Finian McGrath (Dublin North Central, Independent)
Link to this: Individually | In context

Question 113: To ask the Minister for Enterprise, Trade and Employment the strategies and plans he has for Irish industry, especially when many companies have moved to low-wage economies from here; and if he will make a statement on this potential crisis for workers here. [11392/06]

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

My Department and the enterprise agencies are acutely aware of the challenges that have emerged as a result of globalisation and increased international competition. However, Ireland's experience of this globalising trend to date has been a largely positive one. Employment in manufacturing has declined in recent years but that has been more than offset by increases in employment in services, including a substantial increase in internationally traded services. Furthermore, manufacturing output has continued to increase, indicating improved productivity.

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 partners' currencies. To counterbalance the threat from lower-wage competitor economies, our policy is to encourage a move to higher levels of productivity and value-added products and services in sectors where we have or can develop a competitive advantage. While manufacturing will continue to play a key role in the economy, Ireland will also make a transition towards more service-orientated activities, as is the case with all developed countries.

One of my Department's principal tasks is to ensure that Ireland continues to be an 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 remains 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, consequently being less likely to move on the basis of simple cost influences.

To assist the drive towards competitiveness and increased productivity, the enterprise development agencies are working with companies: to provide mentoring and developmental supports; to enhance management capabilities and critical workforce skills; to support the creation and implementation of strategies for market entry, development and growth; to build productivity; and to provide support for innovation and research and development.

We will also continue to pursue labour market policies to promote lifelong learning and upskilling as a means of enhancing labour market flexibility and, where necessary, ensure that appropriate training supports are provided for workers in sectors that are no longer competitive to help them find alternative employment. Moderation of the rate of growth in operating costs is also necessary to ensure that our costs remain in line with those of other high-cost locations and that cost increases do not negate or overshadow the effect on competitiveness of productivity growth.

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