates to human skills. It is no good being brilliant academically if one does not have interpersonal skills and cannot communicate with one's colleagues or those with whom one is doing business. The report calls on the universities to examine the possibility of developing soft skills.

The term "emotional intelligence" has entered the vernacular only recently. From my experience in my company, Lir Chocolates, I have learned that 95% of the success of our small business is due to human relations. The companies with which we deal, including Senator Quinn's company, Superquinn, placed their trust in us and we in them, which allowed us to do business together. One needs human skills to have empathy for one's customers, to be able to interpret what they want and enable them to understand one's needs.

I am delighted to have an opportunity to discuss the report following calls by Senator Quinn that these reports be debated in the House. I learned a great deal from this report and was so driven by it I went outside the Chamber to speak to the young students visiting the Houses. Their teacher was thrilled and when they had to leave the Chamber before I spoke, he asked that I speak to his students on the stairs outside. We must compete and seize opportunities.

Another point about soft skills, which I address to the universities, is that one must be able to learn to manage one's times and priorities. One may be an excellent engineer, but one must also be able to manage time, see the wood for the trees and prioritise and one must have interpersonal skills. I applaud the fact that the need for soft skills has been raised for the first time in the group's reports.

Feargal Quinn (Independent)
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I thank the Cathaoirleach for the opportunity to speak and welcome the Minister of State. As Senator White stated, I sought this debate some time ago and therefore welcome it. I also welcome the publication of the Fourth Report of the Expert Group on Future Skills Needs and compliment the chairman of the group, Dr. Danny O'Hare, on the excellent work his committee has done. I also commend and wish well Anne Heraty, announced by the Minister today as the future chairperson of the group.

It is incumbent on all of us to pay attention to what the group says. Not only must we listen, we must take the action spelled out in the report. I hope, in particular, that the fine words used by the Tánaiste and Minister for Enterprise, Trade and Employment and the Minister for Education and Science in welcoming the report will be matched by the resources they make available to implement its recommendations.

I regularly make the point that our modern economy demands that we take action earlier if we are to keep abreast of change. Therefore, I am delighted to see so much attention has been given to this here. The expert group examined in detail the prospects for several key sectors, to which the Minister of State referred. He broke them down clearly and detailed them, as did Senators Coghlan and White. All of these sectors offer different scenarios for the future. For example, there seems to be no major problem on the horizon for financial services but for other sectors, such as the food processing industry, one about which Senator White knows much, the main problem seems to be with the industry itself rather than specifically with the skills required. I take note of that with particular regret because it has always seemed to me that one of the country's great lost opportunities was the area of food processing — a field in which our agricultural heritage should have given us the opportunity for a flying start. However, our performance has never equalled my hopes.

Approximately ten years ago, I had the opportunity to sit on the expert group on food and compiled a minority report which found that food processing should be anywhere but under the remit of the Department of Agriculture and Food — in other words, it must be market driven. We have not achieved nearly as much as we should have. I sit on an advisory group of the national food centre. Its heart is in the right place but the opportunity is very often driven by the suppliers rather than the marketplace.

For two of the most important sectors, the ICT and the biotechnology sectors, skills are at the heart of the problem. There is a significant danger that our ability to compete effectively in these areas will be seriously compromised by skills shortages unless we take effective and early action. In both of these sectors, we are hobbled by our traditions and our views of ourselves. Put bluntly, we see ourselves as an arts and humanities country and not a scientific one. The problem is that our economic future depends critically on us becoming a scientific country. Important as it is in its own way, we cannot expect Riverdance to drive our economic future. It is great to see such a success, but it is unlikely that is where our future will lie.

The Government and the people must get serious about science. In a way, we have been spoiled by our own success over the past 30 years or so. Up to now, we have succeeded in meeting the scientific demands on us by engaging in relatively low value industrial activities — there have been some great successes about which Senator White spoke — and by the large-scale importation of technological competence. However, as we move up the value chain, which we must do if we are to survive, we need more real scientists to drive our efforts.

I commend the Government on recognising the importance of research for our future even though there have been some dangerous wobbles in its support for it. This report clearly shows that our ability to deliver an efficient level of scientific skills will depend on one thing only, that is, the number of young people who make the decision to make their careers in a science related discipline. All the signs point in the wrong direction. At second level, the number of students taking the threshold subjects for science is falling. At third level, the number of students applying for places on undergraduate programmes relating to science is falling which, in turn, creates knock-on doubts about the equality of our graduates.

In view of this continuing problem, it is a matter of alarm that the blueprint for dealing with the situation — the report of the Task Force on the Physical Sciences — has been gathering dust on the Minister's shelf for almost two years. There is no sign that the problem is being taken with anything like the seriousness it deserves. In the meantime, we are making a time bomb which will eventually explode with devastating effects. We have had the opportunity to do something about it for at least two years but we do not seem to be moving on it.

The fundamental problem revolves around the low interest in science as a career, and I look forward to hearing Senator Ormonde's contribution given her career in career guidance. There is another aspect of this issue which has not received enough attention. As a nation, we simply do not put enough care and resources into the task of helping our children decide and choose which career they will make for themselves. Too often, the choice is driven by fad or fashion or by inappropriate motives. I remember in the late 1980s when there was a big hoo-ha about our national shortage of marketing expertise. Suddenly, marketing became the flavour of the month with young people. I remember being asked to speak at the Foresight Business Studies Group in Trinity College, probably in the late 1970s, and it seemed to be news to people at that stage. Suddenly, marketing became the thing to do but within a short period of time, the shortage of marketing skills turned into a surplus. What was obvious to me was that many of the young people going into marketing were doing so without giving it much thought. They went into marketing because it was the fashionable thing to do.

More recently, we saw an upsurge in people applying for computer courses because they were seduced by nothing better than greed. The prospect of becoming a dotcom millionaire by the age of 25 was attractive. We can laugh at those motives but we should be concerned at the vacuum these people fill. There is a lack of proper advice and information for young people about careers which leads them to make hasty decisions they sometimes find impossible to carry through. Meanwhile, the bulk of young people choose to follow the existing role models rather than explore the new possibilities opened up by the world in which we now live. I stress that the task is not so much to make science-related subjects fashionable but to bring much more serious and focused attention and thinking to the choosing of careers. I hope the Minister for Education and Science, having been a career guidance counsellor in a former life, will see the sense of the argument.

I wish to turn to an aspect of the report which deals with skills of quite a different type — Senator White spoke about these soft skills. Most of the attention is given to job specific skills and the need to match the availability of particular specialised skills to the needs future industry will have for them. However, as the report points out, there are changes in train in regard to what are called the more general soft skills, which are increasingly in demand across the world spectrum of industrial activity at all levels.

I came across this area in the 1990s when I chaired the committee which introduced and guided the introduction of the leaving certificate applied programme. That steering committee came under curriculum and assessment. As that qualification is primarily intended for young people who go into employment rather than go on to third level after leaving school, it was crucial for us to know what skills employers needed, especially skills they felt were neglected by the existing school system. When reading this report by the future skills group, I found myself on familiar ground. As we found out in our work on the leaving certificate applied, there is an emerging need from employers for a group of skills which have up to now been, more or less, neglected by our educational system. One such skill is the ability to use knowledge creatively and to solve new problems rather than simply to apply expert knowledge to existing problems. Another such skill is the ability to work effectively in teams and to take satisfaction from group achievement — working together as a team is so necessary — rather than the overwhelming emphasis on individual performance which, I suppose, is more in our tradition. Changing tack in regard to basic skills of this type is as an important part of the task which faces us in providing the highly technical and job specific skills on which we tend to focus when we consider this subject.

I commend the expert group on this good report which is well worth reading and I commend it for throwing its net wide enough to include many important dimensions. I hope the report receives attention and that resources will be allocated where they are needed in this area. The report is worthwhile and I am pleased we have had the opportunity to debate it.

John Gerard Hanafin (Fianna Fail)
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I wish to share my time with Senator Ormonde.

Paddy Burke (Fine Gael)
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Is that agreed? Agreed.

John Gerard Hanafin (Fianna Fail)
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In researching the Fourth Report of the Expert Group on Future Skills Needs, I came across an interesting quote from an eminent philosopher, Yogi Berra. Notwithstanding his fine credentials, the quotation reads "the future ain't what it used to be." This is all too true in the context of where the Irish economy will be going in future years. We have come from an agrarian to a manufacturing assembly economy, and are now heading towards a knowledge-based economy.

Much of the wealth created in Ireland over the past few decades can be attributed to the success of Fianna Fáil policies adopted in the 1960s to ensure education and opportunities for manufacturing. The emphasis was there, and we used our contacts abroad to bring manufacturing to this country by putting in place a business and taxation-friendly environment. We were extremely successful at attracting foreign investment, and we still attract 29% of all foreign direct investment from the United States.

The future will be different, taking us on a road for which this report provides the signposts. It points to upskilling towards a knowledge-based economy. We were no doubt helped by remittances from Europe in the Structural Funds and the CAP, but by and large the results we have seen in our economy have come from the education and skills people have used and were inspired to take up during the 1960s. Now we have a different challenge, and skills will be Ireland's most sustainable competitive advantage in the years ahead. Skills are pivotal to Ireland's future economic prosperity and will be fundamental to our successful transition to a knowledge economy.

The latest report from the EGFSN reviews the future skill requirements of seven key sectors of the Irish economy. It concentrates on areas of high added value such as ICT, biotechnology, financial services and food processing. It also investigates the importance of generic skills for organisational success. Much of Ireland's economic progress over the past two decades can be attributed to the ready availability of people with the right skills. The essence of the knowledge economy towards which Ireland is moving will be the creation and commercial exploitation of intellectual property. That will require the highest level of skills across a full range of disciplines, from science and technology to business and law.

We are outlining the fact that Ireland is among the wealthiest countries in Europe. It is a wealthy economy, and that is reflected in our wage rates. Not just in the European Union, but in Europe in general, it is up there with Norway and Switzerland and very wealthy countries to which we looked in the past. Our success is in part responsible for our non-competitiveness. I support the report's principal findings. Notwithstanding the downturn in the economy and the increase in the rate of unemployment, the workforce continued to expand during 2002, although at a reduced rate of 1%. The problems in recruitment and staff retention, which were ubiquitous in the economy at the time of the third report from the EGFSN in July 2001, have largely disappeared and the labour market has loosened appreciably. Sectors as diverse as biotechnology, engineering and logistics are primed for significant growth from 2005 onwards.

If current trends in the supply of skills by the broad education and training sector are left unchecked, there will be a significant shortfall in the skills required to fuel that growth. The skills gap could be substantial in sectors which depend heavily on science and technology skills. In other words, our future lies with science and technology. That is where we must make up the deficit. We will not be competitive in manufacturing or assembly industries in future, and many say that those industries will go to eastern Europe. With the emergence of China as a major trading nation, we may see a very large percentage of all manufacturing goods made there.

The publication of this report is timely in view of the tentative signs of recovery in the global economy, particularly in the US over the last quarter. It identifies the issues that must be addressed to ensure Ireland is well placed to benefit fully from the upturn and is at the vanguard of the global move towards a knowledge-based economy. In the current climate, there is a danger that Ireland could adopt an approach of adapting to short-term demand in the provision of skills. Such a development would be short-sighted and ultimately detrimental to Ireland's future prospects. Instead, Ireland must continue to identify the medium and long-term skills needed and ensure they are available to industry.

The report outlines specific recommendations for each of the sectors reviewed. The recommendations aim to ensure that Ireland's ability to benefit from the anticipated global economic upturn is not in any way compromised by a shortfall in either the quality or quantity of skills available in the economy. The recommendations fall into two broad categories. The first aim is to increase the proportion of highly skilled workers in the labour force by improving the quality of the vocational system to facilitate upskilling and reskilling, arresting and reversing the decline in the take-up of science subjects at second level, increasing the participation rate in higher education, addressing the variation in participation and levels of attainment in education based on socio-economic background, gender and so on, and establishing a more targeted immigration policy.

The report makes specific recommendations, and I propose that this House support them.

Ann Ormonde (Fianna Fail)
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I thank Senator Hanafin for giving me the opportunity to speak. We could all speak at length about this report, but as I have only six minutes, I am delighted to compliment the Tánaiste and the Minister for Education and Science on initiating this report. I thank the expert group under the chairmanship of Danny O'Hare for producing such a fine report. The whole exercise is to examine the areas in which we may be skills-oriented over the next ten years. The ESRI report has clearly indicated a very positive picture from 2004 on and, in a rapidly evolving economy, it is necessary that we ensure our future economic prosperity is guaranteed by having the proper skills.

I have looked through the report which examines where the shortages were and how we could best move forward. The obvious shortages are in the area of communications technology and computing. I will very quickly run through this. The report states that there will be a major drive in the Irish economy in these areas and that we must therefore re-examine courses and consider sales management and training initiatives. Likewise, it examines the gap regarding biotechnology and engineering. What sticks out is that there is a lack of motivation and encouragement in the science area coming from second level education.

In the area of construction, we seem not to have proper training. In particular, there is a lack in the area of apprenticeships, which must be examined. We must ensure proper sponsorship of plasterers, decorators, bricklayers and so on. I know that area because I worked for many years with young people trying to find apprenticeships, and the position has not changed very much in the past ten years. We must upgrade our skills to ensure upskilling is ongoing because of the changes that will take place in our environment, including waste disposal and management and safety. That must all be taken into consideration in any training course in future.

I compliment the pioneers of the food-processing sector in the City of Dublin VEC. This became a new idea back in the 1970s and 1980s. They literally engineered the whole food-processing industry, and it has mushroomed from there, crossing into the institutes of technology throughout the length and breadth of Ireland. I compliment the education system on the post-leaving certificate courses. However, we must examine the types of course available and their relevance. This is a significant issue, as many of those courses are very ad hoc. The level of research into the development of various modules within those courses is low. Once again, we must examine the kinds of people we wish to attract. Food processing is very much a people industry, and we have not gone into that at much length. We must examine certificate, diploma and degree courses. We must examine the third level programmes that are not sufficiently broad-based regarding food management and marketing, which are both part of the food-processing industry.

The subject of the blue collar worker is barely referred to in the report.

Mary White (Fianna Fail)
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Hear, hear.

Ann Ormonde (Fianna Fail)
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We are not all madly third level-educated people. Thankfully, I am delighted to have such an education but not everybody will take that option. We need drivers, transport workers, forklift operators and people to do the operative jobs and this has not been emphasised enough. I ask the new chairman to examine this area. I will not deal with the financial skills because they look after themselves.

Senator White referred to the importance of soft skills. I am familiar with them, I believe in them and I have spoken about them in second level schools. All courses at second level should have formal assessment which is formally recognised in a module dealing with soft skills programmes. All university courses should contain a soft skills module.

I ask the new chairman, Ms Anne Heraty, to hold an inservice day to link all the educational institutions, industry and bodies, such as FÁS and Teagasc. It should be a brainstorming day to discuss this issue at length with the people who will be initiating and implementing the recommendations. I ask the Tánaiste or the new chairperson to move immediately so that this report will not gather dust on a shelf.

Joanna Tuffy (Labour)
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Some speakers mentioned the need for urgency in the implementation of these recommendations. Senator White stated that we cannot be complacent. The Minister of State's speech was very informative, especially his reference to the next phase for the expert group and the advisory committee. It is helpful to have that information. The Minister of State listed the recommendations in the different sectors. What is lacking in the Minister of State's speech is information about what action the Government plans for the implementation of the recommendations.

The Minister of State said: "There is little point in continuing to generate new reports and recommendations if insufficient attention is paid to implementation of existing recommendations." He described the role of the expert group in that regard. He also referred to what is regarded as the importance of Government policy and its implementation of the recommendations. The Government is being complacent about this issue. We do not have the luxury of being complacent or of taking our time on this issue. We could be left behind. Ireland now has the disadvantage of being a high cost country and must, therefore, have highly skilled employees available. This is mentioned in the report and the Minister of State also referred to it.

Everybody accepts that our economic strategy must be to move towards an increasingly knowledge based economy in which foreign direct investment enterprise will be at the upper end of the value chain and increase the volume of high technology indigenous enterprises. The experts and groups agree that Ireland will need to find its niche.

The State's strategy for education and training is confused and dissipated and is not in keeping with support for the economic strategy. It is increasingly in conflict with the economic strategy which we all accept. This strategy requires that greater numbers of young people should acquire third level qualifications, yet the Minister for Education and Science has slashed third level capital expenditure, making it impossible for the colleges to increase numbers. It was reported recently that the Department of Education and Science has forecast that there will be an increase in the numbers in education from more than 130,000 presently in third level education to 180,000 in a few years' time. As a result of current Government policy the infrastructure will not be in place to cater for those greater numbers and the Government's policy of increasing numbers at third level.

The economic strategy also requires substantial upskilling of the existing workforce. This would be achieved by an increase in the numbers undertaking part-time study options. The Minister for Education and Science has allowed the White Paper on lifelong learning to gather dust and many of its recommendations have not been implemented. He has cut budgets for the institutes of technology and they have been forced to cut part-time programmes. The economic strategy demands a significant increase in research and development and the production of doctoral graduates.

The Minister for Education and Science has paused the PTRLI. He has cut the capital to the institutes of technology in that regard, making it impossible for them to carry out their research and development mission. The Department of Education and Science is no longer an autonomous Department; it is now a subsection of the Department of Finance. The Minister for Education and Science has lost the connection between education and economic development. I suggest to the Minister of State that if the Minister for Education and Science will not act and the reports and White Papers are gathering dust, that responsibility for higher education should be transferred to the Department of Enterprise, Trade and Employment, which might take a more proactive attitude than the Department of Education and Science.

The Government's response to this report will tell if it is capable of realising its economic strategy in the future. If it does not respond quickly, clearly and with determination, we will not achieve our goals. Although the Minister of State's speech is informative and positive, it does not give the impression that the issue is being dealt in the required urgent manner. If the initiative is not taken, Ireland will lose its share of foreign direct investment because it will be unable to operate at the higher end of the value chain. There is competition from countries such as China and the EU accession states.

It is not only the Government but also the universities and colleges who must respond. They are justified in their complaints about funding cuts but they have much to do and are very slow in taking action. The Government needs to confront the universities in particular and the other colleges to ensure they implement the recommendations of the report which relate directly to them. Senator Ormonde asked whether they are willing to be more flexible in the manner in which they deliver courses. As the Labour Party spokesperson in the Seanad on education and science, I have often raised this issue. The colleges need to change their product and provide more flexible third level education which would allow more people to take up the option of part-time study, as in the case of those who wish to study and work or mature students who want to acquire third level qualifications. The cost is prohibitive and there are not sufficient options available at part-time level. Part-time courses should be available during the day, for example. There is strong evidence from other countries that the improvement of flexibility in the way colleges deliver their product helps to increase the level of participation of the disadvantaged and of mature students.

The report makes recommendations on upskilling the workforce and increasing the numbers of young people in third level education. The fees for technology management courses are too high. The colleges are under-resourced in that regard and must charge high fees. More needs to be done. The Government was investing in research and development through the PTRLI and so on, but in the past few years, it stopped such investment. We cannot have stop-go economic strategies if we do not want to miss the boat. It is important the Government gives priority to this issue. The most important aspect of economic strategy is education and training, yet it has been cut back in recent years. The Government must reverse these cuts and take on board its responsibilities.

Pat Moylan (Fianna Fail)
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I welcome the Minister of State to the House and thank him for his excellent presentation. I also welcome the important Fourth Report of the Expert Group on Future Skills Needs. It is important that such reports forward plan the needs of the country and the demands of employers and business people who want to ensure the best people are qualified.

The transition year is important because when students reach that stage they have experienced four years of secondary education and have an opportunity to forward plan and decide what skills, trade or profession they wish to take up. The importance of science subjects, which was referred to today and has been in the past, must also be emphasised to young people who must be encouraged to undertake the maximum number of subjects in which they have the ability to get marks. As the old saying goes, education is no load to carry, which is particularly true of science subjects.

FÁS must be complimented because of its involvement in training. It has always been to the forefront in ensuring the needs of industry and business are met with excellently qualified people. Perhaps it is not important to some people but the FÁS social community schemes in various areas were important. Many young people were well educated on those schemes. There is an ideal opportunity for FÁS to ask people under 35 who are on those schemes to leave them and take on a trade. After three, four or five years training, such people would emerge with a trade and would have 35 years to give to the country. In almost all cases, people with a trade are guaranteed employment and it is no load to carry.

Mary White (Fianna Fail)
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Hear, hear.

Pat Moylan (Fianna Fail)
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This issue must be examined. If the initiative is there and such people are pointed in the right direction, they will take it up. There may need to be some movement to ensure such people have a reasonable income because some of them are married and their financial situation must be secured.

The report highlights future demands in the context of economic growth, the labour market, engineering skills, the construction industry, the food processing sector and logistics. Senator Ormonde also referred to the importance of drivers and delivery people as well as financial skills and other issues. The report should be examined by trades-people and those who are planning the future.

In regard to craft skills, some 3% more qualified electricians are required in the next few years, 4% more plumbers, 5% more carpenters and 6% more bricklayers. We must pay attention to this and ensure such people are available and trained to meet the demand. With the accession of new countries to the EU, there will be great opportunities for Irish trades-people to move to those countries to create their own industries and they will be an asset to those countries and their development.

We must not forget agriculture and training in agricultural skills. I compliment Teagasc on the work it has done to date with FÁS by training young farmers in its training colleges throughout the country. We must recognise the importance of the agricultural sector.

The report also states that there are 540 town planners but there is a requirement for 850 and just 30 are qualifying annually. I have strong views on planning and town planners. There can be huge differences between rural and town areas and much contention and many problems have arisen in that regard.

A person who wishes to build a house will often employ a fully qualified architect to design his or her house and yet, after the fact, a town planner may dictate the design of the house. This is not good. We must look at future skills in order to ensure that local authorities have on their staff architects who will vet applications before a town planner sends them back or requires them to be modified. In many cases, architects look at a site in order to design a house which is suitable for the site, the application and the location. Therefore, I have always thought that architects are the experts in house design.

I am not happy that town planners are adequately qualified for developments in rural areas and have a major input into agricultural developments which are important to the countryside. Some town planners are not up to speed with such considerations. If we require 850 town planners and just 30 are qualifying annually, the shortfall will create problems for local authorities.

Our students have never been better prepared to meet the demands to enable the country to develop to its full potential. Whatever qualifications were required of students in the past, whether in architecture or engineering, they were capable of fulfilling the requirements. Furthermore, our teachers are doing an excellent job.

There may be room for improvement in the advice some career guidance teachers are giving some students. In some cases, guidance provided by career guidance teachers to students has been akin to putting a square peg in a round hole, which is not acceptable and much needs to be done in this regard.

I thank the Minister and others for their excellent contributions to the debate and I compliment the expert group. We will not agree with the recommendations of every expert group but this group has outlined a road map for us to follow to address the country's future needs and we must stick with it.

Terry Leyden (Fianna Fail)
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I welcome the Minister of State to the House for the first time in 2004. He always gives great recognition to the House and I thank him for taking this debate given his busy schedule. I will not detain him.

I am delighted the Seanad has an opportunity to debate this report, which was issued last October. Many reports are issued but not debated in either House of the Oireachtas. However, the Seanad has a role in highlighting the issues they address. I agree with Senator Moylan that the expert group did worthwhile work on future skills needs. This report should be implemented to the letter because it is important. Senator Moylan referred to the skills of tradesmen in the building industry. The late Jim Kemmy from Limerick was a stonemason, as was my father, and they shared the saying, "With a trowel, you can travel the world". Based on my observations of building taking place in my locality in County Roscommon, young tradesmen, who have served their apprenticeships, are producing fine quality buildings and they are capable of constructing buildings to the highest standard in terms of architectural design and engineering.

The fourth report of the expert group on future skills needs was brought to our attention in October 2003 and it offers us an invaluable insight into what policy should be followed by the Government to ensure the inadequate supply of skills across the workforce, which will eventually hamper Ireland's future economic prosperity, will be remedied. The latest report from the expert group reviews the future skills requirements in seven key sectors of the economy. It concentrates on areas of high added value such as ICT, biotechnology, financial services and food processing and also investigates the importance of generic skills for organisational success.

Sectors as diverse as biotechnology, engineering and logistics are primed for significant growth from 2005. The warning issued by Forfás must be taken on board. The body states if current trends in the supply of skills by the wider education and training sector are left unchecked, there will be a significant shortfall in skills required to fuel this growth. Since much of Ireland's economic progress over the past two decades can be attributed to the ready availability of people with the right skills, the deficit in this area, which has emerged since the last expert group report, must be addressed.

As the Tánaiste and Minister for Enterprise, Trade and Employment illustrated, the essence of the knowledge economy, towards which Ireland is moving, will be the creation and commercial exploitation of intellectual property. This will require the highest skills across a full range of disciplines from science and technology to business and law.

The key issues and findings in the report include the significant changes that have taken place in the economy since the publication of the third report of the expert group in 2001. Specifically, the group warned of ubiquitous problems in recruitment and staff retention. These have largely disappeared and the labour market has loosened appreciably. The report also investigates the importance of soft skills such as teamwork and problem solving skills in the development of a healthy, knowledge based economy.

The group's recommendations for the overall labour market focus primarily on increasing the proportion of highly skilled workers in the labour force by upskilling, reskilling and improving the quality of vocational systems. Forfás has found that the ICT downturn has caused an excess of supply over demand for graduates but that an economic recovery would once again lead to a shortage of graduates. However, one projection suggests if students continue to shun computer courses, as they did last year, significant skills shortages may emerge. A second projection suggests if confidence in computing and electronic engineering courses recovers, 80% of previous peak levels could be reached by 2007.

The supply of science graduates must be increased significantly if Ireland is to compete for investment from the rapid growth in the biotechnology sector, which is anticipated worldwide over the next seven years. Heed, therefore, must be taken of the warning that in the current climate there is a danger that Ireland could adopt an approach of reacting to short-term demand in the provision of skills. Such a development would be short sighted and, ultimately, detrimental to Ireland's future prospects. The medium and long-term skills needed must be identified and it must be ensured they are available to industry in the future.

It has been argued that Ireland's relatively low Internet and broadband penetration is a factor in the lack of interest in high-tech jobs among students. However, I hope this damaged interest will soon be revived with the provision of non-commercial broadband networks. The skills gap cannot be allowed to increase further in sectors that rely heavily on science and technology skills. There has been significant interest in broadband since the Government took office. The Minister of State has made significant investment and commitments in this area, in which Ireland was lagging behind. That was unusual because broadband is needed to develop in rural areas. It is absolutely vital in the context of the decentralisation programme that broadband should be available in every town and village over the next three or four years.

I welcome the two pronged approach of the recommendations in the expert group report. The recommendations aim to ensure Ireland's ability to benefit from the anticipated global economic upturn is not compromised by a shortfall in the quality or quantity of skills available in the economy. The dual approach is, first, to increase the proportion of highly skilled workers in the labour force and, second, to address the need to track the evolving skills needs of the enterprise sector.

Our job, as policymakers, is to provide greater investment in the public education system and to address the manifest inequalities in access to education at all levels, as skills will be Ireland's most sustainable competitive advantage in the years ahead. We are benefiting from the investment made in education by the former Minister for Education, Donogh O'Malley, in the 1960s and the Celtic tiger can be attributed to the investment made by him and Seán Lemass. The provision of free secondary education was one of the greatest decisions made by a Government and I am proud a Fianna Fáil Government recognised the needs of the future. Ireland missed out on economic development because it was under British rule for so long but, when we got an opportunity, we grasped the nettle and that is why Ireland has the best educated workforce in the world. Long may that continue but investment in education is absolutely essential. We need to increase the participation rate and levels of attainment in the education sector and review curricula regularly.

I congratulate the expert group, which drew up such an impressive, informative and necessary report and I am optimistic the Minister of State, the Tánaiste and Minister for Enterprise, Trade and Employment and the Minister for Education and Science will ensure the report is implemented. Many significant points were made by colleagues. Senator Moylan referred to the shortage of planning experts and we must rely on attracting them from around the world. Our own experts are needed in this field.

Michael Ahern (Cork East, Fianna Fail)
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I thank the Senators who contributed to the debate. The challenge that lies before us is to ensure the labour force has the necessary skills to secure our continuing development and prosperity. The work of the EGFSN, as reflected in the fourth report, is an invaluable guide to future policy actions and we will ignore it at our peril.

The task of preparing the Irish workforce of the future is one we share, in the first instance, with our colleagues in the Department of Education and Science but it would be misleading to suggest that the solution to the problem lies solely in the hands of Government. While the Government can go a considerable way towards helping to create the conditions in which the education, training and development of the workforce occurs, it requires a response from individuals and enterprises to make learning and upskilling and the potential benefits they can deliver a reality.

There are challenges, about which many Senators spoke, which require changes in our thinking. It is not simply a question of committing more resources but how, within the context of the significant investment the State makes in education and training, we can build linkages with the enterprise sector and individual learners to leverage greater and better training and education outcomes.

Forecasting the supply of and demand for skills is not an exact science and it is understandable if there are differences of opinion about the precise nature of the projections across skills or sectors of the labour force. It is clear that there is, at least, a shared understanding of the challenge which the skills agenda poses for the economy.

I thank Senator Coghlan for his comments on the report. I am delighted to hear that he agrees with its conclusions. Senator Coghlan requested that the recommendations be implemented. Senator White welcomed the report and spoke particularly about the areas of biotechnology and ICT. I agree with her that we need to focus on those skills. We have adequate courses at third level and our problem is to ensure that students take up those courses. Senator White also mentioned the soft skills report. This area was also referred to by other speakers.

Senator Quinn agreed with the report's analysis of the food sector, an area in which he is an expert. Senator Hanafin was also supportive of the report and its recommendations. Senator Ormonde spoke of the need for people to become involved in the ICT and biotechnology areas and of the importance of training for apprentices. She made the worthwhile suggestion that the new chair, Ms Anne Heraty, should have an inservice day to consider the report's recommendations. Senator Ormonde considered it important for all sectors of society to be involved in this in order to progress the report's recommendations.

Senator Tuffy raised the question of the implementation of the report's recommendations. The EGFSN is an advisory group to the Ministers for Education and Science and Enterprise, Trade and Employment. Both Ministers recognise the need to implement the recommendations and this is being done. I disagree with Senator Tuffy's claim that lifelong learning is being neglected. Both Departments are pressing ahead with implementing a broad range of recommendations in the taskforce approach to lifelong learning. Anyone who visits a VEC school in the evening will see the number of people who partake in the lifelong learning process, which is becoming more and more popular.

Senator Moylan raised the question of career guidance teachers. These teachers have a most important role in ensuring that they give the proper advice to students and do not, as the Senator said, put square pegs into round holes. This area must be examined. I can speak from my own experience in this area. Many young people have come to me, as a Deputy, to tell me they were told to take a certain career path although they had no interest in or aptitude for it. This question is vitally important in the areas of skills and education.

I agree with Senator Leyden that we should take a longer term view of the ICT sector. The downturn in this sector in recent years has discouraged students from entering it but there is already a change in this area. It is important to convey the message to students that they should not ignore this vital area.

I thank Senators for their comments and I commend the work of the expert group on future skills needs. I thank the outgoing chairman, Dr. Daniel O'Hare and I welcome the new chairperson, Ms Anne Heraty. I thank Senators for bringing this debate to the House and for their participation therein.

Paddy Burke (Fine Gael)
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When is it proposed to sit again?

Pat Moylan (Fianna Fail)
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At 2.30 p.m. on Tuesday, 27 January 2004.