Bernard Durkan (Kildare North, Fine Gael)
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Question 21: To ask the Minister for Enterprise, Trade and Employment the extent to which he or his Department have investigated the cause or causes of job losses that have resulted in most cases in the relocation of the jobs to lower cost economies; the action he proposes to take to tackle the underlying reasons; when he expects to implement the measures necessary to effectively address the issue of such job relocation; and if he will make a statement on the matter. [11322/06]

Micheál Martin (Cork South Central, Fianna Fail)
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It is not possible to infer precise causes for the decisions taken by companies relating to location or relocation. The reasons may be many and varied and include the availability of incentives, market access, availability and cost of labour, regulatory and financial issues. I am aware that some international research suggests that only 20% of the de-industrialisation between 1970 and 2002 in OECD countries was due to offshoring and trade effects. Forfás, the policy advisory body under the aegis of my Department, is also undertaking some research in this area, which should be completed later this year.

It is certainly the case that manufacturing firms in the more traditional sectors have, in recent years, operated against a backdrop of significantly declining external demand, downward price pressure and an increasingly competitive international environment, together with upward pressure on costs and the strengthening of the euro against our key trading partner currencies. There are areas of activity in which Ireland's competitiveness is seriously challenged and it is inevitable that, among the factors which influence the location decisions of companies, the competitive attractions of alternative geographic locations will figure.

Our experience of the increasing trend towards globalisation has been a largely positive one. There was a 4.7% increase in employment during 2005 with 87,000 new jobs created across the economy. This was the highest annual rate of employment growth recorded since 2000. Since 1997, employment in financial services and other business services has grown by 100,000 approximately, while employment in the construction sector grew by 100,000. Employment within manufacturing has declined by 31,000 since peaking at 251,000 in 2001. However, this decline has been more than offset by the rise in the number of jobs in services. Furthermore, manufacturing output has continued to increase, indicating improved productivity.

One of my Department's principal tasks is to ensure that Ireland continues to be attractive place to do business and to support the development of economic competencies higher up the value chain. In that regard, we have made significant efforts to maintain and enhance our framework competitive conditions and to promote new areas of competitive advantage, such as by developing our research and development base.

Our priority is the creation of sustainable employment, driven by companies with higher profitability, that are more technologically advanced and prove a better fit with the competitive characteristics of our economy. In this context the enterprise development agencies are working on an ongoing basis with companies to provide mentoring and developmental supports, to enhance management capabilities and critical workforce skills, to build productivity, to support the creation and implementation of strategies for market entry, development and growth and to provide support for innovation and for research and development.

While the changing nature of our economy resulted in some losses, in contrast, the new jobs created in the economic development agencies' client companies in the last number of years are heavily concentrated in high value added, knowledge based companies that offer greater security in the face of intense international competition.