Bernard Durkan (Kildare North, Fine Gael)
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Question 282: To ask the Minister for Enterprise, Trade and Employment the number of manufacturing or service jobs lost or relocated to more competitive economies in the past five years; his predictions in respect of the next five years; and if he will make a statement on the matter. [18453/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 284: To ask the Minister for Enterprise, Trade and Employment the way in which he proposes to counter the move by manufacturing industry to low wage economies; and if he will make a statement on the matter. [18455/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 288: To ask the Minister for Enterprise, Trade and Employment his proposals to reverse the trend towards the relocation of manufacturing industry to lower wage economies; and if he will make a statement on the matter. [18462/05]

Micheál Martin (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 282, 284 and 288 together.

It is not possible to determine the number of manufacturing or service jobs that have relocated to more competitive economies in the past five years or the employment change arising directly from just one aspect affecting the enterprise economy. Firms relocate for a variety of reasons. Relocation is just one factor in the many enterprise related issues that determine employment levels. Firms invest in different regions for a variety of reasons and while there is little doubt that some firms establish themselves primarily to take advantage of reduced costs in lower wage economies, this is often not the only factor in deciding where to invest.

The tabular statement provides a breakdown of employment gains/losses in agency supported firms for the last five years for the manufacturing and services — financial and international — sectors.

Ireland's economy has undergone a fundamental change in the last decade and can no longer be seen as a low cost location for investment. 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. We no longer operate primarily as a location for what could be called low tech production; other low wage economies provide a level of cost competitiveness for this form of production that we can no longer realistically match.

As the figures on the statement indicate, our economy is holding firm in the service sectors and, as Ireland becomes more economically sophisticated, services are likely to become a much more important source of wealth and employment creation. Nevertheless, we are acutely aware of the importance of manufacturing and we cannot afford to be complacent about erosion in employment in such an important economic sector. While the figures show that over the period 2001-03 we suffered heavy losses in this sector among agency supported firms, there are some indications that the level of attrition may have peaked and, indeed, given the problems besetting the world economy during those years, we should recognise this as a strong performance in the circumstances of a global downturn.

Enterprise policy is being actively refocused towards creating conditions that will make possible a sustained shift to higher skill, knowledge intensive activities, in which advanced manufacturing expertise will be an important contributor to growth and employment. 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 are active and supportive partners with enterprise in helping new, market oriented investment projects.

Manufacturing remains a core sector in our economy. This is reflected in changes to tax rules to encourage more research and development activity to take place here, particularly in the area of high value added and customer driven innovation. The sustainability of employment levels in manufacturing is heavily tied to the sustainability of their competitiveness both in terms of delivering products and services in Ireland and in export markets. To this end, Enterprise Ireland is working with its client base to improve the productivity of this important aspect of our industrial base in line with its new strategy, which I launched on 4 May 2005.

The Government is committed to developing a competitive economy that will be resilient to competitive pressures from today's global economy. This involves maintaining a pro-business environment that will provide firms with a solid stable platform from which they can successfully compete on both domestic and international markets, helping to make Ireland one of the most attractive locations in the world from which to do business.