Bernard Durkan (Kildare North, Fine Gael)
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Question 374: To ask the Minister for Enterprise, Trade and Employment the countermeasures he proposes to take to address the issue of manufacturing or service job relocation to lower wage economies; and if he will make a statement on the matter. [31964/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 375: To ask the Minister for Enterprise, Trade and Employment the number of jobs which have relocated from here to lower wage economies in the past five years; and if he will make a statement on the matter. [31965/05]I

Micheál Martin (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 374 and 375 together.

It is not possible to determine the number of manufacturing or service jobs that have relocated to lower wage economies in the past five years. 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.

Where relocation has occurred to date, it has largely been limited to relatively low-technology, labour-intensive manufacturing activities. The service sectors in Ireland are holding firm, and as the country grows increasingly economically sophisticated, services are likely to become a much more important source of wealth and employment creation. This is an economic fact of life and one which policy makers have to work with and not against. We have consistently recognised the value and potential of services to propel economic growth. This is reflected in changes to tax rules to promote the location of corporate head quarters or to encourage more R&D activity to take place here, as well as expanding the range of service industries that can be grant aided. At the same time, we must recognise that lower cost locations abroad will prove attractive to some companies whose margins are tighter, which is often the case with basic manufacturing. The sustainability of employment levels in our companies, operating in both manufacturing and internationally traded services, is heavily tied to the sustainability of their competitiveness both in terms of delivering products and services in Ireland and in export markets.

Sustainable employment will be linked to companies that have higher profitability, are more technologically advanced and thereby prove a better fit with the competitive characteristics of our economy. Such companies are less likely to move on the basis of simple cost influences. The enterprise development agencies have a clear mandate to align their operations around this policy objective, and are working to source new investment by a combination of developing existing clients and new investors in existing or new activities or sectors. The enterprise development agencies will attract and support such growth by providing funding for innovation development, upskilling within client companies, developing export opportunities in overseas markets, and providing advice and referrals for clients to improve their competitive position.

The Government is committed to developing a competitive economy that can meet the challenge from the competitive pressures of 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.