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

Question 396: To ask the Minister for Enterprise, Trade and Employment the action he will take regarding companies moving out of Ireland to low wage economies; and the impact on employment here. [26005/06]

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

One of my Department's main tasks is to ensure that Ireland remains an attractive place to do business, and to support the development of economic competencies higher up the value chain. Maintaining the capacity of the economy to consistently generate new employment opportunities is a key policy of this Government. We continue to work to maintain and enhance our framework competitive conditions, and to promote new areas of competitive advantage, such as by developing our R&D base.

Further, to promote the development of high value, sustainable employment, the enterprise development agencies are working with companies to provide mentoring and developmental supports, enhance management capabilities and critical workforce skills, build productivity, support the creation and implementation of strategies for market entry, development and growth, and to provide support for innovation and for research and development.

Ireland's strengths and competitive advantages have changed over the last ten years, and our economy is now characterised by high output and productivity, together with high returns to labour in terms of remuneration and living standards. Low technology production is being replaced by higher technology and services enterprises. Against a backdrop in some traditional sectors, of 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 key trading currencies, there are areas of activity in which our competitiveness is seriously challenged. It is inevitable that among the factors that influence the location decisions of companies, the competitive attractions of alternative geographic locations have some impact.

However, CSO figures show a 4.7% increase in employment during 2005 with almost 90,000 new jobs created across the economy. In the two years since 2004, employment in Financial Services and other business services has grown by 20,000 while employment in the construction sector grew by 49,000. While employment within manufacturing has declined by 10,000 in the same period, this decline has been more than offset by the rise in the number of jobs in services and manufacturing output has continued to increase, indicating improved productivity.

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