Bernard Durkan (Kildare North, Fine Gael)
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Question 15: To ask the Minister for Enterprise, Trade and Employment the steps he has taken or proposes to take to combat job relocation to lower wage economies with particular reference to identification of the most obvious cost factors affecting employment here; and if he will make a statement on the matter. [32072/06]

Micheál Martin (Cork South Central, Fianna Fail)
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The reasons for companies to relocate activities from Ireland are many and varied, and include relocation to be closer to customers or other competitive considerations. I believe that firms must be free to allocate resources and production to where the returns are highest. It is not in our interest to obstruct what is in the best interest of competitive enterprises. Our best response to the realities of globalisation is to ensure that Ireland remains attractive for investment and enterprise growth.

Our employment record indicates that the effects of job relocation has not been significant. In the last eight years we have added over 523,000 people to our workforce, an unprecedented growth of 35%. We now have over two million people working in Ireland. It is clear that the rate of job relocations is far exceeded by new job creation, often higher up the value-chain and usually accompanied by better-paid high-skilled employment. Indeed, maintaining low-wage jobs at any cost, irrespective of globalisation trends, might serve to keep incomes low and depress standards of living.

As our economy has matured, we have tailored our FDI incentives to match our strengths. Low wage costs are no longer a major enticement, but have been replaced by other attractions, including a benign tax and regulatory environment, better-educated workforce, an improving infrastructure and a commitment to world-class standards of research, development and innovation. Maintaining and improving upon these standards is vital to sustaining Ireland's competitiveness. The IMD World Competitiveness Scoreboard ranked us as the world's 11th most competitive economy in 2006, up one place on last year's position.

The Strategy for Science, Technology and Innovation, launched in June, demonstrates this Government's commitment to continuing the transformation of the economy and continue to create high-value jobs that will mitigate the effects of any job relocation.

The agencies under my Department are working to maintain Ireland attractiveness to foreign investment while assisting indigenous industry. In 2005, the IDA supported over 50 R&D projects related to business investment to the value of over €275 million, a record both in number and value for the agency. Enterprise Ireland has introduced a Productivity Improvement Fund for indigenous enterprises to improve levels of productivity through technology acquisition or labour force training. In 2005 Enterprise Ireland helped 515 client companies invest over €100,000 each in meaningful R&D, with 33 companies investing over €2 million in research and development. With this and other assistance, Enterprise Ireland is making significant progress in helping Irish enterprises improve their export performance, with growth of 7% in 2005 and 15% in exports to Asia.