Trevor Sargent (Dublin North, Green Party)
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Question 59: To ask the Minister for Enterprise, Trade and Employment the measures which have been taken within the framework of the National Development Plan for locating an increased proportion of new investment projects in objective one regions designated under the EU regional aid; the measures adopted in response to the loss of 50 per cent of coverage under the new EU regional aid guidelines. [23955/06]

Micheál Martin (Cork South Central, Fianna Fail)
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IDA Ireland is the agency charged with the attraction of foreign direct investment to this country and its regions. Under the Industrial Development Acts I am precluded from giving directives in respect of individual cases or in giving preference to one area over others.

One of the key objectives of IDA Ireland strategy since the beginning of the current Operational Programme for Industry in 2000 has been to encourage more balanced regional development. IDA Ireland has taken a number of proactive steps to promote this objective. The Agency has adopted a target of trying to achieve 50% of all new Greenfield FDI first time jobs to locate in the BMW region. This is an ambitious target relative to the 25% share being won by the BMW region in the late 1990's. Over the 2000-2005 period an estimated 40% of all new Greenfield first time jobs have been located in the BMW region.

Over recent years the Agency has substantially upgraded the scale, resources and management responsibility of its regional offices, in order to enhance its ability to maximise the amount of FDI that locates in the BMW region. The level of infrastructure in much of the Objective 1 region, in terms of scale, capacity and quality, is still being developed with a view to accommodating high technology and infrastructure intensive investment projects. FDI projects also have a very strong preference for locating in a major urban centre, with its concentration of labour, services, transport links, and infrastructure. Development of the NSS Gateways and Hubs will assist in offering a wider choice to potential FDI projects in the future.

With regard to the loss of coverage in part of the country from the beginning of 2007 it should be noted that Regional Aid coverage will be retained in the Objective 1 region and the South-East Region (Waterford, Wexford, Kilkenny, Carlow and south Tipperary), albeit at reduced rates, for the entire 2007-2013 period. The reduced coverage in regional aid directly affects capital and employment grants. Ireland will continue to retain full national coverage for other forms of grant such as R&D and Training, which are classified as "horizontal aids" as opposed to "regional aids". This is important since a key focus of IDA strategy for some time has been to develop the mandate and strategic importance of the existing FDI base, and win new client companies, by promoting Ireland as a premier location for high value/high skill innovation orientated functions such as R&D.

In light of the reduced capability to grant aid in much of the country in the future the current IDA Ireland strategy puts a critical focus on the areas of infrastructure, education and innovation, and is centred round developing an innovation-driven value proposition for Ireland and connecting this offering to international companies in a more globalised world economy.