Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 242: To ask the Minister for Enterprise, Trade and Employment the number of jobs that have been relocated to low wage economies in the past five years; the countries or regions affected most; the action taken or proposed to address the issue; and if he will make a statement on the matter. [12498/05]

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Ireland's economy is undergoing fundamental change, which is affecting all sectors of our economy. Ireland can no longer be seen as a low cost location for investment as our strengths and competitive advantages have inexorably changed. High output and productivity together with high returns to labour in the form of wages, salaries and better living standards now typify Ireland's economy. Ireland is no longer seen as a location for what could be called basic low-tech production and is being overtaken by low wage economies in terms of cost competitiveness. However, no measure is available to quantify jobs that may have relocated to other countries. Naturally, a more attractive cost environment abroad will inevitably entice some firms that are unable to generate their required return from the modern enterprise economy into which we have transformed ourselves. A continuing structural evolution of our economy is both unavoidable and necessary to maintain current levels of growth and low unemployment. With this, some plant transfers and other adjustments are bound to come but where relocation has occurred to date, it has largely been limited to relatively low-technology, labour-intensive activities.

We have become a more sophisticated and developed economy where the application of technology and intellectual endeavour is becoming more important than simple cost competitiveness as the foundation for growth and prosperity. We now have one of the most open economies in the world where trends in world trade, global business investment and consumer decisions directly influence the pattern of economic growth, company development and job prospects here more so than probably in other developed economies.

A balanced combination of pro-enterprise policies has helped propel economic growth and employment expansion and these have encouraged deeper and stronger links to both the enlarging EU markets and internationally. Consequently, Irish enterprise and society has benefited enormously from the ability of entrepreneurs to operate more profitably both in and from Ireland.

To counterbalance the competitive threat from lower wage competitor economies, our policy is to encourage a move to higher levels of productivity and value added products and services. Sustainable employment will be driven by companies with higher profitability that are more technologically advanced and prove a better fit with the competitive characteristics of our economy, and are therefore less likely to move on the basis of simple cost influences. This new investment will be sourced by a combination of developing existing clients and new investors in existing or new activities or sectors. The enterprise development agencies have a clear mandate to align their operations around this policy objective.

The latest data from the Central Statistics Office's quarterly national household survey in respect of Quarter 4 2004 shows that employment increased by 65,200 on the corresponding period in 2003, bringing the total number in employment to a record 1,894,100. This is a remarkable achievement at a time when there is considerable debate and comment about the impact of competition from lower wage economies on employment levels in developed economies.