Bernard Durkan (Kildare North, Fine Gael)
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Question 67: To ask the Minister for Enterprise, Trade and Employment if his attention has been drawn to the growing lack of competitiveness in manufacturing industry with resultant relocation to lower wage economies; if he has taken steps to address this issue having particular regard to the number of such manufacturing jobs lost to this economy in the past five years; and if he will make a statement on the matter. [18049/05]

Micheál Martin (Cork South Central, Fianna Fail)
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Competitiveness is an issue of national importance that deserves careful monitoring and corrective policy intervention where necessary, but it must be pointed out that competitiveness does not affect the manufacturing sector alone. An uncompetitive economy will never be able to consistently create employment and increase its citizens' standard of living. While I recognise that manufacturing employment has declined by around 25,000 in the past five years, sound and supportive business policies have enabled enterprise to create almost 182,000 jobs in the same period. Approximately 65,000 of these jobs were created in the past year alone. The capacity of the economy to consistently expand quality employment opportunities, not only for our own labour force but for thousands of immigrants as well, strongly suggests that we have significant competitive strengths in a global context.

Clearly, a more attractive cost environment abroad will inevitably attract some firms that are unable to produce in high wage, high reward economies such as ours. The continuing structural transformation of our economy is inevitable as high value added services and related activities increasingly become the wealth and employment drivers in the economy. With this evolution, 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 — those least suited to the economy we have become.

Over the past few years the enterprise support agencies under my Department have been mandated to adjust their support strategies to meet both the needs of society in terms of high quality employment opportunities and the more sophisticated needs of businesses that generate and sustain those jobs. As part of our determinedly pro-business support environment, for example, I recently asked Enterprise Ireland to rethink how it could better support indigenous firms in managing the challenges of enterprise growth and globalisation. This policy review has been guided by the recommendations of the enterprise strategy group and culminated in a new strategic direction for Enterprise Ireland that I launched at the beginning of the month. As part of this transition, Enterprise Ireland launched a €20 million productivity improvement fund to help indigenous firms invest in technology, equipment and employee training. In boosting productivity, this new programme will considerably strengthen the competitive position of Irish industry by increasing firms' value added output, making them less susceptible to cost pressures and giving them the capacity to grow and expand against global competition.