Bernard Durkan (Kildare North, Fine Gael)
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Question 122: To ask the Minister for Enterprise, Trade and Employment the number of jobs that have been relocated out of Ireland in the past three years; the reason for the relocation; the action taken to address the issue; the net number of new jobs created here in the same period; and if he will make a statement on the matter. [28454/04]

Micheál Martin (Cork South Central, Fianna Fail)
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The Forfás employment survey tracks employment levels in agency assisted companies on an annual basis. The life cycle of companies influences the ebb and flow of employment and relocation is just one factor in the many enterprise related issues that determines employment levels. It is not possible to determine the employment change arising from just one aspect affecting the enterprise economy. The competitive characteristics of our enterprise base has made a reliance on low-technology, basic manufacturing less sustainable than it was in the past. There has been a fundamental shift in the strengths and competitive advantages of our economy which is now typified by higher output and productivity together with high returns to labour in the form of wages, salaries and improved living standards.

A more attractive cost environment abroad will inevitably attract some firms which are unable to produce in the high wage environment of a modern industrial economy and the continuing structural transformation of our economy is inevitable. While there are bound to be some plant transfers and other adjustments, where relocation has occurred to date, it has largely been limited to relatively low-technology, labour-intensive activities least suited to the economy we have now. Over the past few years, the enterprise support agencies for which my Department has responsibility have been mandated to adjust their support strategies to meet the needs of society in terms of high quality employment opportunities and the needs of the businesses which generate and sustain those jobs. To counterbalance the competitive threat from lower cost competitor economies, our policy is to encourage a move to higher levels of competitiveness and value added products and services. Sustainable employment will be driven by companies with higher profitability which are more technologically advanced and prove a better fit with the competitive characteristics of our economy. Such companies are, therefore, less likely to move on the basis of simple cost influences.

New investment will be sourced by a combination of developing existing clients and new investors in existing or new activities or sectors. Given the critical mass of foreign direct investment in Ireland and its linkages with indigenous companies, one of the greatest potential contributions will come from developing companies already operating here. Enterprise development agencies are working to encourage companies into more sophisticated activities where competitive advantage is less likely to be whittled away by cost based competition. The latest quarterly national household survey of the Central Statistics Office shows that over the past three years employment has grown by 114,300 or by 6.6%.