Bernard Durkan (Kildare North, Fine Gael)
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Question 238: To ask the Minister for Enterprise, Trade and Employment if he has monitored the extent to which Irish goods being exported are maintaining a competitive edge against all others; and if he will make a statement on the matter. [12494/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 240: To ask the Minister for Enterprise, Trade and Employment if he has satisfied himself that Irish-based manufacturers are in a position to compete with all others, both European and worldwide; and if he will make a statement on the matter. [12496/05]

Michael Ahern (Cork East, Fianna Fail)
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I propose to take Questions Nos. 238 and 240 together.

The National Competitiveness Council's annual competitiveness report for 2004 ranks Ireland second only to Singapore in terms of exports of goods and services in 2003 as a percentage of GDP. Given the fact that Ireland is obviously one of the world's most open economies, firms must be competitive to succeed both in the domestic market and in international markets. Firms operating here have been adversely affected by a rise in the cost of goods and services, wages and business costs in recent years. However, there are many different factors which contribute to Ireland's overall competitiveness other than just prices and costs. A competitive taxation regime, a highly educated and flexible workforce, low levels of business regulation, access to European markets as well as a transition towards higher end value products and services all combine to create a positive and competitive business environment for exporting firms operating in Ireland.

Ireland's trading performance has been remarkable in recent times, as evidenced by the NCC's analysis. Exports constitute an increasing share of the economy's total output of goods and services. They make a substantial contribution to employment creation and maintenance and underpin a positive trade surplus position. Since the strong appreciation of the euro against both the US dollar and sterling, and given the fact that the USA and the UK are among Ireland's largest trading partners, Ireland's competitiveness has been significantly affected. Despite this, Ireland's trade remains strong with the most recent CSO external trade 2004 figures showing that total merchandise exports for 2004 were worth €83.9 billion, an increase of 2% on the 2003 figures.

We are no longer a low cost economy and as such our future competitiveness and prosperity is dependent upon our ability to move further up the value chain and become an innovative knowledge intensive economy. Enterprise policy is being actively refocused towards creating the conditions that will make possible a sustained shift to higher skill, knowledge-intensive activities and in which advanced manufacturing expertise will be an important contributor to growth and employment. These are essential if our enterprises are to capture sustainable competitive advantage in niche markets that are less susceptible to cost-based competition. The range of incentives provided through the enterprise development agencies are designed to meet these objectives and to help enterprise operate at higher levels of skill, undertake higher order strategic investments, product development and innovation. The agencies want to be active and supportive partners with enterprise in helping new market oriented investment projects.

The Government recognised the need to develop a high value-added knowledge intensive economy when it established the enterprise strategy group. The ESG's report Ahead of the Curve is pivotal in mapping the future direction of Ireland's enterprise policy and ensuring our competitiveness. The purpose of the ESG is to ensure that Ireland's enterprise sector is able to build on its strengths and to exploit new opportunities in technology and services. The Government is committed to implementing the key recommendations contained in this report to maintain the competitiveness of our enterprise economy.